EXHIBIT 4
================================================================================
BCAP LLC,
Depositor,
BARCLAYS CAPITAL REAL ESTATE INC. D/B/A
HOMEQ SERVICING,
Servicer,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Custodian
-----------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2007
-----------------------------------------------------------
EQUIFIRST LOAN SECURITIZATION TRUST 2007-1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-1
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Certain Representations, Warranties and Covenants............
Section 2.04 [Reserved]...................................................
Section 2.05 Execution and Delivery of Certificates.......................
Section 2.06 REMIC Matters................................................
Section 2.07 Representations and Warranties of the Depositor..............
Section 2.08 Enforcement of Obligations for Breach of Mortgage Loan
Representations.............................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...........................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicer....................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee.....................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.....................................................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.............................................
Section 3.10 Collection Account...........................................
Section 3.11 Withdrawals from the Collection Account......................
Section 3.12 Investment of Funds in the Collection Account, Escrow
Accounts and the Distribution Account.......................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.......................................
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans..........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee.........................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants'
Attestation Report..........................................
Section 3.24 Trustee to Act as Servicer...................................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
Section 4.06 Supplemental Interest Account................................
Section 4.07 Supplemental Float Account and Supplemental Float Reserve
Account.....................................................
ARTICLE V
THE CERTIFICATES AND THE SERVICING FEE CERTIFICATE
Section 5.01 The Certificates and the Servicing Fee Certificate...........
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.....
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.....
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others..................................................
Section 6.04 Limitation on Resignation of the Servicer....................
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Trustee to Act; Appointment of Successor.....................
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIAN
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee and the Custodian......
Section 8.03 Trustee and Custodian Not Liable for Certificates or
Mortgage Loans..............................................
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's and Custodian's Fees and Expenses..................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account,
the Supplemental Interest Account and the Interest Rate
Swap Agreement..............................................
Section 8.14 Custodial Responsibilities...................................
Section 8.15 Limitations on Custodial Responsibilities....................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.......................................................
Section 9.02 Final Distribution on the Certificates.......................
Section 9.03 Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment....................................................
Section 10.02 Recordation of Agreement; Counterparts.......................
Section 10.03 Governing Law................................................
Section 10.04 Intention of Parties.........................................
Section 10.05 Notices......................................................
Section 10.06 Severability of Provisions...................................
Section 10.07 Limitation on Rights of Certificateholders...................
Section 10.08 Inspection and Audit Rights..................................
Section 10.09 Certificates Nonassessable and Fully Paid....................
Section 10.10 Assignment; Sales; Advance Facilities........................
Section 10.11 Rule of Construction.........................................
Section 10.12 Waiver of Jury Trial.........................................
Section 10.13 Third Party Rights...........................................
Section 10.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness..............................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties of the Custodian
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificate
Exhibit C-1 Form of Class R-I Certificate
Exhibit C-2 Form of Class R-II Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Custodian
Exhibit F Form of Document Certification and Exception Report of Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Contents of Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Trustee's Certification to be provided to Depositor
Exhibit N Form of Servicer's Certification to be provided to Depositor
Exhibit O Barclays Representation Agreement
Exhibit P Servicing Criteria to be Addressed in Assessment of Compliance
Exhibit Q Additional Form 10-D Disclosure
Exhibit R Additional Form 10-K Disclosure
Exhibit S Form 8-K Disclosure Information
Exhibit T Interest Rate Swap Agreement
Exhibit U Form of Additional Disclosure Notification
Exhibit V Form of Trustee's Limited Power of Attorney
Exhibit W Form of Irrevocable Instruction
Exhibit X Form of Servicing Fee Certificate
Exhibit Y EquiFirst Agreements
THIS POOLING AND SERVICING AGREEMENT, dated as of June 1, 2007,
among BCAP LLC, a Delaware limited liability company, as depositor (the
"Depositor"), BARCLAYS CAPITAL REAL ESTATE INC. D/B/A HOMEQ SERVICING, a
Delaware corporation, as servicer (the "Servicer"), DEUTSCHE BANK NATIONAL TRUST
COMPANY, a national banking association, as trustee (the "Trustee"), and THE
BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association, as
custodian (the "Custodian").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that four segregated asset pools within the
Trust Fund (exclusive of (i) the Prepayment Charges, (ii) the Interest Rate Swap
Agreement, (iii) the Supplemental Interest Account, (iv) the Excess Reserve Fund
Account, and (v) the right of the LIBOR Certificates to receive Basis Risk Carry
Forward Amounts and, without duplication, Upper Tier Carry Forward Amounts,
subject to the obligation to pay Class IO Shortfalls) be treated for federal
income tax purposes as comprising four REMICs (each, a "Trust REMIC" or, in the
alternative, Pooling Tier REMIC-1, Pooling Tier REMIC-2, the Lower Tier REMIC
and the Upper Tier REMIC, respectively). Each Class of Certificates (other than
the Class P Certificates and the Residual Certificates), other than the right of
each Class of LIBOR Certificates to receive Basis Risk Carry Forward Amounts
and, without duplication, Upper Tier Carry Forward Amounts and the obligation to
pay Class IO Shortfalls and the right of the Class X Certificates to receive
payments from the Interest Rate Swap Agreement and the right to receive Class IO
Shortfalls, represents ownership of a regular interest in the Upper Tier REMIC
for purposes of the REMIC Provisions. The Class R-I Certificates represent
ownership of the sole class of residual interest in Pooling Tier REMIC-1 for
purposes of the REMIC Provisions. The Class R-II Certificates represent
ownership of the sole class of residual interest in each of Pooling Tier
REMIC-2, the Lower Tier REMIC and the Upper Tier REMIC for purposes of the REMIC
Provisions. The Startup Day for each Trust REMIC is the Closing Date. The latest
possible maturity date for each regular interest is the latest date referenced
in Section 2.06.
The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier REMIC Regular Interests, set out below. The Lower Tier
REMIC shall hold as assets the several classes of uncertificated Pooling Tier
REMIC-2 Regular Interests. Pooling Tier REMIC-2 shall hold as assets the several
classes of uncertificated Pooling Tier REMIC-1 Regular Interests. Pooling Tier
REMIC-1 shall hold as assets the assets of the Trust Fund (exclusive of (i) the
Prepayment Charges, (ii) the Interest Rate Swap Agreement, (iii) the
Supplemental Interest Account, (iv) the Excess Reserve Fund Account and (v) the
right of the LIBOR Certificates to receive Basis Risk Carry Forward Amounts and,
without duplication, Upper Tier Carry Forward Amounts, subject to the obligation
to pay Class IO Shortfalls).
For federal income tax purposes, the Class P Certificates represent
beneficial ownership of the Prepayment Charges, each Class of LIBOR Certificates
represents beneficial ownership of a regular interest in the Upper Tier REMIC
and the right to receive Basis Risk Carry Forward Amounts and, without
duplication, Upper Tier Carry Forward Amounts, subject to the obligation to pay
Class IO Shortfalls, and the Class X Certificates represent beneficial ownership
of two regular interests in the Upper Tier REMIC, the Excess Reserve Fund
Account, the Supplemental Interest Account, the Interest Rate Swap Agreement and
the right to receive Class IO Shortfalls, which portions of the Trust Fund shall
be treated as a grantor trust.
Pooling Tier REMIC-1
Pooling Tier REMIC-1 shall issue the following interests in Pooling
Tier REMIC-1, and each such interest, other than the Class PT1-R Interest, is
hereby designated as a regular interest in the Pooling Tier REMIC-1. Pooling
Tier REMIC-1 Interests with an "I" in their designation shall relate to Group I
Mortgage Loans and Pooling Tier REMIC-1 Interests with a "II" in their
designation shall relate to the Group II Mortgage Loans. Pooling Tier REMIC-1
shall also issue the Class R-I Certificates. The Class PT1-R Interest is hereby
designated as the sole class of residual interest in Pooling Tier REMIC-1.
Initial Pooling Tier
Pooling Tier Pooling Tier REMIC-1 REMIC-1
REMIC-1 Interest Interest Rate Principal Amount
---------------- -------------------- --------------------
Class PT1-I-1 (1) $ 24,642,891.39
Class PT1-I-2A (2) $ 3,031,302.33
Class PT1-I-2B (3) $ 3,031,302.33
Class PT1-I-3A (2) $ 4,970,541.88
Class PT1-I-3B (3) $ 4,970,541.88
Class PT1-I-4A (2) $ 5,108,636.04
Class PT1-I-4B (3) $ 5,108,636.04
Class PT1-I-5A (2) $ 5,233,109.26
Class PT1-I-5B (3) $ 5,233,109.26
Class PT1-I-6A (2) $ 5,343,576.78
Class PT1-I-6B (3) $ 5,343,576.78
Class PT1-I-7A (2) $ 5,439,717.73
Class PT1-I-7B (3) $ 5,439,717.73
Class PT1-I-8A (2) $ 5,587,962.86
Class PT1-I-8B (3) $ 5,587,962.86
Class PT1-I-9A (2) $ 5,652,478.63
Class PT1-I-9B (3) $ 5,652,478.63
Class PT1-I-10A (2) $ 5,701,969.75
Class PT1-I-10B (3) $ 5,701,969.75
Class PT1-I-11A (2) $ 5,735,890.64
Class PT1-I-11B (3) $ 5,735,890.64
Class PT1-I-12A (2) $ 5,738,095.60
Class PT1-I-12B (3) $ 5,738,095.60
Class PT1-I-13A (2) $ 5,525,314.29
Class PT1-I-13B (3) $ 5,525,314.29
Class PT1-I-14A (2) $ 5,306,025.69
Class PT1-I-14B (3) $ 5,306,025.69
Class PT1-I-15A (2) $ 5,095,651.34
Class PT1-I-15B (3) $ 5,095,651.34
Class PT1-I-16A (2) $ 4,893,814.16
Class PT1-I-16B (3) $ 4,893,814.16
Class PT1-I-17A (2) $ 4,700,163.57
Class PT1-I-17B (3) $ 4,700,163.57
Class PT1-I-18A (2) $ 4,514,354.65
Class PT1-I-18B (3) $ 4,514,354.65
Class PT1-I-19A (2) $ 4,348,879.19
Class PT1-I-19B (3) $ 4,348,879.19
Class PT1-I-20A (2) $ 4,336,364.57
Class PT1-I-20B (3) $ 4,336,364.57
Class PT1-I-21A (2) $ 7,906,288.89
Class PT1-I-21B (3) $ 7,906,288.89
Class PT1-I-22A (2) $ 7,433,305.38
Class PT1-I-22B (3) $ 7,433,305.38
Class PT1-I-23A (2) $ 6,797,962.81
Class PT1-I-23B (3) $ 6,797,962.81
Class PT1-I-24A (2) $ 6,218,896.67
Class PT1-I-24B (3) $ 6,218,896.67
Class PT1-I-25A (2) $ 5,687,943.82
Class PT1-I-25B (3) $ 5,687,943.82
Class PT1-I-26A (2) $ 4,998,318.69
Class PT1-I-26B (3) $ 4,998,318.69
Class PT1-I-27A (2) $ 4,407,943.39
Class PT1-I-27B (3) $ 4,407,943.39
Class PT1-I-28A (2) $ 3,910,129.55
Class PT1-I-28B (3) $ 3,910,129.55
Class PT1-I-29A (2) $ 3,487,487.83
Class PT1-I-29B (3) $ 3,487,487.83
Class PT1-I-30A (2) $ 3,126,055.83
Class PT1-I-30B (3) $ 3,126,055.83
Class PT1-I-31A (2) $ 2,814,938.18
Class PT1-I-31B (3) $ 2,814,938.18
Class PT1-I-32A (2) $ 2,545,477.75
Class PT1-I-32B (3) $ 2,545,477.75
Class PT1-I-33A (2) $ 2,311,281.27
Class PT1-I-33B (3) $ 2,311,281.27
Class PT1-I-34A (2) $ 2,107,673.50
Class PT1-I-34B (3) $ 2,107,673.50
Class PT1-I-35A (2) $ 1,928,823.42
Class PT1-I-35B (3) $ 1,928,823.42
Class PT1-I-36A (2) $ 1,770,787.47
Class PT1-I-36B (3) $ 1,770,787.47
Class PT1-I-37A (2) $ 1,631,199.33
Class PT1-I-37B (3) $ 1,631,199.33
Class PT1-I-38A (2) $ 1,557,592.79
Class PT1-I-38B (3) $ 1,557,592.79
Class PT1-I-39A (2) $ 1,490,471.00
Class PT1-I-39B (3) $ 1,490,471.00
Class PT1-I-40A (2) $ 1,426,167.81
Class PT1-I-40B (3) $ 1,426,167.81
Class PT1-I-41A (2) $ 1,364,792.85
Class PT1-I-41B (3) $ 1,364,792.85
Class PT1-I-42A (2) $ 1,306,096.08
Class PT1-I-42B (3) $ 1,306,096.08
Class PT1-I-43A (2) $ 1,249,958.82
Class PT1-I-43B (3) $ 1,249,958.82
Class PT1-I-44A (2) $ 1,142,918.04
Class PT1-I-44B (3) $ 1,142,918.04
Class PT1-I-45A (2) $ 1,093,918.13
Class PT1-I-45B (3) $ 1,093,918.13
Class PT1-I-46A (2) $ 1,047,073.14
Class PT1-I-46B (3) $ 1,047,073.14
Class PT1-I-47A (2) $ 1,002,236.49
Class PT1-I-47B (3) $ 1,002,236.49
Class PT1-I-48A (2) $ 959,348.65
Class PT1-I-48B (3) $ 959,348.65
Class PT1-I-49A (2) $ 918,322.28
Class PT1-I-49B (3) $ 918,322.28
Class PT1-I-50A (2) $ 879,075.38
Class PT1-I-50B (3) $ 879,075.38
Class PT1-I-51A (2) $ 841,529.51
Class PT1-I-51B (3) $ 841,529.51
Class PT1-I-52A (2) $ 805,558.22
Class PT1-I-52B (3) $ 805,558.22
Class PT1-I-53A (2) $ 771,199.89
Class PT1-I-53B (3) $ 771,199.89
Class PT1-I-54A (2) $ 738,327.84
Class PT1-I-54B (3) $ 738,327.84
Class PT1-I-55A (2) $ 706,877.12
Class PT1-I-55B (3) $ 706,877.12
Class PT1-I-56A (2) $ 636,774.49
Class PT1-I-56B (3) $ 636,774.49
Class PT1-I-57A (2) $ 609,791.90
Class PT1-I-57B (3) $ 609,791.90
Class PT1-I-58A (2) $ 12,452,486.36
Class PT1-I-58B (3) $ 12,452,486.36
Class PT1-II-1 (4) $ 32,756,050.57
Class PT1-II-2A (5) $ 4,029,295.54
Class PT1-II-2B (6) $ 4,029,295.54
Class PT1-II-3A (5) $ 6,606,989.36
Class PT1-II-3B (6) $ 6,606,989.36
Class PT1-II-4A (5) $ 6,790,548.15
Class PT1-II-4B (6) $ 6,790,548.15
Class PT1-II-5A (5) $ 6,956,001.59
Class PT1-II-5B (6) $ 6,956,001.59
Class PT1-II-6A (5) $ 7,102,838.24
Class PT1-II-6B (6) $ 7,102,838.24
Class PT1-II-7A (5) $ 7,230,631.59
Class PT1-II-7B (6) $ 7,230,631.59
Class PT1-II-8A (5) $ 7,427,683.34
Class PT1-II-8B (6) $ 7,427,683.34
Class PT1-II-9A (5) $ 7,513,439.59
Class PT1-II-9B (6) $ 7,513,439.59
Class PT1-II-10A (5) $ 7,579,224.64
Class PT1-II-10B (6) $ 7,579,224.64
Class PT1-II-11A (5) $ 7,624,313.27
Class PT1-II-11B (6) $ 7,624,313.27
Class PT1-II-12A (5) $ 7,627,244.18
Class PT1-II-12B (6) $ 7,627,244.18
Class PT1-II-13A (5) $ 7,344,409.03
Class PT1-II-13B (6) $ 7,344,409.03
Class PT1-II-14A (5) $ 7,052,924.23
Class PT1-II-14B (6) $ 7,052,924.23
Class PT1-II-15A (5) $ 6,773,288.50
Class PT1-II-15B (6) $ 6,773,288.50
Class PT1-II-16A (5) $ 6,505,000.64
Class PT1-II-16B (6) $ 6,505,000.64
Class PT1-II-17A (5) $ 6,247,594.61
Class PT1-II-17B (6) $ 6,247,594.61
Class PT1-II-18A (5) $ 6,000,611.97
Class PT1-II-18B (6) $ 6,000,611.97
Class PT1-II-19A (5) $ 5,780,657.16
Class PT1-II-19B (6) $ 5,780,657.16
Class PT1-II-20A (5) $ 5,764,022.36
Class PT1-II-20B (6) $ 5,764,022.36
Class PT1-II-21A (5) $ 10,509,269.98
Class PT1-II-21B (6) $ 10,509,269.98
Class PT1-II-22A (5) $ 9,880,566.50
Class PT1-II-22B (6) $ 9,880,566.50
Class PT1-II-23A (5) $ 9,036,050.60
Class PT1-II-23B (6) $ 9,036,050.60
Class PT1-II-24A (5) $ 8,266,338.99
Class PT1-II-24B (6) $ 8,266,338.99
Class PT1-II-25A (5) $ 7,560,580.96
Class PT1-II-25B (6) $ 7,560,580.96
Class PT1-II-26A (5) $ 6,643,911.10
Class PT1-II-26B (6) $ 6,643,911.10
Class PT1-II-27A (5) $ 5,859,167.02
Class PT1-II-27B (6) $ 5,859,167.02
Class PT1-II-28A (5) $ 5,197,458.34
Class PT1-II-28B (6) $ 5,197,458.34
Class PT1-II-29A (5) $ 4,635,670.62
Class PT1-II-29B (6) $ 4,635,670.62
Class PT1-II-30A (5) $ 4,155,244.66
Class PT1-II-30B (6) $ 4,155,244.66
Class PT1-II-31A (5) $ 3,741,698.00
Class PT1-II-31B (6) $ 3,741,698.00
Class PT1-II-32A (5) $ 3,383,523.33
Class PT1-II-32B (6) $ 3,383,523.33
Class PT1-II-33A (5) $ 3,072,222.53
Class PT1-II-33B (6) $ 3,072,222.53
Class PT1-II-34A (5) $ 2,801,581.14
Class PT1-II-34B (6) $ 2,801,581.14
Class PT1-II-35A (5) $ 2,563,848.39
Class PT1-II-35B (6) $ 2,563,848.39
Class PT1-II-36A (5) $ 2,353,782.39
Class PT1-II-36B (6) $ 2,353,782.39
Class PT1-II-37A (5) $ 2,168,237.77
Class PT1-II-37B (6) $ 2,168,237.77
Class PT1-II-38A (5) $ 2,070,397.80
Class PT1-II-38B (6) $ 2,070,397.80
Class PT1-II-39A (5) $ 1,981,177.56
Class PT1-II-39B (6) $ 1,981,177.56
Class PT1-II-40A (5) $ 1,895,703.88
Class PT1-II-40B (6) $ 1,895,703.88
Class PT1-II-41A (5) $ 1,814,122.50
Class PT1-II-41B (6) $ 1,814,122.50
Class PT1-II-42A (5) $ 1,736,101.04
Class PT1-II-42B (6) $ 1,736,101.04
Class PT1-II-43A (5) $ 1,661,481.75
Class PT1-II-43B (6) $ 1,661,481.75
Class PT1-II-44A (5) $ 1,519,200.02
Class PT1-II-44B (6) $ 1,519,200.02
Class PT1-II-45A (5) $ 1,454,067.91
Class PT1-II-45B (6) $ 1,454,067.91
Class PT1-II-46A (5) $ 1,391,800.18
Class PT1-II-46B (6) $ 1,391,800.18
Class PT1-II-47A (5) $ 1,332,201.99
Class PT1-II-47B (6) $ 1,332,201.99
Class PT1-II-48A (5) $ 1,275,194.23
Class PT1-II-48B (6) $ 1,275,194.23
Class PT1-II-49A (5) $ 1,220,660.78
Class PT1-II-49B (6) $ 1,220,660.78
Class PT1-II-50A (5) $ 1,168,492.66
Class PT1-II-50B (6) $ 1,168,492.66
Class PT1-II-51A (5) $ 1,118,585.59
Class PT1-II-51B (6) $ 1,118,585.59
Class PT1-II-52A (5) $ 1,070,771.50
Class PT1-II-52B (6) $ 1,070,771.50
Class PT1-II-53A (5) $ 1,025,101.40
Class PT1-II-53B (6) $ 1,025,101.40
Class PT1-II-54A (5) $ 981,406.92
Class PT1-II-54B (6) $ 981,406.92
Class PT1-II-55A (5) $ 939,601.70
Class PT1-II-55B (6) $ 939,601.70
Class PT1-II-56A (5) $ 846,419.23
Class PT1-II-56B (6) $ 846,419.23
Class PT1-II-57A (5) $ 810,553.19
Class PT1-II-57B (6) $ 810,553.19
Class PT1-II-58A (5) $ 16,552,208.37
Class PT1-II-58B (6) $ 16,552,208.37
Class PT1-R (7) (7)
------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-1 Interest Rate") equal to the Pooling Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling Tier REMIC-1 Loan Group I WAC Rate, subject to
a maximum rate of the applicable Fixed Swap Rate.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling Tier REMIC-1 Loan
Group I WAC Rate over (B) the applicable Fixed Swap Rate.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC- Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-1 Interest Rate") equal to the Pooling Tier
REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling Tier REMIC-1 Loan Group II WAC Rate, subject to
a maximum rate of the applicable Fixed Swap Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling Tier REMIC-1 Loan
Group II WAC Rate over (B) the applicable Fixed Swap Rate.
(7) The Class PT1-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the Trustee shall first pay from the
Trust Fund and charge as an expense of Pooling Tier REMIC-1 all expenses of the
Trust for such Distribution Date. Such expense, other than Servicing Fees and
Custodian Fees, shall be allocated in the same manner as Realized Losses.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be deemed to be distributed to the Pooling Tier REMIC-1 Regular Interests at the
rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the
outstanding Pooling Tier REMIC-1 Regular Interest with the lowest numerical
denomination until the Pooling Tier REMIC-1 Principal Amount of such interest or
interests, as the case may be, is reduced to zero, provided that, with respect
to Pooling Tier REMIC-1 Regular Interests relating to the Group I Mortgage Loans
with the same numerical denomination, such Realized Losses and payments of
principal shall be allocated pro rata between such Pooling Tier REMIC-1 Regular
Interests until the Pooling Tier REMIC-1 Principal Amount of such interest is
reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the
outstanding Pooling Tier REMIC-1 Regular Interest relating to the Group II
Mortgage Loans with the lowest numerical denomination until the Pooling Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling Tier REMIC-1 Regular Interests relating to the Group II
Mortgage Loans with the same numerical denomination, such Realized Losses and
payments of principal shall be allocated pro rata between such Pooling Tier
REMIC-1 Regular Interests until the Pooling Tier REMIC-1 Principal Amount of
such interests is reduced to zero.
Pooling Tier REMIC-2
Pooling Tier REMIC-2 shall issue the following interests in Pooling
Tier REMIC-2, and each such interest, other than the Class PT2-R Interest, is
hereby designated as a regular interest in Pooling Tier REMIC-2. Pooling Tier
REMIC-2 Interests with an "I" in their designation shall relate to The Group I
Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in their
designation shall relate to The Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in Pooling
Tier REMIC-2 and shall be represented by the Class R-II Certificates.
Corresponding
Pooling Tier Pooling Tier REMIC-2 Corresponding Pooling Tier Corresponding
Pooling Tier REMIC-2 REMIC-2 Initial Principal Pooling Tier REMIC-1 Regular Scheduled Crossover
Interest Interest Rate Amount REMIC-2 IO Interest Interest Distribution Date
-------------------- ------------- -------------------- ------------------- ---------------- -------------------
Class PT2-I-1 (1) $ 24,642,891.39 N/A N/A N/A
Class PT2-I-2A (2) $ 3,031,302.33 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 3,031,302.33 N/A N/A N/A
Class PT2-I-3A (2) $ 4,970,541.88 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 4,970,541.88 N/A N/A N/A
Class PT2-I-4A (2) $ 5,108,636.04 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 5,108,636.04 N/A N/A N/A
Class PT2-I-5A (2) $ 5,233,109.26 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 5,233,109.26 N/A N/A N/A
Class PT2-I-6A (2) $ 5,343,576.78 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 5,343,576.78 N/A N/A N/A
Class PT2-I-7A (2) $ 5,439,717.73 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 5,439,717.73 N/A N/A N/A
Class PT2-I-8A (2) $ 5,587,962.86 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 5,587,962.86 N/A N/A N/A
Class PT2-I-9A (2) $ 5,652,478.63 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 5,652,478.63 N/A N/A N/A
Class PT2-I-10A (2) $ 5,701,969.75 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 5,701,969.75 N/A N/A N/A
Class PT2-I-11A (2) $ 5,735,890.64 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 5,735,890.64 N/A N/A N/A
Class PT2-I-12A (2) $ 5,738,095.60 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 5,738,095.60 N/A N/A N/A
Class PT2-I-13A (2) $ 5,525,314.29 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 5,525,314.29 N/A N/A N/A
Class PT2-I-14A (2) $ 5,306,025.69 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 5,306,025.69 N/A N/A N/A
Class PT2-I-15A (2) $ 5,095,651.34 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 5,095,651.34 N/A N/A N/A
Class PT2-I-16A (2) $ 4,893,814.16 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 4,893,814.16 N/A N/A N/A
Class PT2-I-17A (2) $ 4,700,163.57 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 4,700,163.57 N/A N/A N/A
Class PT2-I-18A (2) $ 4,514,354.65 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 4,514,354.65 N/A N/A N/A
Class PT2-I-19A (2) $ 4,348,879.19 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 4,348,879.19 N/A N/A N/A
Class PT2-I-20A (2) $ 4,336,364.57 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 4,336,364.57 N/A N/A N/A
Class PT2-I-21A (2) $ 7,906,288.89 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 7,906,288.89 N/A N/A N/A
Class PT2-I-22A (2) $ 7,433,305.38 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 7,433,305.38 N/A N/A N/A
Class PT2-I-23A (2) $ 6,797,962.81 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 6,797,962.81 N/A N/A N/A
Class PT2-I-24A (2) $ 6,218,896.67 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 6,218,896.67 N/A N/A N/A
Class PT2-I-25A (2) $ 5,687,943.82 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 5,687,943.82 N/A N/A N/A
Class PT2-I-26A (2) $ 4,998,318.69 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 4,998,318.69 N/A N/A N/A
Class PT2-I-27A (2) $ 4,407,943.39 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 4,407,943.39 N/A N/A N/A
Class PT2-I-28A (2) $ 3,910,129.55 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 3,910,129.55 N/A N/A N/A
Class PT2-I-29A (2) $ 3,487,487.83 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 3,487,487.83 N/A N/A N/A
Class PT2-I-30A (2) $ 3,126,055.83 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 3,126,055.83 N/A N/A N/A
Class PT2-I-31A (2) $ 2,814,938.18 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 2,814,938.18 N/A N/A N/A
Class PT2-I-32A (2) $ 2,545,477.75 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 2,545,477.75 N/A N/A N/A
Class PT2-I-33A (2) $ 2,311,281.27 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 2,311,281.27 N/A N/A N/A
Class PT2-I-34A (2) $ 2,107,673.50 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 2,107,673.50 N/A N/A N/A
Class PT2-I-35A (2) $ 1,928,823.42 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 1,928,823.42 N/A N/A N/A
Class PT2-I-36A (2) $ 1,770,787.47 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 1,770,787.47 N/A N/A N/A
Class PT2-I-37A (2) $ 1,631,199.33 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 1,631,199.33 N/A N/A N/A
Class PT2-I-38A (2) $ 1,557,592.79 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 1,557,592.79 N/A N/A N/A
Class PT2-I-39A (2) $ 1,490,471.00 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 1,490,471.00 N/A N/A N/A
Class PT2-I-40A (2) $ 1,426,167.81 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 1,426,167.81 N/A N/A N/A
Class PT2-I-41A (2) $ 1,364,792.85 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 1,364,792.85 N/A N/A N/A
Class PT2-I-42A (2) $ 1,306,096.08 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 1,306,096.08 N/A N/A N/A
Class PT2-I-43A (2) $ 1,249,958.82 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 1,249,958.82 N/A N/A N/A
Class PT2-I-44A (2) $ 1,142,918.04 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 1,142,918.04 N/A N/A N/A
Class PT2-I-45A (2) $ 1,093,918.13 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 1,093,918.13 N/A N/A N/A
Class PT2-I-46A (2) $ 1,047,073.14 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 1,047,073.14 N/A N/A N/A
Class PT2-I-47A (2) $ 1,002,236.49 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 1,002,236.49 N/A N/A N/A
Class PT2-I-48A (2) $ 959,348.65 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 959,348.65 N/A N/A N/A
Class PT2-I-49A (2) $ 918,322.28 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 918,322.28 N/A N/A N/A
Class PT2-I-50A (2) $ 879,075.38 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 879,075.38 N/A N/A N/A
Class PT2-I-51A (2) $ 841,529.51 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 841,529.51 N/A N/A N/A
Class PT2-I-52A (2) $ 805,558.22 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 805,558.22 N/A N/A N/A
Class PT2-I-53A (2) $ 771,199.89 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 771,199.89 N/A N/A N/A
Class PT2-I-54A (2) $ 738,327.84 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 738,327.84 N/A N/A N/A
Class PT2-I-55A (2) $ 706,877.12 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 706,877.12 N/A N/A N/A
Class PT2-I-56A (2) $ 636,774.49 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56B (3) $ 636,774.49 N/A N/A N/A
Class PT2-I-57A (2) $ 609,791.90 Class PT2-I-IO-57 N/A N/A
Class PT2-I-57B (3) $ 609,791.90 N/A N/A N/A
Class PT2-I-58A (2) $ 12,452,486.36 Class PT2-I-IO-58 N/A N/A
Class PT2-I-58B (3) $ 12,452,486.36 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A July 2007
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A August 2007
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A September 2007
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A October 2007
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A November 2007
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A December 2007
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A January 2008
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A February 2008
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A March 2008
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A April 2008
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A May 2008
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A June 2008
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A July 2008
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A August 2008
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A September 2008
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A October 2008
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A November 2008
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A December 2008
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A January 2009
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A February 2009
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A March 2009
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A April 2009
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A May 2009
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A June 2009
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A July 2009
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A August 2009
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A September 2009
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A October 2009
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A November 2009
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A December 2009
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A January 2010
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A February 2010
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A March 2010
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A April 2010
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A May 2010
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A June 2010
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A July 2010
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A August 2010
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A September 2010
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A October 2010
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A November 2010
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A December 2010
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A January 2011
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A February 2011
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A March 2011
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A April 2011
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A May 2011
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A June 2011
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A July 2011
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A August 2011
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A September 2011
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A October 20011
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A November 2011
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A December 2011
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A January 2012
Class PT2-I-IO-57 (4) (4) N/A Class PT1-I-57A February 2012
Class PT2-I-IO-58 (4) (4) N/A Class PT1-I-58A March 2012
Class PT2-I-IO-59 (4) (4) N/A Class PT1-I-59A April 2012
Class PT2-II-1 (5) $ 32,756,050.57 N/A N/A N/A
Class PT2-II-2A (6) $ 4,029,295.54 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 4,029,295.54 N/A N/A N/A
Class PT2-II-3A (6) $ 6,606,989.36 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 6,606,989.36 N/A N/A N/A
Class PT2-II-4A (6) $ 6,790,548.15 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 6,790,548.15 N/A N/A N/A
Class PT2-II-5A (6) $ 6,956,001.59 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 6,956,001.59 N/A N/A N/A
Class PT2-II-6A (6) $ 7,102,838.24 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 7,102,838.24 N/A N/A N/A
Class PT2-II-7A (6) $ 7,230,631.59 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 7,230,631.59 N/A N/A N/A
Class PT2-II-8A (6) $ 7,427,683.34 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 7,427,683.34 N/A N/A N/A
Class PT2-II-9A (6) $ 7,513,439.59 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 7,513,439.59 N/A N/A N/A
Class PT2-II-10A (6) $ 7,579,224.64 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 7,579,224.64 N/A N/A N/A
Class PT2-II-11A (6) $ 7,624,313.27 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 7,624,313.27 N/A N/A N/A
Class PT2-II-12A (6) $ 7,627,244.18 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 7,627,244.18 N/A N/A N/A
Class PT2-II-13A (6) $ 7,344,409.03 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 7,344,409.03 N/A N/A N/A
Class PT2-II-14A (6) $ 7,052,924.23 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 7,052,924.23 N/A N/A N/A
Class PT2-II-15A (6) $ 6,773,288.50 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 6,773,288.50 N/A N/A N/A
Class PT2-II-16A (6) $ 6,505,000.64 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 6,505,000.64 N/A N/A N/A
Class PT2-II-17A (6) $ 6,247,594.61 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 6,247,594.61 N/A N/A N/A
Class PT2-II-18A (6) $ 6,000,611.97 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 6,000,611.97 N/A N/A N/A
Class PT2-II-19A (6) $ 5,780,657.16 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 5,780,657.16 N/A N/A N/A
Class PT2-II-20A (6) $ 5,764,022.36 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 5,764,022.36 N/A N/A N/A
Class PT2-II-21A (6) $ 10,509,269.98 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 10,509,269.98 N/A N/A N/A
Class PT2-II-22A (6) $ 9,880,566.50 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 9,880,566.50 N/A N/A N/A
Class PT2-II-23A (6) $ 9,036,050.60 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 9,036,050.60 N/A N/A N/A
Class PT2-II-24A (6) $ 8,266,338.99 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 8,266,338.99 N/A N/A N/A
Class PT2-II-25A (6) $ 7,560,580.96 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 7,560,580.96 N/A N/A N/A
Class PT2-II-26A (6) $ 6,643,911.10 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 6,643,911.10 N/A N/A N/A
Class PT2-II-27A (6) $ 5,859,167.02 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 5,859,167.02 N/A N/A N/A
Class PT2-II-28A (6) $ 5,197,458.34 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 5,197,458.34 N/A N/A N/A
Class PT2-II-29A (6) $ 4,635,670.62 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 4,635,670.62 N/A N/A N/A
Class PT2-II-30A (6) $ 4,155,244.66 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 4,155,244.66 N/A N/A N/A
Class PT2-II-31A (6) $ 3,741,698.00 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 3,741,698.00 N/A N/A N/A
Class PT2-II-32A (6) $ 3,383,523.33 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 3,383,523.33 N/A N/A N/A
Class PT2-II-33A (6) $ 3,072,222.53 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 3,072,222.53 N/A N/A N/A
Class PT2-II-34A (6) $ 2,801,581.14 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 2,801,581.14 N/A N/A N/A
Class PT2-II-35A (6) $ 2,563,848.39 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 2,563,848.39 N/A N/A N/A
Class PT2-II-36A (6) $ 2,353,782.39 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 2,353,782.39 N/A N/A N/A
Class PT2-II-37A (6) $ 2,168,237.77 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 2,168,237.77 N/A N/A N/A
Class PT2-II-38A (6) $ 2,070,397.80 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 2,070,397.80 N/A N/A N/A
Class PT2-II-39A (6) $ 1,981,177.56 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 1,981,177.56 N/A N/A N/A
Class PT2-II-40A (6) $ 1,895,703.88 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 1,895,703.88 N/A N/A N/A
Class PT2-II-41A (6) $ 1,814,122.50 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 1,814,122.50 N/A N/A N/A
Class PT2-II-42A (6) $ 1,736,101.04 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 1,736,101.04 N/A N/A N/A
Class PT2-II-43A (6) $ 1,661,481.75 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 1,661,481.75 N/A N/A N/A
Class PT2-II-44A (6) $ 1,519,200.02 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 1,519,200.02 N/A N/A N/A
Class PT2-II-45A (6) $ 1,454,067.91 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 1,454,067.91 N/A N/A N/A
Class PT2-II-46A (6) $ 1,391,800.18 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 1,391,800.18 N/A N/A N/A
Class PT2-II-47A (6) $ 1,332,201.99 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 1,332,201.99 N/A N/A N/A
Class PT2-II-48A (6) $ 1,275,194.23 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 1,275,194.23 N/A N/A N/A
Class PT2-II-49A (6) $ 1,220,660.78 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 1,220,660.78 N/A N/A N/A
Class PT2-II-50A (6) $ 1,168,492.66 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 1,168,492.66 N/A N/A N/A
Class PT2-II-51A (6) $ 1,118,585.59 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 1,118,585.59 N/A N/A N/A
Class PT2-II-52A (6) $ 1,070,771.50 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 1,070,771.50 N/A N/A N/A
Class PT2-II-53A (6) $ 1,025,101.40 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 1,025,101.40 N/A N/A N/A
Class PT2-II-54A (6) $ 981,406.92 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 981,406.92 N/A N/A N/A
Class PT2-II-55A (6) $ 939,601.70 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 939,601.70 N/A N/A N/A
Class PT2-II-56A (6) $ 846,419.23 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $ 846,419.23 N/A N/A N/A
Class PT2-II-57A (6) $ 810,553.19 Class PT2-II-IO-57 N/A N/A
Class PT2-II-57B (7) $ 810,553.19 N/A N/A N/A
Class PT2-II-58A (6) $ 16,552,208.37 Class PT2-II-IO-58 N/A N/A
Class PT2-II-58B (7) $ 16,552,208.37 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A July 2007
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A August 2007
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A September 2007
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A October 2007
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A November 2007
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A December 2007
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A January 2008
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A February 2008
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A March 2008
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A April 2008
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A May 2008
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A June 2008
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A July 2008
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A August 2008
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A September 2008
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A October 2008
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A November 2008
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A December 2008
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A January 2009
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A February 2009
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A March 2009
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A April 2009
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A May 2009
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A June 2009
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A July 2009
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A August 2009
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A September 2009
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A October 2009
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A November 2009
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A December 2009
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A January 2010
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A February 2010
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A March 2010
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A April 2010
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A May 2010
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A June 2010
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A July 2010
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A August 2010
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A September 2010
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A October 2010
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A November 2010
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A December 2010
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A January 2011
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A February 2011
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A March 2011
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A April 2011
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A May 2011
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A June 2011
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A July 2011
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A August 2011
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A September 2011
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A October 20011
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A November 2011
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A December 2011
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A January 2012
Class PT2-II-IO-57 (4) (4) N/A Class PT1-II-57A February 2012
Class PT2-II-IO-58 (4) (4) N/A Class PT1-II-58A March 2012
Class PT2-II-IO-59 (4) (4) N/A Class PT1-II-59A April 2012
Class PT2-R (8) (8) N/A N/A N/A
------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-2 Interest Rate") equal to the Pooling Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling Tier REMIC-1 Interest Rates on the Pooling Tier
REMIC-1 Regular Interests relating to the Group I Mortgage Loans and
having an "A" in their class designation, provided that, on each
Distribution Date on which interest is distributable on the Corresponding
Pooling Tier REMIC-2 IO Interest, this Pooling Tier REMIC-2 Regular
Interest shall bear interest at a per annum rate equal to Swap LIBOR
subject to a maximum rate equal to the weighted average of the Pooling
Tier REMIC-1 Interest Rates on the Pooling Tier REMIC-1 Regular Interests
relating to the Group I Mortgage Loans and having an "A" in their class
designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling Tier REMIC-1 Interest Rates on the Pooling Tier
REMIC-1 Regular Interests relating to the Group I Mortgage Loans and
having a "B" in their class designation.
(4) Each Pooling Tier REMIC-2 IO Interest is an interest-only interest and
does not have a principal balance but has a notional balance ("Pooling
Tier REMIC-2 IO Notional Balance") equal to the Pooling Tier REMIC-1
Principal Amount of the Corresponding Pooling Tier REMIC-1 Regular
Interest. From the Closing Date through and including the Corresponding
Actual Crossover Distribution Date, each Pooling Tier REMIC-2 IO Interest
shall be entitled to receive interest that accrues on the Corresponding
Pooling Tier REMIC-1 Regular Interest at a rate equal to the excess, if
any, of (i) the Pooling Tier REMIC-1 Interest Rate for the Corresponding
Pooling Tier REMIC-1 Regular Interest over (ii) Swap LIBOR. After the
related Corresponding Actual Crossover Distribution Date, the Pooling Tier
REMIC-2 IO Interest shall not accrue interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-2 Interest Rate") equal to the Pooling Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling Tier REMIC-1 Interest Rates on the Pooling Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
having an "A" in their class designation, provided that, on each
Distribution Date on which interest is distributable on the Corresponding
Pooling Tier REMIC-2 IO Interest, this Pooling Tier REMIC-2 Regular
Interest shall bear interest at a per annum rate equal to Swap LIBOR
subject to a maximum rate equal to the weighted average of the Pooling
Tier REMIC-1 Interest Rates on the Pooling Tier REMIC-1 Regular Interests
relating to the Group II Mortgage Loans and having an "A" in their class
designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling Tier REMIC-1 Interest Rates on the Pooling Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
having a "B" in their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans for such Distribution Date shall be distributed to the
Pooling Tier REMIC-2 Regular Interests at the Pooling Tier REMIC-2 Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the then
outstanding Pooling Tier REMIC-2 Regular Interests (other than the Pooling Tier
REMIC-2 IO Interests) relating to the Group I Mortgage Loans with the lowest
numerical denomination until the Pooling Tier REMIC-2 Principal Amount of such
interest or interests, as the case may be, is reduced to zero, provided that,
for Pooling Tier REMIC-2 Regular Interests Mortgage Loans with the same
numerical denomination, such Realized Losses, Subsequent Recoveries and payments
of principal shall be allocated pro rata between such Pooling Tier REMIC-2
Regular Interests until the Pooling Tier REMIC-2 Principal Amount of such
interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the
outstanding Pooling Tier REMIC-2 Regular Interests (other than the Pooling Tier
REMIC-2 IO Interests) relating to the Group II Mortgage Loans with the lowest
numerical denomination until the Pooling Tier REMIC-2 Principal Amount of such
interest is reduced to zero, provided that, for Pooling Tier REMIC-2 Regular
Interests relating to the Group II Mortgage Loans with the same numerical
denomination, such Realized Losses, Subsequent Recoveries and payments of
principal shall be allocated pro rata between such Pooling Tier REMIC-2 Regular
Interests until the Pooling Tier REMIC-2 Principal Amount of such interests is
reduced to zero.
Lower Tier REMIC
The Lower Tier REMIC shall issue the following interests, and each
such interest, other than the Class LT-R Interest, is hereby designated as a
regular interest in the Lower Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower Tier REMIC and
shall be represented by the Class R-II Certificates.
Corresponding Upper
Lower Tier REMIC Lower Tier REMIC Initial Lower Tier Tier REMIC Regular
Class Designation Interest Rate REMIC Principal Amount Interest
----------------- ---------------- -------------------------------------- -------------------
Class LT-A-1 (1) 1/4 Corresponding Upper Tier REMIC A-1
Regular Interest initial
Class Principal Balance
Class LT-A-2A (1) 1/4 Corresponding Upper Tier REMIC A-2A
Regular Interest initial
Class Principal Balance
Class LT-A-2B (1) 1/4 Corresponding Upper Tier REMIC A-2B
Regular Interest initial
Class Principal Balance
Class LT-A-2C (1) 1/4 Corresponding Upper Tier REMIC A-2C
Regular Interest initial
Class Principal Balance
Class LT-M-1 (1) 1/4 Corresponding Upper Tier REMIC M-1
Regular Interest initial
Class Principal Balance
Class LT-M-2 (1) 1/4 Corresponding Upper Tier REMIC M-2
Regular Interest initial
Class Principal Balance
Class LT-M-3 (1) 1/4 Corresponding Upper Tier REMIC M-3
Regular Interest initial
Class Principal Balance
Class LT-M-4 (1) 1/4 Corresponding Upper Tier REMIC M-4
Regular Interest initial
Class Principal Balance
Class LT-M-5 (1) 1/4 Corresponding Upper Tier REMIC M-5
Regular Interest initial
Class Principal Balance
Class LT-M-6 (1) 1/4 Corresponding Upper Tier REMIC M-6
Regular Interest initial
Class Principal Balance
Class LT-B-1 (1) 1/4 Corresponding Upper Tier REMIC B-1
Regular Interest initial
Class Principal Balance
Class LT-B-2 (1) 1/4 Corresponding Upper Tier REMIC B-2
Regular Interest initial
Class Principal Balance
Class LT-B-3 (1) 1/4 Corresponding Upper Tier REMIC B-3
Regular Interest initial
Class Principal Balance
Class LT-Accrual (1) 1/4 Pool Stated Principal Balance plus N/A
1/4 Subordinated Amount
Class LT- (1) 0.01% initial Group Subordinated N/A
Group I(SUB) Amount of the Group I Mortgage
Loans (6)
Class LT- (2) 0.01% initial aggregate Stated N/A
Group I Principal Balance of the Group I
Mortgage Loans (6)
Class LT- (1) 0.01% initial Group Subordinated N/A
Group II(SUB) Amount of the Group II Mortgage
Loans (6)
Class LT- (3) 0.01% initial aggregate Stated N/A
Group II Principal Balance of the Group II
Mortgage Loans (6)
Class LT-XX (1) 1/2 initial Pool Stated Principal N/A
Balance, less aggregate Initial Lower
Tier REMIC Principal Amounts of
Class LT-Group I(SUB),
Class LT-Group I,
Class LT-Group II(SUB) and
Class LT-Group II Interests
Class LT-IO (4) (4) N/A
Class LT-R (5) (5) N/A
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the Lower Tier REMIC WAC
Rate.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling Tier REMIC-2 Interest Rates of the Pooling Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling Tier REMIC-2 Interest Rates of the Pooling Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group II Mortgage Loans.
(4) This Lower Tier Regular Interest is an interest-only interest and does not
have a Lower Tier REMIC Principal Amount. On each Distribution Date, this
Lower Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling Tier REMIC-2 IO Interests.
(5) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
(6) For all Distribution Dates, the Lower Tier Principal Amount of these Lower
Tier REMIC Regular Interests shall be rounded to eight decimal places.
Each Lower Tier REMIC Regular Interest is hereby designated as a
regular interest in the Lower Tier REMIC. The Class LT-A-1, Class LT-A-2A, Class
LT-A-2B, Class LT-A-2C, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4,
Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3
Interests are hereby designated the LT Accretion Directed Classes (the "LT
Accretion Directed Classes").
On each Distribution Date, 25% of the increase in the Subordinated
Amount shall be payable as a reduction of the Lower Tier REMIC Principal Amount
of the LT Accretion Directed Classes (each such Class will be reduced by an
amount equal to 25% of any increase in the Subordinated Amount that is
attributable to a reduction in the Class Certificate Balance of its
Corresponding Class) and shall be accrued and added to the Lower Tier REMIC
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower Tier REMIC Principal Amount of the Class LT-Accrual
Interest may not exceed interest accruals for such Distribution Date for the
Class LT-Accrual Interest. All payments of scheduled principal and prepayments
of principal generated by the Mortgage Loans (including, for the first
Distribution Date only, the Closing Date Deposit Amount) and all Subsequent
Recoveries allocable to principal shall be allocated (i) 25% to the Class
LT-Accrual Interest, (ii) 25% to the LT Accretion Directed Classes (such
principal payments and Subsequent Recoveries shall be allocated among such LT
Accretion Directed Classes in an amount equal to 25% of the principal amounts
and Subsequent Recoveries allocated to their respective Corresponding Classes),
until paid in full and (iii) 50% to Class LT-Group I(SUB) Interest, Class
LT-Group I Interest, Class LT-Group II(SUB) Interest, Class LT-Group II Interest
and Class LT-XX Interest (and further allocated among these Lower Tier REMIC
Regular Interests in the manner described in the next sentence). As among the
Class LT-Group I(SUB) Interest, Class LT-Group I Interest, Class LT-Group
II(SUB) Interest, Class LT-Group II Interest and Class LT-XX Interest, all
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans and Subsequent Recoveries referred to in clause (iii) of the
previous sentence shall be allocated (i) first, to the Class LT-Group I(SUB)
Interest, and Class LT-Group II(SUB) Interest, each from the related Loan Group,
so that their respective Lower Tier REMIC Principal Amount (computed to at least
eight decimal places) is equal to 0.01% of the related Group Subordinated Amount
(except that if any such amount is a larger number than in the preceding
distribution period, the least amount of principal shall be distributed to the
Class LT-Group I(SUB) Interest and Class LT-Group II(SUB) Interest, as
applicable, such that the Lower Tier REMIC Subordinated Balance Ratio is
maintained); (ii) second, to the Class LT-Group I Interest and the Class
LT-Group II Interest 0.01% of the principal collected in respect of the related
Loan Group; and (iii) third, any remaining amounts of principal shall be
distributed to the Class LT-XX Interest. Notwithstanding the above, principal
payments and Subsequent Recoveries allocated to the Class X Interest that result
in the reduction in the Subordinated Amount shall be allocated (i) 50% to the
Class LT-Accrual Interest (until paid in full) and (ii) 50% to the Class
LT-Group I(SUB) Interest, the Class LT-Group II(SUB) Interest, the Class
LT-Group I Interest, the Class LT-Group II Interest and the Class LT-XX Interest
(and allocated among these Lower Tier REMIC Regular Interests in a manner
similar to that described in the immediately preceding sentence).
Reductions to Lower Tier REMIC Principal Amounts as a result of
Realized Losses and increases in Lower Tier REMIC Principal Amounts as a result
of Subsequent Recoveries shall be applied so that after all distributions have
been made on each Distribution Date (i) the Lower Tier REMIC Principal Amount of
each LT Accretion Directed Class is equal to 25% of the Class Certificate
Balance of its Corresponding Class, (ii) the Class LT-Accrual Interest is equal
to 25% of the aggregate Stated Principal Balance of the Mortgage Loans plus 25%
of the Subordinated Amount, (iii) the Class LT-Group I(SUB) Interest is equal to
0.01% of the Group Subordinated Amount of the Group I Mortgage Loans, (iv) the
Class LT-Group II(SUB) Interest is equal to 0.01% of the Group Subordinated
Amount of the Group II Mortgage Loans, (v) the Class LT-Group I Interest is
equal to 0.01% of the aggregate Stated Principal Balance of the Group I Mortgage
Loans, (vi) the Class LT-Group II Interest is equal to 0.01% of the aggregate
Stated Principal Balance of the Group II Mortgage Loans and (vii) the remainder
shall be applied to the Class LT-XX Interest.
Upper Tier REMIC
The Upper Tier REMIC shall issue the following classes of Upper Tier
REMIC Regular Interests and each such interest, other than the Class UT-R
Interest, is hereby designated as a regular interest in the Upper Tier REMIC.
The Class UT-R Interest is hereby designated as the sole class of residual
interests in the Upper Tier REMIC and shall be represented by the Class R-II
Certificates.
Upper Tier REMIC Upper Tier REMIC Interest Initial Upper Tier Corresponding
Class Designation Rate REMIC Principal Amount Class of Certificates
----------------- ------------------------- ---------------------- ---------------------
Class A-1 (1) $302,312,000 Class A-1
Class A-2A (2) $249,946,000 Class A-2A
Class A-2B (2) $140,050,000 Class A-2B
Class A-2C (2) $11,846,000 Class A-2C
Class M-1 (3) $57,903,000 Class M-1
Class M-2 (3) $45,635,000 Class M-2
Class M-3 (3) $15,212,000 Class M-3
Class M-4 (3) $21,591,000 Class M-4
Class M-5 (3) $16,193,000 Class M-5
Class M-6 (3) $11,286,000 Class M-6
Class B-1 (3) $20,119,000 Class B-1
Class B-2 (3) $13,740,000 Class B-2
Class B-3 (3) $18,644,000 Class B-3
Class IO (4) (4)
Class X (5) (5) Class X (5)
Class UT-R (6) (6) Class R-II
------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the Group I Loan Cap) for the Corresponding
Class of Certificates and (ii) the Lower Tier Interest Rate for the Class
LT-Group I Interest (the "Upper Tier REMIC Loan Group I Rate").
(2) For any Distribution Date (and the related Interest Accrual Period), this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the Group II Loan Cap) for the Corresponding
Class of Certificates and (ii) the Lower Tier Interest Rate for the Class
LT-Group II Interest (the "Upper Tier REMIC Loan Group II Rate").
(3) For any Distribution Date (and the related Interest Accrual Period), this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the Pool Cap) for the Corresponding Class of
Certificates and (ii) the Upper Tier REMIC Pool Cap Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO
Interest. This interest shall be beneficially owned by the holders of the
Class X Certificates and shall be held as an asset of the Supplemental
Interest Account.
(5) The Class X Interest has an initial principal balance of $56,921,941.96
but it will not accrue interest on such balance but will accrue interest
on a notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the Lower Tier Principal Amounts of the Lower Tier REMIC Regular Interests
(other than the Class LT-IO Interest) as of the first day of the related
Interest Accrual Period. With respect to any Interest Accrual Period, the
Class X Interest shall bear interest at a rate equal to the excess, if
any, of the Lower Tier REMIC WAC Rate over the product of (i) 2 and (ii)
the weighted average Lower Tier REMIC Interest Rate of the Lower Tier
REMIC Regular Interests (other than Class LT-Group I(SUB), Class LT-Group
I, Class LT-Group II(SUB), Class LT-Group II, Class LT-XX and Class LT-IO
Interests), where the Lower Tier REMIC Interest Rate on the Class
LT-Accrual Interest is subject to a cap equal to zero and each
LT-Accretion Directed Class is subject to a cap equal to the Upper Tier
Interest Rate on its Corresponding Class of Upper Tier Regular Interest.
With respect to any Distribution Date, interest that so accrues on the
notional principal balance of the Class X Interest shall be deferred in an
amount equal to any increase in the Subordinated Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of the
Lower Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper Tier REMIC at the rates shown above,
provided that the Class IO Interest shall be entitled to receive interest before
any other interest in the Upper Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
Certificates
Class Certificate
Class Designation Class Pass-Through Rate Balance
----------------- ----------------------- -----------------
Class A-1 (7) (1) $302,312,000
Class A-2A (7) (2) $249,946,000
Class A-2B (7) (2) $140,050,000
Class A-2C (7) (2) $11,846,000
Class M-1 (7) (3) $57,903,000
Class M-2 (7) (3) $45,635,000
Class M-3 (7) (3) $15,212,000
Class M-4 (7) (3) $21,591,000
Class M-5 (7) (3) $16,193,000
Class M-6 (7) (3) $11,286,000
Class B-1 (7) (3) $20,119,000
Class B-2 (7) (3) $13,740,000
Class B-3 (7) (3) $18,644,000
Class X (4) (4)
Class R-I (5) (5)
Class R-II (6) (6)
------------
(1) The Class A-1 Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) LIBOR plus the
applicable Pass-Through Margin and (ii) the Group I Loan Cap.
(2) The Class A-2A, Class A-2B and Class A-2C Certificates will bear interest
during each Interest Accrual Period at a per annum rate equal to the
lesser of (i) LIBOR plus the applicable Pass-Through Margin and (ii) the
Group II Loan Cap.
(3) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Certificates will bear interest during
each Interest Accrual Period at a per annum rate equal to the lesser of
(i) LIBOR plus the applicable Pass-Through Margin and (ii) the Pool Cap.
(4) The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Class IO Interest, the right to receive Class IO
Shortfalls, the Interest Rate Swap Agreement, amounts in the Supplemental
Interest Account, subject to the obligation to pay Net Swap Payments to
the Swap Provider and Basis Risk Carry Forward Amounts and, without
duplication, Upper Tier Carry Forward Amounts to the LIBOR Certificates.
For federal income tax purposes, the Trustee will treat a Class X
Certificateholder's obligation to make payments to the LIBOR Certificates
of Basis Risk Carry Forward Amounts from the Excess Reserve Fund Account
and the Supplemental Interest Account and, without duplication, Upper Tier
Carry Forward Amounts from the Supplemental Interest Account and the right
to receive Class IO Shortfalls as payments made or received pursuant to a
notional principal contract between the Class X Certificateholders and the
Holders of each Class of LIBOR Certificates. Such rights of the Class X
Certificateholders and LIBOR Certificateholders shall be treated as held
in a portion of the Trust Fund that is treated as a grantor trust under
subpart E, Part I of subchapter J of the Code. The Class X Certificates do
not have a Class Certificate Balance.
(5) The Class R-I Certificates do not have a principal balance or an interest
rate. The Class R-I Certificates represent the Class PT1-R Interest.
(6) The Class R-II Certificates do not have a principal balance or an interest
rate. The Class R-II Certificates represent ownership of the Class PT2-R
Interest, the Class LT-R Interest and the Class UT-R Interest.
(7) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier REMIC Regular Interest but also the
right to receive payments from the Excess Reserve Fund Account and
Supplemental Interest Account in respect of any Basis Risk Carry Forward
Amounts and, without duplication, from the Supplemental Interest Account
in respect of Upper Tier Carry Forward Amounts. Each of these Certificates
will also be subject to the obligation to pay Class IO Shortfalls as
described in Section 8.13. For federal income tax purposes, any amount
distributed on the LIBOR Certificates on any such Distribution Date in
excess of the amount distributable on their Corresponding Class of Upper
Tier Regular Interest on such Distribution Date shall be treated as having
been paid from the Excess Reserve Fund Account or the Supplemental
Interest Account, as applicable, and any amount distributable on such
Corresponding Class of Upper Tier Regular Interest on such Distribution
Date in excess of the amount distributable on the Corresponding Class of
Certificates on such Distribution Date shall be treated as having been
paid to the Supplemental Interest Account, all pursuant to, and as further
provided in Section 8.13. For federal income tax purposes, the Trustee
will treat a LIBOR Certificateholder's right to receive payments from the
Excess Reserve Fund Account and Supplemental Interest Account subject to
the obligation to pay Class IO Shortfalls as payments made pursuant to a
notional principal contract between the Class X Certificateholders and the
Holders of each Class of LIBOR Certificates.
The minimum denomination for each Class of Certificates, other than
the Class P and Class X Certificates and the Residual Certificates, will be
$25,000 with integral multiples of $1 in excess thereof except that one
Certificate in each Class may be issued in a different amount. The minimum
denomination for each of the Class P and Class X Certificates will be a 1%
Percentage Interest in such Class, and the minimum denomination for the Residual
Certificates shall be 100% Percentage Interest in such Class.
It is expected that each Class of Certificates will receive its
final distribution on or prior to the applicable Final Scheduled Distribution
Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates......... Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇▇ and
Class A-2C Certificates.
Class B Certificates......... Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates......... Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class P and Class X Certificates and the Residual
Certificates; any certificate with a rating below
the lowest applicable permitted rating under the
Underwriters' Exemption.
Group I Class A Certificates. Class A-1 Certificates.
Group II Class A
Certificates............... Class A-2A, Class A-2B and Class A-2C
Certificates.
LIBOR Certificates........... Class A and Subordinated Certificates.
Non-Delay Certificates....... Class A, Class X and Subordinated Certificates.
Offered Certificates......... All Classes of Certificates other than the
Private Certificates.
Physical Certificates........ Class P and Class X Certificates and the
Residual Certificates.
Private Certificates......... Class A-1, Class P and Class X Certificates and
the Residual Certificates.
Rating Agencies.............. Moody's, Fitch, Standard & Poor's and DBRS.
Regular Certificates......... All Classes of Certificates other than the
Class P Certificates and the Residual
Certificates.
Residual Certificates........ Class R-I and Class R-II Certificates.
Subordinated Certificates.... Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account, the Supplemental Interest Account, the Supplemental Float
Account or the Excess Reserve Fund Account. Each Account shall be an Eligible
Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class' share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Additional Disclosure Notification: As defined in Section 8.12(c).
Additional Form 10-D Disclosure: As defined in Section 8.12(b).
Additional Form 10-K Disclosure: As defined in Section 8.12(c).
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.10.
Advance Reimbursement Amounts: As defined in Section 10.10.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 10.10.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans received after the end of the
related Prepayment Period and (ii) all Scheduled Payments on the Mortgage Loans
due after the end of the related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the Depositor.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans, to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicer on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries
received by the Servicer during the related Prepayment Period (in each case, net
of unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all partial or full
prepayments on the Mortgage Loans received by the Servicer during the related
Prepayment Period together with all Compensating Interest paid by the Servicer
in connection therewith (excluding any Prepayment Charges); (iv) all
Substitution Adjustment Amounts with respect to substitutions of Mortgage Loans
that occur on or prior to the related Determination Date; (v) all amounts
received with respect to such Distribution Date as the Repurchase Price in
respect of a Mortgage Loan purchased on or prior to the related Determination
Date; (vi) the proceeds with respect to the termination of the Trust Fund
pursuant to clause (a) of Section 9.01; and (vii) the Closing Date Deposit
Amount; reduced by (y) amounts in reimbursement for Advances previously made
with respect to the Mortgage Loans and other amounts as to which the Servicer,
the Depositor, the Custodian or the Trustee are entitled to be paid or
reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal (not including the payment due on its stated maturity
date) that are based on an amortization schedule that would be insufficient to
fully amortize the principal thereof by the stated maturity date of the Mortgage
Loan.
Barclays Bank PLC: Barclays Bank PLC, a public limited company
registered in England and Wales under number 1026167, and its successors in
interest.
Barclays Representation Agreement: The Representations and
Warranties Agreement, dated as of June 27, 2007, by and between Barclays Bank
PLC and the Depositor, a copy of which is attached hereto as Exhibit O.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Group Loan Cap or the Pool Cap, as applicable, the excess of (i)
the Accrued Certificate Interest Distribution Amount such Class of Certificates
would otherwise be entitled to receive on such Distribution Date had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date, over (ii) the Accrued
Certificate Interest Distribution Amount payable on such Class of Certificates
on such Distribution Date giving effect to (a) with respect to the Group I Class
A Certificates, the Group I Loan Cap, (b) with respect to the Group II Class A
Certificates, the Group II Loan Cap, and (c) with respect to each other Class of
LIBOR Certificates, the Pool Cap, and (B) the portion of any such excess
described in clause (A) for such Class of Certificates from all previous
Distribution Dates not previously paid, together with interest thereon at a rate
equal to the sum of LIBOR and the applicable Pass-Through Margin for such Class
of Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for (x) amounts paid from the Excess Reserve Fund Account to pay any
Basis Risk Carry Forward Amount or (y) any Defaulted Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, California, New Jersey or Delaware, (b) the State in which the Servicer's
servicing operations are located, or (c) any State in which the Trustee's
Corporate Trust Office is located, are authorized or obligated by law or
executive order to be closed.
Certificate: Any one of the Certificates (other than the Servicing
Fee Certificate) executed by the Trustee in substantially the forms attached
hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X or Class P Certificates or the Residual Certificates, at
any date, the maximum dollar amount of principal to which the Holder thereof is
then entitled hereunder, such amount being equal to the Denomination thereof
minus all distributions of principal previously made with respect thereto and in
the case of any Certificates, reduced by any Applied Realized Loss Amounts
allocated to such Class of Certificates pursuant to Section 4.05; provided,
however, that immediately following the Distribution Date on which a Subsequent
Recovery is distributed, the Class Certificate Balances of any Class or Classes
of Certificates that have been previously reduced by Applied Realized Loss
Amounts will be increased, in order of seniority, by the amount of the
Subsequent Recovery distributed on such Distribution Date (up to the amount of
Unpaid Realized Loss Amount for such Class or Classes for such Distribution
Date). The Class P and Class X Certificates and the Residual Certificates have
no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any Affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any Affiliate of the Depositor in
determining which Certificates are registered in the name of an Affiliate of the
Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or the
Group II Class A Certificates, as applicable.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date; and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 43.50% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $4,906,995.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1."
Class A-2 Certificates: Collectively, the Class A-2A, Class A-2B
and Class A-2C Certificates.
Class A-2A Certificates: All Certificates bearing the class
designation of "Class A-2A."
Class A-2B Certificates: All Certificates bearing the class
designation of "Class A-2B."
Class A-2C Certificates: All Certificates bearing the class
designation of "Class A-2C."
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 81.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,906,995.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date) and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 84.60% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,906,995.
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.40% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,906,995.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfall: As defined in Section 8.13. For the avoidance of
doubt, the Class IO Shortfall for any Distribution Date shall equal the amount
payable to the Class X Certificates in respect of amounts due to the Swap
Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to
reduction for any Basis Risk Payments or Defaulted Swap Termination Payments) or
Class IO Interest on such Distribution Date, all as further provided in Section
8.13.
Class LT-R Interest: The sole class of "residual interest" in the
Lower Tier REMIC evidenced by the Class R-II Certificates.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date) and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to that Distribution Date over (ii) the lesser of (A)
approximately 55.30% of the aggregate Stated Principal Balance of the Mortgage
Loans for that Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for that Distribution Date over
$4,906,995.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for that Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for that Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to that Distribution Date over (ii) the
lesser of (A) approximately 64.60% of the aggregate Stated Principal Balance of
the Mortgage Loans for that Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for that Distribution
Date over $4,906,995.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for that Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for that Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for that Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) approximately 67.70% of the
aggregate Stated Principal Balance of the Mortgage Loans for that Distribution
Date and (B) the excess, if any, of the aggregate Stated Principal Balance of
the Mortgage Loans for that Distribution Date over $4,906,995.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the aggregate Class Certificate Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount for such Distribution Date), (C) the Class Certificate
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount for such Distribution Date) and (E) the Class
Certificate Balance of the Class M-4 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 72.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,906,995.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5."
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the aggregate Class Certificate Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount for such Distribution Date), (C) the Class Certificate
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount for such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount for such
Distribution Date) and (F) the Class Certificate Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 75.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,906,995.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6."
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the aggregate Class Certificate Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount for such Distribution Date), (C) the Class Certificate
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount for such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount for such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount for such
Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount for such Distribution Date) and (G) the Class
Certificate Balance of the Class M-6 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 77.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,906,995.
Class P Certificates: All Certificates bearing the class
designation of "Class P."
Class PT1-R Interest: The residual interest in Pooling Tier REMIC-1
as described in the Preliminary Statement and the related footnote thereto.
Class PT2-R Interest: The residual interest in Pooling Tier REMIC-2
as described in the Preliminary Statement and the related footnote thereto.
Class R-I Certificates: All Certificates bearing the class
designation of "Class R-I."
Class R-II Certificates: All Certificates bearing the class
designation of "Class R-II."
Class UT-R Interest: The sole class of "residual interest" in the
Upper Tier REMIC evidenced by the Class R-II Certificate.
Class X Certificates: All Certificates bearing the class
designation of "Class X."
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest (as set forth in the Preliminary Statement) and
not applied as an Extra Principal Distribution Amount on such Distribution Date,
plus any such accrued interest remaining undistributed from prior Distribution
Dates, plus (without duplication) (ii) as a distribution in respect of
principal, any portion of the principal balance of the Class X Interest which is
distributable as a Subordination Reduction Amount, minus (iii) any Defaulted
Swap Termination Payment payable from Available Funds to the Swap Provider and
any amounts paid from the Excess Reserve Fund Account to pay Basis Risk Carry
Forward Amounts.
Class X Interest: The Upper Tier REMIC Regular Interest represented
by the Class X Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Closing Date: June 27, 2007.
Closing Date Deposit Amount: $300 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Collateral: As defined in Section 5.01.
Collection Account: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of any date and as to any
Second-Lien Mortgage Loan, the ratio (expressed as a percentage) of the (a) sum
of (i) the outstanding principal balance of the Second-Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second-Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) (i) in the case
of a purchase, the lesser of (A) the sale price of the Mortgaged Property and
(B) its appraised value at the time of sale, or (ii) in the case of a
refinancing or modification, the appraised value of the Mortgaged Property at
the time of the refinancing or modification.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a)
the amount, if any, by which the Prepayment Interest Shortfall, if any, for such
Distribution Date, with respect to voluntary Principal Prepayments in Full
(excluding any payments made upon liquidation of any Mortgage Loan) exceeds all
Prepayment Interest Excesses for such Distribution Date on the Mortgage Loans,
and (b) the amount of the Servicing Fee payable to the Servicer for such
Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Trust Administration - BC07E1, facsimile no. (714)
247-6478 and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each Pooling
Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling Tier
REMIC-2 IO Notional Balance of each other Pooling Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount of the Interest Rate
Swap Agreement applicable for such Distribution Date, in which case the
Corresponding Actual Crossover Distribution Date for such Pooling Tier REMIC-2
IO Interest shall be the first Distribution Date thereafter on which two times
the Pooling Tier REMIC-2 IO Notional Balance of each other Pooling Tier REMIC-2
IO Interest then outstanding is greater than or equal to the scheduled swap
notional amount of the Interest Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower Tier REMIC
or Upper Tier REMIC created under this Agreement that corresponds to the Class
of interests in the other such REMIC, as applicable, or to a Class of
Certificates in the manner set out below:
Corresponding
Corresponding Upper Tier REMIC Corresponding Class of
Lower Tier REMIC Class Designation Regular Interest Certificates
---------------------------------- ---------------- ----------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2A Class A-2A Class A-2A
Class LT-A-2B Class A-2B Class A-2B
Class LT-A-2C Class A-2C Class A-2C
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Corresponding Pooling Tier REMIC-1 Regular Interest: As described
in the Preliminary Statement.
Corresponding Pooling Tier REMIC-2 IO Interest: As described in
the Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling Tier REMIC-2 IO Interest.
Corresponding Upper Tier REMIC Regular Interest: As defined in
the Preliminary Statement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: If, with respect to any Distribution
Date, the quotient (expressed as a percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Due Period, divided by (y) the Cut-off Date Pool Principal Balance,
exceeds the applicable Cumulative Loss Percentages set forth below with respect
to such Distribution Date:
Distribution Date Occurring In Loss Percentage
------------------------------ --------------------------------------------------------
July 2009 through June 2010 1.800% for the first month, plus an additional 1/12th of
2.200% for each month thereafter
July 2010 through June 2011 4.000% for the first month, plus an additional 1/12th of
2.300% for each month thereafter
July 2011 through June 2012 6.300% for the first month, plus an additional 1/12th of
1.850% for each month thereafter
July 2012 through June 2013 8.150% for the first month, plus an additional 1/12th of
1.050% for each month thereafter
July 2013 and thereafter 9.200%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Custodian on behalf of the Trustee consisting of items (a) -
(h) as listed on Exhibit K hereto.
Custodian: The Bank of New York Trust Company, N.A., a national
banking association, and its successors in interest and, if any successor
custodian is appointed hereunder, such successor.
Custodian Fee: As to any Distribution Date, an amount equal to the
product of (a) one-twelfth of the Custodian Fee Rate and (b) the sum of (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the first day of
the related Due Period, and (ii) with respect to the first Distribution Date
only, the portion of the Closing Date Deposit Amount allocable to principal.
Custodian Fee Rate: With respect to any Distribution Date
(commencing with the July 2007 Distribution Date), the amount charged by the
Custodian to the Trustee for custodial services with respect to the Mortgage
Loans performed by the Custodian during the preceding calendar month (commencing
with the month of June 2007), based on a custodial fee schedule previously
furnished by the Custodian to the Trustee, converted into a per annum rate
calculated on the basis of a 360-day year consisting of twelve 30-day months;
provided, however, that in no event shall such rate exceed 0.005% per annum.
Cut-off Date: June 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
Data Tape Information: With respect to each Mortgage Loan, the
following information as of the Cut-off Date provided by the Original Loan
Sellers to the Sponsor pursuant to the EquiFirst Agreements: (1) the applicable
Original Loan Seller's Mortgage Loan identifying number; (2) the Mortgagor's
name; (3) the street address of the Mortgaged Property including the city, state
and zip code; (4) a code indicating whether the Mortgagor is self-employed; (5)
as to each Mortgage Loan, the Stated Principal Balance as of the Cut-off Date;
(6) the Index; (7) a code indicating whether the Mortgaged Property is
owner-occupied; (8) the number and type of residential units constituting the
Mortgaged Property; (9) the original stated months to maturity; (10) the
original amortization months to maturity; (11) the stated maturity date; (12)
the amount of the Scheduled Payment as of the Cut-off Date; (13) the first date
on which the Scheduled Payment was due on the Mortgage Loan and, if such date is
not consistent with the Due Date currently in effect, such Due Date; (14) the
"paid through date" based on payments received from the related Mortgagor; (15)
the original principal amount of the Mortgage Loan; (16) with respect to each
Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17) with respect to
each Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate; (18) with respect
to each Adjustable Rate Mortgage Loan, the initial Periodic Mortgage Rate Cap;
(19) with respect to each Adjustable Rate Mortgage Loan, the subsequent Periodic
Mortgage Rate Cap; (20) with respect to each Adjustable Rate Mortgage Loan, the
first payment Adjustment Date immediately following the Cut-off Date; (21) with
respect to each Adjustable Rate Mortgage Loan, the first Interest Rate
Adjustment Date immediately following the Cut-off Date; (22) with respect to
each Adjustable Rate Mortgage Loan, the Gross Margin; (23) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Rate adjustment period; (24) the
type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate Mortgage Loan); (25)
lien position (i.e., First-Lien or Second-Lien Mortgage Loan); (26) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (27) the credit risk score (FICO score); (28) the
loan credit grade classification (as described in the Underwriting Guidelines);
(29) the Mortgage Rate at origination; (30) the Mortgage Rate as of the Cut-off
Date; (31) the value of the Mortgaged Property; (32) a code indicating the term
and amount of Prepayment Charges applicable to such Mortgage Loan (including any
prepayment penalty term), if any; (33) with respect to each First-Lien Mortgage
Loan, the Loan-to-Value Ratio at origination, and with respect to each
Second-Lien Mortgage Loan, the Combined Loan-to-Value Ratio at origination; (34)
the documentation level; (35) the date of origination; (36) a code indicating
whether the Mortgage Loan is a Balloon Loan; (37) the Due Date for the first
Scheduled Payment; (38) the original Scheduled Payment due; (39) the
debt-to-income ratio with respect to the Mortgage Loan; (40) the Mortgage Rate
calculation method (i.e., 30/360, simple interest, other); (41) a code
indicating whether the Mortgage Loan is Home Loan; (42) appraisal verification
(Y/N); (43) type of appraisal verification, if any; (44) with respect to
Second-Lien Mortgage Loans, the outstanding principal balance of the superior
lien at origination; (45) whether the Mortgagor is a first-time home buyer and
(46) whether or not the Mortgage Loan has any silent-second lien loans. With
respect to the Mortgage Loans in the aggregate, the Data Tape Information shall
set forth the following information, as of the Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans.
DBRS: DBRS, Inc. If DBRS is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(c) the address for notices
to DBRS shall be DBRS, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇, or such other address as DBRS may hereafter furnish to
the Depositor, the Trustee and the Servicer.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
defaulting party or a Termination Event (as defined in the Interest Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with respect to
which the Swap Provider is the sole Affected Party (as defined in the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan removed from the Trust
Fund pursuant to the EquiFirst Agreements or the Barclays Representation
Agreement.
Delinquency Trigger Event: With respect to any Distribution Date,
the circumstances in which the quotient (expressed as a percentage) of (x) the
rolling three month average of the aggregate unpaid principal balance of 60+ Day
Delinquent Mortgage Loans, divided by (y) the aggregate unpaid principal balance
of the Mortgage Loans, as of the last day of the related Due Period, equals or
exceeds 28.32% of the prior period's Senior Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: BCAP LLC, a Delaware limited liability company, and
its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Moody's, "F1+" by Fitch, "A-1" by Standard & Poor's and, if
rated by DBRS, "R-1" by DBRS (in each case, to the extent they are designated as
Rating Agencies in the Preliminary Statement).
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 Remittance Date, the 15th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Remittance Date occurs.
Disqualified Non-U.S. Person: With respect to a Residual
Certificate, (i) any Non-U.S. Person or agent thereof other than a Non-U.S.
Person that holds the Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Trustee with an effective IRS Form W-8ECI, or (ii) any domestic entity
classified as a partnership under the Code if any of its direct or indirect
partners (other than through a U.S. corporation) are (or are permitted to be
under the applicable partnership agreement) Disqualified Non-U.S. Persons,
unless such Person described in (i) or (ii) above has delivered to both the
transferor and the Trustee an opinion of a nationally recognized tax counsel to
the effect that the transfer of the Residual Certificate to it is in accordance
with the requirements of the Code and the regulations promulgated thereunder and
that such transfer of the Residual Certificate will not be disregarded for
federal income tax purposes.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of EquiFirst Loan Securitization
Trust 2007-1 Mortgage Pass-Through Certificates, 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.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day, commencing in July
2007.
Document Certification and Exception Report: The report attached
to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution (provided, however, that following a
downgrade, withdrawal, or suspension of such Eligible Institution's Standard &
Poor's rating below the levels set forth in definition of "Eligible Institution"
with respect to any Eligible Account, the applicable Eligible Institution shall
either (x) obtain a guaranty from a guarantor which satisfies the Standard &
Poor's requirements set forth in such definition, or (y) transfer any such
Eligible Account to one or more segregated trust accounts in the trust
department of an institution which satisfies the definition of "Eligible
Institution", in either case, as promptly as practicable (and in any case within
not more than 60 calendar days with respect to the Excess Reserve Fund Account
or the Swap Account, or 30 calendar days with respect to each other Account)),
(ii) an account maintained with the corporate trust department of a federal
depository institution or state-chartered depository institution subject to
regulations regarding fiduciary funds on deposit similar to Title 12 of the U.S.
Code of Federal Regulation Section 9.10(b), which, in either case, has corporate
trust powers and is acting in its fiduciary capacity or (iii) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee. Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement).
EquiFirst Agreements: Collectively, the EquiFirst Purchase Agreement
and the EquiFirst Assignment Agreement, copies of which are attached hereto as
Exhibit Y.
EquiFirst Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated June 27, 2007, among the Sponsor, the Depositor,
the Original Loan Sellers and Barclays Bank PLC, relating to the Mortgage Loans.
EquiFirst Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of March 1, 2007, by and among the Original Loan Sellers and the
Sponsor.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2007-05, 72 Fed. Reg. 13130 (2007) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank National Trust Company in trust for registered holders
of EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, Series 2007-1". Funds in the Excess Reserve Fund Account shall be
held in trust for the Regular Certificateholders for the uses and purposes set
forth in this Agreement. Amounts on deposit in the Excess Reserve Fund Account
shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate and the Custodian Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee and the Custodian Fee.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇
Mae Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the applicable Original Loan Seller or Barclays Bank PLC, as applicable, as
contemplated by the EquiFirst Agreements or the Barclays Representation
Agreement, respectively), a determination made by the Servicer that all
Insurance Proceeds, Condemnation 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. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in April
2037.
First-Lien Mortgage Loan: A Mortgage Loan secured by a first-lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(c) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring -
EquiFirst Loan Securitization Trust 2007-1, or such other address as Fitch
may hereafter furnish to the Depositor, the Trustee and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Fixed Swap Rate: For any Distribution Date and the related Interest
Accrual Period a per annum rate equal to the product of (i) 2 and (ii) the rate
specified in the Interest Rate Swap Agreement for such Distribution Date and
related Interest Accrual Period.
Form 8-K Disclosure Information: As defined in Section 8.12(g).
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: As specified in the Preliminary
Statement.
Group I Loan Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, a per annum rate equal to the product of (i) the weighted
average of the Adjusted Net Mortgage Rates then in effect on the beginning of
the related Due Period on the Group I Mortgage Loans minus the product of (A)
the Net Swap Payment plus any Swap Termination Payment (other than a Defaulted
Swap Termination Payment), if any, made to the Swap Provider from Available
Funds, expressed as a percentage equal to a fraction, the numerator of which is
equal to the Net Swap Payment plus any Swap Termination Payment (other than a
Defaulted Swap Termination Payment), if any, made to the Swap Provider from
Available Funds and the denominator of which is equal to the aggregate Stated
Principal Balance of the Mortgage Loans at the beginning of such Due Period and
(B) 12 and (ii) a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the Group I
Loan Cap shall be reduced by a fraction, the numerator of which is the portion
of the Closing Date Deposit Amount allocable to the Group I Mortgage Loans and
the denominator of which is the portion of the Cut-off Date Pool Principal
Balance relating to the Group I Mortgage Loans.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: As specified in the Preliminary
Statement.
Group II Loan Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, a per annum rate equal to the product of (i) the weighted
average of the Adjusted Net Mortgage Rates then in effect on the beginning of
the related Due Period on the Group II Mortgage Loans minus the product of (A)
the Net Swap Payment plus any Swap Termination Payment (other than a Defaulted
Swap Termination Payment), if any, made to the Swap Provider from Available
Funds, expressed as a percentage equal to a fraction, the numerator of which is
equal to the Net Swap Payment plus any Swap Termination Payment (other than a
Defaulted Swap Termination Payment), if any, made to the Swap Provider from
Available Funds and the denominator of which is equal to the aggregate Stated
Principal Balance of the Mortgage Loans at the beginning of such Due Period and
(B) 12 and (ii) a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the Group II
Loan Cap shall be reduced by a fraction, the numerator of which is the portion
of the Closing Date Deposit Amount allocable to the Group I Mortgage Loans and
the denominator of which is the portion of the Cut-off Date Pool Principal
Balance relating to the Group I Mortgage Loans.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Group Loan Cap: The Group I Loan Cap or the Group II Loan Cap, as
applicable.
Group Subordinated Amount: For any Distribution Date and (i) for the
Group I Mortgage Loans, the excess of the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the beginning of the related Due Period over
the Class Certificate Balance of the Class A-1 Certificates immediately prior to
the current Distribution Date and (ii) for the Group II Mortgage Loans, the
excess of the aggregate Stated Principal Balance of the Group II Mortgage Loans
as of the beginning of the related Due Period over the aggregate Class
Certificate Balance of the Class A-2 Certificates immediately prior to such
Distribution Date.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," (excluding
New Jersey "Covered Home Loans" as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) a Mortgage Loan categorized as High Cost pursuant to Appendix E of Standard
& Poor's Glossary.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HomEq: Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, a Delaware corporation, and its successors in interest.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Initial Certification: As defined in Section 2.02.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier REMIC Regular Interests
and any Distribution Date, the period commencing on the Distribution Date
occurring in the month preceding the month in which the current Distribution
Date occurs and ending on the day immediately preceding the current Distribution
Date (or, in the case of the first Distribution Date, the period from and
including the Closing Date to but excluding such first Distribution Date). With
respect to each Lower Tier REMIC Regular Interest (other than each Corresponding
Class of Lower Tier REMIC Regular Interest) and each Pooling Tier REMIC-1
Regular Interest and Pooling Tier REMIC-2 Regular Interest and any Distribution
Date, the calendar month preceding such Distribution Date. For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of June 27, 2007 between the Swap Provider and the Trustee, on behalf
of the Trust, a copy of which is attached hereto as Exhibit T.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in any Loan Group, that portion of Available Funds
attributable to interest received or advanced with respect to the Mortgage Loans
in such Loan Group, net of the fees payable to the Servicer, the Custodian and
the Trustee, and net of any Net Swap Payments and Swap Termination Payments,
other than Defaulted Swap Termination Payments, payable to the Swap Provider
from Available Funds attributable to such Loan Group with respect to such
Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS
Procedures Manual.
Irrevocable Instruction: As defined in Section 4.07.
IRS: The Internal Revenue Service.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries or
otherwise, which represent late payments or collections of principal and/or
interest due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) but delinquent for such Due Period and not
previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Reuters Page LIBOR01 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Reuters Page
LIBOR01, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified to the Trustee that it has received all amounts it
expects to receive in connection with the liquidation of such Mortgage Loan
including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan-to-Value Ratio or LTV: As of any date and as to any First-Lien
Mortgage Loan, the ratio (expressed as a percentage) of the outstanding
principal balance of the First-Lien Mortgage Loan to (a) in the case of a
purchase, the lesser of (i) the sale price of the Mortgaged Property and (ii)
the lesser of (y) its appraised value at the time of sale or (z) the appraised
value determined by a review appraisal conducted by the applicable Original Loan
Seller, or (b) in the case of a refinancing or modification, the lesser of (i)
the appraised value of the Mortgaged Property at the time of the refinancing or
modification or (ii) the appraised value determined by a review appraisal
conducted by the applicable Original Loan Seller.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier REMIC: As described in the Preliminary Statement.
Lower Tier REMIC Interest Rate: As described in the Preliminary
Statement.
Lower Tier REMIC Principal Amount: The principal balance of each
Lower Tier REMIC Regular Interest, determined as set forth in the Preliminary
Statement. The Lower Tier REMIC Principal Amount shall be computed to at least
eight (8) decimal places.
Lower Tier REMIC Regular Interest: Each of the Class LT-A-1, Class
LT-A-2A, Class LT-A-2B, Class LT-A-2C, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2, Class
LT-B-3, Class LT-Group I, Class LT-Group I(SUB), Class LT-Group II(SUB), Class
LT-Group II, Class LT-XX, Class LT-IO and Class LT-Accrual Interests as
described in the Preliminary Statement.
Lower Tier REMIC Subordinated Balance Ratio: The ratio between the
Lower Tier REMIC Principal Amounts of the Class LT-Group I(SUB) Interest and
Class LT-Group II(SUB) Interest, equal to the ratio between the Group
Subordinated Amount of the Group I Mortgage Loans and the Group Subordinated
Amount of the Group II Mortgage Loans, respectively.
Lower Tier REMIC WAC Rate: A per annum variable rate equal to the
weighted average of the Pooling Tier REMIC-2 Interest Rates of the Pooling Tier
REMIC-2 Regular Interests (other than the Pooling Tier REMIC-2 IO Interests).
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a)
the applicable Original Loan Seller has designated or will designate MERS as,
and has taken or will take such action as is necessary to cause MERS to be, the
mortgagee of record, as nominee for the applicable Original Loan Seller, in
accordance with the MERS Procedure Manual and (b) the applicable Original Loan
Seller has designated or will designate the purchaser as the investor on the
MERS System.
MERS Procedure Manual: The MERS Procedures Manual, as it may
be amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is designated
as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(c) the address for notices to Moody's shall be ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Mortgage Pass-Through Group, or such other address as
Moody's may hereafter furnish to the Depositor, the Trustee and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan that is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, Prepayment Charges, and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and the Custodian and referred to as Schedule I, such schedule
setting forth, for each Loan Group, the Data Tape Information with respect to
each Mortgage Loan. In addition, the Mortgage Loan Schedule shall include the
Original Sale Date for each Mortgage Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date, the amount
remaining for distribution pursuant to Section 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) payable by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement), or any amount withdrawn from the reserve account
referred to in the third full paragraph of Section 4.06 that is required under
that paragraph be treated as a Net Swap Receipt for purposes of determining the
distributions from the Supplemental Interest Account.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by any Rating
Agency.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related Late
Collections on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Late Collections.
Non-U.S. Person: A person that is not a U.S. Person.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or any Subservicer, reasonably acceptable to
the Trustee (and/or such other Persons as may be set forth herein), provided,
that any Opinion of Counsel relating to (a) qualification of any Trust REMIC or
(b) compliance with the REMIC Provisions, must be (unless otherwise stated in
such Opinion of Counsel) an opinion of counsel who (i) is in fact independent of
the Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
Affiliate of the Servicer and (iii) is not connected with the Servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
Original Loan Sellers: With respect to each Mortgage Loan, EquiFirst
Corporation, a North Carolina corporation, and EquiFirst Mortgage Corporation of
Minnesota, a Minnesota corporation.
Original Sale Date: With respect to any Mortgage Loan, the date on
which the applicable Original Loan Seller sold such Mortgage Loan to the Sponsor
pursuant to the EquiFirst Purchase Agreement.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates or the Servicing Fee
Certificate as of any date of determination, all Certificates or the Servicing
Fee Certificate theretofore executed and authenticated under this Agreement
except:
(i) Certificates or the Servicing Fee Certificate theretofore
canceled by the Trustee or delivered to the Trustee for
cancellation; and
(ii) Certificates or the Servicing Fee Certificate in exchange
for which or in lieu of which other Certificates have been executed
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1, 0.170%; Class A-2A, 0.060%;
Class A-2B, 0.190%; Class A-2C, 0.260%; Class M-1, 0.280%; Class M-2, 0.290%;
Class M-3, 0.300%; Class M-4, 0.410%; Class M-5, 0.510%; Class M-6, 0.750%;
Class B-1, 1.750%; Class B-2, 2.500%; and Class B-3, 2.500%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class A-1, 0.340%; Class A-2A, 0.120%; Class A-2B, 0.380%;
Class A-2C, 0.520%; Class M-1, 0.420%; Class M-2, 0.435%; Class M-3, 0.450%;
Class M-4, 0.615%; Class M-5, 0.765%; Class M-6, 1.125%; Class B-1, 2.625%;
Class B-2, 3.750%; and Class B-3, 3.750%.
Pass-Through Rate: For each Class of Certificates and each Class of
Upper Tier REMIC Regular Interest, the per annum rate set forth or calculated in
the manner described in the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
"F1+" by Fitch, "A-1+" by Standard & Poor's, "P-1" by Moody's and
"R-1" by DBRS (in each case, to the extent they are designated as
Rating Agencies in the Preliminary Statement);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities (which shall in no event have an original
maturity of more than 365 days) bearing interest or sold at a
discount that are issued by any corporation incorporated under the
laws of the United States of America or any state thereof and that
are rated by Standard & Poor's and Moody's (in each case, to the
extent they are designated as Rating Agencies in the Preliminary
Statement), and by each other Rating Agency that rates such
securities in its highest long-term unsecured rating categories at
the time of such investment or contractual commitment providing for
such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by Standard & Poor's and
Moody's (in each case, to the extent they are designated as Rating
Agencies in the Preliminary Statement), and by each other Agency
that rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
managed or advised by the Depositor, the Trustee or an Affiliate
thereof, that have been rated "Aaa" by Moody's, "AAAm" or "AAAm-G"
by Standard & Poor's and, if rated by Fitch, at least "AAA" by Fitch
and "R-1" by DBRS (in each case, to the extent they are designated
as Rating Agencies in the Preliminary Statement); and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to each of the Rating
Agencies as a permitted investment of funds backing "Aaa" or "AAA"
rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a
Residual Certificate is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any Trust REMIC to
fail to qualify as a REMIC at any time that the Certificates are outstanding.
The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Cap: With respect to the Mortgage Loans as of any Distribution
Date, the weighted average of (x) the Group I Loan Cap for such Distribution
Date (y) the Group II Loan Cap for such Distribution Date, in each case weighted
on the basis of the related Group Subordinated Amount. For federal income tax
purposes, the economic equivalent of the Pool Cap shall be expressed as the
weighted average of the Lower Tier REMIC Interest Rate on (a) the Class LT-Group
I(SUB), subject to a cap and floor equal to the Lower Tier REMIC Interest Rate
of the Class LT-Group I Interest and (b) the Class LT-Group II(SUB), subject to
a cap and floor equal to the Lower Tier REMIC Interest Rate of the Class
LT-Group II Interest, weighted on the basis of the respective Lower Tier REMIC
Principal Amounts of the Class LT-Group I(SUB) and Class LT-Group II(SUB),
respectively. With respect to the first Due Period and first Distribution Date
only, the Pool Cap shall be reduced by a fraction, the numerator of which is the
Closing Date Deposit Amount and the denominator of which is the Cut-Off Date
Pool Principal Balance.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling Tier REMIC-1: As described in the Preliminary Statement.
Pooling Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling Tier REMIC-1 Loan Group I WAC Rate: With respect to the
Group I Mortgage Loans as of any Distribution Date, the weighted average of the
Adjusted Net Mortgage Rates then in effect on the beginning of the related Due
Period on the Group I Mortgage Loans multiplied by (b) 30 divided by the actual
number of days in the related Interest Accrual Period. With respect to the first
Due Period and first Distribution Date only, the Pooling Tier REMIC-1 Loan Group
I WAC Rate shall be reduced by a fraction, the numerator of which is the Closing
Date Deposit Amount and the denominator of which is the Cut-off-Date Pool
Principal Balance of the Group I Mortgage Loans.
Pooling Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
(a) the weighted average of the Adjusted Net Mortgage Rates then in effect on
the beginning of the related Due Period on the Group II Mortgage Loans
multiplied by (b) 30 divided by the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and first
Distribution Date only, the Pooling Tier REMIC-1 Loan Group II WAC Rate shall be
reduced by a fraction, the numerator of which is the Closing Date Deposit Amount
and the denominator of which is the Cut-off-Date Pool Principal Balance of the
Group II Mortgage Loans.
Pooling Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling Tier REMIC-2: As described in the Preliminary Statement.
Pooling Tier REMIC-2 Interest Rate: As described in the Preliminary
Statement.
Pooling Tier REMIC-2 IO Interest: Any of the Pooling Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by the Servicer with respect to any Mortgage Loan
serviced by the Servicer as to which a Principal Prepayment in Full occurs from
the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the 1st
day of such month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
Prepayment Period from the first day of such Prepayment Period through the last
day of the month preceding the month in which such Distribution Date occurs, the
subject of a Principal Prepayment which is not accompanied by an amount equal to
one month of interest that would have been due on such Mortgage Loan on the Due
Date that occurs during such Prepayment Period and which was applied by the
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding such Due Date, an amount equal to the product of (a) the Mortgage
Rate net of the Servicing Fee Rate for such Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number of
days commencing on the date on which such Principal Prepayment was applied and
ending on the last day of the calendar month in which the related Prepayment
Period begins.
Prepayment Period: With respect to any Distribution Date, either (i)
with respect to any Principal Prepayments in Full, the period from and including
the 16th day of the month preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, from the Cut-off Date)
to and including the 15th day of the month in which such Distribution Date
occurs, or (ii) with respect to any partial Principal Prepayments, the calendar
month preceding the month in which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each Scheduled Payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, (ii) all Principal Prepayments received during the
related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the Mortgage Loans allocable to principal,
and all Subsequent Recoveries, actually collected by the Servicer during the
related Prepayment Period; (iv) the portion of the Repurchase Price allocable to
principal with respect to each Mortgage Loan purchased on or prior to the
related Determination Date; (v) all Substitution Adjustment Amounts allocable to
principal with respect to the substitutions of Mortgage Loans that occur on or
prior to the related Determination Date; (vi) the allocable portion of the
proceeds received with respect to the termination of the Trust Fund pursuant to
clause (a) of Section 9.01 (to the extent such proceeds relate to principal);
and (vii) with respect to the Distribution Date in July 2007 only, the Closing
Date Deposit Amount.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated June 26,
2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(c), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as such Rating Agency may hereafter furnish to the
Depositor, the Trustee and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that, for any Definitive Certificate, the Record Date shall
be the close of business on the last Business Day of the month preceding the
month in which such Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631
(January 7, 2005)) or by the staff of the Commission, or as may be provided
by the Commission or its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: As defined in Section 4.06.
Reportable Event: As defined in Section 8.12(g).
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of purchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Rate from the last date through which interest has
been paid to the date of purchase, (iii) all unreimbursed Servicing Advances and
(iv) all expenses incurred by the Trustee arising out of the Trustee's
enforcement of the applicable Person's purchase obligation under the EquiFirst
Agreements or the Barclays Representation Agreement, as applicable.
Request for Release: The Request for Release submitted by the
Servicer to the Custodian (with a copy to the Trustee), substantially in the
form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Reuters Page LIBOR01: The display page currently so designated on
the Reuters Xtra 3000 Service (or such other page as may replace that page on
that service for displaying comparable rates or prices).
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second-Lien Mortgage Loan: A Mortgage Loan secured by a second-lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distribution of the Principal
Distribution Amount, including any principal payments on such Classes from the
Supplemental Interest Account and the Supplemental Float Account, for such
Distribution Date) by (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 56.50%.
Servicer: Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, a Delaware corporation, and its successors in interest, and if a
successor servicer is appointed hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement, administrative or judicial proceedings, including
foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Sections
3.01, 3.09, 3.13 and 3.15. The Servicing Advances shall also include any
reasonable "out-of-pocket" costs and expenses (including legal fees) incurred by
the Servicer in connection with executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments of Mortgage in connection
with any satisfaction or foreclosure in respect of any Mortgage Loan 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.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit P
hereto.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan as of the first day of the related Due
Period. Such fee shall be payable monthly, and shall be prorated for any portion
of a month during which the Mortgage Loan is serviced by the Servicer under this
Agreement. The Servicing Fee is payable solely from the interest portion
(including recoveries with respect to interest from Liquidation Proceeds,
Subsequent Recoveries, Insurance Proceeds, Condemnation Proceeds and proceeds
received with respect to REO Properties) of such Scheduled Payment collected by
the Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Certificate: As defined in Section 3.21(a).
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum with respect to each remaining Distribution Date.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Custodian in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any employee or officer of the Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period (not including a Mortgage Loan that became a Liquidated Mortgage Loan
after such last day of the prior Due Period and on or prior to the end of the
Prepayment Period in which such Due Period ends), 60 days or more delinquent,
each Mortgage Loan in foreclosure, each Mortgage Loan related to REO Property,
each Mortgage Loan where the related Mortgagor has filed for bankruptcy and each
Mortgage Loan modified with 12 months of the applicable Distribution Date.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 5.80% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 11.60% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; provided, however, that
if, on any Distribution Date, a Trigger Event exists, the Specified Subordinated
Amount shall not be reduced to the applicable percentage of the then current
aggregate Stated Principal Balance of the Mortgage Loans but instead remain the
same as the prior period's Specified Subordinated Amount until the Distribution
Date on which a Trigger Event no longer exists. When the Class Certificate
Balance of each Class of LIBOR Certificates has been reduced to zero, the
Specified Subordinated Amount will thereafter equal zero.
Sponsor: ▇▇▇▇▇▇ Funding LLC, a Delaware limited liability company,
and its successors in interest.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(c) the
address for notices to Standard & Poor's shall be Standard & Poor's, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance
Group - EquiFirst Loan Securitization Trust 2007-1, or such other address as
Standard & Poor's may hereafter furnish to the Depositor, the Trustee, the
Custodian and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Trustee with respect to the related Mortgage Loan representing payments or
recoveries of principal including advances in respect of scheduled payments of
principal. For purposes of any Distribution Date, the Stated Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of principal
received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date and any unscheduled
principal payments and other unscheduled principal collections received during
the related Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage Loan during
the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in July 2010 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balance of the Mortgage Loans for the applicable
Distribution Date but prior to any applications of Principal Distribution Amount
to the Certificates on such Distribution Date) is greater than or equal to the
Senior Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by the Servicer, a Subservicer, the Custodian or the
Trustee, as applicable, that is not responsible for the overall servicing (as
"servicing" is commonly understood by participants in the mortgage-backed
securities market) of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to any of the Mortgage
Loans.
Subordinated Amount: As of any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be included as part of the Principal Remittance Amount
for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
the Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
applicable Original Loan Seller or Barclays Bank PLC, as applicable, for a
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed
in a Request for Release, substantially in the form of Exhibit J, (i) have a
Stated Principal Balance, after deduction of all Scheduled Payments due in the
month of substitution, not in excess of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) be accruing interest at a rate not lower than and
not more than 1% higher than that of the Deleted Mortgage Loan; (iii) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (iv) be of the same type as the Deleted
Mortgage Loan; and (v) comply with each applicable representation and warranty
made by such representing party set forth in the Barclays Representation
Agreement or the EquiFirst Agreements, as applicable.
Substitution Adjustment Amount: As defined in Section 2.03.
Supplemental Float Account: The trust account created pursuant to
Section 4.07 of this Agreement consisting of any interest or investment income
earned on funds deposited in the Collection Account, subject to Section 3.21(c).
The Supplemental Float Account shall be an asset of Pooling Tier REMIC-1.
Supplemental Float Reserve Account: The reserve account created
pursuant to Section 4.07 of this Agreement.
Supplemental Float Reserve Beneficiary: As defined in Section
4.07.
Supplemental Interest Account: The trust account created pursuant to
Section 4.06 of this Agreement consisting of the Interest Rate Swap Agreement,
the Class IO Interest and the right to receive Class IO Shortfalls, subject to
the obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in the
Interest Rate Swap Agreement), (ii) two, and (iii) the quotient of (a) the
actual number of days in the Interest Accrual Period for the LIBOR Certificates
divided by (b) 30.
Swap Provider: Barclays Bank PLC, a bank authorized and regulated by
the United Kingdom's Financial Services Authority and a member of the London
Stock Exchange, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement).
Tax Matters Person: The Holder of the (i) Class R-I Certificates and
(ii) Class R-II Certificates designated as "tax matters person" of (i) Pooling
Tier REMIC-1 and (ii) Pooling Tier REMIC-2, the Lower Tier REMIC and the Upper
Tier REMIC, respectively, in the manner provided under Treasury Regulations
Section 1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
10-K Filing Deadline: As defined in Section 8.12(c).
Termination Price: As defined in Section 9.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess, if any, of (i) the interest on the Mortgage Loans (other
than Prepayment Interest Excesses) received by the Servicer on or prior to the
related Determination Date or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date, (B) any Net Swap Payments paid to the Swap Provider and (C) any Swap
Termination Payment (other than a Defaulted Swap Termination Payment) payable to
the Swap Provider from Available Funds.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution Account, the
Supplemental Float Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise; (iv) the Interest Rate Swap Agreement; (v) the Supplemental Interest
Account; (vi) the Closing Date Deposit Amount; (vii) the Depositor's rights
under the Barclays Representation Agreement and the EquiFirst Assignment
Agreement; and (viii) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing.
Trust REMIC: Any of Pooling Tier REMIC-1, Pooling Tier REMIC-2, the
Lower Tier REMIC or the Upper Tier REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Float Period: With respect to the Distribution Date and the
related amounts in the Distribution Account, the period commencing on the second
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg.
54487 (2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
or referred to in the EquiFirst Purchase Agreement.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper Tier Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper Tier REMIC Interest Rate for the Corresponding Class
of Upper Tier REMIC Regular Interest is based upon the Upper Tier REMIC Loan
Group I Rate, Upper Tier REMIC Loan Group II Rate or Upper Tier REMIC Pool Cap
Rate, as applicable, the excess, if any, of (i) the Accrued Certificate Interest
Distribution Amount such Class of LIBOR Certificates would otherwise be entitled
to receive on such Distribution Date taking into account the Group I Loan Cap,
Group II Loan Cap or Pool Cap, as applicable, over (ii) the Accrued Certificate
Interest Distribution Amount such Class of Upper Tier REMIC Regular Interest
would otherwise be entitled to receive on such Distribution Date taking into
account the Upper Tier REMIC Loan Group I Rate, Upper Tier REMIC Loan Group II
Rate or Upper Tier REMIC Pool Cap Rate, as applicable, and (B) the Upper Tier
Carry Forward Amount for such Class of Certificates for all previous
Distribution Dates not previously paid, together with interest thereon at a rate
equal to the applicable Upper Tier REMIC Interest Rate for such Class of
Certificates for such Distribution Date, without giving effect to the Upper Tier
REMIC Loan Group I Rate, Upper Tier REMIC Loan Group II Rate or Upper Tier REMIC
Pool Cap Rate, as applicable.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Loan Group I Rate: As described in the Preliminary
Statement.
Upper Tier REMIC Loan Group II Rate: As described in the Preliminary
Statement.
Upper Tier REMIC Pool Cap Rate: For any Distribution Date, the
weighted average of the Lower Tier REMIC Interest Rate on (a) the Class LT-Group
I(SUB), subject to a cap and floor equal to the Lower Tier REMIC Interest Rate
of the Class LT-Group I Interest and (b) the Class LT-Group II(SUB), subject to
a cap and floor equal to the Lower Tier REMIC Interest Rate of the Class
LT-Group II Interest, weighted on the basis of the respective Lower Tier REMIC
Principal Amounts of the Class LT-Group I(SUB) and Class LT-Group II(SUB),
respectively.
Upper Tier REMIC Regular Interest: As described in the Preliminary
Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Custodian for
the benefit of the Certificateholders the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note (except for the Mortgage Notes for
which there is a lost note affidavit and the copy of the Mortgage Note),
bearing all intervening endorsements showing a complete chain of
endorsement from the originator to the last endorsee, endorsed "Pay to the
order of _____________, without recourse" and signed in the name of the
last endorsee by an authorized officer. To the extent that there is no
room on the face of any Mortgage Note for an endorsement, the endorsement
may be contained on an allonge, unless state law does not so allow and the
Custodian is so advised in writing by the applicable Original Loan Seller
or the Depositor that state law does not so allow. If the Mortgage Loan
was acquired by the applicable Original Loan Seller in a merger, the
endorsement must be by "[last endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the last
endorsee while doing business under another name, the endorsement must be
by "[last endorsee], formerly known as [previous name]";
(ii) the original of any guarantee executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the Depositor shall deliver or cause to be delivered to
the Custodian a photocopy of such Mortgage, together with (A) in the case
of a delay caused by the public recording office, an Officer's Certificate
of the Depositor (or certified by the applicable Original Loan Seller or
the Depositor, title company, escrow agent, or closing attorney) stating
that such Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a copy
of such Mortgage certified by such public recording office to be a true
and complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Depositor or the
applicable Original Loan Seller; or (B) in the case of a Mortgage where a
public recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
and extension agreements, if any, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank (except with respect to MERS Designated Loans);
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee (or, in the case of a MERS Designated
Loan, MERS) 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 Depositor shall deliver or cause to
be delivered a photocopy of such intervening assignment, together with (A)
in the case of a delay caused by the public recording office, an Officer's
Certificate of the Depositor or the applicable Original Loan Seller or a
certificate from an escrow company, a title company or a closing attorney
stating that such intervening assignment of Mortgage has been dispatched
to the appropriate public recording office for recordation and that such
original recorded intervening assignment of Mortgage or a copy of such
intervening assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Depositor or the applicable Original
Loan Seller; or (B) in the case of an intervening assignment where a
public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and
complete copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy or, in the event
such original title policy is unavailable, a copy of the title policy,
certified by the applicable Original Loan Seller or the Depositor, or
certified true copy of the related policy binder or commitment for title
certified to be true and complete by the title insurance company;
(viii) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage (if provided); and
(ix) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the applicable Original Loan Seller or the Depositor to be a
true and correct copy of the original.
To the extent not previously delivered to the Sponsor pursuant to
the EquiFirst Agreements, the Depositor shall use reasonable efforts to promptly
upon receipt from the respective recording office cause to be delivered to the
Custodian the original recorded document described in (iii), (iv) and (vi)
above.
From time to time, the Depositor or the Servicer, as applicable,
shall forward to the Custodian, additional original documents, additional
documents evidencing an assumption, modification, consolidation or extension of
a Mortgage Loan, in accordance with the terms of this Agreement upon receipt of
such documents. All such mortgage documents held by the Custodian as to each
Mortgage Loan shall constitute the "Custodial File."
To the extent not previously delivered to the Sponsor pursuant to
this Agreement, on or prior to the Closing Date, the Depositor shall use
reasonable efforts to deliver or cause to be delivered to the Custodian,
Assignments of Mortgages, in blank, for each Mortgage Loan that is not a MERS
Designated Loan. No later than thirty (30) Business Days following the later of
the Closing Date and the date of receipt by the Servicer of the complete
recording information for a Mortgage, the Servicer shall promptly submit or
cause to be submitted for recording, at the expense of the Depositor, and at no
expense to the Trust Fund, the Trustee, the Custodian or the Servicer, in the
appropriate public office for real property records, each Assignment of Mortgage
referred to in Section 2.01(b)(v). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan (i) if the Custodian,
the Trustee and each Rating Agency have received an Opinion of Counsel,
satisfactory in form and substance to the Custodian, the Trustee and each Rating
Agency to the effect that the recordation of such Assignments of Mortgage in any
specific jurisdiction is not necessary to protect the Trustee's interest in the
related Mortgage Note, (ii) if such Mortgage Loan is a MERS Designated Mortgage
Loan or (iii) if the Rating Agencies have each notified the Depositor and the
Servicer in writing that not recording any such Assignments of Mortgage would
not cause the initial ratings on any LIBOR Certificates to be downgraded or
withdrawn; provided, however, that the Servicer shall not be held responsible or
liable for any loss that occurs because an Assignment of Mortgage was not
recorded, but only to the extent the Servicer does not have prior knowledge of
the act or omission that causes such loss. Unless the Depositor gives the
Servicer notice to the contrary, the Depositor is deemed to have given the
Servicer notice that the condition set forth in clause (iii) above is
applicable. In addition to the foregoing, the Servicer shall cause each
Assignment of Mortgage to be recorded in accordance with Accepted Servicing
Practices in order to convey, upon foreclosure, the title of any Mortgaged
Property to the Trust as set forth in Section 3.17 hereof. If the Assignment of
Mortgage is to be recorded, the applicable Mortgage shall be assigned to
"Deutsche Bank National Trust Company, as trustee under the Pooling and
Servicing Agreement dated as of June 1, 2007, EquiFirst Loan Securitization
Trust 2007-1." In the event that any such Assignment of Mortgage is lost or
returned unrecorded because of a defect therein, the Depositor shall promptly
cause to be delivered a substitute Assignment of Mortgage to cure such defect
and thereafter cause each such assignment to be duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee and the Custodian a copy of the Data Tape Information in electronic,
machine readable medium in a form mutually acceptable to the Depositor, the
Trustee and the Custodian. Within ten (10) Business Days of the Closing Date,
the Depositor shall deliver a copy of the complete Mortgage Loan Schedule to the
Custodian and the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within 120 days (or such other time period as may be required
by any Rating Agency) following the Closing Date as evidenced in the Document
Certification and Exception Report to be delivered on the first Business Day
after the 120-day period by the Custodian to the Trustee, the Servicer and the
Depositor, the Trustee upon receipt thereof shall send written notice to the
applicable Original Loan Seller (with a copy to the Custodian and the Depositor)
requiring substitution or repurchase of the related Mortgage Loan pursuant to
the EquiFirst Agreements, at the price and in the manner specified in the
EquiFirst Agreements. In the event that the applicable Original Loan Seller does
not cure such failure or repurchase or substitute the related Mortgage Loan
within 30 days of receipt of written notice as evidenced in the Document
Certification and Exception Report to be delivered on the first Business Day
after 155 days following the Closing Date by the Custodian to the Trustee, the
Servicer and the Depositor, the Trustee upon receipt thereof shall enforce the
rights of the Trust under the EquiFirst Agreements in the manner set forth in
Section 2.08.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Depositor shall be deemed to have been satisfied upon delivery by the
Depositor to the Custodian, prior to the Closing Date of a copy of such Mortgage
or assignment, as the case may be, certified (such certification to be an
original thereof) by the public recording office to be a true and complete copy
of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "EquiFirst Loan
Securitization Trust 2007-1" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the requirement that no Mortgage Loan
be a High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 be governed by the
Georgia Fair Lending Act. The Trust's fiscal year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
pursuant to Section 2.01(a). The Trustee on behalf of the Trust is hereby
authorized to enter into the Interest Rate Swap Agreement.
Section 2.02 Acceptance by the Custodian of the Mortgage Loans. The
Custodian shall acknowledge, on the Closing Date, receipt by it on behalf of the
Trustee, of the documents identified in the Initial Certification in the form
annexed hereto as Exhibit E ("Initial Certification") for each Mortgage Loan in
the Mortgage Loan Schedule, subject to any exceptions listed on the exception
report attached thereto, and declares that it holds and will hold such documents
and the other documents delivered to it pursuant to Section 2.01, and that it
holds or will hold such other assets as are included in the Trust Fund, in trust
for the exclusive use and benefit of all present and future Certificateholders.
The Custodian shall maintain possession of the related Mortgage Notes in the
State of Texas, unless otherwise permitted by the Rating Agencies.
In connection with the Closing Date, the Custodian shall be required
to deliver via facsimile (with original to follow the next Business Day) to the
Depositor and the Trustee an Initial Certification prior to the Closing Date,
or, as the Depositor and the Trustee agree on the Closing Date, certifying
receipt of a Mortgage Note and Assignment of Mortgage for each Mortgage Loan
with any exceptions noted on the exception report attached thereto. The
Custodian shall not be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
Within 120 days after the Closing Date, the Custodian shall
ascertain that all documents identified in the Document Certification and
Exception Report in the form attached hereto as Exhibit F are in its possession,
and shall deliver to the Depositor, the Trustee and the Servicer a Document
Certification and Exception Report, in the form annexed hereto as Exhibit F, to
the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as an exception and not covered by such
certification): (i) all documents identified in the Document Certification and
Exception Report and required to be reviewed by it are in its possession; (ii)
such documents have been reviewed by it and appear regular on their face and
relate to such Mortgage Loan; (iii) based on its examination and only as to the
foregoing documents, the information set forth in items (1), (2), (3), (15),
(22) and (29) of the Data Tape Information respecting such Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. The Custodian shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
The Custodian shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Custodian, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
The Depositor shall deliver or cause to be delivered to the Servicer
copies of all trailing documents required to be included in the Custodial File
at the same time the original or certified copies thereof are delivered to the
Custodian, including but not limited to such documents as the title insurance
policy and any other Mortgage Loan documents upon return from the public
recording office. The Depositor shall deliver the documents, at its own expense
to the Servicer.
Section 2.03 Certain Representations, Warranties and Covenants. (a)
The Servicer hereby makes the representations and warranties set forth in
Schedule II hereto to the Depositor and the Trustee, as of the Closing Date. The
Custodian hereby makes the representations and warranties set forth in Schedule
III hereto to the Depositor and the Trustee, as of the Closing Date.
(b) It is understood and agreed by the Servicer and the Custodian
that the representations and warranties set forth in this Section 2.03 shall
survive the transfer of the Mortgage Loans by the Depositor to the Trustee on
the Closing Date, and shall inure to the benefit of the Depositor and the
Trustee notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by the Depositor, the Trustee, the Custodian or
the Servicer of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
others. The Trustee shall enforce the rights of the Trust under the Barclays
Representation Agreement and the EquiFirst Assignment Agreement.
(c) In connection with any purchase or substitution of a Mortgage
Loan pursuant to the EquiFirst Agreements or the Barclays Representation
Agreement, the Servicer, based upon information provided by the Depositor, the
applicable Original Loan Seller or Barclays Bank PLC, as applicable, shall amend
the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect
the removal of such Deleted Mortgage Loan and the substitution of the Substitute
Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee and the Custodian. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the applicable Original Loan Seller or Barclays
Bank PLC, as applicable, will be deemed to have made with respect to such
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to the EquiFirst Agreements or
Barclays Representation Agreement, as applicable, with respect to such Mortgage
Loan. Upon any such substitution and the deposit to the Collection Account of
the amount required to be deposited therein in connection with such substitution
as described in the following paragraph, the Custodian shall release, upon a
Request for Release in the form of Exhibit J hereto, the Mortgage File held for
the benefit of the Certificateholders relating to such Deleted Mortgage Loan to
the applicable Original Loan Seller or Barclays Bank PLC, as applicable, and the
Trustee shall execute and deliver at the applicable Original Loan Seller's or
Barclays Bank PLC's, as applicable, written direction such instruments of
transfer or assignment prepared by the applicable Original Loan Seller or
Barclays Bank PLC, as applicable, in each case without recourse, as shall be
necessary to vest title in the applicable Original Loan Seller or Barclays Bank
PLC, as applicable, of the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to the EquiFirst Agreements or the Barclays
Representation Agreement, as applicable.
(d) For any month in which an Original Loan Seller or Barclays Bank
PLC substitutes one or more Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the Servicer will determine the amount (if any) by which the
aggregate unpaid principal balance of all such Substitute Mortgage Loans as of
the date of substitution is less than the aggregate unpaid principal balance of
all such Deleted Mortgage Loans. The amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Mortgage Loans (collectively,
the "Substitution Adjustment Amount") will be remitted by the applicable
Original Loan Seller or Barclays Bank PLC, as applicable, to the Servicer for
deposit into the Collection Account on or before the Distribution Account
Deposit Date for the Distribution Date in the month succeeding the calendar
month during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
(e) In the event that a Mortgage Loan shall have been purchased
pursuant to the EquiFirst Assignment Agreement or the Barclays Representation
Agreement, the proceeds from such purchase shall be deposited by the Servicer in
the Collection Account pursuant to Section 3.10 on or before the Distribution
Account Deposit Date for the Distribution Date in the month following the month
during which the applicable Person became obligated to purchase or replace such
Mortgage Loan and upon such deposit of the Repurchase Price, and receipt of a
Request for Release in the form of Exhibit J hereto, the Custodian shall release
within two Business Days the related Custodial File held for the benefit of the
Certificateholders to such Person as directed by the Servicer, and the Trustee
shall execute and deliver at such Person's written direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. In addition, the
Trustee will assign the rights of the Trust with respect to such Mortgage Loan
under the EquiFirst Assignment Agreement or the Barclays Representation
Agreement to such Person and, upon such assignment, shall have no further
duties, obligations or responsibilities thereunder with respect to such Mortgage
Loan. In accordance with Section 10.05(b), the Trustee shall promptly notify
each Rating Agency of a purchase of a Mortgage Loan pursuant to this Section
2.03.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Custodian.
Section 2.04 [Reserved].
Section 2.05 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized Denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC Provisions shall
be the Closing Date. The "latest possible maturity date" of the regular
interests in each Trust REMIC is the Distribution Date occurring in April 2037,
which is the Distribution Date in the month following the latest Mortgage Loan
maturity date.
Amounts distributable to the Class X Certificates (prior to any
reduction for any Basis Risk Payment, Net Swap Payment or Swap Termination
Payment), exclusive of any amounts received from the Swap Provider, shall be
deemed paid from the Upper Tier REMIC in respect of the Class X Interest and the
Class IO Interest to the Holders of the Class X Certificates prior to
distribution of any Basis Risk Payments to the LIBOR Certificates or Net Swap
Payments or Swap Termination Payment to the Swap Provider.
For federal income tax purposes, any amount distributed on the LIBOR
Certificates on any Distribution Date in excess of the amount distributable on
their Corresponding Class of Upper Tier Regular Interest on such Distribution
Date shall be treated as having been paid from the Excess Reserve Fund Account
or the Supplemental Interest Account, as applicable, and any amount
distributable on such Corresponding Class of Upper Tier Regular Interest on such
Distribution Date in excess of the amount distributable on the Corresponding
Class of LIBOR Certificates on such Distribution Date shall be treated as having
been paid to the Supplemental Interest Account, all pursuant to and as further
provided in Section 8.13.
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicer that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the power and authority to convey the Mortgage
Loans and to execute, deliver and perform, and to enter into and consummate
transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite company action having been taken,
and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of, or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been received or obtained on or
prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the certificate of formation or limited liability company
agreement of the Depositor, or (B) of any term, condition or provision of any
material indenture, deed of trust, contract or other agreement or instrument to
which the Depositor or any of its subsidiaries is a party or by which it or any
of its subsidiaries is bound; (ii) results or will result in a violation of any
law, rule, regulation, order, judgment or decree applicable to the Depositor of
any court or governmental authority having jurisdiction over the Depositor or
its subsidiaries; or (iii) results in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that would materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04.
The Depositor shall indemnify the Trustee and the Trust and hold the
Trustee and the Trust harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses (including, without limitation, any taxes payable
by the Trust) resulting from any third party claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach by the Depositor of any
of its representations and warranties or obligations contained in this
Agreement. This indemnity shall survive the termination of this Agreement.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Custodial Files to the Custodian and shall inure to the benefit of
the Trustee.
Section 2.08 Enforcement of Obligations for Breach of Mortgage Loan
Representations. Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by an Original Loan Seller or Barclays Bank PLC
pursuant to the EquiFirst Agreements or the Barclays Representation Agreement,
respectively, the party discovering such breach shall give prompt written notice
thereof to the other parties to this Agreement and the applicable Original Loan
Seller or Barclays Bank PLC, as applicable. If the Trustee has received written
notice from the Depositor of such breach under the EquiFirst Agreements or the
Barclays Representation Agreement specifying action to be taken by the Trustee,
the Trustee shall pursue all legal remedies available to the Trustee to enforce
the rights of the Trust under the EquiFirst Agreements or the Barclays
Representation Agreement with respect to such breach as directed by the
Depositor. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Trustee shall be entitled to be reimbursed therefor out of
the Collection Account.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-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 or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, if the Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer in its
own name or in the name of a Subservicer is hereby authorized and empowered by
the Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall be responsible for preparing and recording
all lien releases and mortgage satisfactions in accordance with state and local
regulations, and shall be responsible for all expenses in connection therewith
if not paid by the Mortgagor if permitted by applicable law and the related
Mortgage Loan Documents (except if such expense would constitute a Servicing
Advance) and all other consequences resulting from its failure to fully
discharge such obligation. The Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
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 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents provided to the Trustee as are necessary or appropriate to enable
the Servicer or any Subservicer to carry out their servicing and administrative
duties hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement shall constitute, a power of attorney to carry out such duties
including a power of attorney to take title to Mortgaged Properties after
foreclosure on behalf of the Trustee. The Trustee shall execute a separate power
of attorney, substantially in the form attached as Exhibit V, in favor of the
Servicer for the purposes described herein to the extent necessary or desirable
to enable the Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Servicer or any Subservicers under such powers of
attorney. Notwithstanding anything contained herein to the contrary, no Servicer
or Subservicer shall without the Trustee's consent: (i) initiate any action,
suit or proceeding solely under the Trustee's name without indicating such
Servicer's or Subservicer's, as applicable, representative capacity, or (ii)
take any action with the intent to, or which actually does cause, the Trustee to
be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01 and except for Servicing Advances) and,
except with respect to any Mortgage Loan in default or as to which default is
reasonably foreseeable in the judgment of the Servicer, the Servicer shall not
(i) permit any modification with respect to any Mortgage Loan that would change
the Mortgage Rate, reduce or increase the principal balance (except for
reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (except for a reduction of interest payments
resulting from the application of the Servicemembers Civil Relief Act or any
similar state statutes), (ii) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup day"
under the REMIC Provisions, or (iii) except as provided in Section 3.07(a),
waive any Prepayment Charges. In addition to the foregoing, in the event that
any Mortgage Loan is in default or, in the judgment of the Servicer, a default
is reasonable foreseeable, the Servicer may accept payment from the related
Mortgagor of an amount less than the unpaid principal balance of such Mortgage
Loan in final satisfaction thereof, if in the Servicer's determination such
action is not materially adverse to the interests of the Certificateholders
(taking into account any estimated Realized Loss that might result absent such
action).
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). The Servicer represents and warrants to the other
parties hereto that no Subservicing Agreement is in effect as of the Closing
Date with respect to any Mortgage Loans required to be serviced by it hereunder.
The Servicer shall give notice to the Depositor and the Trustee of any such
Subservicer and Subservicing Agreement, which notice shall contain all
information (including without limitation a copy of the Subservicing Agreement)
reasonably necessary to enable the Trustee, pursuant to Section 8.12(g), to
accurately and timely report the event under Item 6.02 of Form 8-K pursuant to
the Exchange Act (if such reports under the Exchange Act are required to be
filed under the Exchange Act). No Subservicing Agreement shall be effective
until 30 days after such written notice is received by both the Depositor and
the Trustee. The Trustee shall not be required to review or consent to such
Subservicing Agreements and shall have no liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(d) The Servicer shall cause any Subservicer engaged by the Servicer
(or by any Subservicer) for the benefit of the Depositor and the Trustee to
comply with the provisions of this Section 3.02 and with Sections 3.22, 3.23,
6.02 and 6.05 of this Agreement to the same extent as if such Subservicer were
the Servicer, and to provide the information required with respect to such
Subservicer under Section 8.12 of this Agreement. The Servicer shall be
responsible for obtaining from each such Subservicer and delivering to
applicable Persons any servicer compliance statement required to be delivered by
such Subservicer under Section 3.22 and any assessment of compliance report and
related accountant's attestation required to be delivered by such Subservicer
under Section 3.23, in each case as and when required to be delivered.
(e) Subject to the conditions set forth in this Section 3.02(e), the
Servicer and any Subservicer engaged by the Servicer is permitted to utilize one
or more Subcontractors to perform certain of its obligations hereunder. The
Servicer shall promptly upon request provide to the Depositor and the Trustee a
written description (in form and substance satisfactory to the Depositor and the
Trustee) of the role and function of each Subcontractor utilized by the Servicer
or any such Subservicer, specifying, not later than the date specified for
delivery of the annual report on assessment of compliance set forth in Section
3.23(a) (i) the identity of each such Subcontractor, if any, that is
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (ii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (i) of this paragraph. As a condition to the utilization by
the Servicer or any such Subservicer of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any such Subservicer) for the benefit of the Depositor and the
Trustee to comply with the provisions of Section 3.23 of this Agreement to the
same extent as if such Subcontractor were the Servicer. The Servicer shall be
responsible for obtaining from each such Subcontractor and delivering to the
applicable Persons any assessment of compliance report and related accountant's
attestation required to be delivered by such Subcontractor under Section 3.23,
in each case as and when required to be delivered.
Notwithstanding the foregoing, the Servicer engages a Subcontractor
in connection with the performance of any of its duties under this Agreement,
the Servicer shall be responsible for determining whether such Subcontractor is
a "servicer" within the meaning of Item 1101 of Regulation AB and whether any
such affiliate or third-party vendor meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB. If the Servicer determines, pursuant to the
preceding sentence, that such Subcontractor is a "servicer" within the meaning
of Item 1101 of Regulation AB and meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB, then such Subcontractor shall be deemed to be a
Subservicer for purposes of this Agreement, the engagement of such Subservicer
shall not be effective unless and until notice is given pursuant to Section
3.02(a) and the Servicer shall comply with Section 3.02(d) with respect thereto.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement; provided, however, that the
termination, resignation or removal of a Subservicer shall be not be effective
until 30 days after written notice is received by both the Depositor and the
Trustee that contains all information reasonably necessary to enable the
Trustee, pursuant to Section 8.12(g), to accurately and timely report the event
under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under
the Exchange Act are required to be filed under the Exchange Act). In the event
of termination of any Subservicer, all servicing obligations of such Subservicer
shall be assumed simultaneously by the Servicer without any act or deed on the
part of such Subservicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Subservicing Agreement
with a successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee or the successor Servicer if the successor is not the
Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee or the successor Servicer if
the successor is not the Trustee, prior to the Trustee or the successor Servicer
if the successor is not the Trustee, assuming such rights and obligations,
unless the Trustee elects to terminate any Subservicing Agreement in accordance
with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee, its
designee or the successor Servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by or on behalf
of it, and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) 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 and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the Due Dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided, that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding anything to the contrary contained in this Agreement, the
Servicer may waive, in whole or in part, a Prepayment Charge only under the
following circumstances: (i) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Servicer,
maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and the related Mortgage Loan; provided, however, that with
respect to any Group I Mortgage Loan, the Servicer shall waive such Prepayment
Charge if the Mortgage Loan is accelerated or paid-off in connection with the
workout of a delinquent Mortgage Loan or due to the related Mortgagor's default,
notwithstanding that the terms of the Mortgage Loan or federal or state law
might permit the imposition of such Prepayment Charge, or (ii) such Prepayment
Charge is not permitted to be collected by applicable law. If a Prepayment
Charge is waived other than as permitted by the prior sentence, then the
Servicer is required to pay the amount of such waived Prepayment Charge, for the
benefit of the Holders of the Class P Certificates, by depositing such amount
into the Collection Account from its own funds, without any right of
reimbursement therefor, together with and at the time that the amount prepaid on
the related Mortgage Loan is required to be deposited into the Collection
Account; provided, however, that the Servicer shall not have an obligation to
pay the amount of any uncollected Prepayment Charge if the failure to collect
such amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders as a non-interest
bearing account, to receive any Basis Risk Payment and to secure their limited
recourse obligation to pay to the LIBOR Certificateholders Basis Risk Carry
Forward Amounts (prior to using any Net Swap Receipts). For the avoidance of
doubt, any Basis Risk Carry Forward Amounts shall be paid to the LIBOR
Certificates first from the Excess Reserve Fund Account and then from the
Supplemental Interest Account.
(ii) On each Distribution Date, the Trustee shall deposit the amount
of any Basis Risk Payment for such date into the Excess Reserve Fund
Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
Carry Forward Amount on any Class of Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x) the Class X
Distributable Amount (without regard to the reduction in the definition thereof
for any Basis Risk Carry Forward Amount or any Defaulted Swap Termination
Payment (to the extent remaining after the distributions specified in Sections
4.02(a)(iii)(A)-(R)) and (y) the aggregate Basis Risk Carry Forward Amounts for
such Distribution Date and (2) withdraw from the Excess Reserve Fund Account
amounts necessary to pay to such Class or Classes of Certificates the Basis Risk
Carry Forward Amount. Such payments shall be allocated to those Classes and paid
in the priority set forth in Section 4.02(a)(iii)(T).
(ii) The Trustee shall account for the Excess Reserve Fund Account
as an asset of a grantor trust under subpart E, Part I of subchapter J of
the Code and not as an asset of any REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are
the Class X Certificateholders. For all federal tax purposes, amounts
transferred by the Upper Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholders.
(iii) Any Basis Risk Carry Forward Amounts paid by the Trustee to
the LIBOR Certificateholders from the Excess Reserve Fund Account or the
Supplemental Interest Account shall be accounted for by the Trustee as
amounts paid first to the Holders of the Class X Certificates (in respect
of the Class X Interest or the Class IO Interest, respectively) and then
to the respective Class or Classes of LIBOR Certificates. In addition, the
Trustee shall account for the LIBOR Certificateholders' rights to receive
payments of Basis Risk Carry Forward Amounts from the Excess Reserve Fund
Account (along with payments of Basis Risk Carry Forward Amounts and,
without duplication, Upper Tier Carry Forward Amounts from the
Supplemental Interest Account), subject to the obligation to pay Class IO
Shortfalls, as rights and obligations under a limited recourse notional
principal contract between the Class X Certificateholders and the Holders
of each of LIBOR Certificates.
(iv) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.07(c) and
Sections 4.02(a)(iii)(T) and (V).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders, which shall be a non-interest
bearing trust account. The Depositor shall cause to be deposited into the
Distribution Account on the Closing Date the Closing Date Deposit Amount. The
Trustee shall, promptly upon receipt, deposit in the Distribution Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at the
direction of the Servicer.
(e) The Trustee may invest the funds in the Distribution Account in
one or more Permitted Investments in accordance with Section 3.12. The Trustee
may withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein during the Trustee Float Period for its
own benefit.
(f) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account within a reasonable period of time prior to any change
thereof.
(g) In order to comply with its duties under the USA Patriot Act of
2001 and other laws, rules and regulations applicable to banking institutions,
including those related to the funding of terrorist activities and money
laundering, the Trustee is required to obtain, verify and record certain
information relating to individuals and entities which maintain a business
relationship with the Trustee. Accordingly, each of the parties agrees to
provide to the Trustee upon its request from time to time such party's complete
name, address, tax identification number and such other identifying information
together with copies of such party's constituting documentation, securities
disclosure documentation and such other identifying documentation as may be
available for such party.
(h) On or prior to the Determination Date, the Custodian shall
deliver an invoice to the Trustee, setting forth the amount of the Custodian Fee
for the related Distribution Date. On each Distribution Date, the Trustee shall
remit the Custodian Fee to the Custodian from funds in the Distribution Account.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Subservicing Account. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract in
effect with respect to each First Lien Mortgage Loan (each, a "Tax Service
Contract"). Each Tax Service Contract shall be assigned to the Trustee, or its
designee, at the Servicer's expense in the event that the Servicer is terminated
as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) above, the Servicer undertakes to perform such functions. To the
extent the related Mortgage provides for Escrow Payments, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
The Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all (i) collections from the Mortgagors (or related advances
from Subservicers) for the payment of taxes, assessments, hazard insurance
premiums and comparable items for the account of the Mortgagors ("Escrow
Payments") collected on account of the Mortgage Loans and (ii) all Condemnation
Proceeds and Insurance Proceeds to be applied to the restoration of the related
Mortgaged Property or released to the related Mortgagor in accordance with
applicable law and Accepted Servicing Practices, and the Servicer shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay itself any interest earned on the Escrow Account or, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
transfer such funds to a replacement Escrow Account that meets the requirements
hereof; (vii) recover amounts deposited in error or (viii) to release
Condemnation Proceeds or Insurance Proceeds to be applied to the restoration of
the related Mortgaged Property or to the related Mortgagor in accordance with
the applicable law and Accepted Servicing Practices. As part of its servicing
duties, the Servicer or Subservicers shall pay to the Mortgagors interest on
funds in Escrow Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Escrow Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor. To the
extent that a Mortgage does not provide for Escrow Payments, the Servicer shall
use its reasonable best efforts to determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments, including
any payment required to be made in connection with a Mortgage Loan that does
provide for Escrow Payments and is insufficient to make such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee and
the Certificateholders, the Servicer shall establish and maintain, or cause to
be established and maintained, one or more segregated Eligible Accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee on behalf of the Certificateholders. On behalf of the Trustee, the
Servicer shall deposit or cause to be deposited in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, and shall thereafter deposit into the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices, Liquidation Proceeds and
Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan purchased in accordance with
the EquiFirst Agreements or the Barclays Representation Agreement; and
(vii) all Prepayment Charges collected by the Servicer or required
to be paid by the Servicer pursuant to Section 3.07.
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, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. 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. The Servicer shall at its own expense be responsible for
reviewing and reconciling the Collection Account in accordance with industry
standards and shall act promptly to resolve any discrepancies related thereto.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12, subject
to Section 3.21(c). The Servicer shall give notice to the Trustee and the
Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof.
Section 3.11 Withdrawals from the Collection 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 4.01:
(i) on or prior to each Remittance Date, to remit to the Trustee (A)
the Custodian Fee with respect to such Distribution Date, (B) all
Available Funds in respect of the related Distribution Date together with
all amounts representing Prepayment Charges (payable to the Class P
Certificateholders) from the Mortgage Loans received by the Servicer
during the related Prepayment Period and (C) all income and gain realized
from the investment of funds deposited in the Collection Account, for
deposit in the Supplemental Float Account;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances and any
previously unpaid late charges, fees and penalties with respect to each
Mortgage Loan, but only to the extent of any Late Collections or other
amounts as may be collected by the Servicer from a Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as additional servicing compensation (in
addition to the Servicing Fee) on each Remittance Date any Prepayment
Interest Excesses to the extent permitted under Section 3.21(b);
(v) to pay to the applicable Person, with respect to each Mortgage
Loan that has previously been purchased or replaced by such Person
pursuant to the EquiFirst Agreements or the Barclays Representation
Agreement, all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(vi) to reimburse the Servicer for (A) any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii);
(vii) to pay, or to reimburse the Servicer for Servicing Advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to the Servicer, the Depositor or the
Trustee, as the case may be, pursuant to Section 6.03, Section 7.02 or
Section 8.05;
(ix) to reimburse the Servicer 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 the EquiFirst Agreements or the
Barclays Representation Agreement that were included in the Repurchase
Price of the Mortgage Loan, including any expenses arising out of the
enforcement of the purchase obligation, to the extent not otherwise paid
pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination
of this Agreement;
(xii) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Trustee on the Remittance Date
occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse such Servicer for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
Advances; and
(xiii) to invest funds in Permitted Investments in accordance with
Section 3.12.
(b) 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 (a)(ii), (iii), (v), (vi), (vii), (viii), (ix) and
(x) above. The Servicer shall provide written notification (as set forth in
Section 4.01(d)) to the Trustee, on or prior to the next succeeding Remittance
Date, upon making any withdrawals from the Collection Account pursuant to
subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account, Escrow
Accounts and the Distribution Account. (a) (i) The Servicer may invest the funds
in the Collection Account pursuant to Section 3.21(c) and (ii) the Servicer may
invest the funds in the Escrow Accounts (to the extent permitted by law and the
related Mortgage Loan documents) and the Trustee may (but is not obligated to)
invest funds in the Distribution Account during the Trustee Float Period and
shall (except during the Trustee Float Period) invest such funds in the
Distribution Account (for purposes of this Section 3.12, each such Account is
referred to as an "Investment Account"), in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement;
provided, however, that any such Permitted Investment may mature, unless payable
on demand or held at the institution of the Trustee, no later than one Business
Day prior to the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. If no investment instruction is given in a
timely manner, the Trustee shall hold the funds in the Distribution Account
uninvested. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Servicer or the Trustee, as applicable. The Servicer or
the Trustee, as applicable, shall be entitled to sole possession over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Servicer or the Trustee or its
agent, as applicable, together with any document of transfer necessary to
transfer title to such investment to the Servicer or the Trustee or its agent,
as applicable. In the event amounts on deposit in an Investment Account are at
any time invested in a Permitted Investment payable on demand, the Servicer or
the Trustee, as applicable, may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account (subject to Section 3.21(c) and Section
4.07) or Escrow Account, as applicable, held by or on behalf of the Servicer,
shall be for the benefit of the Servicer and shall be subject to its withdrawal
in the manner set forth in Section 3.11. The Servicer shall, from its own funds,
deposit in the Collection Account or Escrow Account, as applicable, the amount
of any loss of principal incurred in respect of any such Permitted Investment
made with funds in such accounts immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Trustee, and shall be subject to the Trustee's withdrawal in the
manner set forth in Section 3.07(e). The Trustee shall, from its own funds,
deposit in the Distribution Account the amount of any loss of principal incurred
in respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment of
funds held in the Escrow Account or the Collection Account, or if a default
occurs in any other performance required under any Permitted Investment of funds
held in the Escrow Account or the Collection Account, the Servicer shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account (except that if any losses
are incurred from the investment of funds deposited in the Distribution Account
during the Trustee Float Period, the Trustee shall be responsible for
reimbursing the Trust for such loss immediately upon realization of such loss)
if made in accordance with this Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan fire insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the least of (i) the
outstanding principal balance of such Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss to the improvements that are a part
of such property on a replacement cost basis and (iii) the maximum insurable
value of the improvements which are a part of such Mortgaged Property, in each
case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property, plus accrued interest at
the Mortgage Rate and related Servicing Advances. 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 (other than amounts required to be deposited in
the Escrow Account and applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Trustee, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
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 and flood
insurance has been made available, 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 the event that the Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or
(ii) having a general policy rating of A:VI or better in Best's (or such other
rating that is comparable to such rating) insuring against hazard losses on all
of the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case 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 the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
Collection Account from its own funds the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of itself and the Trustee, claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy.
(b) 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 the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans. 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 provide the Trustee upon request with copies of any such
insurance policies and fidelity bond. 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 days' prior written notice to the Trustee. The
Servicer shall also cause each Subservicer to maintain a policy of insurance
covering errors and omissions and a fidelity bond which would meet such
requirements.
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into either (i)
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 or (ii) a
substitution agreement as provided in the succeeding sentence. 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 underwriting criteria of the Servicer and has a credit
risk rating at least equal to that of the original Mortgagor. In connection with
any assumption, modification 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, or a new policy meeting the requirements of this Section is obtained.
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 Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
and the Custodian that any such substitution, modification or assumption
agreement has been completed by forwarding to 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 whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an acquisition
of REO Property) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from this Agreement pursuant to any
other provision hereof. The Servicer shall use reasonable efforts to realize
upon such defaulted Mortgage Loans in such manner as will maximize the receipt
of principal and interest by the Trustee, taking into account, among other
things, the timing of foreclosure proceedings; provided, however, with respect
to any Second Lien Mortgage Loan for which the related first lien mortgage loan
is not included in the Trust Fund, if, after such Mortgage Loan becomes 180 days
or more delinquent, the Servicer determines that a significant net recovery is
not possible through foreclosure, such Mortgage Loan may be charged off and the
Mortgage Loan will be treated as a Liquidated Mortgage Loan giving rise to a
Realized Loss. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such
restoration will increase the net Liquidation Proceeds of the related Mortgage
Loan to the Trustee, after reimbursement to itself for such expenses, and (ii)
that such expenses will be recoverable by the Servicer through Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or Subsequent Recoveries
from the related Mortgaged Property, as contemplated in Section 3.11. The
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or Subsequent Recoveries or any income from an
REO Property, will be applied in the following order of priority: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances, and any previously unpaid late charges, fees and penalties, pursuant
to Section 3.11 or 3.17; second, to reimburse the Servicer for any related
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant to Section 3.11; third, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be distributed if not
in connection with a liquidation or REO Disposition; and fourth, as a recovery
of principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Rate (net of the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Servicer or any
Subservicer pursuant to Section 3.11 or 3.17. The portions of the recovery so
allocated to interest at the Mortgage Rate (net of the Servicing Fee Rate) and
to principal of the Mortgage Loan shall be applied as follows: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to paragraph (g) of
Section 3.17 with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the Servicer
shall determine consistent with Accepted Servicing Practices how the Servicer
shall proceed with respect to the Mortgaged Property. In the event (a) the
environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the Servicer
proceeds with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean-up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the
Servicer, the Servicer shall be entitled to be reimbursed from amounts in the
Collection Account pursuant to Section 3.11. In the event the Servicer does not
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed from general collections for all Servicing Advances
made with respect to the related Mortgaged Property from the Collection Account
pursuant to Section 3.11.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, within five (5) Business Days of the payment in full, notify the
Trustee and the Custodian by a certification (which certification shall include
a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Custodial File by
submitting a Request for Release, which Request for Release may be in an
electronic format (including in the form of an e-mail) in a form acceptable to
the Custodian, to the Custodian (with a copy to the Trustee). Upon receipt of
such certification and Request for Release, the Custodian shall promptly release
the related Custodial File to the Servicer within two (2) Business Days. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account unless such expenses
constitute Servicing Advances.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Custodian shall, upon
request of the Servicer and delivery to the Custodian of a Request for Release,
which Request for Release may be in an electronic format (including in the form
of an e-mail) in a form acceptable to the Custodian, release the related
Custodial File to the Servicer within three (3) Business Days, and the Trustee
shall, at the direction of the Servicer (which may be by a Request for Release),
execute such documents as shall be necessary to the prosecution of any such
proceedings and the Servicer shall retain the Mortgage File in trust for the
benefit of the Trustee. Such Request for Release shall obligate the Servicer to
return each and every document previously requested from the Custodial File to
the Custodian when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Collection Account or the Mortgage
File or such document has been delivered to an attorney, or to a public trustee
or other public official as required by law, for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property either judicially or non-judicially, and the Servicer has delivered to
the Custodian a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Custodian to the Servicer or its designee. Upon
receipt of a Request for Release under this Section 3.16, the Custodian shall
deliver the related Custodial File to the Servicer (if by overnight courier it
shall be at the Servicer's expense).
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the deed
or certificate of sale shall be issued to Deutsche Bank National Trust Company
(or, if applicable, the name of the successor Trustee) as Trustee for EquiFirst
Loan Securitization Trust 2007-1 Mortgage Pass-Through Certificates, Series
2007-1, or to its nominee, for the benefit of the Certificateholders.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders. The Servicer shall notify the Trustee from time to time as
to the status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within three years after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. Subject to Section 3.17(h), if a period longer than three years is
permitted under the foregoing sentence and is necessary to sell any REO
Property, the Servicer shall report monthly to the Trustee as to the progress
being made in selling such REO Property.
(d) 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 deposit such funds in the
Collection Account.
(e) The Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding Servicing Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be deposited, in no event more than two
(2) Business Days after the Servicer's receipt thereof, in the Collection
Account all revenues received with respect to the related REO Property and shall
withdraw therefrom funds necessary for the proper operation, management and
maintenance of the REO Property.
(f) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the Servicer as additional servicing compensation.
(h) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property as soon as possible, but in no event later than the conclusion
of the third calendar year beginning after the year of its acquisition by
Pooling Tier REMIC-1 unless (i) the Servicer applies for an extension of such
period from the Internal Revenue Service pursuant to the REMIC Provisions and
Code Section 856(e)(3), in which event such REO Property shall be sold within
the applicable extension period, or (ii) the Servicer obtains for the Trustee an
Opinion of Counsel, addressed to the Depositor, the Trustee and the Servicer, to
the effect that the holding by Pooling Tier REMIC-1 of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause any
Trust REMIC to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of relevant state laws at any time. The Servicer shall
manage, conserve, protect and operate each REO Property for the Trustee, the
Certificateholders and the Trust Fund solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) or
result in the receipt by the Pooling Tier REMIC-1 of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code or
any "net income from foreclosure property" which is subject to taxation under
Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the Trustee
on behalf of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders for the period prior to the sale of such REO Property;
provided, however, that any rent received or accrued with respect to such REO
Property qualifies as "rents from real property" as defined in Section 856(d) of
the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Adjustment Date and shall adjust the Scheduled Payment on the
related mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. In
the event that an Index becomes unavailable or otherwise unpublished, the
Servicer shall select a comparable alternative index over which it has no direct
control and which is readily verifiable. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Trustee such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer or the receipt of notice from
the Trustee that the Servicer has failed to adjust a Mortgage Rate or Scheduled
Payment in accordance with the terms of the related Mortgage Note, the Servicer
shall deposit in the Collection Account from its own funds the amount of any
interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. In the event the Servicer reasonably believes that
compliance with this Section will make the Mortgage Loans legal for investment
by federally insured savings and loan associations, the Servicer shall provide,
or cause the Subservicer to provide, to the Depositor, the Trustee, the OTS or
the FDIC and the examiners and supervisory agents thereof, access to the
documentation regarding the Mortgage Loans in its possession required by
applicable regulations of the OTS. Such access shall be afforded without charge,
but only upon reasonable and prior written request and during normal business
hours at the offices of the Servicer or, if applicable, any Subservicer. Nothing
in this Section shall derogate from the obligation of any such party to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of any such party to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan serviced by the Servicer. All Mortgage
Files and funds collected or held by, or under the control of, the Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including, but not limited to,
any funds on deposit in its Collection Account, shall be held by the Servicer
for and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
The Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in any Collection Account, the Distribution
Account or any Escrow Account, or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, Subsequent Recoveries and
REO Proceeds related to such Mortgage Loan, the Servicing Fee with respect to
each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of related Late Collections and as otherwise permitted under
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement; provided, however, that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
The Servicer may elect to have the entire Servicing Fee represented
by a certificate in the form attached as Exhibit X hereto (the "Servicing Fee
Certificate"). The Servicing Fee Certificate may only be held by the Trustee on
behalf of the Servicer and shall not be issued to or held by any other Person
(including without limitation any Subservicer). The Servicer shall deliver the
Servicing Fee Certificate to the Trustee on the date hereof as security for the
Servicer's obligation to surrender the Servicing Fee Certificate upon
resignation, termination or merger or consolidation of the Servicer, as
applicable. The Servicer shall be entitled to the Servicing Fee whether or not
the Servicing Fee Certificate is outstanding. The Servicing Fee Certificate is
not an asset of the Trust Fund, nor of any REMIC thereof and is not subject to
any tax reporting provisions of this Agreement. The Servicing Fee will not be
paid pursuant to or through the Servicing Fee Certificate, but rather as
provided for in the paragraph immediately preceding this paragraph.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, net Prepayment Interest Excesses (to
the extent not required to offset Prepayment Interest Shortfalls), NSF fees,
reconveyance fees and other similar fees and charges (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 as
additional servicing compensation, to interest or other income earned on
deposits in the Escrow Account (to the extent permitted by law and the related
Mortgage Loan documents) in accordance with Section 3.12.
(c) The Servicer shall forward to the Trustee for deposit in the
Supplemental Float Account all income and gain realized from the investment of
funds deposited in the Collection Account.
(d) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer shall
deliver, and shall cause each Subservicer engaged by the Servicer to deliver or
cause to be delivered, to the Depositor, the Rating Agencies and the Trustee on
or before March 15th of each calendar year, commencing in 2008, an Officer's
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer or Subservicer, as applicable, during the preceding
calendar year and of its performance under this Agreement or the applicable
Subservicing Agreement, as the case may be, has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on such
review, the Servicer or Subservicer, as applicable, has fulfilled all of its
obligations under this Agreement or the applicable Subservicing Agreement, as
the case may be, in all material respects, throughout such year, or, if there
has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officers and the nature and status
thereof. Promptly after receipt of each such Officer's Certificate, the
Depositor shall review such Officer's Certificate and, if applicable, consult
with the Servicer or Subservicer as to the nature of any failure by the Servicer
or Subservicer in the fulfillment of any of the Servicer's or Subservicer's
obligations. The obligations of the Servicer and Subservicer under this Section
apply to each Servicer and Subservicer that serviced a Mortgage Loan, as
applicable, during the applicable period, whether or not the Servicer or such
Subservicer is acting as Servicer or Subservicer, as applicable, at the time
such Officer's Certificate is required to be delivered. None of the Servicer or
Subservicer shall be required to cause the delivery of any Officer's Certificate
required by this Section until March 15th in any given year so long as it has
received written confirmation from the Depositor that a Form 10-K is not
required to be filed in respect of the Trust for the preceding calendar year.
In the event the Servicer or any Subservicer engaged by the Servicer
is terminated or resigns pursuant to the terms of this Agreement, or any
applicable agreement in the case of a Subservicer, as the case may be, such
party shall provide with respect to the year of termination an Officer's
Certificate pursuant to this Section 3.22 or to such applicable agreement, as
the case may be, notwithstanding any such termination, assignment or
resignation, but only covering the period prior to such termination.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants' Attestation Report.
(a) Not later than March 15th of each calendar year commencing in
2008, each of the Servicer, the Trustee and the Custodian shall deliver, and the
Servicer shall cause each Subservicer engaged by the Servicer and the Servicer,
the Custodian and the Trustee shall cause each Subcontractor utilized by the
Servicer (or by any such Subservicer), the Custodian or the Trustee, as
applicable, and determined by the Servicer, the Custodian or the Trustee, as
applicable, pursuant to Section 3.02(e) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB (in each case, a
"Servicing Function Participant"), to deliver, each at its own expense, to the
Depositor and the Trustee, a report on an assessment of compliance with the
Servicing Criteria applicable to it that contains (A) a statement by such party
of its responsibility for assessing compliance with the Servicing Criteria
applicable to it, (B) a statement that such party used the Servicing Criteria to
assess compliance with the applicable Servicing Criteria, (C) such party's
assessment of compliance with the applicable Servicing Criteria as of and for
the period ending the end of the fiscal year covered by the Form 10-K required
to be filed pursuant to Section 8.12, including, if there has been any material
instance of noncompliance with the applicable Servicing Criteria, a discussion
of each such failure and the nature and status thereof, and (D) a statement that
a registered public accounting firm has issued an attestation report on such
Person's assessment of compliance with the applicable Servicing Criteria as of
and for such period. Each such assessment of compliance report shall be
addressed to the Depositor and signed by an authorized officer of the applicable
company, and shall address each of the applicable Servicing Criteria set forth
on Exhibit P hereto, or as set forth in the notification furnished to the
Depositor and the Trustee pursuant to Section 3.23(c). Each of the Servicer, the
Custodian and the Trustee hereby acknowledges and agrees that its respective
assessments of compliance will cover the items identified on Exhibit P hereto as
being covered by such party. The parties to this Agreement acknowledge that
where a particular Servicing Criteria has multiple components, each party's
assessment of compliance and related attestation of compliance will relate only
to those components that are applicable to such party. Promptly after receipt of
each such report on assessment of compliance, the Depositor shall review each
such report and, if applicable, consult with the Servicer, the Custodian or the
Trustee as to the nature of any material instance of noncompliance with the
Servicing Criteria applicable to it (and each Subservicer or Servicing Function
Participant engaged or utilized by the Servicer, such Subservicer, the Custodian
or the Trustee, as applicable), as the case may be. None of the Servicer, the
Custodian or the Trustee or any Subservicer or Servicing Function Participant
shall be required to cause the delivery of any such assessments until March 15th
in any given year so long as it has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect of the Trust
for the preceding calendar year.
In the event the Servicer, the Trustee, the Custodian, any
Subservicer or any Servicing Function Participant engaged by any such party is
terminated, assigns its rights and obligations under, or resigns pursuant to,
the terms of this Agreement, or any other applicable agreement, as the case may
be, such party shall provide with respect to the year of termination a report on
assessment of compliance pursuant to this Section 3.23, or to such other
applicable agreement, notwithstanding any such termination, assignment or
resignation.
(b) Not later than March 15th of each calendar year commencing in
2008, the Servicer, the Custodian and the Trustee shall cause, and the Servicer
shall cause each Subservicer engaged by the Servicer and the Servicer, the
Custodian and the Trustee shall cause each Servicing Function Participant
utilized by the Trustee, the Custodian or the Servicer, as applicable (or by any
Subservicer engaged by the Servicer), to cause, each at its own expense, a
registered public accounting firm (which may also render other services to such
party) that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Trustee and the Depositor that attests to
and reports on such Person's assessment of compliance with the Servicing
Criteria applicable to it , with a copy to the Rating Agencies, to the effect
that (i) it has obtained a representation regarding certain matters from the
management of such Person, which includes an assertion that such Person has
complied with the Servicing Criteria applicable to it pursuant to Section
3.23(a) and (ii) on the basis of an examination conducted by such firm in
accordance with standards for attestation engagements issued or adopted by the
PCAOB, that attests to and reports on such Person's assessment of compliance
with the Servicing Criteria applicable to it. In the event that an overall
opinion cannot be expressed, such registered public accounting firm shall state
in such report why it was unable to express such an opinion. Each such related
accountant's attestation report shall be made in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act. Promptly after receipt of each such accountants' attestation
report, the Depositor shall review the report and, if applicable, consult with
the Servicer, the Custodian or the Trustee as to the nature of any defaults by
the Servicer, the Custodian or the Trustee (and each Subservicer or Servicing
Function Participant engaged or utilized by the Servicer, the Custodian or the
Trustee, as applicable, or by any Subservicer engaged by the Servicer), as the
case may be, in the fulfillment of any of the Servicer's, the Custodian's, the
Trustee's or the applicable Subservicer's or Servicing Function Participant's
obligations hereunder or under any applicable sub-servicing agreement. None of
the Servicer, the Custodian, the Trustee or any Servicer or Servicing Function
Participant shall be required to cause the delivery of any such attestation
required by this paragraph until March 15th in any given year so long as it has
received written confirmation from the Depositor that a Form 10-K is not
required to be filed in respect of the Trust for the preceding calendar year.
(c) No later than February 1 of each fiscal year, commencing in
2008, the Servicer shall notify the Trustee and the Depositor as to the name of
each Subservicer engaged by it for the prior fiscal year and each Servicing
Function Participant utilized by it and by each Subservicer engaged by it, but
only to the extent there has been a change in the information in such
notification from notices previously delivered, and the Trustee and the
Custodian shall notify the Depositor as to the name of each Servicing Function
Participant utilized by the Trustee or the Custodian, as applicable, and each
such notice will specify what specific Servicing Criteria will be addressed in
the report on assessment of compliance prepared by such Subservicer and
Servicing Function Participant in each case, to the extent of any change from
the prior year's notice, if any. When the Servicer, the Custodian or the Trustee
submits its assessment pursuant to Section 3.23(a), the Servicer, the Custodian
and the Trustee, as applicable, will also at such time include the assessment
(and related attestation pursuant to Section 3.23(b)) of each Servicing Function
Participant utilized by it and by each Subservicer engaged by it.
In the event the Servicer, the Custodian, the Trustee, any
Subservicer or any Servicing Function Participant engaged by any such party, is
terminated, assigns its rights and duties under, or resigns pursuant to the
terms of, this Agreement, or any applicable agreement, as the case may be, such
party shall cause a registered public accounting firm to provide with respect to
the year of termination, at the cost and expense of such party, an attestation
report pursuant to this Section 3.23, or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
Section 3.24 Trustee to Act as Servicer. (a) Subject to Section
7.02, in the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter, except that the Trustee shall not be (i)
liable for losses of the predecessor Servicer pursuant to Section 3.10 or any
acts or omissions of the predecessor Servicer hereunder, (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of the predecessor Servicer pursuant to Section 2.03 or
(iv) deemed to have made any representations and warranties of the Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing 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.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected and held by it,
and otherwise use its best efforts to effect the orderly and efficient transfer
of the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date for deposit in the Distribution Account an
amount from its own funds equal to the Compensating Interest payable by the
Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on the
primary borrower of such Mortgage Loan to Equifax, Experian and TransUnion
Credit Information Company (three of the credit repositories) on a monthly
basis.
(b) The Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
related Determination Date, plus (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Prepayment Period and
as to which such REO Property an REO Disposition did not occur during the
related Prepayment Period, an amount equal to the excess, if any, of the
Scheduled Payments (with each interest portion thereof net of the related
Servicing Fee) that would have been due on the related Due Date in respect of
the related Mortgage Loans, over the net income from such REO Property
transferred to the Collection Account for distribution on such Remittance Date.
With respect to any balloon payment on a Balloon Mortgage Loan, the Servicer
shall only be obligated to advance 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 with interest at the Mortgage Rate net
of the Servicing Fee Rate.
(b) On each Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records of
Collection Account that Amounts Held for Future Distribution have been, as
permitted by this Section 4.01, 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 and REO Properties. Any Amounts Held for Future Distribution and
so used shall be appropriately reflected in the Servicer's records and replaced
by the Servicer by deposit in the Collection Account on or before any future
Remittance Date to the extent required.
(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 Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by 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 a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee. In addition, the
Servicer shall not be required to advance any Relief Act Interest Shortfalls or
any Prepayment Interest Shortfalls in excess of its obligations to pay
Compensating Interest pursuant to Section 3.25.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances and
any previously unpaid late charges, fees and penalties from recoveries from the
related Mortgagor or from all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds, Condemnation Proceeds and Subsequent
Recoveries) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall make the disbursements and transfers from amounts then
on deposit in the Distribution Account in the following order of priority and to
the extent of the Available Funds remaining and, on such Distribution Date,
shall make distributions on the Certificates in accordance with such allocation:
(i) to the holders of each Class of LIBOR Certificates and to the
Supplemental Interest Account in the following order of priority:
(A) to the Supplemental Interest Account, the sum of (x) all
Net Swap Payments and (y) any Swap Termination Payment (to the
extent not previously received by the Swap Provider as a Replacement
Swap Provider Payment), but not including any Defaulted Swap
Termination Payment, owed to the Swap Provider for such Distribution
Date;
(B) from the Interest Remittance Amounts for both Loan Groups,
to the Class A Certificates, the related Accrued Certificate
Interest Distribution Amounts and Unpaid Interest Amounts for such
Distribution Date, allocated pursuant to clauses (iv) and (v) of
this Section 4.02(a);
(C) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(K) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of LIBOR Certificates then entitled to
distributions of principal as set forth below, from amounts remaining on
deposit in the Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to the Principal Distribution Amount in
the following order of priority:
(a) to the Class A Certificates, allocated as described in
Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero; and
(b) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until the respective Class Certificate
Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(a) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are reduced
to zero;
(b) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above and (y) the Class M-1 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to zero;
(c) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and to the Class M-1 Certificateholders in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(d) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above and to the Class M-2 Certificateholders in clause
(ii)(B)(c) above and (y) the Class M-3 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(e) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above and to the Class M-3 Certificateholders in clause
(ii)(B)(d) above and (y) the Class M-4 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(f) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above and to the Class M-4 Certificateholders in clause
(ii)(B)(e) above and (y) the Class M-5 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(g) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above, to the Class M-4 Certificateholders in clause
(ii)(B)(e) above and to the Class M-5 Certificateholders in clause
(ii)(B)(f) above and (y) the Class M-6 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(h) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above, to the Class M-4 Certificateholders in clause
(ii)(B)(e) above, to the Class M-5 Certificateholders in clause
(ii)(B)(f) above and to the Class M-6 Certificateholders in clause
(ii)(B)(g) above and (y) the Class B-1 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(i) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above, to the Class M-4 Certificateholders in clause
(ii)(B)(e) above, to the Class M-5 Certificateholders in clause
(ii)(B)(f) above, to the Class M-6 Certificateholders in clause
(ii)(B)(g) above and to the Class B-1 Certificateholders in clause
(ii)(B)(h) above and (y) the Class B-2 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero; and
(j) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above, to the Class M-4 Certificateholders in clause
(ii)(B)(e) above, to the Class M-5 Certificateholders in clause
(ii)(B)(f) above, to the Class M-6 Certificateholders in clause
(ii)(B)(g) above, to the Class B-1 Certificateholders in clause
(ii)(B)(h) above and to the Class B-2 Certificateholders in clause
(ii)(B)(i) above and (y) the Class B-3 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest Amount
for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest Amount
for such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest Amount
for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest Amount
for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized Loss
Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest Amount
for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized Loss
Amount for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest Amount
for such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized Loss
Amount for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest Amount
for such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest Amount
for such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest Amount
for such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(T) from funds on deposit in the Excess Reserve Fund Account
with respect to such Distribution Date, an amount equal to any
remaining unpaid Basis Risk Carry Forward Amount with respect to any
LIBOR Certificate for such Distribution Date to the LIBOR
Certificates in the same order and priority in which the Accrued
Certificate Interest Distribution Amount is allocated among such
Classes of Certificates, except that the Class A Certificates shall
be paid (a) first, among the Class A Certificates, pro rata, based
upon their respective Class Certificate Balances (only with respect
to those Class A Certificates with an outstanding Basis Risk Carry
Forward Amount) and (b) second, any remaining amounts to the Class A
Certificates, pro rata, based on any such Basis Risk Carry Forward
Amounts remaining unpaid;
(U) to the Supplemental Interest Account, the amount of any
Defaulted Swap Termination Payment owed to the Swap Provider;
(V) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(U);
(W) to the Class R-I Certificates, any remaining amount, in
respect of Pooling Tier REMIC-1 (including, for the avoidance of
doubt, amounts paid from the Collection Account to the Supplemental
Float Account and remaining after application pursuant to Section
4.07(i)-(iv)); and
(X) to the Class R-II Certificates, any remaining amount, in
respect of Pooling Tier REMIC-2, the Lower Tier REMIC and the Upper
Tier REMIC.
(iv) solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will be
allocated as follows:
(a) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
(b) second, concurrently, to the Class A-2 Certificates, pro
rata (based on the amounts distributable or payable under Section
4.02(a)(i)(B) to the Class A-2 Certificates), the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for each such Class; and
(v) solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will be
allocated as follows:
(a) first, concurrently, to the Class A-2 Certificates, pro
rata (based on the amounts distributable or payable under Section
4.02(a)(i)(B) to the Class A-2 Certificates), the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for each such Class; and
(b) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as any Unpaid
Interest Amount, subject to the priorities described above.
Distributions will be determined in part based on the performance of
individual Loan Groups and for such purpose any Net Swap Payments, Net Swap
Receipts or Swap Termination Payments will be allocated between Loan Groups
based on the respective aggregate Stated Principal Balance of the Mortgage Loans
in each Loan Group, unless otherwise set forth in this Agreement.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period (including
amounts payable by the Servicer pursuant to Section 3.07) shall be distributed
by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated by the Trustee
concurrently between the Group I Class A Certificates, on the one hand, and the
Group II Class A Certificates, on the other hand, based on the Class A Principal
Allocation Percentage for the Group I Class A Certificates and the Group II
Class A Certificates, as applicable, for such Distribution Date; provided,
however, that, if the Class Certificate Balances of the Class A Certificates in
either Class A Certificate Group are reduced to zero, then the remaining amount
of principal distributions distributable to the Class A Certificates on such
Distribution Date, and the amount of such principal distributions distributable
on all subsequent Distribution Dates, shall be distributed by the Trustee to the
Holders of the Class A Certificates in the other Class A Certificate Group
remaining Outstanding, in accordance with the principal distribution allocations
described in this Section 4.02(c), until their respective Class Certificate
Balances have been reduced to zero. Any distributions of principal to the Group
I Class A Certificates shall be made by the Trustee first from Available Funds
relating to the Group I Mortgage Loans, and any distributions of principal to
the Group II Class A Certificates shall be made by the Trustee first from
Available Funds relating to the Group II Mortgage Loans.
Any principal allocated to the Group II Class A Certificates shall
be distributed by the Trustee first to the Class A-2A Certificates, until their
Class Certificate Balance has been reduced to zero, then to the Class A-2B
Certificates, until their Class Certificate Balance has been reduced to zero and
then to the Class A-2C Certificates, until their Class Certificate Balance has
been reduced to zero; provided, however, that on and after the Distribution Date
on which the aggregate Class Certificate Balances of the Subordinated
Certificates and the principal balance of the Class X Certificates have been
reduced to zero, any principal distributions allocated to the Group II Class A
Certificates shall be allocated by the Trustee pro rata among the Classes of
Group II Class A Certificates, based on their respective Class Certificate
Balances, and distributed by the Trustee concurrently to the Group II Class A
Certificates, until their respective Class Certificate Balances have been
reduced to zero.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee as a reduction in the following order:
(i) First, to the portion of the Class X Distributable Amount
allocable to interest; and
(ii) Second, pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M and Class B
Certificates, based on the amount of interest to which such Classes would
otherwise be entitled.
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments made
or received under the Interest Rate Swap Agreement and payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. If the Trustee
does withhold any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate the amount withheld to such
Certificateholders. Such amounts shall be deemed to have been distributed to
such Certificateholders for all purposes of this Agreement.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor and each Rating Agency a
statement based in part on information provided by the Servicer setting forth
with respect to the related distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date and
the LIBOR Determination Date for such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal, the
Principal Remittance Amount (separately identifying the components
thereof) and the Principal Distribution Amount (and the calculation
thereof);
(iv) the amount of Available Funds allocable to interest and each
Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class included
in such distribution and any remaining Unpaid Interest Amounts after
giving effect to such distribution, any Basis Risk Carry Forward Amount
for each Class and the amount of such Basis Risk Carry Forward Amount
covered by withdrawals from the Excess Reserve Fund Account on such
Distribution Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation of the shortfall as between principal
and interest, including any Basis Risk Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(viii) the Pool Stated Principal Balance for the related
Distribution Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicer and paid to or retained by the Trustee or the Custodian (stated
separately and
in the aggregate) with respect to such Distribution Date;
(x) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(xi) the amount of Advances included in the distribution on such
Distribution Date reported by the Servicer (and the Trustee as successor
servicer and any other successor servicer, if applicable) as of the close
of business on the Determination Date immediately preceding such
Distribution Date;
(xii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days, 91 or more days, and in such other periods and for
such times as required by Regulation AB, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(xiii) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xiv) with respect to any Mortgage Loans that became REO Properties
during the preceding calendar month, the aggregate number of such Mortgage
Loans and the aggregate outstanding principal balance of such Mortgage
Loans as of the close of business on the last Business Day of the
immediately preceding month and the month and year of acquisition of such
REO Properties;
(xv) the total number and outstanding principal balance of any REO
Properties (and market value, if available) as of the close of business on
the last Business Day of the immediately preceding month;
(xvi) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event);
(xvii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xviii) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xix) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders with
respect to Unpaid Interest Amounts, Applied Realized Loss Amounts and
Basis Risk Carry Forward Amounts;
(xx) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments and Defaulted Swap Termination Payments;
(xxi) the calculations of LIBOR and Swap LIBOR;
(xxii) the Subordinated Amount and Specified Subordinated Amount;
(xxiii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer;
(xxiv) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxv) the amount distributed on the Class X Certificates;
(xxvi) the amount of any Subsequent Recoveries for such Distribution
Date;
(xxvii) the number of Mortgage Loans at the beginning and end of the
applicable reporting period, the pool factor, and the weighted average
interest rate, and weighted average remaining term;
(xxviii) if applicable, the amount distributed to the Supplemental
Float Account; and
(xxix) if applicable, the amount distributed to the Class R-I
Certificates.
In addition, each Form 10-D prepared and filed by the Trustee
pursuant to Section 8.12 shall include the following information with respect to
the related distribution:
(A) material breaches of Mortgage Loan representations and
warranties of which the Trustee has actual knowledge or has received
written notice; and
(B) material breaches of any covenants under this Agreement of which
the Trustee has actual knowledge or has received written notice.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency and the Depositor is limited, if
applicable, to the availability, timeliness and accuracy of the information
derived from the Servicer. The Trustee shall make available the above statement
via the Trustee's internet website. The Trustee's website will initially be
located at ▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ and assistance in using the website can
be obtained by calling the Trustee's investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇.
A paper copy of the above statement will also be made available upon request.
Parties that are unable to use the website are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Trustee may change the way the monthly statements to
Certificateholders are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes. As a condition to access the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement.
The Trustee shall make available to each Analytics Company via the
Trustee's internet website each statement to Certificateholders prepared
pursuant to this Section 4.03(a). The Trustee and the Servicer shall cooperate
in good faith with the Depositor to reconcile any discrepancies in such
statements, and the Trustee shall provide any corrections to such statements to
each Analytics Company as soon as reasonably practicable after the related
Distribution Date.
The Trustee will also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement to Certificateholders
and may affix thereto any disclaimer it deems appropriate in its reasonable
discretion (without suggesting liability on the part of any other party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Not later than three Business Days following the Determination
Date and in no event later than the 20th calendar day of each month, the
Servicer shall furnish to the Depositor with respect to clause (i) below and the
Trustee with respect to clause (ii) below, a monthly remittance advice statement
(the "Servicer Remittance Report") (in a format mutually agreed upon by the
Servicer, the Trustee and the Depositor) containing such information as shall be
reasonably requested (i) by the Depositor to enable the Depositor to disclose
"static pool information", as required by Item 1105 of Regulation AB, with
respect to the Mortgage Loans, and (ii) by the Trustee to enable the Trustee to
provide the reports required by Section 4.03(a) as to the accompanying
remittance. The Servicer shall concurrently deliver to the Depositor a data
tape, in form and substance reasonably satisfactory to the Depositor and the
Servicer, containing the information required pursuant to this Section 4.03(d)
on a loan-by-loan basis for all of the Mortgage Loans.
The Servicer Remittance Report shall, at a minimum, document, on
such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of Servicing Fees received by the Servicer during
the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to the Servicer during the
prior distribution period pursuant to Section 3.11;
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days, 91 or more
days, and in such other periods and for such times as required by
Regulation AB; (b) as to which foreclosure or bankruptcy proceedings of
the related mortgagor have commenced; and (c) as to which REO Property has
been acquired;
(vii) the amount of any interest expense incurred by the Servicer in
connection with funding P&I Advances pursuant to Section 4.01; and
(viii) the balance of the Supplemental Float Reserve Account and the
amount necessary to fund such account an amount equal to $6,000.
(e) For all purposes of this Agreement, with respect to any Mortgage
Loan, delinquencies shall be determined and reported based on the so-called
"OTS" methodology for determining delinquencies on mortgage loans similar to the
Mortgage Loans. By way of example, a Mortgage Loan would be delinquent with
respect to a Scheduled Payment due on a Due Date if such Scheduled Payment is
not made by the close of business on the Mortgage Loan's next succeeding Due
Date, and a Mortgage Loan would be more than 30-days Delinquent with respect to
such Scheduled Payment if such Scheduled Payment were not made by the close of
business on the Mortgage Loan's second succeeding Due Date. The Servicer hereby
represents and warrants to the Depositor that this delinquency recognition
policy is not less restrictive than any delinquency recognition policy
established by the primary safety and soundness regulator, if any, of the
Servicer with respect to mortgage loans similar to the Mortgage Loans.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the definition of
LIBOR. Until all of the LIBOR Certificates are paid in full, the Trustee shall
at all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
(i) The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each
LIBOR Determination Date so long as the LIBOR Certificates are Outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Trustee shall not have any
liability or responsibility to any Person for its inability, following a
good-faith reasonable effort, to obtain quotations from the Reference
Banks or to determine the arithmetic mean referred to in the definition of
LIBOR, all as provided for in this Section 4.04 and the definition of
LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate and the
Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Trustee to the most
junior Class of Subordinated Certificates then Outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 Supplemental Interest Account. On the Closing Date, the
Trustee shall establish and maintain in its name, a separate non-interest
bearing trust account for the benefit of the holders of the LIBOR Certificates
(the "Supplemental Interest Account") as a part of the Trust Fund. The
Supplemental Interest Account shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Trustee
held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipts for that Distribution
Date will be deposited into the Supplemental Interest Account. Funds in the
Supplemental Interest Account will be distributed in the following order of
priority:
(i) to the Swap Provider, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment (to the extent not previously received by
the Swap Provider as a Replacement Swap Provider Payment), other than a
Defaulted Swap Termination Payment, owed to the Swap Provider for that
Distribution Date;
(ii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(iii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i) and (iii), to the extent unpaid from
Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward
Amounts as described in Section 4.02(a)(iii)(R), to the extent unpaid from
Available Funds (including Basis Risk Payments on deposit in the Excess
Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay principal as described, and in the
same manner and order of priority as set forth, in Section 4.02(a)(ii)(A)
or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary
to restore the Subordinated Amount to the Specified Subordinated Amount as
a result of current or prior Realized Losses not previously reimbursed,
after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay any Unpaid Interest Amounts as
described, and in the same manner and order of priority as set forth, in
Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding any other provision in this Agreement, in the event
that the Interest Rate Swap Agreement is terminated and the Trust enters into a
replacement interest rate swap agreement and the Trust is entitled to receive a
payment from a replacement swap provider, the Trustee shall direct the
replacement swap provider to make such payment (the "Replacement Swap Provider
Payment") to the Supplemental Interest Account. The Supplemental Interest
Account shall pay to the Swap Provider the lesser of (x) the amount so received
and (y) any Swap Termination Payment owed to the Swap Provider (to the extent
not already paid by the Trust) that is being replaced immediately upon receipt
of the Replacement Swap Provider Payment, regardless of whether the date of
receipt thereof is a Distribution Date; provided that to the extent that the
Replacement Swap Provider Payment is less than the Swap Termination Payment owed
to the Swap Provider, any remaining amounts will be paid to the Swap Provider on
the subsequent Distribution Date (unless the Replacement Swap Provider Payment
is paid to the Swap Provider on a Distribution Date, in which case such
remaining amounts will be paid on such Distribution Date) in accordance with the
priority of payments described in Section 4.02 of this Agreement. For the
avoidance of doubt, the parties agree that the Swap Provider shall have first
priority to any Replacement Swap Provider Payment over the payment by the Trust
to Certificateholders, any servicer, any custodian, the Trustee or any other
Person.
Notwithstanding the foregoing, in the event that the Trust receives
a Swap Termination Payment and a successor Swap Provider cannot be obtained,
then the Trustee shall establish a separate, non-interest bearing trust account
as a reserve account within, and constituting a part of, the Supplemental
Interest Account and deposit the Swap Termination Payment into such account. On
each subsequent Distribution Date (so long as funds are available in such
reserve account), the Trustee shall withdraw from the reserve account and
deposit into the Supplemental Interest Account an amount equal to the amount of
any Net Swap Receipt due the Trust (calculated in accordance with the terms of
the original Interest Rate Swap Agreement) and treat such amount as a Net Swap
Receipt for purposes of determining the distributions from the Supplemental
Interest Account. The remaining amount in the reserve account will remain in
that account and not treated as a Swap Termination Payment for purposes of
determining the distributions from the Supplemental Interest Account until the
final Distribution Date.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Account shall be distributed pursuant to the priorities
set forth in this Section 4.06.
The Trustee shall account for the Supplemental Interest Account as
an asset of a grantor trust under subpart E, Part I of subchapter J of the Code
and not as an asset of any Trust REMIC created pursuant to this Agreement. The
beneficial owners of the Supplemental Interest Account are the Class X
Certificateholders. For federal income tax purposes, Net Swap Payments and Swap
Termination Payments payable to the Swap Provider from Available Funds shall be
deemed to be paid to the Supplemental Interest Account from the Upper Tier
REMIC, first, by the Holder of the Class X Certificates (in respect of the Class
IO Interest and, if applicable, the Class X Interest) and second, other than any
Defaulted Swap Termination Payment, by the Holders of the applicable Class or
Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the
extent provided in Section 8.13.
Any Basis Risk Carry Forward Amounts and, without duplication, Upper
Tier Carry Forward Amounts distributed by the Trustee to the LIBOR
Certificateholders from the Excess Reserve Fund Account or the Supplemental
Interest Account shall be accounted for by the Trustee, for federal income tax
purposes, as amounts paid first to the Holders of the Class X Certificates (in
respect of the Class X Interest or the Class IO Interest, respectively, or in
respect of the Interest Rate Swap Agreement) and then to the respective Class or
Classes of LIBOR Certificates. In addition, the Trustee shall account for the
rights of Holders of each Class of LIBOR Certificates to receive payments of
Basis Risk Carry Forward Amounts and, without duplication, Upper Tier Carry
Forward Amounts from the Supplemental Interest Account (along with Basis Risk
Carry Forward Amounts payable from the Excess Reserve Fund Account) and the
obligation to pay Class IO Shortfalls to the Supplemental Interest Account as
rights and obligations in a separate limited recourse notional principal
contract between the Class X Certificateholders and Holders of each such Class.
The Supplemental Interest Account shall be an "outside reserve fund"
for federal income tax purposes and not an asset of any Trust REMIC.
Furthermore, the Holders of the Class X Certificates shall be the beneficial
owners of the Supplemental Interest Account for all federal income tax purposes,
and shall be taxable on all income earned thereon, and any amounts reimbursed
from the Upper Tier REMIC to the Supplemental Interest Account shall be treated
as having been distributed to the Holders of the Class X Certificates.
In the event the Swap Provider does not deliver the Delivery Amount
(as defined in the Interest Rate Swap Agreement) to the Trustee, the Trustee
shall provide notice of such failure to the Swap Provider within one Business
Day of such failure.
With respect to the failure of the Swap Provider to perform any of
its obligations under the Interest Rate Swap Agreement, the breach by the Swap
Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Interest Rate Swap
Agreement, the Trustee shall send any notices and make any demands, on behalf of
the Trust as are required under the Interest Rate Swap Agreement upon actual
knowledge of such event.
The Depositor shall cause any replacement swap provider to provide a
copy of the related replacement interest rate swap agreement to the Trustee.
Section 4.07 Supplemental Float Account and Supplemental Float
Reserve Account. On the Closing Date, the Trustee shall establish and maintain
in its name, a separate non-interest bearing trust account for the benefit of
the holders of the LIBOR Certificates (the "Supplemental Float Account") as a
part of the Trust Fund. The Supplemental Float Account shall be an Eligible
Account, and funds on deposit therein shall be held separate and apart from, and
shall not be commingled with, any other moneys, including, without limitation,
other moneys of the Trustee held pursuant to this Agreement. Funds in the
Supplemental Float Account shall remain uninvested.
On the Closing Date, the Servicer shall establish and maintain in
its name, a separate reserve account (the "Supplemental Float Reserve Account")
established and maintained by the Servicer and solely for the purpose of
providing collateral security for the payment of certain amounts otherwise owed
by the initial Holder of the Class R-I Certificates (or any of its affiliates)
to the beneficiary (the "Supplemental Float Reserve Beneficiary") designated in
an irrevocable instruction in the form attached to Exhibit X hereto (an
"Irrevocable Instruction"). On the Remittance Date, the Supplemental Float
Reserve Account shall hold a maximum amount of $6,000 and the Trustee shall have
no duty to determine any amounts distributed to or from the Supplemental Float
Reserve Account.
On or before the Remittance Date, to the extent required pursuant to
Section 3.21(c), and to the extent that the Supplemental Float Reserve Account
has reached its maximum amount, the Servicer shall remit and report any interest
or investment income earned on funds deposited in the Collection Account and the
Trustee shall deposit such interest or investment income into the Supplemental
Float Account. Funds in the Supplemental Float Account will be distributed in
the following order of priority:
(i) to the Class A Certificates, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i), to the extent unpaid from Available Funds
and the Supplemental Interest Account;
(ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i) and (iii), to the extent unpaid from
Available Funds and the Supplemental Interest Account;
(iii) sequentially, to the Class A, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay principal as described in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to restore the Subordinated Amount to the Specified
Subordinated Amount as a result of current or prior Realized Losses not
previously reimbursed, after giving effect to payments and distributions
from Available Funds and the Supplemental Interest Account;
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay any Unpaid Interest Amounts as
described in Section 4.02(a)(iii), to the extent unpaid from Available
Funds and the Supplemental Interest Account; and
(v) any remaining amounts shall be distributed to the holders of all
of the Class R-I Certificates.
Upon delivery to the Servicer by the Supplemental Float Reserve
Beneficiary of a payment certificate in the form attached to Exhibit X hereto as
Annex 1 thereto, the Trustee shall pay out to the Supplemental Float Reserve
Beneficiary such amounts requested in the payment certificate, not to exceed the
amounts remitted by the Servicer to the Trustee pursuant to this Section 4.07.
The Servicer shall maintain the Supplemental Float Reserve Account until
delivery to the Servicer and the Trustee by the Supplemental Float Reserve
Beneficiary of a termination certificate in the form attached to Exhibit X
hereto as Annex 2 thereto. Upon delivery of such termination certificate (X) the
rights of the Supplemental Float Reserve Beneficiary shall be terminated, (Y)
all amounts remaining in the Supplemental Float Reserve Account shall be
remitted by the Servicer to the Trustee and shall be paid to the holders of all
of the Class R-I Certificates on the next Distribution Date and (Z) the second
paragraph of this Section 4.07 shall no longer have any effect unless and until
the holders of all of the Class R-I Certificates deliver to the Servicer and the
Trustee a new Irrevocable Instruction. For federal income tax purposes, amounts
held in the Supplemental Float Reserve Account and payable to the Supplemental
Float Reserve Beneficiary shall be treated as owned by the holder of the Class
R-I Certificates, and such holder shall be taxed on all income and gain thereon
and any amounts paid to the Supplemental Float Reserve Beneficiary pursuant to
this paragraph shall be deemed paid by the holder of the Class R-I Certificates.
Upon termination of the Trust, any amounts remaining in the
Supplemental Float Account shall be distributed pursuant to the priorities set
forth in this Section 4.07 and any remaining amounts in the Supplemental Float
Reserve Account shall be distributed to the holder of the Class R-I
Certificates.
ARTICLE V
THE CERTIFICATES AND THE SERVICING FEE CERTIFICATE
Section 5.01 The Certificates and the Servicing Fee Certificate. The
Certificates and the Servicing Fee Certificate shall be substantially in the
forms attached hereto as exhibits. The Certificates shall be issuable in
registered form, in the minimum denominations, integral multiples in excess
thereof (except that one Certificate in each Class may be issued in a different
amount) and aggregate denominations per Class set forth in the Preliminary
Statement.
The Depositor hereby directs the Trustee to register the Class X and
Class P Certificates in the name of the Depositor or its designee. On a date as
to which the Depositor notifies the Trustee, the Trustee shall transfer the
Class X and Class P Certificates in the name of the NIM Trustee, or such other
name or names as the Depositor shall request, and to deliver the Class X and
Class P Certificates to the NIM Trustee or to such other Person or Persons as
the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such Holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register.
The Certificates and the Servicing Fee Certificate shall be executed
by manual or facsimile signature on behalf of the Trustee by an authorized
officer. Certificates or the Servicing Fee Certificate bearing the manual or
facsimile signatures of individuals who were, at the time such signatures were
affixed, authorized to sign on behalf of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of any such Certificates or
the Servicing Fee Certificate or did not hold such offices at the date of such
Certificate or the Servicing Fee Certificate. No Certificate or the Servicing
Fee Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless authenticated by the Trustee by manual signature,
and such authentication upon any Certificate or the Servicing Fee Certificate
shall be conclusive evidence, and the only evidence, that such Certificate or
the Servicing Fee Certificate has been duly executed and delivered hereunder,
except that the Servicer shall be entitled to the Servicing Fee whether or not
the Servicing Fee Certificate has been executed, authenticated or delivered to
the Servicer. All Certificates and the Servicing Fee Certificate shall be dated
the date of their authentication. On the Closing Date, the Trustee shall
authenticate the Certificates to be issued at the direction of the Depositor, or
any Affiliate thereof.
If the Servicer elects to have its interest in the entire Servicing
Fee evidenced by the Servicing Fee Certificate, the Servicing Fee Certificate
shall be held only by the Trustee on behalf of the Servicer and by no other
Person. The Trustee shall not register any transfer of the Servicing Fee
Certificate to a Person other than the Servicer and any purported transfer of
the Servicing Fee Certificate shall be null and void.
The Servicer hereby grants to the Trustee on the date hereof, all of
Servicer's right, title and interest in, to and under the Servicing Fee
Certificate, all "accounts" and "general intangibles" (as defined in the Uniform
Commercial Code) constituting or relating to the Servicing Fee Certificate, and
all proceeds of the foregoing (collectively, the "Collateral").
The foregoing grant is made in trust to secure the obligation of the
Servicer under this Agreement to surrender the Servicing Fee Certificate to the
Trustee if the Servicer is no longer the Servicer hereunder.
In furtherance of the foregoing, the Servicer hereby delivers or
causes to be delivered to the Trustee or the Trustee's designee each of the
following documents or instruments relating to the Servicing Fee Certificate:
(a) a duly issued and authenticated physical certificate evidencing
the Servicing Fee Certificate; and
(b) a Uniform Commercial Code Financing Statement describing the
Collateral naming the Servicer as debtor and the Trustee as secured party.
The Servicer shall arrange for filing any Uniform Commercial Code
continuation statements in connection with the grant referenced in this Section
5.01, and deliver a copy to the Trustee.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and the Servicing Fee
Certificate and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Trustee
shall execute and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and aggregate
Percentage Interest, or in the case of the Servicing Fee Certificate one new
Servicing Fee Certificate representing the entire interest of the Servicer in
the Servicing Fee.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates or the Servicing Fee
Certificate may be required.
All Certificates and the Servicing Fee Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
destroyed by the Trustee in accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to (i) the
transfer of the Class X or Class P Certificates or the Residual Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
or Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
transfer of the Class X or Class P Certificates from the NIM Issuer or the NIM
Trustee to the Depositor or an Affiliate of the Depositor, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Trustee in writing the
facts surrounding the transfer in substantially the form set forth in Exhibit H
(the "Transferor Certificate") and either (i) there shall be delivered to the
Trustee a letter in substantially the form of Exhibit I (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made without registration under
the Securities Act. In the event that a transfer of a Private Certificate which
is a Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate. As
directed by the Depositor, the Trustee shall provide to any Private
Certificateholder and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Depositor and the Servicer shall cooperate
with the Trustee in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Trustee such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Trustee shall reasonably request to meet its obligation under
the preceding sentence. Each Private Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Servicer
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of the Class X or Class P
Certificates or the Residual Certificates to the Depositor or an Affiliate of
the Depositor, (ii) the transfer of the Class X or Class P Certificates to the
NIM Issuer or the NIM Trustee, or (iii) a transfer of the Class X or Class P
Certificates from the NIM Issuer or the NIM Trustee to the Depositor or an
Affiliate of the Depositor, no transfer of an ERISA-Restricted Certificate shall
be made unless the Trustee shall have received either (i) a representation from
the transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate or a Residual Certificate, such requirement is satisfied only by the
Trustee's receipt of a representation letter from the transferee substantially
in the form of Exhibit I), to the effect that such transferee is not an employee
benefit plan or arrangement subject to Section 406 of ERISA, a plan subject to
Section 4975 of the Code or a plan subject to any Federal, state or local law
("Similar Law") materially similar to the foregoing provisions of ERISA or the
Code, nor a Person acting on behalf of any such plan or arrangement nor using
the assets of any such plan or arrangement to effect such transfer, or (ii) in
the case of an ERISA-Restricted Certificate other than a Residual Certificate or
a Class P Certificate that has been the subject of an ERISA-Qualifying
Underwriting, and the purchaser is an insurance company, a representation that
the purchaser is an insurance company that is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60 or (iii) in the case of any such
ERISA-Restricted Certificate other than a Residual Certificate or Class P
Certificate presented for registration in the name of an employee benefit plan
subject to Title I of ERISA, a plan or arrangement subject to Section 4975 of
the Code (or comparable provisions of any subsequent enactments), or a plan
subject to Similar Law, or a trustee of any such plan or any other Person acting
on behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee and the Servicer,
which Opinion of Counsel shall not be an expense of the Depositor, the Trustee,
the Servicer or the Trust Fund, addressed to the Trustee, to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not constitute or
result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Depositor,
the Trustee or the Servicer to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a Physical
Certificate, in the event the representation letter referred to in the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA-Restricted Certificate,
other than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
None of the Residual Certificates or Class P Certificates may be
sold to any employee benefit plan subject to Title I of ERISA, any plan subject
to Section 4975 of the Code, or any plan subject to any Similar Law or any
Person investing on behalf or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of (i) Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (for transactions by
independent "qualified professional asset managers"), (ii) PTCE 91-38 (for
transactions by bank collective investment funds), (iii) ▇▇▇▇ ▇▇-▇ (for
transactions by insurance company pooled separate accounts), (iv) PTCE 95-60
(for transactions by insurance company general accounts) or (v) PTCE 96-23 (for
transactions effected by "in-house asset managers") or similar exemption under
Similar Law.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) Other than in the case of the Depositor or an Affiliate of the
Depositor that is a U.S. Person, no Ownership Interest in a Residual
Certificate may be registered on the Closing Date or thereafter
transferred, and the Trustee shall not register the Transfer of any
Residual Certificate unless, in addition to the certificates required to
be delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached hereto
as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact a Non-Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became a Non-Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Trustee shall be paid and delivered
by the Trustee to the last preceding Permitted Transferee of such
Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee or the
Servicer, to the effect that the elimination of such restrictions will not cause
any Trust REMIC to fail to qualify as a REMIC at any time that the Certificates
are Outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement which, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is a Non-Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by a
Person that is a Non-Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository of its intent to terminate the book-entry system through the
Depository and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of definitive, fully registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the Servicer, the
Depositor or the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder;
provided, that the Trustee shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee, duly
executed by the Certificateholder or his attorney duly authorized in writing
(with copies directly (other than with respect to a Residual Certificate) to the
Swap Provider). The Trustee shall forward any such IRS Form (other than with
respect to a Residual Certificate) received to the Swap Provider. Each Private
Certificateholder by its purchase of a Certificate is deemed to consent to any
such IRS Form being so forwarded. The Trustee shall be required to forward any
tax certification received by it to the Swap Provider at the last known address
provided to it, and, subject to Section 8.01, shall not be liable for the
receipt of such tax certification by the Swap Provider, nor any action taken or
not taken by the Swap Provider with respect to such tax certification. Upon the
request of the Swap Provider, the Trustee shall forward the name and address and
Percentage Interest held in the Private Certificates for each Private
Certificateholder to the Swap Provider at the last known address provided to it.
The Trustee shall have no duty to take any action to correct any misstatement or
omission in any tax certification provided to it and forwarded to the Swap
Provider; provided however, if the Trustee has actual knowledge that a tax
certificate or name and address information provided to it by a Private
Certificateholder contains a misstatement or omission (including by reason of
the Swap Provider informing it of the misstatement or omission), it shall notify
the Swap Provider of the misstatement or omission, and when it receives a
corrected form or name and address information from the Holder of the Private
Certificate it shall forward the corrected form and/or name and address
information to the Swap Provider.
(g) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Trustee in accordance with its customary practice. No service charge
shall be made for any registration of transfer or exchange of Private
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate or mutilated Servicing Fee Certificate is
surrendered to the Trustee, or the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate or the Servicing Fee
Certificate and (b) there is delivered to the Depositor, the Servicer and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate or Servicing Fee Certificate, a
new Certificate of like Class, tenor and Percentage Interest or the new
Servicing Fee Certificate, as applicable. In connection with the issuance of any
new Certificate or Servicing Fee Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate or Servicing Fee Certificate issued pursuant to this
Section 5.03 shall constitute complete and indefeasible evidence of ownership,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate or Servicing Fee Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Trustee, the
Depositor and any agent of the Servicer, the Depositor or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee, the Depositor, nor any agent of the Servicer, the Depositor or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies where Certificates or the Servicing Fee Certificate may be
surrendered for registration of transfer or exchange. The Trustee initially
designates its offices located at Deutsche Bank National Trust Company, c/o DB
Services Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Transfer Unit. The Trustee shall give prompt written notice to the
Certificateholders and the Holder of the Servicing Fee Certificate of any change
in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. (a) The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) The Servicer is and shall continue to be an institution which is
a ▇▇▇▇▇▇ ▇▇▇-approved and ▇▇▇▇▇▇▇ Mac-approved seller/servicer in good standing,
shall maintain a net worth of at least $30,000,000 (as determined in accordance
with generally accepted accounting principles) and shall maintain its license to
do business or service residential mortgage loans in any jurisdictions in which
the Mortgaged Properties are located.
(c) Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business (including a sale of substantially all of the assets
of the Servicer) of the Depositor or the Servicer, shall be the successor of the
Depositor or the 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
the successor or surviving Person to the Servicer shall make the covenant set
forth in Section 6.02(b). As a condition to the succession to the Servicer under
this Agreement by any Person (i) into which the Servicer may be merged or
consolidated, or (ii) which may be appointed as a successor to a Servicer, the
Servicer shall provide to the Depositor, at least 15 calendar days prior to the
effective date of such succession or appointment, (x) written notice to the
Depositor of such succession or appointment and (y) in writing and in form and
substance reasonably satisfactory to the Depositor, all information reasonably
necessary to enable the Trustee, pursuant to Section 8.12(g), to accurately and
timely report the event under Item 6.02 of Form 8-K pursuant to the Exchange Act
(if such reports under the Exchange Act are required to be filed under the
Exchange Act). In addition, unless any such successor Servicer is the same legal
entity as the predecessor Servicer, the predecessor Servicer shall, upon such
succession, surrender to the Trustee for cancellation any Servicing Fee
Certificate previously issued to it and Outstanding pursuant to the terms of
this Agreement.
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. None of the Depositor, the Servicer or any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, its Affiliates, the Servicer
and any of their respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
its Affiliates, the Servicer and any of their respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates other than
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that the Depositor
may in its discretion undertake any such action (or direct the Trustee to
undertake such actions pursuant to Section 2.03 for the benefit of the
Certificateholders) that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be
entitled to be reimbursed therefor out of the Collection Account.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee or the Depositor for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement; provided, however, that this provision shall not
protect the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in compliance
with the terms of this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Servicer may undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities for which the Trust Fund will be liable, and the Servicer
shall be entitled to be reimbursed therefor out of the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Section 6.02 and 7.01, the Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent of
the Servicer, the Depositor and the Trustee or (i) upon the determination that
the performance of its obligations or duties hereunder are no longer permissible
under applicable law or are in material conflict by reason of applicable law
with any other activities carried on by it or its subsidiaries or Affiliates,
the other activities of the Servicer so causing such a conflict being of a type
and nature carried on by the Servicer or its subsidiaries or Affiliates at the
date of this Agreement or (ii) upon satisfaction of the following conditions:
(a) the Servicer has proposed a successor servicer to the Trustee and the
Depositor and (b) each Rating Agency shall have delivered a letter to the
Trustee and the Depositor prior to the appointing of the successor servicer
stating that the proposed appointment of such successor servicer as Servicer
hereunder will not result in the reduction or withdrawal of the then current
rating of the Certificates; provided, however, that no such resignation by the
Servicer shall become effective until such successor servicer or, in the case of
(i) above, the Trustee shall have assumed the Servicer's responsibilities and
obligations hereunder or the Trustee shall have designated a successor servicer
in accordance with Section 7.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to (i) above shall be evidenced by an Opinion of Counsel to such effect
delivered to the Depositor and the Trustee which Opinion of Counsel shall be in
form and substance acceptable to the Depositor and the Trustee. No such
resignation shall become effective until a successor shall have assumed in
writing the Servicer's responsibilities and obligations hereunder.
In connection with any resignation by the Servicer hereunder, the
Servicer shall, upon such resignation, surrender to the Trustee for cancellation
any Servicing Fee Certificate previously issued to it and Outstanding pursuant
to the terms of this Agreement.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims.
(a) The Servicer shall indemnify the Sponsor, the Depositor, the
Custodian, the Trustee and any Affiliate, director, officer, employee or agent
of the Depositor and hold them harmless against any and all third party claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to (i) any breach by the Servicer, of
any of its representations and warranties referred to in Section 2.03(a), (ii)
any error in any tax or information return prepared by the Servicer, or (iii)
the failure of the Servicer to perform its duties and service the Mortgage Loans
in compliance with the terms of this Agreement (including, without limitation,
the failure to deliver accurate and complete information on a timely basis
pursuant to Section 4.03(d)). The Servicer immediately shall notify the
Depositor, the Custodian and the Trustee if a claim is made by a third party
with respect to this Agreement or the Mortgage Loans, assume (with the prior
written consent of the Depositor, the Custodian and the Trustee) the defense of
any such claim and pay all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or the Depositor, the Custodian or the Trustee in respect
of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall indemnify the Depositor, the Sponsor, the Trustee
and any director, officer, employee or agent of the Depositor, the Sponsor or
the Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any failure by the Servicer or any Subservicer
engaged by the Servicer or any Subcontractor utilized by the Servicer to deliver
any information, report, certification or accountants' letter when and as
required under Sections 3.22, 3.23, 6.02 or 8.12, including without limitation
any failure by the Servicer to identify pursuant to Section 3.02(e) any
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then the Servicer shall contribute to the amount
paid or payable by the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and the
Servicer, on the other, in connection with the Servicer's obligations pursuant
to this Section 6.05. This Section 6.05 shall survive the termination of this
Agreement or the earlier resignation or removal of the Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor or by the Trustee, or to the Servicer, the Depositor
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of forty-five days (except that (x) such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement, (y) there shall be no cure
period in the case of the failure to perform any of the obligations set forth in
Sections 3.22, 3.23 and 8.12 and (z) such number of days shall be ten in the
case of a failure to observe or perform any of the obligations set forth in
Sections 3.02 or 6.02) after the earlier of (i) the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor or by the Trustee, or to the Servicer, the Depositor
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates and (ii) actual knowledge of such failure by a
Servicing Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty consecutive days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability generally to
pay its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee or by the Depositor, or to the Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(g) Fitch reduces its servicer rating of the Servicer to "RPS2-" or
lower, ▇▇▇▇▇'▇ reduces its servicer rating of the Servicer to "SQ3" or lower, or
Standard & Poor's reduces its servicer rating of the Servicer to "Average" or
lower.
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
written direction of a majority of the Voting Rights, the Trustee shall, by
notice in writing to the Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the Trustee shall not be
required to give written notice to the Servicer of the occurrence of an Event of
Default described in clauses (b) through (g) of this Section 7.01 unless and
until a Responsible Officer of the Trustee has actual knowledge of the
occurrence of such an event; provided further, that the Depositor shall give
written notice to the Servicer of the occurrence of an Event of Default
described in clause (g) of this Section 7.01 upon obtaining actual knowledge of
the occurrence of such an event. In the event that a Responsible Officer of the
Trustee has actual knowledge of the occurrence of an event of default described
in clause (a) of this Section 7.01, the Trustee shall give written notice to the
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence; provided, that if such failure is the failure to make a P&I Advance,
the Trustee shall send such notice of termination and, if the Event of Default
of the Servicer was the failure to make a P&I Advance, the Trustee, as successor
servicer, shall make such P&I Advance for distribution on the related
Distribution Date. On and after the receipt by the Servicer of such written
notice, all authority and power of the Servicer hereunder, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
Subject to Section 7.02, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Servicer to pay amounts owed pursuant to Article VIII. The
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Collection Account, or thereafter be received with
respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund payment
of all accrued and unpaid Servicing Fees due to the Servicer prior to such
termination, and reimbursement for all outstanding Advances made by the Servicer
on or prior to the termination of the Servicer. Except to the extent provided by
the following sentence, any successor Servicer shall not be permitted to pay
itself the Servicing Fee due to it or to reimburse itself directly for Advances
made by it as otherwise permitted by Sections 3.11(a)(ii), (iii), (vi) or (vii)
if the terminated Servicer has not been paid Servicing Fees due to the
terminated Servicer and been fully reimbursed for Advances made by the
terminated Servicer. The successor Servicer is hereby authorized to pay to the
terminated Servicer (or the related Advancing Person in accordance with Section
11.11) and itself, as applicable, all Servicing Fees due to the terminated
Servicer and the successor Servicer, and to reimburse the terminated Servicer
and itself for all Advances made by them from the Collection Account to the same
extent the terminated Servicer or successor Servicer would have been permitted
to pay itself the Servicing Fees due to it or to reimburse itself for such
Advances in accordance with Sections 3.11(a)(ii), (iii), (vi) or (vii). All
Advances made pursuant to the terms of this Agreement shall be deemed made and
shall be reimbursed on a "first in-first out" (FIFO) basis. At such time as the
terminated Servicer has been paid all Servicing Fees due to it and been
reimbursed for all Advances made by it, the successor Servicer shall be
permitted to pay itself the Servicing Fee due to such successor servicer and to
reimburse itself directly for Advances made by such successor servicer in
accordance with Sections 3.11(a)(ii), (iii), (vi) or (vii).
In connection with any termination of the Servicer hereunder, the
Servicer shall, upon such termination, surrender to the Trustee for cancellation
any Servicing Fee Certificate previously issued to it and Outstanding pursuant
to the terms of this Agreement.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 3.24
or Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.05, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances and Servicing Advances, pursuant
to Section 3.24 or Section 7.01. It is understood and acknowledged by the
parties hereto that there will be a period of transition before the transfer of
servicing obligations is fully effective. Notwithstanding the foregoing, the
Trustee will have a period (not to exceed 90 days) to complete the transfer of
all servicing data and correct or manipulate such servicing data as may be
required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise enable the Trustee to service the Mortgage Loans in
accordance with Accepted Servicing Practices. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans that the
Servicer would have been entitled to charge to the Collection Account if the
Servicer had continued to act hereunder including, if the Servicer was receiving
the Servicing Fee, the Servicing Fee and, subject to Section 3.21(c), the income
on investments or gain related to the Collection Account which the Servicer
would be entitled to receive (in addition to income on investments or gain
related to the Distribution Account for the benefit of the Trustee during the
Trustee Float Period). Notwithstanding the foregoing, if the Trustee has become
the successor to the Servicer in accordance with Section 7.01, the Trustee may,
if it shall be unwilling to so act, or shall, if it is prohibited by applicable
law from making P&I Advances and Servicing Advances pursuant to Section 4.01, if
it is otherwise unable to so act or at the written request of Certificateholders
entitled to at least a majority of the Voting Rights, appoint, or petition a
court of competent jurisdiction to appoint, any established mortgage loan
servicing institution the appointment of which does not adversely affect the
then current rating of the Certificates by each Rating Agency, as the successor
to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
to the Servicer shall make the covenant set forth in Section 6.02(b). Any
successor to the Servicer shall be an institution which is willing to service
the Mortgage Loans and which executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 incurred prior to termination of the Servicer under
Section 7.01), with like effect as if originally named as a party to this
Agreement; provided, that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to the Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.05, act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of the Servicing Fee Rate and amounts paid to the Servicer from
investments (subject to Section 3.21(c)). The Trustee and such successor
Servicer shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
successor to the Servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer and pay all of its own out-of-pocket costs and expenses
at its own expense. In addition, in the event that the Servicer is terminated
pursuant to Section 7.01, the terminated Servicer shall pay all reasonable
out-of-pocket costs and expenses of a servicing transfer incurred by parties
other than the terminated Servicer promptly upon presentation of reasonable
documentation of such costs. If the Trustee is the terminated Servicer (except
in the case where the Trustee in its role as successor Servicer is being
terminated pursuant to Section 7.01 by reason of an Event of Default caused
solely by the Trustee as the successor Servicer and not by the predecessor
Servicer's actions or omissions), such costs shall be paid by the prior
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the terminated Servicer defaults in its obligation to pay such
costs and expenses, the same shall be paid by the successor Servicer or the
Trustee, in which case the successor Servicer or the Trustee, as applicable,
shall be entitled to reimbursement therefor from the Trust Fund.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and each Rating Agency
notice of each such Event of Default hereunder known to the Trustee, unless such
event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIAN
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believes in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
The Trustee shall be permitted to utilize one or more Subcontractors
for the performance of certain of its obligations under this Agreement, provided
that the Trustee complies with Section 3.02(e) as if the Trustee were a
"Servicer" pursuant to that Section. The Trustee shall indemnify the Depositor,
the Sponsor and any director, officer, employee or agent of the Depositor or the
Sponsor and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to the failure of the Trustee to perform any of its
obligations under Section 3.22 or Section 3.23, including without limitation any
failure by the Trustee to identify pursuant to Section 3.02(e) any Subcontractor
that is a Servicing Function Participant. This indemnity shall survive the
termination of this Agreement or the earlier resignation or removal of the
Trustee.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodian. Except as otherwise provided in Section 8.01:
(a) the Custodian and the Trustee may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties and neither the
Custodian nor the Trustee shall have any responsibility to ascertain or confirm
the genuineness of any signature of any such party or parties;
(b) the Custodian and the Trustee may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(c) neither the Custodian nor the Trustee 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 nor shall either the Trustee or the Custodian be liable for acts
or omissions of the other;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder; provided, further, the Trustee shall
not be responsible for any act or omission of the Custodian;
(f) neither the Custodian nor the Trustee shall be required to risk
or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than in its corporate capacity as
obligor of the investment security and with respect to the investment of funds
in the Distribution Account during the Trustee Float Period);
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of an Event of Default, the Trustee shall not be deemed to
have knowledge of an Event of Default, until a Responsible Officer of the
Trustee shall have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee and Custodian Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and the Trustee assumes no
responsibility for their correctness. Neither the Trustee nor the Custodian
makes any representations as to the validity or sufficiency of this Agreement or
of the Certificates or of any Mortgage Loan or related document other than with
respect to the Trustee, the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application by
the Depositor or the Servicer of any funds paid to the Depositor or the Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's and Custodian's Fees and Expenses. As
compensation for its activities under this Agreement, the Trustee may withdraw
from the Distribution Account on each Distribution Date the Custodian Fee for
the Distribution Date and any interest or investment income earned on funds
deposited in the Distribution Account during the Trustee Float Period. The
Trustee and any director, officer, employee, or agent of the Trustee and the
Custodian and any director, officer, employee, or agent of the Custodian shall
be indemnified by the Trust Fund and held harmless against any loss, liability,
or expense (including reasonable attorney's fees) resulting from any error in
any tax or information return prepared by the Servicer or incurred in connection
with (including any claim or legal action relating to):
(a) this Agreement,
(b) the Insurance Policy,
(c) the Certificates, or
(d) the performance of any of the Trustee's or the Custodian's
duties under this Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee and the Custodian, as
applicable, pursuant to Section 6.05 or (ii) incurred because of willful
misconduct, bad faith, or negligence in the performance of any of the Trustee's
or Custodian's duties under this Agreement, as applicable. This indemnity shall
survive the termination of this Agreement or the resignation or removal of the
Trustee under this Agreement. Without limiting the foregoing, except as
otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith, or willful misconduct, the Trust Fund shall pay or reimburse the
Trustee for all reasonable expenses, disbursements, and advances incurred or
made by the Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other routine expenses incurred by
the Trustee; provided, however, no expense shall be reimbursed hereunder if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicer and its Affiliates; provided,
however, that such entity cannot be an Affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer, the Custodian and
each Rating Agency not less than 60 days before the date specified in such
notice, when, subject to Section 8.08, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.08 meeting the
qualifications set forth in Section 8.06. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to the Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein. The Depositor, the Servicer and
the predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties, and
obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of any of the Certificates by any of the Rating Agencies.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, the Trustee shall notify the Depositor
of such succession or appointment and shall furnish to the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary for the Trustee to accurately and timely
report, pursuant to Section 8.12(g), the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC and that in such
capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each Trust REMIC
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish to Certificateholders the schedules, statements or information at such
times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities in the Trust; provided,
however, the Trustee shall apply for such employer identification number of the
grantor trust on the Closing Date. The Trustee shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) deliver or cause to be delivered the federal taxpayer
identification number of the grantor trust on correct, complete and duly
executed IRS Form W-9 of the grantor trust to the Swap Provider promptly upon
receipt of such number after applying for it pursuant to Section 8.11(b) above
and, in any event, no later than the first payment date under the Interest Rate
Swap Agreement and promptly upon actual knowledge that such previously provided
form is obsolete or incorrect and, if requested by the Swap Provider, an
applicable IRS Form W-8IMY;
(d) make an election that each of Pooling Tier REMIC-1, Pooling Tier
REMIC-2, the Lower Tier REMIC and the Upper Tier REMIC be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(e) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(f) provide information necessary for the computation of tax imposed
on the Transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(g) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are Outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(h) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(i) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on each Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(j) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other Person as may be required to sign such
returns by the Code or state or local laws, regulations or rules; and
(k) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the adjusted basis of the assets
determined at such intervals as may be required by the Code, as may be necessary
to prepare the foregoing returns, schedules, statements or information.
The Holder of the largest Percentage Interest of the Class R-I
Certificates shall act as Tax Matters Person for Pooling Tier REMIC-1 and the
holder of the largest Percentage Interest of the Class R-II Certificates shall
act as the Tax Matters Person for Pooling Tier REMIC-2, the Lower Tier REMIC and
the Upper Tier REMIC, in each case, within the meaning of Treasury Regulations
Section 1.860F-4(d), and the Trustee is hereby designated as agent of such
Certificateholder for such purpose (or if the Trustee is not so permitted, such
Holder shall be the Tax Matters Person in accordance with the REMIC Provisions).
In such capacity, the Trustee shall, as and when necessary and appropriate,
represent any Trust REMIC in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any Trust REMIC, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each REMIC in relation to any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to receive Prepayment Charges (including amounts payable by the Servicer with
respect thereto), the rights of the Class X Certificateholders to receive
amounts in the Excess Reserve Fund Account and the Supplemental Interest Account
(subject, other than in the case of the Class X Certificates, to the obligation
to pay Basis Risk Carry Forward Amounts and, without duplication, Upper Tier
Carry Forward Amounts) and the rights of the LIBOR Certificateholders to receive
Basis Risk Carry Forward Amounts and, without duplication, Upper Tier Carry
Forward Amounts as the beneficial ownership of interests in a grantor trust, and
not as an obligation of any Trust REMIC created hereunder, for federal income
tax purposes. The Trustee shall file or cause to be filed with the IRS together
with Form 1041 or such other form as may be applicable and shall furnish or
cause to be furnished, to the Class P Certificateholders, the Class X
Certificateholders and the LIBOR Certificateholders, the respective amounts
described above that are received, in the time or times and in the manner
required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk Carry Forward Amounts from the
Excess Reserve Fund Account and Basis Risk Carry Forward Amounts or, without
duplication, Upper Tier Carry Forward Amounts from the Supplemental Interest
Account. Unless otherwise advised by the Depositor, for federal income tax
purposes, the Trustee is hereby directed to assign a value of zero to the right
of each Holder allocating the purchase price of an initial Offered
Certificateholder between such right and the related Upper Tier Regular
Interest. Thereafter, the Depositor shall provide to the Trustee promptly upon
written request therefor any additional information or data that the Trustee
may, from time to time, reasonably request to enable the Trustee to perform its
duties under this Agreement; provided, however, that the Depositor shall not be
required to provide any information regarding the Mortgage Loans that the
Servicer is required to provide to the Trustee pursuant to this Agreement. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims, or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, pursuant
to this paragraph, accurate information or data to the Trustee on a timely
basis.
Neither the Servicer nor Trustee shall (i) permit the creation of
any interests in any Trust REMIC other than the regular and residual interests
set forth in the Preliminary Statement, (ii) receive any amount representing a
fee or other compensation for services (except as otherwise permitted by this
Agreement) or (iii) otherwise knowingly or intentionally take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (A) endanger the status of any Trust REMIC as a
REMIC or (B) result in the imposition of a tax upon any Trust REMIC or the Trust
Fund (including but not limited to the tax on "prohibited transactions" as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
Trust REMIC set forth in Section 860G(d) of the Code, or the tax on "net income
from foreclosure property") unless the Trustee receives an Opinion of Counsel
(at the expense of the party seeking to take such action or, if such party fails
to pay such expense, at the expense of the Trust Fund, but in no event at the
expense of the Trustee) to the effect that the contemplated action will not,
with respect to the Trust Fund or any Trust REMIC created hereunder, endanger
such status.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on any Trust REMIC pursuant to Sections 23153 and 24874
of the California Revenue and Taxation Code, if not paid as otherwise provided
for herein, the tax shall be paid by (i) the Trustee if such tax arises out of
or results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the Servicer, in the case of any such
minimum tax, and otherwise if such tax arises out of or results from a breach by
the Servicer of any of its obligations under this Agreement, or (iii) in all
other cases, or if the Trustee or the Servicer fails to honor its obligations
under the preceding clause (i) or (ii), any such tax will be paid with amounts
otherwise to be distributed to the Certificateholders, as provided in Section
4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the reporting
requirements of the Trust under the Exchange Act. The Trustee shall prepare for
execution by the Depositor any Forms 10-D and 10-K and certain Form 8-K's (not
to include any Form 8-K related to the filing of this Agreement and any
amendments thereto), required by the Exchange Act and the rules and regulations
of the Commission thereunder, in order to permit the timely filing thereof, and
the Trustee shall file (via the Commission's Electronic Data Gathering and
Retrieval System, or ▇▇▇▇▇) such Forms executed by the Depositor.
(b) Within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Trustee shall prepare and file
on behalf of the Trust any Form 10-D required by the Exchange Act, in form and
substance as required by the Exchange Act. The Trustee shall file each Form 10-D
with a copy of the related Monthly Statement attached thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported to the Depositor and the
Trustee by the parties set forth on Exhibit Q and directed and approved by the
Depositor pursuant to the following paragraph. The Trustee will have no duty or
liability for any failure hereunder to determine or prepare any Additional Form
10-D Disclosure, except as set forth in the next paragraph.
As set forth on Exhibit Q hereto, within 5 calendar days after the
related Distribution Date, the parties, to the extent described on Exhibit Q,
shall be required to provide to the Trustee and the Depositor, to the extent
known by such applicable parties, any Additional Form 10-D Disclosure, the form
and substance of the Additional Form 10-D Disclosure described on Exhibit Q
applicable to such party (and shall include with such Additional Form 10-D
Disclosure an Additional Disclosure Notification in the form attached hereto as
Exhibit U), and the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure on Form 10-D. The Trustee has no duty under this Agreement to monitor
or enforce the performance by the parties listed on Exhibit Q (other than with
respect to the Trustee) of their duties under this paragraph or proactively
solicit or procure from such parties any Additional Form 10-D Disclosure
information; provided, however, the Trustee shall cooperate with the Depositor
in a reasonable manner in order for the Depositor to comply with its reporting
obligations under the Exchange Act as set forth in Section 8.12(a). The
Depositor will be responsible for any reasonable fees and expenses assessed or
incurred by the Trustee in connection with including any Additional Form 10-D
Disclosure on Form 10-D pursuant to this paragraph. The Trustee shall compile
all such information provided to it in a Form 10-D prepared by it.
After preparing the Form 10-D, the Trustee shall forward
electronically a copy of the Form 10-D to the Depositor for approval and
execution. No later than 2 Business Days prior to the 15th calendar day after
the related Distribution Date, an officer of the Depositor shall sign the Form
10-D and return an electronic or fax copy of such signed Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Trustee. If a
Form 10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Trustee will follow the procedures set forth in Section
8.12(f)(ii). Form 10-D requires the Depositor to indicate (by checking "yes" or
"no") that it "(1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the Depositor was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Trustee, with respect to each Form 10-D, to check "yes" for each
item unless the Trustee has received timely prior written notice from the
Depositor that the answer should be "no" for an item. The Depositor shall notify
the Trustee in writing, as soon as reasonably practicable but no later than 5
Business Days prior to the 15th calendar day after the related Distribution Date
with respect to the filing of a report on Form 10-D, if the answer to the
questions should be "no." The Trustee shall be entitled to rely on such
instructions in preparing and/or filing any such Form 10-D. The Depositor
acknowledges that the performance by the Trustee of its duties under this
Section 8.12(b) related to the timely preparation and filing of Form 10-D is
contingent upon the Custodian, the Servicer (including Subcontractors and
Servicing Function Participant) and the Depositor observing all applicable
deadlines in the performance of their duties under this Section 8.12(b). The
Trustee shall have no liability for any loss, expense, damage, claim arising out
of or with respect to any failure to properly prepare and/or timely file such
Form 10-D, where such failure results from the Trustee's inability or failure to
receive, on a timely basis, any information from any party hereto (other than
the Trustee or any Subcontractor utilized by the Trustee) needed to prepare,
arrange for execution or file such Form 10-D, not resulting from its own
negligence, bad faith or willful misconduct.
(c) On or before 90 days after the end of each fiscal year of the
Trust or such earlier date as may be required by the Exchange Act (the "10-K
Filing Deadline"), commencing in March 2008, the Trustee shall prepare and file
on behalf of the Trust a Form 10-K, in form and substance as required by the
Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Trustee within the applicable
time frames set forth in this Agreement, (i) an annual compliance statement for
the Servicer and each Subservicer engaged by the Servicer, as described under
Section 3.22, (ii)(A) the annual reports on assessment of compliance with
servicing criteria for the Trustee, the Servicer, the Custodian, each
Subservicer engaged by the Servicer and each Servicing Function Participant
utilized by the Servicer, the Custodian or the Trustee, as described under
Section 3.23, and (B) if any such report on assessment of compliance with
servicing criteria described under Section 3.23 identifies any material instance
of noncompliance, disclosure identifying such instance of noncompliance, or such
report on assessment of compliance with servicing criteria described under
Section 3.23 is not included as an exhibit to such Form 10-K, disclosure that
such report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for the
Trustee, the Servicer, the Custodian, each Subservicer engaged by the Servicer
and each Servicing Function Participant utilized by the Servicer, the Custodian
or the Trustee, as described under Section 3.23, and (B) if any registered
public accounting firm attestation report described under Section 3.23
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any such registered public accounting firm
attestation report is not included as an exhibit to such Form 10-K, disclosure
that such report is not included and an explanation why such report is not
included, and (iv) a certification in the form attached hereto as Exhibit L,
with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission (the "Sarbanes Certification"), which shall be
signed by the senior officer of the Depositor in charge of securitization. Any
disclosure or information in addition to (i) through (iv) above that is required
to be included on Form 10-K ("Additional Form 10-K Disclosure") shall be
reported to the Depositor and the Trustee by the parties set forth on Exhibit R
and directed and approved by the Depositor pursuant to the following paragraph.
The Trustee will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth in
the next paragraph.
As set forth on Exhibit R hereto, no later than March 1 of each year
(or, in the case of the Servicer, March 15th of each year) that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2008, the
parties, to the extent described on Exhibit R, shall be required to provide to
the Trustee and the Depositor, to the extent known by such applicable parties,
any Additional Form 10-K Disclosure, the form and substance of the Additional
Form 10-K Disclosure described on Exhibit R applicable to such party (and shall
include with such Additional Form 10-K Disclosure an Additional Disclosure
Notification in the form attached hereto as Exhibit U), and the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Trustee has
no duty under this Agreement to monitor or enforce the performance by the
parties listed on Exhibit R (other than with respect to the Trustee) of their
duties under this paragraph or proactively solicit from such parties any
Additional Form 10-K Disclosure information; provided, however, the Trustee
shall cooperate with the Depositor in a reasonable manner in order for the
Depositor to comply with its reporting obligations under the Exchange Act as set
forth in Section 8.12(a). The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Trustee in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph. The Trustee shall compile all such information provided to it in a
Form 10-K prepared by it.
After preparing the Form 10-K, the Trustee shall forward
electronically a copy of the Form 10-K to the Depositor for approval and
execution. Form 10-K requires the registrant to indicate (by checking "yes" or
"no") that it "(1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Trustee, with respect to each Form 10-K, to check "yes" for each
item unless the Trustee has received timely prior written notice from the
Depositor that the answer should be "no" for an item. The Depositor shall notify
the Trustee in writing by March 1st if the answer to the questions should be
"no." The Trustee shall be entitled to rely on such instructions in preparing
and/or filing any such Form 10-K. No later than 5:00 p.m. EST on the 4th
Business Day prior to the 10-K Filing Deadline, a senior officer of the
Depositor shall sign the Form 10-K and return an electronic or fax copy of such
signed Form 10-K (with an original executed hard copy to follow by overnight
mail) to the Trustee. If a Form 10-K cannot be filed on time or if a previously
filed Form 10-K needs to be amended, the Trustee will follow the procedures set
forth in Section 8.12(f)(ii). The Depositor acknowledges that the performance by
the Trustee of its duties under this Section 8.12(c) related to the timely
preparation and filing of Form 10-K is contingent upon the Servicer (and any
Subservicer or Servicing Function Participant engaged by the Servicer) and the
Depositor observing all applicable deadlines in the performance of their duties
under this Section 8.12(c), Section 8.12(d), Section 3.22 and Section 3.23. The
Trustee shall have no liability for any loss, expense, damage, claim arising out
of or with respect to any failure to properly prepare and/or timely file such
Form 10-K, where such failure results from the Trustee's inability or failure to
receive, on a timely basis, any information from any party hereto or any
Subservicer or Servicing Function Participant engaged by any such party hereto
(other than the Trustee or any Servicing Function Participant utilized by the
Trustee) needed to prepare, arrange for execution or file such Form 10-K, not
resulting from its own negligence, bad faith or willful misconduct.
(d) In connection with the execution of a Sarbanes Certification,
the Trustee shall sign a certification (in the form attached hereto as Exhibit
M, with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission) for the benefit of the Depositor and its
officers, directors and Affiliates, and the Servicer shall sign a certification
solely with respect to the Servicer (in the form attached hereto as Exhibit N,
with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission) for the benefit of the Depositor, the Trustee and
their respective officers, directors and Affiliates. Each such certification
shall be delivered to the Depositor no later than March 10th of each year (or if
such day is not a Business Day, the immediately preceding Business Day) and the
Depositor shall deliver the Sarbanes Certification no later than the time set
forth for the delivery to the Trustee of the signed Form 10-K pursuant to
Section 8.12(c) for such year. In the event that prior to the filing date of the
Form 10-K in March of each year, the Trustee or the Servicer has actual
knowledge of information material to the Sarbanes Certification, that party
shall promptly notify the Depositor and each of the other parties signing the
certifications. In addition, (i) the Trustee shall indemnify and hold harmless
the Depositor and the Sponsor and their officers, directors, employees, agents
and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Trustee's obligations under this Section 8.12(d) or the Trustee's material
misstatement, material omission, negligence, bad faith or willful misconduct in
connection therewith, and (ii) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of the
Servicer in connection therewith. If the indemnification provided for herein is
unavailable or insufficient to hold harmless any indemnified party, then (i) the
Trustee agrees in connection with a breach of the Trustee's obligations under
this Section 8.12(d) or the Trustee's material misstatement, material omission,
negligence, bad faith or willful misconduct in connection therewith that it
shall contribute to the amount paid or payable by the Depositor and the Sponsor
as a result of the losses, claims, damages or liabilities of the Depositor and
the Sponsor in such proportion as is appropriate to reflect the relative fault
of the Depositor and the Sponsor on the one hand and the Trustee on the other
and (ii) the Servicer agrees that it shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities of such indemnified party in such proportion as is appropriate to
reflect the relative fault of such indemnified party, on the one hand, and the
Servicer, on the other hand, in connection with a breach of the Servicer's
obligations under this Section 8.12(d) or any material misstatement, material
omission, negligence, bad faith or willful misconduct of the Servicer in
connection therewith. The obligations of the Trustee and the Servicer under this
Section 8.12(d) shall apply to the Trustee and the Servicer whether or not such
Trustee or Servicer is acting as Trustee or Servicer, as applicable, at the time
such certification is required to be delivered. The indemnification and
contribution obligations set forth in this Section 8.12(d) shall survive the
termination of this Agreement or the earlier resignation or removal of the
Trustee or the Servicer, as applicable.
(e) Upon any filing of Form 10-D, Form 10-K or Form 8-K with the
Commission, the Trustee shall promptly deliver to the Depositor a copy of each
such executed report, statement or information.
(f) (i) The obligations set forth in paragraphs (a) through (d) of
this Section shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. On or
prior to January 30 of the first year in which the Trustee is able to do so
under applicable law, the Trustee shall prepare and file a Form 15 Suspension
Notification with respect to the Trust, with a copy to the Depositor. At the
start of any fiscal year, including any fiscal year after the filing of a Form
15 Suspension Notification, if the number of Holders of the Offered Certificates
of record exceeds the number set forth in Section 15(d) of the Exchange Act or
the regulations promulgated pursuant thereto which would cause the Trust to
again become subject to the reporting requirements of the Exchange Act, the
Trustee shall recommence preparing and filing reports on Form 10-K, 10-D and 8-K
as required pursuant to this Section 8.12 and the parties hereto shall again
have the obligations set forth in this Section 8.12.
(ii) In the event that the Trustee is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed pursuant to this Agreement because required
disclosure information was either not delivered to it or delivered to it
after the delivery deadlines set forth in this Agreement, the Trustee will
promptly notify the Depositor. In the case of Form 10-D and 10-K, the
Depositor and Trustee will thereupon prepare and file, and the other
parties shall cooperate in connection with such preparation and filing, a
Form 12b-25 and a 10-D/A and 10-K/A as applicable, pursuant to Rule 12b-25
of the Exchange Act. In the case of Form 8-K, the Trustee will, upon
receipt of all required Form 8-K Disclosure Information and, upon the
approval and direction of the Depositor, include such disclosure
information on the next succeeding Form 10-D. In the event that any
previously filed Form 8-K, 10-D or 10-K needs to be amended, in connection
with any Additional Form 10-D Disclosure (other than, in the case of Form
10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Trustee will
notify the Depositor and such other parties to the transaction as are
affected by such amendment, and the Depositor and the Trustee shall
prepare and file, and such other parties will cooperate in connection with
such preparation and filing, any necessary Form 8-K/A, 10-D/A or 10-K/A.
Any Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed
by an officer or a senior officer of the Depositor. The Depositor
acknowledges that the performance by the Trustee of its duties under this
Section 8.12(f) related to the timely preparation and filing of Form 15, a
Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon
the Servicer and the Depositor observing all applicable deadlines in the
performance of their duties under this Section 8.12 and Sections 3.22 and
3.23. The Trustee shall have no liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare
and/or timely file any such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the Trustee's
inability or failure to obtain or receive, on a timely basis, any
information from any party hereto or any Subservicer or any Servicing
Function Participant engaged by any such party hereto (other than the
Trustee or any Servicing Function Participant utilized by the Trustee)
needed to prepare, arrange for execution or file such Form 15, Form 12b-25
or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(g) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and
also if requested by the Depositor, the Trustee shall prepare and file on behalf
of the Trust any Form 8-K, as required by the Exchange Act, provided that the
Depositor shall file the initial Form 8-K in connection with the issuance of the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K (other than the initial
Form 8-K) ("Form 8-K Disclosure Information") shall be reported to the Depositor
and the Trustee by the parties set forth on Exhibit R and directed and approved
by the Depositor pursuant to the following paragraph. The Trustee will have no
duty or liability for any failure hereunder to determine or prepare any Form 8-K
Disclosure Information or any Form 8-K, except as set forth in the next
paragraph.
As set forth on Exhibit S hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business (New York City time) on the 2nd Business Day after the occurrence of a
Reportable Event the parties, to the extent described on Exhibit S, shall be
required to provide to the Trustee and the Depositor, to the extent known by
such applicable parties, any Form 8-K Disclosure Information, the form and
substance of the Form 8-K Disclosure Information described on Exhibit S
applicable to such party (and shall include with such Form 8-K Disclosure
Information, an Additional Disclosure Notification in the form attached hereto
as Exhibit U, and the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information on Form 8-K. The Trustee has no duty under this Agreement to monitor
or enforce the performance by the parties listed on Exhibit S (other than with
respect to the Trustee) of their duties under this paragraph or proactively
solicit or procure from such parties any Form 8-K Disclosure Information;
provided, however, the Trustee shall cooperate with the Depositor in a
reasonable manner in order for the Depositor to comply with its reporting
obligations under the Exchange Act as set forth in Section 8.12(a). The
Depositor will be responsible for any reasonable fees and expenses assessed or
incurred by the Trustee in connection with including any Form 8-K Disclosure
Information on Form 8-K pursuant to this paragraph. The Trustee shall compile
all such information provided to it in a Form 8-K prepared by it.
After preparing the Form 8-K, the Trustee shall no later than 12:00
noon (New York City time) on the 3rd Business Day after the Reportable Event but
in no case without having had notice for 24 hours forward electronically a draft
copy of the Form 8-K to the Depositor for review. No later than 12:00 noon (New
York City time) on the 4th Business Day after the Reportable Event, an officer
of the Depositor shall sign the Form 8-K and return an electronic or fax copy of
such signed Form 8-K (with an original executed hard copy to follow by overnight
mail) to the Trustee. If a Form 8-K cannot be filed on time or if a previously
filed Form 8-K needs to be amended, the Trustee will follow the procedures set
forth in Section 8.12(f)(ii). The Depositor and Servicer acknowledge that the
performance by the Trustee of its duties under this Section 8.12(g) related to
the timely preparation, arrangement for execution and filing of Form 8-K is
contingent upon the Servicer and the Depositor observing all applicable
deadlines in the performance of their duties under this Section 8.12(g). The
Trustee shall have no liability for any loss, expense, damage, claim arising out
of or with respect to any failure to properly prepare and/or timely file such
Form 8-K, where such failure results from the Trustee's inability or failure to
obtain or receive, on a timely basis, any information from any party hereto
(other than the Trustee or any Subcontractor utilized by the Trustee) needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(h) The Trustee shall have no liability for any loss, expense,
damage or claim arising out of or resulting from (i) the accuracy or inaccuracy
of any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form
8-K Disclosure Information (excluding any information therein provided by the
Trustee or any Subcontractor utilized by the Trustee) provided to the Trustee in
connection with the preparation of Forms 10-D, 10-K and 8-K pursuant to this
Section 8.12, or (ii) the failure of the Depositor to approve for filing any
Forms 10-D, 10-K and 8-K required to be prepared by the Trustee pursuant to this
Section 8.12, in either case, not resulting from the Trustee's own negligence,
bad faith or misconduct.
(i) Any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure Information required to be provided to the
Trustee shall be sent (by email at ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇ in
▇▇▇▇▇-compatible format, or in such other format as otherwise agreed upon by the
Trustee, the Depositor and the party providing such information. With respect to
any notice required to be delivered by the Trustee to the Depositor pursuant to
Section 8.12 of this Agreement, the Trustee may deliver such notice,
notwithstanding any contrary provision in Section 11.05, via facsimile to
▇▇▇-▇▇▇-▇▇▇▇ or telephonically by calling the General Counsel at 212-412-4000.
The signing party at the Depositor can be contacted at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or
such other address as to which the Depositor has provided prior written notice
to the Trustee.
Section 8.13 Tax Classification of the Excess Reserve Fund Account,
the Supplemental Interest Account and the Interest Rate Swap Agreement. For
federal income tax purposes, the Trustee shall treat the Excess Reserve Fund
Account, the Supplemental Interest Account and the Interest Rate Swap Agreement
as beneficially owned by the holders of the Class X Certificates and shall treat
such portion of the Trust Fund as a grantor trust, within the meaning of subpart
E, Part I of subchapter J of the Code. The Trustee shall treat the rights that
each Class of LIBOR Certificates has to receive payments of Basis Risk Carry
Forward Amounts from the Excess Reserve Fund Account and, to the extent not paid
from the Excess Reserve Fund Account from the Supplemental Interest Account
(including, without duplication, Upper Tier Carry Forward Amounts), and the
obligation to pay Class IO Shortfalls to the Supplemental Interest Account as
rights and obligations under a notional principal contract between the Class X
Certificateholders and Holders of each such Class and beneficially owned by each
such Class through the grantor trust. Accordingly, each Class of Certificates
(excluding the Class X and Class P Certificates and the Residual Certificates)
will be comprised of two components - an Upper Tier REMIC Regular Interest and
an interest in a notional principal contract, and the Class X Certificates will
be comprised of the following components: (i) two Upper Tier REMIC Regular
Interests (the Class X Interest and the Class IO Interest), (ii) an interest in
the Excess Reserve Fund Account, subject to the obligation to pay Basis Risk
Carry Forward Amounts and (iii) ownership of the Supplemental Interest Account
and the Interest Rate Swap Agreement, subject to the obligation to pay Basis
Risk Carry Forward Amounts (including, without duplication, Upper Tier Carry
Forward Amounts), Net Swap Payments and Swap Termination Payments and (iv) the
right to receive Class IO Shortfalls. The Trustee shall allocate the issue price
for a Class of Certificates among the respective components for purposes of
determining the issue price of each Upper Tier REMIC Regular Interest component
based on information received from the Depositor.
Holders of LIBOR Certificates shall also be treated as having agreed
to pay, on each Distribution Date, to the Holders of the Class X Certificates an
aggregate amount equal to the excess, if any, of (i) Net Swap Payments and Swap
Termination Payments (other than Defaulted Swap Termination Payments) payable
from Available Funds over (ii) the sum of amounts payable on the Class X
Interest available for such payments and amounts payable on the Class IO
Interest (such excess, a "Class IO Shortfall"), first from interest and then
from principal distributable on the LIBOR Certificates. A Class IO Shortfall
payable from interest collections shall be allocated pro rata among such LIBOR
Certificates based on the amount of interest otherwise payable to such Class of
LIBOR Certificates, and a Class IO Shortfall payable from principal collections
shall be allocated in reverse sequential order beginning with the most
subordinate Class of LIBOR Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of LIBOR
Certificates in respect of the corresponding Upper Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Supplemental Interest Account.
Section 8.14 Custodial Responsibilities.
(a) The Custodian shall provide access to the Mortgage Loan
Documents in possession of the Custodian regarding the related Mortgage Loans
and REO Property and the servicing thereof to the Trustee, the
Certificateholders, the FDIC and the supervisory agents and examiners of the
FDIC, such access being afforded only upon two (2) Business Days' prior written
request and during normal business hours at the office of the Custodian. The
Custodian shall allow representatives of the above entities to photocopy any of
the records and documentation and shall provide equipment for that purpose at
the expense of the person requesting such access.
(b) The Custodian may resign from its obligations hereunder upon 60
days' prior written notice to the Trustee, the Depositor and the Servicer. Such
resignation shall take effect upon (i) the appointment of a successor Custodian
reasonably acceptable to the Depositor within such 60 day period; and (ii)
delivery of all Mortgage Loan Files to the successor Custodian. The Trustee
shall have the right, but not the obligation, to become the successor Custodian.
If no successor Custodian is appointed within 60 days after written notice of
the Custodian's resignation is received by the Trustee, the Custodian may
petition a court of competent jurisdiction to appoint a successor Custodian.
Upon such resignation and appointment of successor Custodian, the
Custodian shall, at the Custodian's expense, promptly transfer to the successor
Custodian, as directed in writing by the Trustee, all applicable Mortgage Files
being administered under this Agreement. Notwithstanding the foregoing, the
Trust Fund, not the Custodian, shall bear the costs relating to the transfer of
Mortgage Files if the Custodian shall resign with cause (including a Custodian's
resignation due to the failure of the Custodian to be paid all fees due to such
Custodian hereunder).
(c) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, the Custodian shall
not utilize any Subcontractor for the performance of its duties hereunder if
such Subcontractor would be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB without the prior written consent of the
Depositor, in its sole discretion.
(d) The Custodian and any of its respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to this Agreement
or the performance of any of the Custodian's duties under this Agreement other
than any loss, liability, or expense incurred (i) resulting from any breach of a
Servicer's obligations in connection with this Agreement for which such Servicer
has performed its obligations to indemnify the Custodian pursuant to Section
6.05, or (ii) because of willful misfeasance, bad faith, or negligence in the
performance of any of the Custodian's duties under this Agreement. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Custodian. Except as otherwise provided in this
Agreement or a separate letter agreement between the Depositor and the
Custodian, the Custodian shall not be entitled to payment or reimbursement for
any routine ongoing expenses incurred by the Custodian in the ordinary course of
its duties as Custodian under this Agreement or for any other expenses incurred
by the Custodian; provided, however, that no expense shall be reimbursed by the
Trust Fund under this Agreement if it would not constitute an "unanticipated
expense incurred by the REMIC" within the meaning of the REMIC Provisions.
(e) The Custodian shall indemnify the Depositor, the Sponsor, the
Trustee and any director, officer, employee, agent and affiliate of the
Depositor, the Sponsor or the Trustee and hold them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonably and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain in any way related to (i) the failure of the
Custodian to deliver when required any attestation or assessment of compliance
required to be delivered by the Custodian or (ii) any material misstatement or
material omission contained in any assessment of compliance provided to be
delivered by the Custodian. This indemnity shall survive the termination of this
Agreement or the earlier resignation or removal of the Custodian.
Section 8.15 Limitations on Custodial Responsibilities.
(a) The Custodian shall be under no duty or obligation to inspect,
review or examine the Mortgage Files to determine that the contents thereof are
appropriate for the represented purpose or that they have been actually recorded
or that they are other than what they purport to be on their face.
(b) The Custodian shall not be responsible for preparing or filing
any reports or returns relating to federal, state or local income taxes with
respect to this Agreement, other than for the Custodian's compensation or for
reimbursement of expenses.
(c) The Custodian shall not be responsible or liable for, and makes
no representation or warranty with respect to, the validity, adequacy,
perfection or priority of any lien upon or security interest in any Mortgage
File.
(d) The duties and obligations of the Custodian shall only be such
as are expressly set forth in this Agreement or as set forth in a written
amendment to this Agreement executed by the parties hereto or their successors
and assigns. In the event that any provision of this Agreement implies or
requires that action or forbearance be taken by a party, but is silent as to
which party has the duty to act or refrain from acting, the parties agree that
the Custodian shall not be the party required to take the action or refrain from
acting. In no event shall the Custodian have any responsibility to ascertain or
take action except as expressly provided herein.
(e) The Custodian makes no representations and shall have no
responsibilities (except as expressly set forth herein) as to the validity,
sufficiency, value, genuineness, ownership or transferability of any of the
Mortgage Loans.
(f) The Custodian shall not be liable for any error of judgment, or
for any act done or step taken or omitted by it, in good faith, or for any
mistake of fact or law, or for anything that it may do or refrain from doing in
connection therewith, except in the case of its negligent performance or
omission or its bad faith or willful misfeasance.
(g) The Custodian shall not be responsible to verify (i) the
validity, legality, enforceability, sufficiency, due authorization or
genuineness of any document in the Mortgage File or of any Mortgage Loans or
(ii) the collectibility, insurability, effectiveness including the authority or
capacity of any Person to execute or issue any document in the Mortgage File, or
suitability of any Mortgage Loans.
(h) The Custodian shall have no obligation to verify the receipt of
any such documents the existence of which was not made known to the Custodian by
receipt of the Mortgage File.
(i) The Custodian shall have no obligation to determine whether the
recordation of any document is necessary.
(j) Except as set forth in Section 8.14(d), in no event shall the
Custodian or its directors, affiliates, officers, agents, and employees be held
liable for any special, indirect or consequential damages resulting from any
action taken or omitted to be taken by it or them hereunder or in connection
herewith even if advised of the possibility of such damages.
(k) In order to comply with laws, rules and regulations applicable
to banking institutions, including those related to the funding of terrorists
activities and money laundering, the Custodian is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Custodian. Accordingly, each of the parties
agrees to provide to the Custodian upon its request from time to time such
party's complete name, address, tax identification number and such other
identifying information together with copies of such party's constituting
documentation, securities disclosure documentation and such other identifying
documentation as may be available for such party.
(l) The Custodian shall not be responsible for delays or failures in
performance resulting from acts beyond its control. Such acts shall include, but
not be limited to, acts of God, strikes, lockouts, riots, acts of war or
terrorism, epidemics, governmental or regulatory actions, fire, communication
line failures, computer viruses, power failures, or earthquakes (each a "Force
Majeure Event"). The Custodian agrees that it will use commercially reasonable
efforts to mitigate the effects of the Force Majeure Event. The Custodian
further agrees that it shall give notice (including a reasonable description of
such Force Majeure Event) to the other parties hereto within a reasonable time
but in no event later than two (2) Business Days of the Custodian having notice
or knowledge of such Force Majeure Event and use its best efforts to resume
performance as promptly as practicable under the circumstances.
(m) Nothing in this Agreement shall be deemed to impose on the
Custodian any duty to qualify to do business in any jurisdiction, other than (i)
any jurisdiction where any Mortgage File is or may be held by the Custodian from
time to time hereunder, and (ii) any jurisdiction where its ownership of
property or conduct of business requires such qualification and where failure to
qualify could have a material adverse effect on the Custodian or its property or
business or on the ability of the Custodian to perform it duties hereunder.
(n) The Custodian shall have no responsibility nor duty with respect
to any Mortgage File while such Mortgage File is not in its possession. If the
Custodian requests instructions from the Trustee with respect to any act, action
or failure to act in connection with this Agreement, the Custodian shall be
entitled to refrain from taking such action and continue to refrain from acting
unless and until the Custodian shall have received written instructions from the
Trustee, the Servicer or the Depositor with respect to a Mortgage File without
incurring any liability therefore to the Trustee or any other person.
(o) Any Person into which the Custodian may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Custodian shall be a party, or any person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto anything herein to the contrary notwithstanding.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer, the Custodian and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase,
on or after the Optional Termination Date, by the Servicer of all Mortgage Loans
(and REO Properties) at the price (the "Termination Price") equal to the sum of
(i) 100% of the unpaid principal balance of each Mortgage Loan (other than in
respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, (ii) the lesser of (x) the appraised value of any REO
Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at the expense of the Servicer
and (y) the unpaid principal balance of each Mortgage Loan related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, (iii) all ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, Servicing
Advances and indemnification payments payable to the Servicer, (iv) any Swap
Termination Payment owed to the Swap Provider pursuant to the Interest Rate Swap
Agreement (to the extent not received by the Swap Provider as a Replacement Swap
Provider Payment), and (v) any unreimbursed indemnification payments payable to
the Custodian or the Trustee under this Agreement and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the expiration of 21 years from the death
of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase by the Servicer shall be permitted unless (i) after distribution of the
proceeds thereof to the Certificateholders (other than the Holders of the Class
X, Class P and Residual Certificates) pursuant to Section 9.02, the distribution
of the remaining proceeds to the Class X and Class P Certificates is sufficient
to pay the outstanding principal amount of and accrued and unpaid interest on
the NIM Securities, to the extent the NIM Securities are then outstanding, or
(ii) prior to such purchase, the Servicer remits to the Trustee an amount that,
together with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of, and accrued and unpaid interest on, the NIM Securities, to
the extent the NIM Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder and the Swap Provider. If
the Servicer elects to exercise its option to purchase the Mortgage Loans
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date the
Notice of Final Distribution is to be mailed to the affected Certificateholders,
the Servicer shall notify the Depositor and the Trustee of (a) the date on which
the Servicer intends to exercise such purchase option and (b) the Termination
Price.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month of such final distribution. Any such Notice of
Final Distribution shall specify (a) the Distribution Date upon which final
distribution on the Certificates will be made upon presentation and surrender of
Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Trustee will give such Notice of Final Distribution to each
Rating Agency at the time such Notice of Final Distribution is given to
Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee and the Custodian of a Request for Release
therefor, the Custodian shall promptly release to the Servicer the Custodial
Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicer, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the Notice of Final Distribution, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after such second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Residual Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Servicer exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on any Trust REMIC as
defined in Section 860F of the Code or (ii) cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are Outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Servicer, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Trust REMICs; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the Trust REMICs stating that pursuant to Treasury
Regulations Section 1.860F-1, the first day of the 90-day liquidation period for
each such REMIC was the date on which the Trustee sold the assets of the Trust
Fund to the Servicer.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer, the Custodian and the Trustee, without the
consent of any of the Certificateholders (i) to cure any ambiguity or mistake,
(ii) to correct any defective provision herein or to supplement any provision
herein which may be inconsistent with any other provision herein, (iii) to add
to the duties of the Depositor, the Custodian or the Servicer, (iv) to add any
other provisions with respect to matters or questions arising hereunder or (v)
to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided, that any action pursuant to clause (iv)
or (v) above shall not, as evidenced by an Opinion of Counsel (which Opinion of
Counsel shall not be an expense of the Trustee, the Custodian or the Trust
Fund), adversely affect in any material respect the interests of any
Certificateholder; provided, further, that any such action pursuant to clause
(iv) or (v) above shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination by such Rating Agency
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Custodian, the Depositor and the Servicer also may at any time and from time to
time amend this Agreement, but without the consent of the Certificateholders to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or helpful to (i) maintain the qualification of each Trust REMIC and
the grantor trust portion of the Trust Fund under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on any Trust REMIC or the grantor
trust pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code or to facilitate the administration and reporting of each Trust REMIC
and the grantor trust; provided, that the Trustee has been provided an Opinion
of Counsel, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Custodian and the Trustee, but with the consent of
the Holders of Certificates evidencing Percentage Interests aggregating not less
than 66(2)/3% of each Class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66(2)/3% or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such REMIC to fail to qualify as a REMIC or the grantor trust to fail
to qualify as a grantor trust at any time that any Certificates are Outstanding
and (ii) the party seeking such amendment shall have provided written notice to
the Rating Agencies and the Swap Provider (with a copy of such notice to the
Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
shall be deemed not to be Outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee or the Custodian
to enter into an amendment without receiving an Opinion of Counsel (which
Opinion shall not be an expense of the Custodian, the Trustee or the Trust
Fund), satisfactory to the Trustee that (i) such amendment is permitted and is
not prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 10.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Depositor, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 10.05 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03; and
2. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
(c) All directions, demands, consents and notices hereunder shall be
in writing and shall be deemed to have been duly given when delivered to: (i) in
the case of the Depositor, BCAP LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as
the Depositor may hereafter furnish to the Servicer, the Trustee and the
Custodian; (ii) in the case of the Servicer to HomEq Servicing, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Portfolio Management,
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Custodian by the Servicer in
writing; (iii) in the case of the Trustee to Deutsche Bank National Trust
Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn:
Trust Administration - BC07E1, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address
as may be hereafter furnished to the Depositor, the Servicer and the Custodian
by the Trustee in writing; (iv) in the case of the Custodian to The Bank of New
York Trust Company, N.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Custody Manager, or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Servicer by the Custodian in
writing; and (v) in the case of each of the Rating Agencies, the address
specified therefor in the definition corresponding to the name of such Rating
Agency. Notices to Certificateholders shall be deemed given when mailed, first
class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.08 Inspection and Audit Rights. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor
or the Trustee during the Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of the Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.08 shall be
borne by the Servicer.
Section 10.09 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.10 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.02,
this Agreement may not be assigned by the Servicer without the prior written
consent of the Trustee and Depositor; provided, however, the Servicer is hereby
authorized to enter into an Advance Facility under which (1) the Servicer sells,
assigns or pledges to an Advancing Person the Servicer's rights under this
Agreement to be reimbursed for any P&I Advances or Servicing Advances ("Advance
Reimbursement Amounts") and/or (2) an Advancing Person agrees to fund some or
all P&I Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders or any
other party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund P&I Advances and/or Servicing Advances on 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.
Advance Reimbursement Amounts shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which 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). The Trustee shall not have any duty or
liability with respect to the calculation of any Advance Reimbursement Amount.
The Trustee shall also not have any responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the related Advancing Person.
The Servicer shall maintain and provide to any successor Servicer
and (upon request) the Trustee a detailed accounting on a loan-by-loan basis as
to amounts advanced by, pledged or assigned to, and reimbursed to any Advancing
Person. The successor Servicer shall be entitled to rely on any such information
provided by the predecessor Servicer, and the successor Servicer shall not be
liable for any errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
Advance Reimbursement Amounts allocated to reimburse P&I Advances or
Servicing Advances made with respect to any particular Mortgage Loan shall be
allocated to the reimbursement of the ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing
Advances (as the case may be) made with respect to such Mortgage Loan on a
"first-in, first out" ("FIFO") basis, such that the Advance Reimbursement
Amounts shall be applied to reimburse the P&I Advance or Servicing Advance (as
the case may be) for such Mortgage Loan that was disbursed earliest in time
first, and to reimburse the P&I Advance or Servicing Advance (as the case may
be) for such Mortgage Loan that was disbursed latest in time last. Liquidation
Proceeds and Subsequent Recoveries with respect to a Mortgage Loan shall be
applied to reimburse Servicing Advances outstanding with respect to such
Mortgage Loan before being applied to reimburse P&I Advances outstanding with
respect to such Mortgage Loan. The Servicer shall provide to the related
Advancing Person, the Advance Facility trustee (or to any designee of either)
loan-by-loan information with respect to each Advance Reimbursement Amount
remitted to such Advancing Person, Advance Facility trustee or designee, to
enable the Advancing Person or Advance Facility trustee to make the FIFO
allocation of each such Advance Reimbursement Amount with respect to each
Mortgage Loan. The Servicer shall remain entitled to be reimbursed by the
Advancing Person or Advance Facility trustee for all P&I Advances and Servicing
Advances funded by the Servicer to the extent the related rights to be
reimbursed therefor have not been sold, assigned or pledged to an Advancing
Person. The Servicer shall indemnify the Trustee and the Trust Fund for any
loss, liability or damage resulting from any claim by the related Advancing
Person.
Any amendment to this Section 10.10 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.10, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee and the Servicer without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement
upon receipt by the Trustee of an Opinion of Counsel that such amendment has no
material adverse effect on the Certificateholders or written confirmation from
the Rating Agencies that such amendment will not adversely affect the ratings on
the Certificates. All reasonable costs and expenses (including attorney's fees)
of each party hereto of any such amendment shall be borne by the Servicer.
Prior to entering into an Advance Facility, the Servicer shall
notify the Advancing Person in writing that (1) the Trustee and the Trust are
not obligated or liable to repay from their own assets (other than, with respect
to the Trust, proceeds of payments from which the Servicer is entitled to
reimburse itself) any Advances financed by the Advancing Person and (2) the
Trustee shall not have any responsibility to track or monitor the administration
of the Advance Facility between the Servicer and the Advancing Person. If the
Trustee has received from the Servicer written notice of the assignment of any
Advance Reimbursement Amounts, it shall act, and shall be protected in acting,
at the written instruction of such Advancing Person with respect to the
disposition of such Advance Reimbursement Amounts and, if so directed, shall pay
the same directly to such Advancing Person.
Section 10.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Pooling and Servicing Agreement or the intent of the parties hereto.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.13 Third Party Rights. Each of the Swap Provider, and
each Person entitled to indemnification hereunder who is not a party hereto,
shall be deemed a third-party beneficiary of this Agreement to the same extent
as if it were a party hereto and shall have the right to enforce its rights
under this Agreement.
Section 10.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and, to
the extent practicable from a timing and information systems perspective and to
the extent the Depositor will pay any increased costs of the Trustee and the
Servicer caused by such request, agree to comply with all reasonable requests
made by the Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with the Trust, the Servicer, the Custodian and the Trustee shall, to
the extent practicable from a timing and information systems perspective and to
the extent the Depositor will pay any increased costs of the Servicer and the
Trustee caused by such request, cooperate fully with the Depositor to deliver to
the Depositor (including its assignees or designees), any and all statements,
reports, certifications, records and any other information available to such
party and reasonably necessary in the good faith determination of the Depositor
to permit the Depositor to comply with the provisions of Regulation AB, together
with such disclosures relating to the Servicer, the Custodian and the Trustee,
as applicable, reasonably believed by the Depositor to be necessary in order to
effect such compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Depositor, the Trustee, the Custodian and
the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
BCAP LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signer
THE BANK OF NEW YORK TRUST COMPANY,
N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
BARCLAYS CAPITAL REAL ESTATE INC.
D/B/A HOMEQ SERVICING
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Trustee and the Custodian and
not attached to the Pooling and Servicing Agreement)
SCHEDULE II
Mortgage Pass-Through Certificates,
Series 2007-1
Representations and Warranties of the Servicer
The Servicer hereby makes the representations and warranties set
forth in this Schedule II to the Depositor and the Trustee as of the Closing
Date. Capitalized terms used but not otherwise defined in this Schedule II shall
have the meaning ascribed thereto in the Pooling and Servicing Agreement.
(1) The Servicer is duly organized as a corporation and is validly
existing and in good standing under the laws of the state of Delaware, and
is licensed and qualified to transact any and all business contemplated by
this Pooling and Servicing Agreement to be conducted by the Servicer in
any state in which a Mortgaged Property securing a Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement;
(2) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the Depositor and
the Trustee, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms;
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans required to
be serviced by the Servicer hereunder, the consummation by the Servicer of
any other of the transactions herein contemplated, and the fulfillment of
or compliance with the terms hereof are in the ordinary course of business
of the Servicer and will not (A) result in a breach of any term or
provision of the organizational documents of the Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument to
which the Servicer is a party or by which it may be bound, or any law,
statute, rule, order, regulation, judgment or decree applicable to the
Servicer or its property 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 law, statute, rule, order, regulation, judgment or decree of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which (w) materially and adversely affects or, to
the Servicer's knowledge, would in the future materially and adversely
affect, the ability of the Servicer to perform its obligations under this
Pooling and Servicing Agreement, (x) materially and adversely affects or,
to the Servicer's knowledge, would in the future materially and adversely
affect, the business, operations, financial condition, properties or
assets of the Servicer taken as a whole, (y) impair the ability of the
Trust to realize on the Mortgage Loans, or (z) impair the value of the
Mortgage Loans;
(4) The Servicer has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans;
(5) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Pooling and Servicing Agreement;
(6) No action, suit, proceeding or investigation is pending or
threatened against the Servicer, before any court, administrative agency
or other tribunal asserting the invalidity of this Pooling and Servicing
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Pooling and Servicing Agreement or which, either in
any one instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
which would draw into question the validity of this Pooling and Servicing
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Servicer contemplated herein, or
which would be likely to impair materially the ability of the Servicer to
perform under the terms of this Pooling and Servicing Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the servicing of the Mortgage Loans as
evidenced by the consummation by the Servicer of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(8) With respect to each Mortgage Loan serviced by the Servicer
hereunder, to the extent the Servicer serviced such Mortgage Loan and to
the extent the Servicer provided monthly reports to the three credit
repositories, the Servicer has fully furnished, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
SCHEDULE III
Mortgage Pass-Through Certificates,
Series 2007-1
Representations and Warranties of The Bank of New York Trust Company, N.A.
The Bank of New York Trust Company, N.A. ("BNY") hereby makes the
representations and warranties set forth in this Schedule VI to the Depositor
and the Trustee, as of the Closing Date:
(1) BNY is duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by BNY or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(2) BNY has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary action on the part
of BNY the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery thereof
by the other parties thereto, constitutes a legal, valid and binding
obligation of BNY, enforceable against BNY in accordance with its terms,
except that (i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by BNY, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of BNY and will not result in a
material breach of any term or provision of the articles of association or
bylaws of BNY.
EXHIBIT A
[To be added to the Class A-1 Certificates while they remain Private
Certificates: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "RULE 144A LETTER") IN THE FORM OF
EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN
OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
IF THIS CERTIFICATE IS A BOOK ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No: A-1-[__]
A-2A-[__]
A-2B-[__]
A-2C-[__]
M-1-[__]
M-2-[__]
M-3-[__]
M-4-[__]
M-5-[__]
M-6-[__]
B-1-[__]
B-2-[__]
B-3-[__]
Cut-off Date: June 1, 2007
First Distribution Date: July 25, 2007
Initial Certificate Balance of this
Certificate ("Denomination"): $[ ]
Initial Certificate Balances of all
Certificates of this Class: A-1 $302,312,000
A-2A $249,946,000
A-2B $140,050,000
A-2C $11,846,000
M-1 $57,903,000
M-2 $45,635,000
M-3 $15,212,000
M-4 $21,591,000
M-5 $16,193,000
M-6 $11,286,000
B-1 $20,119,000
B-2 $13,740,000
B-3 $18,644,000
CUSIP: A-1 29445U AN5
A-2A 29445U ▇▇▇
▇-▇▇ 29445U AB1
A-2C 29445U AC9
M-1 29445U AD7
M-2 29445U AE5
M-3 29445U AF2
M-4 29445U AG0
M-5 29445U AH8
M-6 29445U AJ4
B-1 29445U ▇▇▇
▇-▇ ▇▇▇▇▇▇ ▇▇▇
▇-▇ ▇▇▇▇▇▇ AM7
ISIN: A-1 US29445UAN54
A-2A US29445UAA34
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇
M-2 US29445UAE55
M-3 US29445UAF21
M-4 US29445UAG04
M-5 US29445UAH86
M-6 US29445UAJ43
B-1 US29445UAK16
B-2 US29445UAL98
B-3 US29445UAM71
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Servicer, the Custodian or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage Loans
are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among BCAP LLC, as depositor (the
"Depositor"), Barclays Capital Real Estate Inc. d/b/a HomEq Servicing, as
servicer (the "Servicer"), Deutsche Bank National Trust Company, as trustee (the
"Trustee"), and The Bank of New York Trust Company, N.A. as custodian (the
"Custodian"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:___________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Custodian and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number __________, or, if mailed by check, to _______________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA"), OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT
SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS P CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS P CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE
TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR
W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH
FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH
FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE
OF ANY CLASS P CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER. EACH HOLDER OF A CLASS P CERTIFICATE
AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE TRUSTEE
FORWARDING TO THE SWAP PROVIDER ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED
AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES
OR TRANSFERS OF ANY CLASS P CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY
WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : P-1
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Custodian or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that __________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among BCAP LLC, as depositor (the
"Depositor"), Barclays Capital Real Estate Inc. d/b/a HomEq Servicing, as
servicer (the "Servicer"), Deutsche Bank National Trust Company, as trustee (the
"Trustee"), and The Bank of New York Trust Company, N.A. as custodian (the
"Custodian"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Custodian and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number __________, or, if mailed by check, to _______________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT C-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-I-[_]
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
Percentage Interest of this
Certificate ("Denomination") : 100%
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
Class R-I
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R-I Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer, the Custodian or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that ________________________ is the registered owner
of the Percentage Interest specified above of any monthly distributions due to
the Class R-I Certificates pursuant to a Pooling and Servicing Agreement dated
as of the Cut-off Date specified above (the "Agreement") among BCAP LLC, as
depositor (the "Depositor"), Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, as servicer (the "Servicer"), Deutsche Bank National Trust Company,
as trustee (the "Trustee"), and The Bank of New York Trust Company, N.A. as
custodian (the "Custodian"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R-I
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R-I Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R-I Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-I Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R-I Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-I Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R-I Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R-I Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R-I Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class R-I Certificate, (C) not to cause income with respect to the Class R-I
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class R-I Certificate or to cause the Transfer of the Ownership Interest in this
Class R-I Certificate to any other Person if it has actual knowledge that such
Person is a Non-Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class R-I Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Custodian and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number __________, or, if mailed by check, to _______________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT C-2
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-II-[_]
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
Percentage Interest of this
Certificate ("Denomination") : 100%
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
Class R-II
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R-II Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer, the Custodian or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that ________________________ is the registered owner
of the Percentage Interest specified above of any monthly distributions due to
the Class R-II Certificates pursuant to a Pooling and Servicing Agreement dated
as of the Cut-off Date specified above (the "Agreement") among BCAP LLC, as
depositor (the "Depositor"), Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, as servicer (the "Servicer"), Deutsche Bank National Trust Company,
as trustee (the "Trustee"), and The Bank of New York Trust Company, N.A. as
custodian (the "Custodian"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R-II
Certificate at the offices designated by the Trustee for such purposes or the
office or such other location specified in the notice to Certificateholders.
No transfer of a Class R-II Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R-II Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-II Certificate
to have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R-II Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-II Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R-II Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R-II Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R-II Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class R-II Certificate, (C) not to cause income with respect to the Class R-II
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class R-II Certificate or to cause the Transfer of the Ownership Interest in
this Class R-II Certificate to any other Person if it has actual knowledge that
such Person is a Non-Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class R-II Certificate in violation
of the provisions herein shall be absolutely null and void and shall vest no
rights in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Custodian and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number __________, or, if mailed by check, to _______________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND THE SERVICER, TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR
SIMILAR LAW AND WILL NOT SUBJECT THE DEPOSITOR, THE TRUSTEE OR THE SERVICER TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO
ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS X CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS X CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE
TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR
W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH
FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH
FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE
OF ANY CLASS X CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER. EACH HOLDER OF A CLASS X CERTIFICATE
AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE TRUSTEE
FORWARDING TO THE SWAP PROVIDER ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED
AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES
OR TRANSFERS OF ANY CLASS X CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY
WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : X-1
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
Class X
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Custodian or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that ____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among BCAP LLC, as depositor (the
"Depositor"), Barclays Capital Real Estate Inc. d/b/a HomEq Servicing, as
servicer (the "Servicer"), Deutsche Bank National Trust Company, as trustee (the
"Trustee"), and The Bank of New York Trust Company, N.A. as custodian (the
"Custodian"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purposes or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Custodian and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number __________, or, if mailed by check, to _______________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[DATE]
BCAP LLC
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Barclays Capital Real Estate Inc. d/b/a HomEq Servicing
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Deutsche Bank National Trust Company, as Trustee
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Attn: Trust Administration -BC07E1
Re: Pooling and Servicing Agreement, dated as of June 1, 2007, by and
among BCAP LLC, as depositor, Barclays Capital Real Estate Inc.
d/b/a HomEq Servicing, as servicer, Deutsche Bank National Trust
Company, as trustee, and The Bank of New York Trust Company, N.A.,
as custodian, EquiFirst Loan Securitization Trust 2007-1 Mortgage
Pass-Through Certificates, Series 2007-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, for each Mortgage Loan listed in the Mortgage Loan Schedule as to
which the undersigned is identified as Custodian (other than any Mortgage Loan
listed in the attached schedule), it has received:
a. the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without
recourse"; and
b. Except with respect to each MERS Designated Mortgage Loan, an
executed assignment of the Mortgage (which may be included in
a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Custodian has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK TRUST COMPANY,
N.A.,
as Custodian
By:____________________________________
Name:
Title:
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[DATE]
BCAP LLC
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Barclays Capital Real Estate Inc. d/b/a HomEq Servicing
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Deutsche Bank National Trust Company, as Trustee
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Attn: Trust Administration -BC07E1
Re: Pooling and Servicing Agreement, dated as of June 1, 2007, among
BCAP LLC, as depositor, Barclays Capital Real Estate Inc. d/b/a
HomEq Servicing, as servicer, Deutsche Bank National Trust Company,
as trustee, and The Bank of New York Trust Company, N.A., as
custodian, EquiFirst Loan Securitization Trust 2007-1 Mortgage
Pass-Through Certificates, Series 2007-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
a. The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of
endorsement from the originator to the last endorsee.
b. The original recorded Mortgage.
c. Except with respect to each MERS Designated Mortgage Loan, an
executed assignment of the Mortgage in the form provided in
Section 2.01 of the Pooling and Servicing Agreement; or, if
the applicable Original Loan Seller or the Depositor has
certified or the Custodian has actual knowledge that the
related Mortgage has not been returned from the applicable
recording office, a copy of the assignment of the Mortgage
(excluding information to be provided by the recording
office).
d. Except with respect to each MERS Designated Mortgage Loan, the
original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of
assignment from the originator to the last endorsee.
e. The original or duplicate original lender's title policy and
all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (3), (15),
(22) and (29) of the Data Tape Information accurately reflects information set
forth in the Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Custodian
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK TRUST COMPANY,
N.A.,
as Custodian
By:____________________________________
Name:
Title:
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R-I][R-II] Certificate
(the "Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among BCAP LLC, as
depositor (the "Depositor"), Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, as servicer, Deutsche Bank National Trust Company, as trustee (the
"Trustee"), and The Bank of New York Trust Company, N.A., as custodian (the
"Custodian"). Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee for the
benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is not a Disqualified Non-U.S. Person as defined
in the Agreement.
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. Person.
12. Check the applicable paragraph:
[_] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
a. the present value of any consideration given to the Transferee
to acquire such Certificate;
b. the present value of the expected future distributions on such
Certificate; and
c. the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[_] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[_] None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of _______, 20__.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_______________________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this______day of ________ , 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
BCAP LLC
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Attention: [_________]
Deutsche Bank National Trust Company
c/o DB Services Tennessee
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Attn: Transfer Unit
Re: EquiFirst Loan Securitization Trust 2007-1 Mortgage
Pass-Through Certificates, Series 2007-1, Class [ ]
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee and (ii) after conducting
a reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_______________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
BCAP LLC
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Attention: [_________]
Deutsche Bank National Trust Company
c/o DB Services Tennessee
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Attn: Transfer Unit
Barclays Bank PLC
as Swap Provider
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Attention: [_________]
Re: EquiFirst Loan Securitization Trust 2007-1 Mortgage Pass-Through
Certificates, Series 2007-1, Class [ ]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class ▇-▇, ▇▇▇▇▇ ▇-▇▇,
▇▇▇▇▇ ▇-▇▇, Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 or Class B-3 Certificate or we are not an
employee benefit plan that is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan or arrangement that
is subject to Section 4975 of the Internal Revenue Code of 1986, as amended, or
a plan subject to materially similar provisions of applicable federal, state or
local law, nor are we acting on behalf of any such plan or arrangement nor using
the assets of any such plan or arrangement to effect such acquisition or, with
respect to a Class X Certificate, the purchaser is an insurance company that is
purchasing this certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase and holding
of such Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
The Transferee's taxpayer identification number is __________. The
Transferee attaches hereto IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate
attachments) or W-9. The Transferee hereby consents to the attached Form being
provided to the Swap Provider.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
Date:
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must on and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Custodian)
To: The Bank of New York Trust Company, N.A., as Custodian
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Custody Manager
Re: In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders pursuant to
the Pooling and Servicing Agreement, dated as of June 1, 2007, among
BCAP LLC, as depositor, Barclays Capital Real Estate Inc. d/b/a
HomEq Servicing, as servicer, Deutsche Bank National Trust Company,
as trustee, and The Bank of New York Trust Company, N.A., as
custodian, EquiFirst Loan Securitization Trust 2007-1, we request
the release, and acknowledge receipt, of the (Custodial
File/[specify documents]) for the Mortgage Loan described below, for
the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Section 2.03 of the Pooling and
Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
Address to which Custodian should
deliver the Custodian's Mortgage File:
_______________________________________
_______________________________________
BARCLAYS CAPITAL REAL ESTATE INC.
D/B/A HOMEQ SERVICING
By:____________________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
THE BANK OF NEW YORK TRUST COMPANY,
N.A.,
as Custodian
By:____________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Sponsor and which shall be retained by the Servicer or delivered to and retained
by the Custodian, as applicable:
(a) The documents or instruments set forth as items (i) to (ix) in
Section 2.01(b) of the Agreement.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income, if applicable.
(e) Verification of acceptable evidence of source and amount of down
payment.
(f) Credit report on Mortgagor.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property.
(j) 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.
(k) All required disclosure statements.
(l) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(m) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
Re: EquiFirst Loan Securitization Trust 2007-1 (the "Trust") Mortgage
Pass-Through Certificates, Series 2007-1, issued pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2007 (the
"Pooling and Servicing Agreement"), by and among BCAP LLC, as
depositor, Deutsche Bank National Trust Company, as trustee (the
"Trustee"), Barclays Capital Real Estate Inc. d/b/a HomEq Servicing,
as servicer (the "Servicer"), and The Bank of New York Trust
Company, N.A., as custodian (the "Custodian")
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K ("Annual
Report"), and all reports on Form 10-D (collectively with this Annual Report,
the "Reports") required to be filed in respect of period covered by this Annual
Report, of the Trust;
2. Based on my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this Annual Report;
3. Based on my knowledge, all of the distribution, servicing and
other information required to be provided under Form 10-D for the period covered
by this Annual Report is included in the Reports;
4. Based on my knowledge and the compliance statements required in
this Annual Report under Item 1123 of Regulation AB, and except as disclosed in
the Reports, the Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement in all material respects; and
5. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation reports on
assessment of compliance with servicing criteria required to be included in this
Annual Report in accordance with Item 1122 of Regulation AB and Exchange Act
Rules 13a-18 and 15d-18 have been included as an exhibit to this Annual Report,
except as otherwise disclosed in this Annual Report. Any material instances of
non-compliance described in such reports have been disclosed in this Annual
Report.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: the Trustee,
the Custodian and the Servicer.
Date:
By:____________________________________
Name:
Title:
EXHIBIT M
FORM OF TRUSTEE'S CERTIFICATION
TO BE PROVIDED TO DEPOSITOR
Re: EquiFirst Loan Securitization Trust 2007-1 (the "Trust") Mortgage
Pass-Through Certificates, Series 2007-1, issued pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2007 (the
"Pooling and Servicing Agreement"), by and among BCAP LLC, as
depositor (the "Depositor"), Deutsche Bank National Trust Company,
as trustee (the "Trustee"), Barclays Capital Real Estate Inc. d/b/a
HomEq Servicing, as servicer, and The Bank of New York Trust
Company, N.A., as custodian
The Trustee hereby certifies to the Depositor and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 10-D required to be
filed in respect of the period covered by the Annual Report (collectively with
the Annual Report, the "Reports"), of the Trust;
2. Based on my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
the Annual Report, it being understood that the Trustee is not responsible for
verifying the accuracy or completeness of information in the Reports (a)
provided by Persons other than the Trustee or any Subcontractor utilized by the
Trustee or (b) relating to Persons other than the Trustee or any Subcontractor
utilized by the Trustee as to which a Responsible Officer of the Trustee does
not have actual knowledge;
3. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Pooling and Servicing Agreement for
inclusion in the Reports is included in the Reports; and
4. The report on assessment of compliance with servicing criteria
applicable to the Trustee for asset-backed securities of the Trustee and each
Subcontractor utilized by the Trustee and its related attestation report on
assessment of compliance with servicing criteria required to be included in the
Annual Report in accordance with Item 1122 of Regulation AB and Exchange Act
Rules 13a-18 and 15d-18 has been included as an exhibit to the Annual Report.
Any material instances of non-compliance are described in such report and have
been disclosed in the Annual Report.
Date:
By:____________________________________
Name:
Title:
EXHIBIT N
FORM OF SERVICER'S CERTIFICATION
TO BE PROVIDED TO DEPOSITOR
Re: EquiFirst Loan Securitization Trust 2007-1 (the "Trust") Mortgage
Pass-Through Certificates, Series 2007-1, issued pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2007 (the
"Pooling and Servicing Agreement"), by and among BCAP LLC, as
depositor (the "Depositor"), Deutsche Bank National Trust Company,
as trustee (the "Trustee"), Barclays Capital Real Estate Inc. d/b/a
HomEq Servicing, as servicer (the "Servicer"), and The Bank of New
York Trust Company, N.A., as custodian
I, [identify the certifying individual], certify to the Depositor
and the Trustee, and their officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and I have reviewed the
servicer compliance statement of the Servicer and the compliance statements of
each Subservicer, if any, engaged by the Servicer provided to the Depositor and
the Trustee for the Trust's fiscal year [___] in accordance with Item 1123 of
Regulation AB (each a "Compliance Statement"), the report on assessment of the
Servicer's compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria") and reports on assessment of compliance
with servicing criteria for asset-backed securities of the Servicer and of each
Subservicer or Subcontractor, if any, engaged or utilized by the Servicer
provided to the Depositor and the Trustee for the Trust's fiscal year [___] in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934,
as amended (the "Exchange Act") and Item 1122 of Regulation AB (each a
"Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB related to each Servicing Assessment
(each an "Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the Mortgage
Loans by the Servicer during 200[_] that were delivered or caused to be
delivered by the Servicer pursuant to the Agreement (collectively, the
"Servicing Information");
2. Based on my knowledge, the Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Servicing Information;
3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Servicer pursuant to the Pooling and Servicing
Agreement has been provided to the Trustee;
4. Based on my knowledge and the compliance review conducted in
preparing the Compliance Statement of the Servicer and, if applicable, reviewing
each Compliance Statement of each Subservicer, if any, engaged by the Servicer,
and except as disclosed in such Compliance Statement[(s)], the Servicer
[(directly and through its Subservicers, if any)] has fulfilled its obligations
under the Pooling and Servicing Agreement in all material respects.
5. Each Servicing Assessment of the Servicer and of each Subservicer
or Subcontractor, if any, engaged or utilized by the Servicer and its related
Attestation Report required to be included in the Annual Report in accordance
with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has
been provided to the Depositor and the Trustee. Any material instances of
non-compliance are described in any such Servicing Assessment or Attestation
Report.
Date:
By:_________________________________
Name:
Title:
EXHIBIT O
BARCLAYS REPRESENTATION AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT ("Agreement"), dated
as of June 27, 2007 (the "Closing Date"), is between BARCLAYS BANK PLC, a public
limited company registered in England and Wales under company number 1026167
("BBPLC"), and BCAP LLC, a Delaware limited liability company (the "Depositor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, ▇▇▇▇▇▇ Funding LLC ("▇▇▇▇▇▇") purchased certain mortgage
loans (the "Mortgage Loans") set forth on the mortgage loan schedule attached
hereto as Schedule I (the "Mortgage Loan Schedule") from EquiFirst Corporation
("EquiFirst") and EquiFirst Mortgage Corporation of Minnesota ("EquiFirst
Mortgage") pursuant to that certain Mortgage Loan Purchase Agreement, dated as
of March 1, 2007 (the "Purchase Agreement"), by and among ▇▇▇▇▇▇, as purchaser,
and EquiFirst and EquiFirst Mortgage, as sellers;
WHEREAS, ▇▇▇▇▇▇ assigned the Mortgage Loans and the Purchase
Agreement to the Depositor, as assignee, pursuant to an Assignment, Assumption
and Recognition Agreement, dated June 27, 2007 (the "Assignment Agreement"), by
and among ▇▇▇▇▇▇, as assignor, the Depositor, EquiFirst and EquiFirst Mortgage;
WHEREAS, pursuant to that certain Pooling and Servicing Agreement,
dated as of June 1, 2007 (the "Pooling and Servicing Agreement"), by and among
the Depositor, Barclays Capital Real Estate Inc. d/b/a HomEq Servicing, as
servicer, Deutsche Bank National Trust Company, as trustee, and The Bank of New
York Trust Company, N.A., as custodian, EquiFirst Loan Securitization Trust
2007-1 (the "Trust") shall issue its Mortgage Pass-Through Certificates, Series
2007-1 (the "Certificates"), representing beneficial ownership interest in a
trust, the assets of which include, but are not limited to, the Mortgage Loans
transferred by the Depositor to the Trust pursuant to the Pooling and Servicing
Agreement;
WHEREAS, BBPLC is the parent of the Depositor and is the
administrator of ▇▇▇▇▇▇;
WHEREAS, in connection with the securitization of the Mortgage Loans
and the issuance of the Certificates, the parties hereto have determined it to
be necessary and appropriate for BBPLC to make various representations and
warranties to the Depositor regarding the Mortgage Loans;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Defined Terms.
(a) Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to such terms in the Pooling and Servicing
Agreement. In the event of a conflict between any of the defined terms contained
in this Agreement and the Pooling and Servicing Agreement, the definitions
contained in this Agreement shall control.
(b) The following capitalized terms shall have the meanings assigned
to such terms below:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
ALTA: The American Land Title Association, or any successor thereto.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the related Mortgagor and relating to a stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Deleted Mortgage Loan: A Mortgage Loan that is purchased or replaced
or to be replaced with a Qualified Substitute Mortgage Loan by BBPLC in
accordance with the terms of this Agreement.
Delinquent: With respect to any Mortgage Loan, means any Monthly
Payment due on a Due Date that is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with respect to each Group I
Mortgage Loan secured by the related Mortgagor's primary residence with an
"annual percentage rate" or total "points and fees" (as each such term is
calculated under HOEPA) payable by the related Mortgagor that exceed the
thresholds set forth by HOEPA and its implementing regulations, including 12
C.F.R. ss. 226.32(a)(1)(i) and (ii), (c) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
was defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004), "high risk home," "predatory" or similar loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (d) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
such Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination and
(b) if such Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the Mortgagor or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by BBPLC for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of all
scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid by BBPLC
to the Depositor or its designee in the month of substitution), (ii) have a
Mortgage Rate not less than, and not more than 1% greater than, 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) be of the same type as the Deleted Mortgage Loan (i.e., fixed-rate or
adjustable-rate with the same Periodic Rate Cap and Index) and (v) comply with
each representation and warranty (respecting individual Mortgage Loans) set
forth in Section 2 of this Agreement.
Servicing Transfer Date: April 23, 2007.
Standard & Poor's Glossary: Version 5.7 of the Standard & Poor's
LEVELS(R) Glossary.
Section 2. Representations and Warranties of BBPLC with Respect to
the Mortgage Loans.
(a) As to each Mortgage Loan, BBPLC hereby represents and warrants
to the Depositor that nothing has occurred since the Servicing Transfer Date
that would render the representations and warranties set forth in Part A of
Exhibit I hereto to be untrue in any material respect as of the Closing Date.
(b) As to each Group I Mortgage Loan, BBPLC hereby represents and
warrants to the Depositor that nothing has occurred since the Servicing Transfer
Date that would render the representations and warranties set forth in Part B of
Exhibit I hereto to be untrue in any material respect as of the Closing Date.
(c) In addition, as to each Mortgage Loan, BBPLC hereby represents
to the Depositor that:
(i) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act. No
Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or
local law; and
(ii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, disclosure and all predatory, abusive and fair lending laws
applicable to the Mortgage Loan, including, without limitation, any
provisions relating to Prepayment Charges, have been complied with, and
the consummation of the transactions contemplated hereby will not involve
the violation of any such laws or regulations.
Section 3. Purchase or Substitution Obligation for Breach of a
Representation or Warranty with Respect to the Mortgage Loans.
(a) Within sixty (60) days of the earlier of either discovery by or
notice to BBPLC of any breach of a representation or warranty which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Depositor therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Depositor therein), BBPLC shall
cure such breach in all material respects and, if such breach cannot be cured,
BBPLC shall, within sixty (60) calendar days of BBPLC's receipt of request from
the Depositor, purchase such Mortgage Loan at the Repurchase Price. In the event
that such a breach shall involve any representation or warranty set forth in
Section 2 of this Agreement, and such breach cannot be cured within sixty (60)
days of the earlier of either discovery by or notice to BBPLC of such breach,
all of the Mortgage Loans materially and adversely affected thereby shall be
purchased by BBPLC at the Repurchase Price. Notwithstanding the above sentence,
within sixty (60) days of the earlier of either discovery by, or notice to,
BBPLC of any breach of the representations or warranties set forth in Section
2(c), clauses (p), (v) and (w) on Part A of Exhibit I or on Part B of Exhibit I,
BBPLC shall repurchase the affected Mortgage Loan or Mortgage Loans at the
Repurchase Price, together with all expenses incurred by the Depositor as a
result of such repurchase. Any purchase of a Mortgage Loan or Loans pursuant to
the foregoing provisions of this Section 3 shall be accomplished by direct
remittance of the Repurchase Price to the Depositor or its designee in
accordance with the Depositor's instructions.
However, if the breach shall involve a representation or warranty
set forth in Section 2 of this Agreement (other than the representations or
warranties set forth in Section 2(c), clauses (p), (v) and (w) on Part A of
Exhibit I or on Part B of Exhibit I) relating to any Mortgage Loan and BBPLC
discovers or receives notice of any such breach within two years of the Closing
Date, BBPLC shall, at the Depositor's option and provided that BBPLC has a
Qualified Substitute Mortgage Loan, rather than purchase such Mortgage Loan as
provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Mortgage Loans,
provided that any such substitution shall be effected not later than two years
after the Closing Date. If BBPLC has no Qualified Substitute Mortgage Loan,
BBPLC shall purchase the deficient Mortgage Loan. Any purchase of a Mortgage
Loan or Mortgage Loans pursuant to the foregoing provisions of this Section 3
shall be accomplished by direct remittance of the Repurchase Price to the
Depositor or its designee in accordance with the Depositor's instructions.
At the time of purchase or substitution, the Depositor and BBPLC
shall arrange for the reassignment of the Deleted Mortgage Loan to BBPLC and the
delivery to BBPLC of any documents held by the Trustee relating to the Deleted
Mortgage Loan. In the event of a purchase or substitution, BBPLC shall,
simultaneously with such reassignment, give written notice to the Depositor that
such purchase or substitution has taken place, amend the applicable 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 applicable Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, BBPLC shall be deemed to have made as to
such Qualified Substitute Mortgage Loan the representations and warranties set
forth in this Agreement except that all such representations and warranties set
forth in this Agreement shall be deemed made as of the date of such
substitution. BBPLC shall effect such substitution by delivering to the Trustee
or to such other party as the Depositor may designate in writing for such
Qualified Substitute Mortgage Loan the documents required by the Pooling and
Servicing Agreement, with the Mortgage Note endorsed as required by the Pooling
and Servicing Agreement. No substitution will be made in any calendar month
after the initial Determination Date for such month. BBPLC shall remit directly
to the Depositor, or its designee, in accordance with the Depositor's
instructions the monthly payment less the Servicing Fee due, if any, on such
Qualified Substitute Mortgage Loan or Mortgage 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
BBPLC. For the month of substitution, distributions to the Depositor shall
include the monthly payment due on any Deleted Mortgage Loan in the month of
substitution, and BBPLC shall thereafter be entitled to retain all amounts
subsequently received by BBPLC in respect of such Deleted Mortgage Loan.
For any month in which BBPLC substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, BBPLC shall remit to the Servicer the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution) in
accordance with Section 2.03(d) of the Pooling and Servicing Agreement.
Any cause of action against BBPLC relating to or arising out of the
breach of any representations and warranties made in Section 2 shall accrue as
to any Mortgage Loan upon (i) discovery of such breach by the Depositor or
notice thereof by BBPLC to the Depositor, (ii) failure by BBPLC to cure such
breach, purchase such Mortgage Loan or substitute a Qualified Substitute
Mortgage Loan as specified above and (iii) demand upon BBPLC by the Depositor
for compliance with this Agreement.
In the event BBPLC is obligated to purchase or substitute any
Mortgage Loan due to a breach, the Depositor shall assign to BBPLC all of its
rights under the Purchase Agreement, provided under the Assignment Agreement.
(b) It is understood and agreed that the obligation of BBPLC set
forth in Section 3(a) to purchase or substitute for a Mortgage Loan in breach of
a representation or warranty contained in Section 2 constitutes the sole remedy
of the Depositor or any other person or entity with respect to such breach.
Section 4. Term of Representation and Warranties with Respect to the
Mortgage Loans.
The representations and warranties of BBPLC set forth in Part A of
Exhibit I hereto shall inure to the benefit of the Depositor and its successors
and assigns until all amounts payable to Certificateholders under the Pooling
and Servicing Agreement have been paid in full, and the representations and
warranties of BBPLC set forth on Part B of Exhibit I hereto shall inure to the
benefit of the Depositor and its successors and assigns until all amounts
payable to the holders of the Group I Class A Certificates under the Pooling and
Servicing Agreement have been paid in full.
Section 5. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
Section 6. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO CONFLICTS OF LAWS
PRINCIPLES.
Section 7. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 8. Captions.
The captions in this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
Section 9. Successors and Assigns.
This Agreement shall insure to the benefit of the parties hereto and
their respective successors and assigns. Any entity into which BBPLC or the
Depositor may be merged or consolidated shall, without the requirement for any
further writing, be deemed BBPLC or the Depositor, respectively, hereunder.
Section 10. Amendments.
This Agreement may be amended from time to time by the parties
hereto.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first above written.
BARCLAYS BANK PLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
BCAP LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
EXHIBIT I
Representations and Warranties Regarding the Mortgage Loans. For the
purposes of this exhibit, "Mortgage Loan" refers to each Mortgage Loan, "Group I
Mortgage Loan" refers to each Group I Mortgage Loan, "Mortgage Loan Schedule"
refers to the Mortgage Loan Schedule and "Sellers" refers to EquiFirst and
EquiFirst Mortgage.
Part A- Representations and Warranties with respect to each Mortgage Loan
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule relating to the Mortgage Loans is complete, true and
correct as of the Cut-off Date;
(b) Payments Current. (i) All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days Delinquent, have been made and credited, (ii) no
payment required under the Mortgage Loan has been 30 days or more Delinquent at
any time since the origination of the Mortgage Loan, and (iii) the first Monthly
Payment was made with respect to the Mortgage Loan on its related Due Date or
within the grace period, all in accordance with the terms of the related
Mortgage Note;
(c) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(d) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customarily insured against in the jurisdiction
where the related Mortgaged Property is located and acceptable to the Rating
Agencies;
(e) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First-Lien Mortgage
Loan) or second lien (with respect to a Second-Lien Mortgage Loan) on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(1) with respect to a Second-Lien Mortgage Loan only, the lien of
the first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments not yet
due and payable;
(3) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (b) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal; and
(4) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien (with respect to a
First-Lien Mortgage Loan) or second lien (with respect to a Second-Lien Mortgage
Loan) and first priority (with respect to a First-Lien Mortgage Loan) or second
priority (with respect to a Second-Lien Mortgage Loan) security interest on the
property described therein and ▇▇▇▇▇▇ has full right to sell and assign the same
to the Depositor.
(f) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Charges). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties;
(g) Title Insurance. With respect to a Mortgage Loan which is not a
Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title insurance
policy, or with respect to any Mortgage Loan for which the related Mortgaged
Property is located in California a CLTA lender's title insurance policy, or
other generally acceptable form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac and each such title insurance policy is issued by a generally
accepted title insurer and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the Sellers, their successors and
assigns, as to the first (with respect to a First-Lien Mortgage Loan) or second
(with respect to a Second-Lien Mortgage Loan) priority lien of the Mortgage in
the original principal amount of the Mortgage Loan (or to the extent a Mortgage
Note provides for negative amortization, the maximum amount of negative
amortization in accordance with the Mortgage), subject only to the exceptions
contained in clauses (1), (2) and (3) of paragraph (f) of this Exhibit I, and in
the case of Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Rate and Monthly Payment;
(h) No Defaults. Except as set forth in paragraph (b) above, there
is no default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would permit
acceleration, and neither the ▇▇▇▇▇▇ nor any of its Affiliates nor any of their
respective predecessors, have waived any default, breach, violation or event
which would permit acceleration;
(i) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the related Mortgagor is not entitled to any refund of
any amounts paid or due under the Mortgage Note or Mortgage;
(j) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(k) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure;
(l) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of BBPLC's knowledge, such provision
is enforceable;
(m) Mortgaged Property Undamaged; No Condemnation Proceedings. There
is no proceeding pending or threatened for the total or partial condemnation of
the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended and each Mortgaged
Property is in good repair. There have not been any condemnation proceedings
with respect to the Mortgaged Property;
(n) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable;
(o) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Depositor, and which has
been delivered to the Trustee or to such other Person as the Depositor shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the issuer of the title insurer, if any, to the extent required, and
its terms are reflected on the Mortgage Loan Schedule, if applicable;
(p) Qualified Mortgage. The Mortgage Loan would be a "qualified
mortgage," within the meaning of Section 860G(a)(3) of the Code, if transferred
to a REMIC on its startup day in exchange for the regular or residual interests
in the REMIC;
(q) Ownership. ▇▇▇▇▇▇ is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The Mortgage
Loan is not assigned or pledged, and ▇▇▇▇▇▇ has good, indefeasible and
marketable title thereto, and has full right to transfer and sell the Mortgage
Loan to the Depositor free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full right
and authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan and following the sale of
each Mortgage Loan, the Depositor will own such Mortgage Loan free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest;
(r) Location of Improvements; No Encroachments. All improvements
which were considered in determining the appraised value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(s) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, duly appointed by the Sellers, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of ▇▇▇▇▇▇ ▇▇▇ 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;
(t) LTV. No Mortgage Loan has an LTV greater than 100%;
(u) Mortgage Loans with Prepayment Charges. No Mortgage Loan has a
Prepayment Charge period at origination in excess of three years;
(v) Purchase of Insurance. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g. life, mortgage, disability,
property, accident unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment or health insurance) in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan;
(w) No Arbitration. No Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Part B - Representations and Warranties with respect to each Group I Mortgage
Loan
(a) Fair Credit Reporting Act. ▇▇▇▇▇▇ has, or has caused the
applicable servicer to, fully furnished accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis and in accordance with the Fair Credit Reporting Act and its
implementing regulations;
(b) Mortgagor Selection. The related Mortgagor was not encouraged or
required to select a mortgage loan product offered by the Group I Mortgage
Loan's originator which is a higher cost product designed for less creditworthy
mortgagors, taking into account such facts as, without limitation, the Group I
Mortgage Loan's requirements and the related Mortgagor's credit history, income,
assets and liabilities. For a Mortgagor who seeks financing through a Mortgage
Loan originator's higher-priced subprime lending channel, the related Mortgagor
was directed towards or offered the Group I Mortgage Loan originator's standard
mortgage line if the related Mortgagor was able to qualify for one of the
standard products;
(c) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Group I Mortgage Loan does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such extension of credit. The methodology
employed related objective criteria that related such facts as, without
limitation, the related Mortgagor's income, assets, and liabilities to the
proposed mortgage payment and, based on such methodology, the Group I Mortgage
Loan's originator made a reasonable determination that at the time of
origination the related Mortgagor had the ability to make timely payments on the
Group I Mortgage Loan;
(d) Group I Mortgage Loans with Prepayment Charges. With respect to
any Group I Mortgage Loan that contains a provision permitting imposition of a
prepayment charge upon a prepayment prior to maturity: (i) with respect to each
Group I Mortgage Loan secured by the related Mortgagor's primary residence, the
Group I Mortgage Loan provides some benefit to the related Mortgagor, including
but not limited to a rate or fee reduction, in exchange for accepting such
prepayment charge, (ii) with respect to each Group I Mortgage Loan secured by
the related Mortgagor's primary residence, the Group I Mortgage Loan's
originator had a written policy of offering the related Mortgagor, or requiring
third-party brokers to offer the related Mortgagor, the option of obtaining a
mortgage loan that did not require payment of such a prepayment charge, (iii)
the prepayment charge was adequately disclosed to the related Mortgagor in the
mortgage loan documents pursuant to applicable state, local and federal law, and
(iv) and no such prepayment charge may be imposed for a term in excess of five
(5) years with respect to Group I Mortgage Loans originated prior to October 1,
2002. With respect to Group I Mortgage Loans originated on or after October 1,
2002, the duration of the prepayment charge period shall not exceed three (3)
years from the date of the Mortgage Note unless the Group I Mortgage Loan was
modified to reduce the prepayment charge period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in prepayment charge period;
(e) ▇▇▇▇▇▇▇ Mac Loan Limits. The original principal balance of each
Group I Mortgage Loan was within ▇▇▇▇▇▇▇ Mac's dollar amount limits for
conforming one- to four-family mortgage loans and the original principal balance
for each Group I Mortgage Loan which is a Second-Lien Mortgage Loan was within
one-half of ▇▇▇▇▇▇▇ Mac's dollar amount limits for one-unit conforming one-to
four-family mortgage loans for first-lien mortgage loans, without regard to the
number of units in the related Mortgaged Property;
(f) ▇▇▇▇▇▇▇ Mac Loan Limits for Second-Lien Mortgage Loans. With
respect to each Group I Mortgage Loan which is a Second-Lien Mortgage Loan (A)
such lien is on a one-to four-family residence that is the principal residence
of the related Mortgagor, and (B) the original principal balance of the related
First-Lien Mortgage Loan plus the original principal balance of any subordinate
lien mortgage loans relating to the same Mortgaged Property was within ▇▇▇▇▇▇▇
Mac's dollar amount limits for First-Lien Mortgage Loans for that property type;
(g) No Manufactured Homes or "Condotels". No Group I Mortgage Loan
is secured by a Mortgaged Property which is a Manufactured Home or a condominium
unit that is part of a condominium development that operates as, or holds itself
out to be, a condominium hotel ("condotel"), regardless of whether such unit
itself is being used as a condotel unit;
(h) Single Family Residential Housing Only. Each Group I Mortgage
Loans is exclusively secured by single-family (one-to four unit) residential
housing. No Group I Mortgage Loans may be on multifamily, commercial,
industrial, agricultural or undeveloped property, or any property located
anywhere except the continental United States, Alaska, Hawaii, Puerto Rico, the
Virgin Islands or Guam; and
(i) Points and Fees. With respect to each Group I Mortgage Loan
secured by the related Mortgagor's primary residence, no Mortgagor was charged
"points and fees" in an amount greater than (i) $1,000, or (ii) 5% of the
principal amount of such Group I Mortgage Loan, whichever is greater. For
purposes of this representation, "points and fees" (x) include origination,
underwriting, broker and finder fees and charges that the mortgagee imposed as a
condition of making the Group I Mortgage Loan, whether they are paid to the
mortgagee or a third party, and (y) exclude bona fide discount points, fees paid
for actual services rendered in connection with the origination of the Group I
Mortgage Loan (such as attorneys' fees, notaries fees and fees paid for property
appraisals, credit reports, surveys, title examinations and extracts, flood and
tax certifications, and home inspections), the cost of mortgage insurance or
credit-risk price adjustments, the costs of title, hazard, and flood insurance
policies, state and local transfer taxes or fees, escrow deposits for the future
payment of taxes and insurance premiums, and other miscellaneous fees and
charges which miscellaneous fees and charges, in total, do not exceed 0.25% of
the principal amount of such Group I Mortgage Loan.
SCHEDULE I
Mortgage Loan Schedule
(Available upon request to the Depositor)
EXHIBIT P
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Custodian],
[the Servicer], [each Subservicer] and [each Subcontractor] shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria":
SERVICING CRITERIA APPLICABLE
SERVICING CRITERIA
Reference Criteria
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to monitor any Trustee/Servicer
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third Trustee/Servicer
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a N/A
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect Servicer
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
Cash Collection and Administration
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate Servicer/Trustee,
custodial bank accounts and related bank clearing accounts no as applicable
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor Servicer/Trustee
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash Servicer
flows or distributions, and any interest or other fees charged
for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve Servicer/Trustee
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured Servicer/Trustee
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized Servicer/Trustee
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all Servicer/Trustee
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
Investor Remittances and Reporting
1122(d)(3)(i) Reports to investors, including those to be filed with the Trustee/Servicer
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in Trustee/Servicer
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two Trustee/Servicer
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree Trustee/Servicer
with cancelled checks, or other form of payment, or custodial
bank statements.
Pool Asset Administration
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as Custodian/Servicer
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as Custodian/Servicer
required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are Servicer
made, reviewed and approved in accordance with any conditions
or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in Servicer
accordance with the related mortgage loan documents are posted
to the Servicer's obligor records maintained no more than two
business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with Servicer
the Servicer's records with respect to an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's Servicer
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, Servicer
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during Servicer
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage Servicer
loans with variable rates are computed based on the related
mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as Servicer
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage
loan documents and state laws; and (C) such funds are returned
to the obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of days
specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or Servicer
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been
received by the servicer at least 30 calendar days prior to
these dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to Servicer
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within Servicer
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are Servicer/Trustee as
recognized and recorded in accordance with the transaction successor Servicer
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item Trustee, if
1114(a)(1) through (3) or Item 1115 of Regulation AB, is applicable.
maintained as set forth in the transaction agreements.
EXHIBIT Q
ADDITIONAL FORM 10-D DISCLOSURE
Item on Form 10-D Party Responsible
Item 1: Distribution and Pool Performance
Information
Information included in the [Monthly Statement] Servicer
Trustee
Any information required by 1121 which is NOT Depositor
included on the [Monthly Statement]
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is
material to Certificateholders, including any
proceeding known to be contemplated by governmental
authorities:
Issuing Entity Trustee
Servicer
Depositor
Depositor Depositor
Custodian Custodian
Trustee Trustee
Sponsor Depositor
Servicer Servicer
1110(b) Originator Depositor
Any 1108(a)(2) Servicer (other than the Servicer or Servicer
Trustee)
Any other party contemplated by 1100(d)(1) Depositor
Item 3: Sale of Securities and Use of Proceeds
Information from Item 2(a) of Part II of Form 10-Q: Depositor
With respect to any sale of securities by the
sponsor, depositor or issuing entity, that are
backed by the same asset pool or are otherwise
issued by the issuing entity, whether or not
registered, provide the sales and use of proceeds
information in Item 701 of Regulation S-K. Pricing
information can be omitted if securities were not
registered.
Item 4: Defaults Upon Senior Securities
Information from Item 3 of Part II of Form 10-Q: Trustee
Report the occurrence of any Event of Default
(after expiration of any grace period and provision
of any required notice)
Item 5: Submission of Matters to a Vote of
Security Holders
Information from Item 4 of Part II of Form 10-Q Trustee
Item 6: Significant Obligors of Pool Assets
Item 1112(b)--Significant Obligor Financial N/A
Information*
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Item.
Item 7: Significant Enhancement Provider
Information
Item 1114(b)(2)--Credit Enhancement Provider
Financial Information*
Determining applicable disclosure threshold Depositor
Requesting required financial information Depositor
(including any required accountants' consent to the
use thereof) or effecting incorporation by reference
Item 1115(b)--Derivative Counterparty Financial
Information*
Determining current maximum probable exposure Depositor
Determining current significance percentage Depositor
Requesting required financial information Depositor
(including any required accountants' consent to the
use thereof) or effecting incorporation by reference
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Items.
Item 8: Other Information
Disclose any information required to be reported on Any party to the Agreement responsible for the
Form 8-K during the period covered by the Form 10-D applicable Form 8-K Disclosure item
but not reported
Item 9: Exhibits
Monthly Statement to Certificateholders Trustee
Exhibits required by Item 601 of Regulation S-K, Depositor
such as material agreements
EXHIBIT R
ADDITIONAL FORM 10-K DISCLOSURE
Item on Form 10-K Party Responsible
Item 9B: Other Information
Disclose any information required to be reported on Any party to this Agreement responsible for
Form 8-K during the fourth quarter covered by the disclosure items on Form 8-K
Form 10-K but not reported
Item 15: Exhibits, Financial Statement Schedules Trustee
Depositor
Reg AB Item 1112(b): Significant Obligors of Pool
Assets
Significant Obligor Financial Information* N/A
*This information need only be reported on the
Form 10-K if updated information is required
pursuant to Item 1112(b).
Reg AB Item 1114(b)(2): Credit Enhancement
Provider Financial Information
Determining applicable disclosure threshold Depositor
Requesting required financial information Depositor
(including any required accountants' consent to the
use thereof) or effecting incorporation by reference
* This information need only be reported on the
Form 10-K if updated information is required
pursuant to the Item.
Reg AB Item 1115(b): Derivative Counterparty
Financial Information
Determining current maximum probable exposure Depositor
Determining current significance percentage Depositor
Requesting required financial information Depositor
(including any required accountants' consent to the
use thereof) or effecting incorporation by reference
* This information need only be reported on the
Form 10-K if updated information is required
pursuant to the Item.
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is
material to Certificateholders, including any
proceeding known to be contemplated by governmental
authorities:
Issuing Entity Trustee, Servicer and Depositor
Depositor Depositor
Custodian Custodian
Trustee Trustee
Sponsor Depositor
Servicer Servicer
1110(b) Originator Depositor
Any 1108(a)(2) Servicer (other than the Servicer or Servicer
Trustee)
Any other party contemplated by 1100(d)(1) Depositor
Reg AB Item 1119: Affiliations and Relationships
Whether (a) the Sponsor (Seller), Depositor or Depositor as to (a)
Issuing Entity is an affiliate of the following
parties, and (b) to the extent known and material, Custodian as to (a)
any of the following parties are affiliated with
one another:
Servicer Servicer
Trustee Trustee as to (a)
Any other 1108(a)(3) servicer Servicer
Any 1110 Originator Depositor
Any 1112(b) Significant Obligor Depositor
Any 1114 Credit Enhancement Provider Depositor
Any 1115 Derivative Counterparty Provider Depositor
Any other 1101(d)(1) material party Depositor
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained
in an arm's length transaction between (a) the
Sponsor (Seller), Depositor or Issuing Entity on
the one hand, and (b) any of the following parties
(or their affiliates) on the other hand, that exist
currently or within the past two years and that are
material to a Certificateholder's understanding of
the Certificates:
Servicer Servicer
Trustee Depositor
Any other 1108(a)(3) servicer Servicer
Any 1110 Originator Depositor
Any 1112(b) Significant Obligor Depositor
Any 1114 Credit Enhancement Provider Depositor
Any 1115 Derivative Counterparty Provider Depositor
Any other 1101(d)(1) material party Depositor
Whether there are any specific relationships Depositor as to (a)
involving the transaction or the pool assets
between (a) the Sponsor (Seller), Depositor or
Issuing Entity on the one hand, and (b) any of the
following parties (or their affiliates) on the
other hand, that exist currently or within the past
two years and that are material:
Servicer Servicer
Trustee Depositor
Any other 1108(a)(3) servicer Servicer
Any 1110 Originator Depositor
Any 1112(b) Significant Obligor Depositor
Any 1114 Credit Enhancement Provider Depositor
Any 1115 Derivative Counterparty Provider Depositor
Any other 1101(d)(1) material party Depositor
EXHIBIT S
FORM 8-K DISCLOSURE INFORMATION
Item on Form 8-K Party Responsible
Item 1.01--Entry into a Material Definitive Agreement
Disclosure is required regarding entry into or
amendment of any definitive agreement that is The party to this Agreement entering into such
material to the securitization, even if depositor material definitive agreement
is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the
prospectus
Item 1.02--Termination of a Material Definitive
Agreement
Disclosure is required regarding termination of any The party to this Agreement requesting termination
definitive agreement that is material to the of a material definitive agreement
securitization (other than expiration in accordance
with its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Item 1.03--Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or Depositor
receivership, with respect to any of the following:
Sponsor (Seller) Depositor
Depositor Depositor
Servicer Servicer
Affiliated Servicer Servicer
Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
Other material servicers Servicer
Trustee Trustee
Significant Obligor Depositor
Credit Enhancer (10% or more) Depositor
Derivative Counterparty Depositor
Item 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 Depositor/Servicer/Trustee
would materially alter the payment
priority/distribution of cash flows/amortization
schedule.
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
monthly statements to the certificateholders.
Item 3.03--Material Modification to Rights of
Security Holders
Disclosure is required of any material modification Trustee/Depositor/Servicer
to documents defining the rights of
Certificateholders, including the Pooling and
Servicing Agreement.
Item 5.03--Amendments of Articles of Incorporation
or Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to the
governing documents of the issuing entity." Depositor
Item 6.01--ABS Informational and Computational Depositor
Material
Item 6.02--Change of Servicer or Trustee
Requires disclosure of any removal, replacement, Servicer/Depositor/Trustee
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10%
or more of pool assets at time of report, other
material servicers or trustee.
Reg AB disclosure about any new servicer or master Servicer/Depositor
servicer is also required.
Reg AB disclosure about any new Trustee is also successor Trustee
required.
Item 6.03--Change in Credit Enhancement or External
Support
Covers termination of any enhancement in manner Depositor/Trustee
other than by its terms, the addition of an
enhancement, or a material change in the
enhancement provided. Applies to external credit
enhancements as well as derivatives.
Reg AB disclosure about any new enhancement Depositor
provider is also required.
Item 6.04--Failure to Make a Required Distribution Trustee
Item 6.05--Securities Act Updating Disclosure
If any material pool characteristic differs by 5% Depositor
or more at the time of issuance of the securities
from the description in the final prospectus,
provide updated Reg AB disclosure about the actual
asset pool.
If there are any new servicers or originators Depositor
required to be disclosed under Regulation AB as a
result of the foregoing, provide the information
called for in Items 1108 and 1110 respectively.
Item 7.01--Reg FD Disclosure Depositor
Item 8.01--Other Events
Any event, with respect to which information is not Depositor
otherwise called for in Form 8-K, that the
registrant deems of importance to
certificateholders.
Item 9.01--Financial Statements and Exhibits Party responsible for reporting/disclosing the
financial statement or exhibit
EXHIBIT T
INTEREST RATE SWAP AGREEMENT
[BARCLAYS CAPITAL LOGO]
Barclays Bank PLC
5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
DATE: June 27, 2007
TO: EquiFirst Loan Securitization Trust 2007-1, Mortgage
Pass-Through Certificates, Series ▇▇▇▇-▇ (▇▇▇ "▇▇▇▇▇"),
▇▇▇▇▇▇▇▇ Bank National Trust Company, not individually,
but solely as Trustee
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: Trust Administration - BC07E1
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
FROM: Barclays Bank PLC
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: 1819920B
The purpose of this long-form confirmation ("Confirmation") is to confirm the
terms and conditions of the Transaction entered into on the Trade Date specified
below (the "Transaction") between Barclays Bank PLC ("Party A") and Deutsche
Bank National Trust Company, not individually, but solely as trustee (the
"Trustee") on behalf of the trust with respect to the EquiFirst Loan
Securitization Trust 2007-1, Mortgage Pass-Through Certificates, Series 2007-1
(the "Trust") ("Party B") created under the Pooling and Servicing Agreement,
dated as of June 1, 2007, among BCAP LLC, as Depositor, Deutsche Bank National
Trust Company, as Trustee, Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, as Servicer,and The Bank of New York Trust Company, N.A., as
Custodian (the "Base Agreement"). This Confirmation evidences a complete and
binding agreement between you and us to enter into the Transaction on the terms
set forth below and replaces any previous agreement between us with respect to
the subject matter hereof. Item 2 of this Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement (defined below); Item
3 of this Confirmation constitutes a "Schedule" as referred to in the ISDA
Master Agreement; and Annex A hereto constitutes Paragraph 13 of a Credit
Support Annex to the Schedule.
1. The Confirmation set forth at Item 2 hereof shall supplement, form a part
of, and be subject to an agreement in the form of the ISDA Master
Agreement (Multicurrency - Cross Border) as published and copyrighted in
1992 by the International Swaps and Derivatives Association, Inc. (the
"ISDA Master Agreement"), as if Party A and Party B had executed an
agreement in such form on the date hereof, with a Schedule as set forth in
Item 3 of this Confirmation, and an ISDA Credit Support Annex (Bilateral
Form - ISDA Agreements Subject to New York Law Only version) as published
and copyrighted in 1994 by the International Swaps and Derivatives
Association, Inc., with Paragraph 13 thereof as set forth in Annex A
hereto (the "Credit Support Annex"). For the avoidance of doubt, the
Transaction described herein shall be the sole Transaction governed by
such ISDA Master Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: With respect to any Calculation Period, the
amount set forth for such period on Schedule
I attached hereto.
Trade Date: June 27, 2007
Effective Date: June 27, 2007
Termination Date: March 25, 2012, which for the purpose of the
final Fixed Rate Payer Calculation Period is
subject to No Adjustment, and for the
purpose of the final Floating Rate Payer
Calculation Period is subject to adjustment
in accordance with the Business Day
Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
July 25, 2007, subject to No Adjustment.
Fixed Rate Payer
Payment Dates: Early Payment shall be applicable. For each
Calculation Period, the Fixed Rate Payer
Payment Date shall be the first Business Day
prior to the related Fixed Rate Payer Period
End Date.
Fixed Rate: 5.4500%
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
July 25, 2007, subject to adjustment in
accordance with the Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. For each
Calculation Period, the Floating Rate Payer
Payment Date shall be the first Business Day
prior to the related Floating Rate Payer
Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days: New York
Business Day
Convention: Modified Following
Calculation Agent: Party A
Account Details and Settlement Information:
Payments to Party A: Correspondent: BARCLAYS BANK PLC NEW YORK
FEED: ▇▇▇▇▇▇▇▇▇
Beneficiary: BARCLAYS SWAPS
Beneficiary Account: ▇▇▇-▇▇▇▇▇-▇
Payments to Party B: Deutsche Bank National Trust Company
ABA #: 021 001 033
Acct #: 01419663
Acct. Name: NYLTD Funds Control - Stars West
Ref: Trust Administration - EQLS 2007-1
3. Provisions Deemed Incorporated in a Schedule to the ISDA Master Agreement:
Part 1. Termination Provisions.
For the purposes of this Agreement:-
(a) "Specified Entity" will not apply to Party A or Party B for any purpose.
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) Events of Default.
The statement below that an Event of Default will apply to a specific
party means that upon the occurrence of such an Event of Default with
respect to such party, the other party shall have the rights of a
Non-defaulting Party under Section 6 of this Agreement; conversely, the
statement below that such event will not apply to a specific party means
that the other party shall not have such rights.
(i) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will
apply to Party A and will apply to Party B.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) will apply
to Party A and will not apply to Party B; provided, however, that
notwithstanding anything to the contrary in Section 5(a)(ii), any
failure by Party A to comply with or perform any obligation to be
complied with or performed by Party A under the Credit Support Annex
shall not constitute an Event of Default under Section 5(a)(ii)
unless (A) a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and
been continuing for 30 or more Local Business Days, (B) an S&P
Required Ratings Downgrade Event has occurred and been continuing
for 10 or more Local Business Days, or (C) a Fitch Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
days.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B except that Section
5(a)(iii)(1) will apply to Party B solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support Annex;
provided, however, that notwithstanding anything to the contrary in
Section 5(a)(iii)(1), any failure by Party A to comply with or
perform any obligation to be complied with or performed by Party A
under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(iii) unless (A) a ▇▇▇▇▇'▇ Second Trigger
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days, (B) an S&P Required Ratings Downgrade Event has
occurred and been continuing for 10 or more Local Business Days, or
(C) a Fitch Required Ratings Downgrade Event has occurred and been
continuing for 30 or more days.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) will apply to
Party A and will not apply to Party B.
(v) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
(vi) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B. For purposes of Section
5(a)(vi), solely with respect to Party A:
"Specified Indebtedness" will have the meaning specified in Section
14, except that such term shall not include obligations in respect
of deposits received in the ordinary course of Party A's banking
business.
"Threshold Amount" means with respect to Party A an amount equal to
three percent (3%) of the Shareholders' Equity of Party A or, if
applicable, a guarantor under an Eligible Guarantee with credit
ratings at least equal to the S&P Required Ratings Threshold, the
▇▇▇▇▇'▇ Second Trigger Threshold and the Fitch Approved Ratings
Threshold.
"Shareholders' Equity" means with respect to an entity, at any time,
such party's shareholders' equity (on a consolidated basis)
determined in accordance with generally accepted accounting
principles in such party's jurisdiction of incorporation or
organization as at the end of such party's most recently completed
fiscal year.
(vii) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to Party
A and will apply to Party B; provided, however, that, for purposes
of applying Section 5(a)(vii) to Party B: (A) Section 5(a)(vii)(2)
shall not apply, (B) Section 5(a)(vii)(3) shall not apply to any
assignment, arrangement or composition that is effected by or
pursuant to the Base Agreement, (C) Section 5(a)(vii)(4) shall not
apply to a proceeding instituted, or a petition presented, by Party
A or any of its Affiliates (notwithstanding anything to the contrary
in this Agreement, for purposes of Section 5(a)(vii)(4), Affiliate
shall have the meaning set forth in Section 14 of the ISDA Master
Agreement), (D) Section 5(a)(vii)(6) shall not apply to any
appointment that is effected by or pursuant to the Base Agreement,
or any appointment to which Party B has not yet become subject; (E)
Section 5(a)(vii) (7) shall not apply; (F) Section 5(a)(vii)(8)
shall apply only to the extent of any event which has an effect
analogous to any of the events specified in clauses (1), (3), (4),
(5) or (6) of Section 5(a)(vii), in each case as modified in this
Part 1(c)(vii), and (G) Section 5(a)(vii)(9) shall not apply.
(viii) The "Merger Without Assumption" provisions of Section 5(a)(viii)
will apply to Party A and will not apply to Party B.
(d) Termination Events.
The statement below that a Termination Event will apply to a specific
party means that upon the occurrence of such a Termination Event, if such
specific party is the Affected Party with respect to a Tax Event, the
Burdened Party with respect to a Tax Event Upon Merger (except as noted
below) or the non-Affected Party with respect to a Credit Event Upon
Merger, as the case may be, such specific party shall have the right to
designate an Early Termination Date in accordance with Section 6 of this
Agreement; conversely, the statement below that such an event will not
apply to a specific party means that such party shall not have such right;
provided, however, with respect to "Illegality" the statement that such
event will apply to a specific party means that upon the occurrence of
such a Termination Event with respect to such party, either party shall
have the right to designate an Early Termination Date in accordance with
Section 6 of this Agreement.
(i) The "Illegality" provisions of Section 5(b)(i) will apply to Party A
and will apply to Party B.
(ii) The "Tax Event" provisions of Section 5(b)(ii) will apply to Party A
except that, for purposes of the application of Section 5(b)(ii) to
Party A, Section 5(b)(ii) is hereby amended by deleting the words
"(x) any action taken by a taxing authority, or brought in a court
of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y)",
and the "Tax Event" provisions of Section 5(b)(ii) will apply to
Party B.
(iii) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will
apply to Party A and will apply to Party B, provided that Party A
shall not be entitled to designate an Early Termination Date by
reason of a Tax Event upon Merger in respect of which it is the
Affected Party.
(iv) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply, provided, however, that, in the event
of a Derivative Provider Trigger Event, the following provisions
will apply:
(A) The definition of Market Quotation in Section 14 shall be
deleted in its entirety and replaced with the following:
"Market Quotation" means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made by a
Reference Market-maker that is an Eligible Replacement, (2)
for an amount that would be paid to Party B (expressed as a
negative number) or by Party B (expressed as a positive
number) in consideration of an agreement between Party B and
such Reference Market-maker to enter into a Replacement
Transaction, and (3) made on the basis that Unpaid Amounts in
respect of the Terminated Transaction or group of Transactions
are to be excluded but, without limitation, any payment or
delivery that would, but for the relevant Early Termination
Date, have been required (assuming satisfaction of each
applicable condition precedent) after that Early Termination
Date is to be included.
(B) The definition of Settlement Amount shall be deleted in its
entirety and replaced with the following:
"Settlement Amount" means, with respect to any Early
Termination Date, an amount equal to:
(a) if, on or prior to such Early Termination Date, a Market
Quotation for the relevant Terminated Transaction or
group of Terminated Transactions is accepted by Party B
so as to become legally binding, the Termination
Currency Equivalent of the amount (whether positive or
negative) of such Market Quotation;
(b) if, on such Early Termination Date, no Market Quotation
for the relevant Terminated Transaction or group of
Terminated Transactions has been accepted by Party B so
as to become legally binding and one or more Market
Quotations from Approved Replacements have been
communicated to Party B and remain capable of becoming
legally binding upon acceptance by Party B, the
Termination Currency Equivalent of the amount (whether
positive or negative) of the lowest of such Market
Quotations (for the avoidance of doubt, (i) a Market
Quotation expressed as a negative number is lower than a
Market Quotation expressed as a positive number and (ii)
the lower of two Market Quotations expressed as negative
numbers is the one with the largest absolute value); or
(c) if, on such Early Termination Date, no Market Quotation
for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by Party B so as to
become legally binding and no Market Quotation from an
Approved Replacement has been communicated to Party B
and remains capable of becoming legally binding upon
acceptance by Party B, Party B's Loss (whether positive
or negative and without reference to any Unpaid Amounts)
for the relevant Terminated Transaction or group of
Terminated Transactions.
(C) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to do so
before the Early Termination Date.
(D) If the Settlement Amount is a negative number, Section
6(e)(i)(3) shall be deleted in its entirety and replaced with
the following:
"(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, (I) Party B shall pay to Party A
an amount equal to the absolute value of the Settlement Amount
in respect of the Terminated Transactions, (II) Party B shall
pay to Party A the Termination Currency Equivalent of the
Unpaid Amounts owing to Party A and (III) Party A shall pay to
Party B the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B; provided, however, that (x) the
amounts payable under the immediately preceding clauses (II)
and (III) shall be subject to netting in accordance with
Section 2(c) of this Agreement and (y) notwithstanding any
other provision of this Agreement, any amount payable by Party
A under the immediately preceding clause (III) shall not be
netted against any amount payable by Party B under the
immediately preceding clause (I)."
(E) At any time on or before the Early Termination Date at which
two or more Market Quotations from Approved Replacements have
been communicated to Party B and remain capable of becoming
legally binding upon acceptance by Party B, Party B shall be
entitled to accept only the lowest of such Market Quotations
(for the avoidance of doubt, (i) a Market Quotation expressed
as a negative number is lower than a Market Quotation
expressed as a positive number and (ii) the lower of two
Market Quotations expressed as negative numbers is the one
with the largest absolute value).
(ii) The Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events. Additional Termination Events will apply as
provided in Part 5(c).
Part 2. Tax Matters.
(a) Tax Representations.
(i) Payer Representations. For the purpose of Section 3(e) of this
Agreement:
(A) Party A makes the following representation(s):
None.
(B) Party B makes the following representation(s):
None.
(ii) Payee Representations. For the purpose of Section 3(f) of this
Agreement:
(A) Party A makes the following representation(s):
None.
(B) Party B makes the following representation(s):
None.
(b) Tax Provisions.
(i) Indemnifiable Tax. Notwithstanding the definition of "Indemnifiable
Tax" in Section 14 of this Agreement, all Taxes in relation to
payments by Party A shall be Indemnifiable Taxes unless (i) such
Taxes are assessed directly against Party B and not by deduction or
withholding by Party A or (ii) arise as a result of a Change in Tax
Law (in which case such Tax shall be an Indemnifiable Tax only if
such Tax satisfies the definition of Indemnifiable Tax provided in
Section 14). In relation to payments by Party B, no Tax shall be an
Indemnifiable Tax, unless the Tax is due to a Change in Tax Law and
otherwise satisfies the definition of Indemnifiable Tax provided in
Section 14.
Part 3. Agreement to Deliver Documents.
(a) For the purpose of Section 4(a)(i), tax forms, documents, or certificates
to be delivered are:
Party required to Form/Document/ Date by which to
deliver document Certificate be delivered
Party A Any form or document required Promptly upon reasonable
or reasonably requested to demand by Party B.
allow Party B to make
payments under the Agreement
without any deduction or
withholding for or on account
of any Tax, or with such
deduction or withholding at a
reduced rate.
Party B (i) A correct, complete and In each case (i) upon
duly executed IRS Form W-9 entering into this Agreement,
(or any successor thereto) of (ii) in the case of a W-8ECI,
the Trust that eliminates W-8IMY, and W-8BEN that does
U.S. federal withholding and not include a U.S. taxpayer
backup withholding tax on identification number in line
payments under this 6, before December 31 of each
Agreement, (ii) if requested third succeeding calendar
by Party A, a correct, year, (iii) promptly upon
complete and executed Form reasonable demand by Party A,
W-8IMY of the Trust, and and (iv) promptly upon actual
(iii) a complete and executed knowledge that any such Form
IRS Form ▇-▇, ▇-▇▇▇▇, ▇-▇▇▇▇, previously provided by Party
or W-8IMY (with attachments) B has become obsolete or
(as appropriate) from each incorrect.
Certificateholder that is not
an "exempt recipient" as that
term is defined in Treasury
regulations section
1.6049-4(c)(1)(ii), that
eliminates U.S. federal
withholding and backup
withholding tax on payments
under this Agreement.
(b) For the purpose of Section 4(a)(ii), other documents to be delivered are:
Covered by
Party required to Form/Document/ Date by which to Section 3(d)
deliver document Certificate be delivered Representation
Party A and Any documents reasonably Upon the execution and Yes
Party B required by the receiving delivery of this Agreement
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
Party A and A certificate of an Upon the execution and Yes
Party B authorized officer of the delivery of this Agreement
party (except, with respect
to Party B, of the Trustee),
as to the incumbency and
authority of the respective
officers of the party signing
the Agreement, this
Confirmation, and any
relevant Credit Support
Document, as the case may be
Party A An opinion of counsel to Upon the execution and No
Party A reasonably delivery of this Agreement
satisfactory to Party B.
Party B An opinion of counsel to Upon the execution and No
Party B reasonably delivery of this Agreement
satisfactory to Party A.
Party B An executed copy of the Base Within 30 days after the No
Agreement date of this Agreement.
Part 4. Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Address: 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
Phone: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
(For all purposes)
Address for notices or communications to Party B:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration - BC07E1
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇ ▇▇▇▇
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is a Multibranch Party and may act through its London and New York
Offices.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided, however,
that if an Event of Default shall have occurred with respect to Party A,
Party B shall have the right to appoint as Calculation Agent a financial
institution which would qualify as a Reference Market-maker, reasonably
acceptable to Party A, the cost for which shall be borne by Party A.
(f) Credit Support Document.
Party A: The Credit Support Annex, and any guarantee in support of
Party A's obligations under this Agreement.
Party B: The Credit Support Annex, solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support Annex.
(g) Credit Support Provider.
Party A: The guarantor under any guarantee in support of Party A's
obligations under this Agreement.
Party B: None.
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole
(including any claim or controversy arising out of or relating to this
Agreement), without regard to the conflict of law provisions thereof other
than New York General Obligations Law Sections 5-1401 and 5-1402.
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) will apply to each
Transaction hereunder.
(j) Affiliate. "Affiliate" shall have the meaning assigned thereto in Section
14; provided, however, that Party B shall be deemed to have no Affiliates
for purposes of this Agreement, including for purposes of Section
6(b)(ii).
Part 5. Other Provisions.
(a) Definitions. Unless otherwise specified in a Confirmation, this Agreement
and each Transaction under this Agreement are subject to the 2000 ISDA
Definitions as published and copyrighted in 2000 by the International
Swaps and Derivatives Association, Inc. (the "Definitions"), and will be
governed in all relevant respects by the provisions set forth in the
Definitions, without regard to any amendment to the Definitions subsequent
to the date hereof. The provisions of the Definitions are hereby
incorporated by reference in and shall be deemed a part of this Agreement,
except that (i) references in the Definitions to a "Swap Transaction"
shall be deemed references to a "Transaction" for purposes of this
Agreement, and (ii) references to a "Transaction" in this Agreement shall
be deemed references to a "Swap Transaction" for purposes of the
Definitions. Each term capitalized but not defined in this Agreement shall
have the meaning assigned thereto in the Base Agreement.
Each reference herein to a "Section" (unless specifically referencing the
Base Agreement) or to a "Section" "of this Agreement" will be construed as
a reference to a Section of the ISDA Master Agreement; each herein
reference to a "Part" will be construed as a reference to the Schedule to
the ISDA Master Agreement; each reference herein to a "Paragraph" will be
construed as a reference to a Paragraph of the Credit Support Annex.
(b) Amendments to ISDA Master Agreement.
(i) Single Agreement. Section 1(c) is hereby amended by the adding the
words "including, for the avoidance of doubt, the Credit Support
Annex" after the words "Master Agreement".
(ii) Change of Account. Section 2(b) is hereby amended by the addition of
the following after the word "delivery" in the first line
thereof:"to another account in the same legal and tax jurisdiction
as the original account".
(iii) Representations. Section 3 is hereby amended by adding at the end
thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Non-Reliance. Party A is acting for its own account, and
with respect to Party B, the Trustee is executing this
Agreement on behalf of Party B in its capacity as
trustee of the Trust. Each party has made its own
independent decisions to enter into that Transaction and
as to whether that Transaction is appropriate or proper
for it based upon its own judgment and upon advice from
such advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the
other party as investment advice or as a recommendation
to enter into that Transaction, it being understood that
information and explanations related to the terms and
conditions of a Transaction will not be considered
investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received
from the other party will be deemed to be an assurance
or guarantee as to the expected results of that
Transaction.
(2) Assessment and Understanding. It is capable of assessing
the merits of and understanding (on its own behalf or
through independent professional advice), and
understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and
assumes, the risks of that Transaction.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments,
hedging its underlying assets or liabilities or in
connection with a line of business.
(4) Status of Parties. The other party is not acting as
fiduciary for or advisor to it in respect of the
Transaction.
(5) Eligible Contract Participant. It is an "eligible
contract participant" as defined in Section 1a(12) of
the Commodity Exchange Act, as amended."
(iv) Transfer to Avoid Termination Event. Section 6(b)(ii) is hereby
amended by (i) deleting the words "or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party," and (ii) by
deleting the words "to transfer" and inserting the words "to effect
a Permitted Transfer" in lieu thereof.
(v) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in
the second line of subparagraph (i) thereof the word "non-", (ii)
deleting "; and" from the end of subparagraph (i) and inserting "."
in lieu thereof, and (iii) deleting the final paragraph thereof.
(vi) Local Business Day. The definition of Local Business Day in Section
14 is hereby amended by the addition of the words "or any Credit
Support Document" after "Section 2(a)(i)" and the addition of the
words "or Credit Support Document" after "Confirmation".
(c) Additional Termination Events. The following Additional Termination Events
will apply:
(i) First Rating Trigger Collateral. If Party A has failed to comply
with or perform any obligation to be complied with or performed by
Party A in accordance with the Credit Support Annex and such failure
has not given rise to an Event of Default under Section 5(a)(i) or
Section 5(a)(iii), then an Additional Termination Event shall have
occurred with respect to Party A and Party A shall be the sole
Affected Party with respect to such Additional Termination Event.
(ii) Second Rating Trigger Replacement. The occurrence of any event
described in this Part 5(c)(ii) shall constitute an Additional
Termination Event with respect to Party A and Party A shall be the
sole Affected Party with respect to such Additional Termination
Event.
(A) A ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and been
continuing for 30 or more Local Business Days and at least one
Eligible Replacement has made a Firm Offer that would,
assuming the occurrence of an Early Termination Date, qualify
as a Market Quotation (on the basis that paragraphs (i) and
(ii) of Part 1(f) (Payments on Early Termination) apply) and
which remains capable of becoming legally binding upon
acceptance.
(B) An S&P Required Ratings Downgrade Event has occurred and been
continuing for 60 or more calendar days.
(C) A Fitch Required Ratings Downgrade Event has occurred and been
continuing for 30 or more calendar days.
(iii) Amendment of Base Agreement. If, without the prior written consent
of Party A where such consent is required under the Base Agreement,
an amendment is made to the Base Agreement which amendment could
reasonably be expected to have a material adverse effect on the
interests of Party A (excluding, for the avoidance of doubt, any
amendment to the Base Agreement that is entered into solely for the
purpose of appointing a successor servicer, master servicer,
securities administrator, trustee or other service provider) under
this Agreement, an Additional Termination Event shall have occurred
with respect to Party B and Party B shall be the sole Affected Party
with respect to such Additional Termination Event; provided,
however, that notwithstanding Section 6(b)(iv) of this Agreement,
both Party A and Party B shall have the right to designate an Early
Termination Date in respect of this Additional Termination Event.
(iv) Termination of Trust. If, the Trust is terminated pursuant to the
Base Agreement and all rated certificates or notes, as applicable,
have been paid in accordance with the terms of the Base Agreement,
an Additional Termination Event shall have occurred with respect to
Party B and Party B shall be the sole Affected Party with respect to
such Additional Termination Event; provided, however, that
notwithstanding Section 6(b)(iv) of this Agreement, both Party A and
Party B shall have the right to designate an Early Termination Date
in respect of this Additional Termination Event.
(v) Securitization Unwind. If a Securitization Unwind (as hereinafter
defined) occurs, an Additional Termination Event shall have occurred
with respect to Party B and Party B shall be the sole Affected Party
with respect to such Additional Termination Event; provided,
however, that notwithstanding Section 6(b)(iv) of this Agreement,
both Party A and Party B shall have the right to designate an Early
Termination Date in respect of this Additional Termination Event.
The Early Termination Date in respect of such Additional Termination
Event shall be not earlier than the latest possible date that the
amount of a termination payment may be submitted to a party
exercising a clean-up call in order to be included in the clean-up
call price. As used herein, "Securitization Unwind" means notice of
the requisite amount of a party's intention to exercise its option
to purchase the underlying mortgage loans pursuant the Base
Agreement is given by the Trustee to certificateholders or
noteholders, as applicable, pursuant to the Base Agreement.
(d) Required Ratings Downgrade Event. In the event that no Relevant Entity has
credit ratings at least equal to the Required Ratings Threshold of each
relevant Rating Agency (such event, a "Required Ratings Downgrade Event"),
then Party A shall, as soon as reasonably practicable and so long as a
Required Ratings Downgrade Event is in effect, at its own expense, use
commercially reasonable efforts to procure either (A) a Permitted Transfer
or (B) an Eligible Guarantee.
(e) Transfers.
(i) Section 7 is hereby amended to read in its entirety as follows:
"Subject to Section 6(b)(ii), neither Party A nor Party B is
permitted to assign, novate or transfer (whether by way of security
or otherwise) as a whole or in part any of its rights, obligations
or interests under the Agreement or any Transaction without (a) the
prior written consent of the other party and (b) satisfaction of the
Rating Agency Condition, except that:
(a) a party may make such a transfer of this Agreement pursuant to
a consolidation or amalgamation with, or merger with or into,
or transfer of all or substantially all its assets to, another
entity (but without prejudice to any other right or remedy
under this Agreement);
(b) a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party
under Section 6(e); and
(c) Party A may transfer or assign this Agreement to any Person,
including, without limitation, another of Party A's offices,
branches or affiliates (any such Person, office, branch or
affiliate, a "Transferee") on at least five Business Days'
prior written notice to Party B and the Trustee; provided
that, with respect to this clause (c), (A) as of the date of
such transfer the Transferee will not be required to withhold
or deduct on account of a Tax from any payments under this
Agreement unless the Transferee will be required to make
payments of additional amounts pursuant to Section 2(d)(i)(4)
of this Agreement in respect of such Tax (B) a Termination
Event or Event of Default does not occur under this Agreement
as a result of such transfer; (C) such notice is accompanied
by a written instrument pursuant to which the Transferee
acquires and assumes the rights and obligations of Party A so
transferred; (D) Party A will be responsible for any costs or
expenses incurred in connection with such transfer and (E)
Party A obtains in respect of such transfer a written
acknowledgement of satisfaction of the Rating Agency Condition
(except for ▇▇▇▇▇'▇). Party B will execute such documentation
provided to it as is reasonably deemed necessary by Party A
for the effectuation of any such transfer."
(ii) If an Eligible Replacement has made a Firm Offer (which remains an
offer that will become legally binding upon acceptance by Party B)
to be the transferee pursuant to a Permitted Transfer, Party B
shall, at Party A's written request and at Party A's expense,
execute such documentation provided to it as is reasonably deemed
necessary by Party A to effect such transfer.
(iii) Upon any transfer of this Agreement by Party A, each of the
transferee and the transferor must be a "dealer in notional
principal contracts" for purposes of Treasury regulations section
1.1001-4(a). For the avoidance of doubt, the Trustee is not
obligated to determine whether each of the transferee and the
transferor are such "dealers in notional principal contracts."
(f) Non-Recourse. Party A acknowledges and agree that, notwithstanding any
provision in this Agreement to the contrary, the obligations of Party B
hereunder are limited recourse obligations of Party B, payable solely from
the Trust and the proceeds thereof, in accordance with the priority of
payments and other terms of the Base Agreement and that Party A will not
have any recourse to any of the directors, officers, employees,
shareholders or affiliates of Party B with respect to any claims, losses,
damages, liabilities, indemnities or other obligations in connection with
any transactions contemplated hereby. In the event that the Trust and the
proceeds thereof, should be insufficient to satisfy all claims outstanding
and following the realization of the account held by the Trust and the
proceeds thereof, any claims against or obligations of Party B under the
ISDA Master Agreement or any other confirmation thereunder still
outstanding shall be extinguished and thereafter not revive. The Trustee
shall not have liability for any failure or delay in making a payment
hereunder to Party A due to any failure or delay in receiving amounts in
the account held by the Trust from the Trust created pursuant to the Base
Agreement. This provision will survive the termination of this Agreement.
(g) Rating Agency Notifications. Notwithstanding any other provision of this
Agreement, no Early Termination Date shall be effectively designated
hereunder by Party B and no transfer of any rights or obligations under
this Agreement shall be made by either party unless each Rating Agency has
been given prior written notice of such designation or transfer.
(h) No Set-off. Except as expressly provided for in Section 2(c), Section 6 or
Part 1(f)(i)(D) hereof, and notwithstanding any other provision of this
Agreement or any other existing or future agreement, each party
irrevocably waives any and all rights it may have to set off, net, recoup
or otherwise withhold or suspend or condition payment or performance of
any obligation between it and the other party hereunder against any
obligation between it and the other party under any other agreements.
Section 6(e) shall be amended by deleting the following sentence: "The
amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.".
(i) Amendment. Notwithstanding any provision to the contrary in this
Agreement, no amendment of either this Agreement or any Transaction under
this Agreement shall be permitted by either party unless each of the
Rating Agencies has been provided prior written notice of the same and
such amendment satisfies the Rating Agency Condition with respect to S&P
and Fitch.
(j) Notice of Certain Events or Circumstances. Each Party agrees, upon
learning of the occurrence or existence of any event or condition that
constitutes (or that with the giving of notice or passage of time or both
would constitute) an Event of Default or Termination Event with respect to
such party, promptly to give the other Party and to each Rating Agency
notice of such event or condition; provided that failure to provide notice
of such event or condition pursuant to this Part 5(j) shall not constitute
an Event of Default or a Termination Event.
(k) Proceedings. No Relevant Entity shall institute against, or cause any
other person to institute against, or join any other person in instituting
against Party B, the Trust, or the trust formed pursuant to the Base
Agreement, in any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any federal or state
bankruptcy or similar law for a period of one year (or, if longer, the
applicable preference period) and one day following payment in full of the
Certificates and any Notes; provided, however, that nothing will preclude,
or be deemed to stop, Party A (i) from taking any action prior to the
expiration of the aforementioned one year and one day period, or if longer
the applicable preference period then in effect, in (A) any case or
proceeding voluntarily filed or commenced by Party B or (B) any
involuntary insolvency proceeding filed or commenced by a Person other
than Party A, or (ii) from commencing against Party B or any of the
Collateral any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium, liquidation or similar proceeding.
This provision will survive the termination of this Agreement.
(l) Trustee Liability Limitations. It is expressly understood and agreed by
the parties hereto that (a) this Agreement is executed by Deutsche Bank
National Trust Company ("DBNTC") not in its individual capacity, but
solely as Trustee under the Base Agreement in the exercise of the powers
and authority conferred and invested in it thereunder; (b) DBNTC has been
directed pursuant to the Base Agreement to enter into this Agreement and
to perform its obligations hereunder; (c) each of the representations,
undertakings and agreements herein made on behalf of the Trust is made and
intended not as personal representations of DBNTC but is made and intended
for the purpose of binding only the Trust; and (d) under no circumstances
shall DBNTC in its individual capacity be personally liable for any
payments hereunder or for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Agreement.
(m) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall
be held to be invalid or unenforceable (in whole or in part) in any
respect, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Agreement had been
executed with the invalid or unenforceable portion eliminated, so long as
this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter of
this Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the
parties; provided, however, that this severability provision shall not be
applicable if any provision of Section 2, 5, 6, or 13 (or any definition
or provision in Section 14 to the extent it relates to, or is used in or
in connection with any such Section) shall be so held to be invalid or
unenforceable.
The parties shall endeavor to engage in good faith negotiations to replace
any invalid or unenforceable term, provision, covenant or condition with a
valid or enforceable term, provision, covenant or condition, the economic
effect of which comes as close as possible to that of the invalid or
unenforceable term, provision, covenant or condition.
(n) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any
and all communications between trading, marketing, and operations
personnel of the parties and their Affiliates, waives any further notice
of such monitoring or recording, and agrees to notify such personnel of
such monitoring or recording.
(o) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any in respect of any suit, action or proceeding
relating to this Agreement or any Credit Support Document.
(p) Regarding Party A. Party B acknowledges and agrees that Party A, in its
capacity as swap provider, has had and will have no involvement in and,
accordingly Party A accepts no responsibility for: (i) the establishment,
structure, or choice of assets of Party B; (ii) the selection of any
person performing services for or acting on behalf of Party B; (iii) the
selection of Party A as the Counterparty; (iv) the terms of the
Certificates; (v) the preparation of or passing on the disclosure and
other information (other than disclosure and information furnished by
Party A) contained in any offering circular for the Certificates, the Base
Agreement, or any other agreements or documents used by Party B or any
other party in connection with the marketing and sale of the Certificates;
(vi) the ongoing operations and administration of Party B, including the
furnishing of any information to Party B which is not specifically
required under this Agreement; or (vii) any other aspect of Party B's
existence.
(q) Rating Agency Requirements. Notwithstanding anything to the contrary
herein, to the extent any Rating Agency does not assign a rating to the
notes or certificates, as applicable, issued pursuant to the Base
Agreement, references to the requirements of such Rating Agency herein
shall be ignored for purposes of this Agreement.
(r) Additional Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth below, unless the context clearly requires otherwise:
"Approved Ratings Threshold" means each of the S&P Approved Ratings
Threshold, the ▇▇▇▇▇'▇ First Trigger Ratings Threshold and the Fitch
Approved Ratings Threshold.
"Approved Replacement" means, with respect to a Market Quotation, an
entity making such Market Quotation, which entity would satisfy
conditions (a), (b), (c) and (d) of the definition of Permitted
Transfer if such entity were a Transferee, as defined in the
definition of Permitted Transfer.
"Derivative Provider Trigger Event" means (i) an Event of Default
with respect to which Party A is a Defaulting Party, (ii) a
Termination Event (other than an Illegality or Tax Event) with
respect to which Party A is the sole Affected Party or (iii) an
Additional Termination Event with respect to which Party A is the
sole Affected Party.
"Eligible Guarantee" means an unconditional and irrevocable
guarantee of all present and future obligations of Party A under
this Agreement (or, solely for purposes of the definition of
Eligible Replacement, all present and future obligations of such
Eligible Replacement under this Agreement or its replacement, as
applicable) which is provided by a guarantor as principal debtor
rather than surety and which is directly enforceable by Party B, the
form and substance of which guarantee are subject to the Rating
Agency Condition with respect to S&P and Fitch, and either (A) a law
firm has given a legal opinion confirming that none of the
guarantor's payments to Party B under such guarantee will be subject
to deduction or Tax collected by withholding, or (B) such guarantee
provides that, in the event that any of such guarantor's payments to
Party B are subject to deduction or Tax collected by withholding,
such guarantor is required to pay such additional amount as is
necessary to ensure that the net amount actually received by Party B
(free and clear of any Tax collected by withholding) will equal the
full amount Party B would have received had no such deduction or
withholding been required, or (C) in the event that any payment
under such guarantee is made net of deduction or withholding for
Tax, Party A is required, under Section 2(a)(i), to make such
additional payment as is necessary to ensure that the net amount
actually received by Party B from the guarantor will equal the full
amount Party B would have received had no such deduction or
withholding been required.
"Eligible Replacement" means an entity (A) (I) (x) which has credit
ratings from S&P at least equal to the S&P Required Ratings
Threshold or (y) all present and future obligations of which entity
owing to Party B under this Agreement (or its replacement, as
applicable) are guaranteed pursuant to an Eligible Guarantee
provided by a guarantor with credit ratings from S&P at least equal
to the S&P Required Ratings Threshold, in either case if S&P is a
Rating Agency, (II) (x) which has credit ratings from Moody's at
least equal to the Moody's Second Trigger Ratings Threshold or (y)
all present and future obligations of which entity owing to Party B
under this Agreement (or its replacement, as applicable) are
guaranteed pursuant to an Eligible Guarantee provided by a guarantor
with credit ratings from Moody's at least equal to the Moody's
Second Trigger Ratings Threshold, in either case if ▇▇▇▇▇'▇ is a
Rating Agency, and (III) (x) which has credit ratings from Fitch at
least equal to the applicable Fitch Approved Ratings Threshold or
(y) all present and future obligations of which entity owing to
Party B under this Agreement (or its replacement, as applicable) are
guaranteed pursuant to an Eligible Guarantee provided by a guarantor
with credit ratings from Fitch at least equal to the Fitch Approved
Ratings Threshold, in either case if Fitch is a Rating Agency. All
credit ratings described in this definition of "Eligible
Replacement" shall be provided to Party B by any such Eligible
Replacement in writing.
"Financial Institution" means a bank, broker/dealer, insurance
company, structured investment company or derivative product
company.
"Firm Offer" means a quotation from an Eligible Replacement (i) in
an amount equal to the actual amount payable by or to Party B in
consideration of an agreement between Party B and such Eligible
Replacement to replace Party A as the counterparty to this Agreement
by way of novation or, if such novation is not possible, an
agreement between Party B and such Eligible Replacement to enter
into a Replacement Transaction (assuming that all Transactions
hereunder become Terminated Transactions), and (ii) that constitutes
an offer by such Eligible Replacement to replace Party A as the
counterparty to this Agreement or enter a Replacement Transaction
that will become legally binding upon such Eligible Replacement upon
acceptance by Party B.
"Fitch" means Fitch Ratings Ltd., or any successor thereto.
"Fitch Approved Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee, or an Eligible
Replacement, a long-term unsecured and unsubordinated debt rating
from Fitch of "A" and a short-term unsecured and unsubordinated debt
rating from Fitch of "F1".
"Fitch Required Ratings Downgrade Event" means that no Relevant
Entity has credit ratings from Fitch at least equal to the Fitch
Required Ratings Threshold.
"Fitch Required Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee, or an Eligible
Replacement, a long-term unsecured and unsubordinated debt rating
from Fitch of "BBB-".
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"Moody's First Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee, or an Eligible
Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A2" and a short-term unsecured and unsubordinated debt rating from
Moody's of "Prime-1", or (ii) if such entity does not have a
short-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's, a long-term unsecured and unsubordinated debt
rating or counterparty rating from Moody's of "A1".
"Moody's Second Trigger Downgrade Event" means that no Relevant
Entity has credit ratings from Moody's at least equal to the Moody's
Second Trigger Ratings Threshold.
"Moody's Second Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee, or an Eligible
Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A3" and a short-term unsecured and unsubordinated debt rating from
Moody's of "Prime-2", or (ii) if such entity does not have a
short-term unsecured and unsubordinated debt rating from Moody's, a
long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's of "A3".
"Permitted Transfer" means a transfer by novation by Party A to a
transferee (the "Transferee") of all, but not less than all, of
Party A's rights, liabilities, duties and obligations under this
Agreement, with respect to which transfer each of the following
conditions is satisfied: (a) the Transferee is an Eligible
Replacement that is a recognized dealer in interest rate swaps, (b)
as of the date of such transfer the Transferee would not be required
to withhold or deduct on account of Tax from any payments under this
Agreement or would be required to gross up for such Tax under
Section 2(d)(i)(4), (c) an Event of Default or Termination Event
would not occur as a result of such transfer (d) pursuant to a
written instrument (the "Transfer Agreement"), the Transferee
acquires and assumes all rights and obligations of Party A under the
Agreement and the relevant Transaction, (e) such Transfer Agreement
is effective to transfer to the Transferee all, but not less than
all, of Party A's rights and obligations under the Agreement and all
relevant Transactions; (f) Party A will be responsible for any costs
or expenses incurred in connection with such transfer (including any
replacement cost of entering into a replacement transaction); (g)
Moody's has been given prior written notice of such transfer and the
Rating Agency Condition (other than with respect to ▇▇▇▇▇'▇) is
satisfied; and (h) such transfer otherwise complies with the terms
of the Base Agreement.
"Rating Agencies" means, with respect to any date of determination,
each of S&P, ▇▇▇▇▇'▇ and Fitch, to the extent that each such rating
agency is then providing a rating for any of the related notes or
certificates, as applicable.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder and each Rating Agency
specified in connection with such proposed act or omission, that the
party proposing such act or failure to act must consult with each of
the specified Rating Agencies and receive from each such Rating
Agency prior written confirmation that the proposed action or
inaction would not cause a downgrade or withdrawal of the
then-current rating of any Certificates or Notes.
"Relevant Entity" means Party A and, to the extent applicable, a
guarantor under an Eligible Guarantee.
"Replacement Transaction" means, with respect to any Terminated
Transaction or group of Terminated Transactions, a transaction or
group of transactions that (i) would have the effect of preserving
for Party B the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and
assuming the satisfaction of each applicable condition precedent) by
the parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but for
the occurrence of the relevant Early Termination Date, have been
required after that date, and (ii) has terms which are substantially
the same as this Agreement, including, without limitation, rating
triggers, Regulation AB compliance and credit support documentation,
save for the exclusion of provisions relating to Transactions that
are not Terminated Transactions.
"Required Ratings Downgrade Event" means that no Relevant Entity has
credit ratings at least equal to the Required Ratings Threshold.
"Required Ratings Threshold" means each of the S&P Required Ratings
Threshold, the Moody's Second Trigger Ratings Threshold and the
Fitch Required Ratings Threshold.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"S&P Approved Ratings Threshold" means, with respect to Party A, the
guarantor under an Eligible Guarantee, or an Eligible Replacement, a
short-term unsecured and unsubordinated debt rating of "A-1" from
S&P, or, if such entity does not have a short-term unsecured and
unsubordinated debt rating from S&P, a long-term unsecured and
unsubordinated debt rating or counterparty rating of "A+" from S&P.
"S&P Required Ratings Downgrade Event" means that no Relevant Entity
has credit ratings from S&P at least equal to the S&P Required
Ratings Threshold.
"S&P Required Ratings Threshold" means, with respect to Party A, the
guarantor under an Eligible Guarantee, or an Eligible Replacement,
(I) if such entity is a Financial Institution, a short-term
unsecured and unsubordinated debt rating of "A-2" from S&P, or, if
such entity does not have a short-term unsecured and unsubordinated
debt rating from S&P, a long-term unsecured and unsubordinated debt
rating or counterparty rating of "BBB+" from S&P, or (II) if such
entity is not a Financial Institution, a short-term unsecured and
unsubordinated debt rating of "A-1" from S&P, or, if such entity
does not have a short-term unsecured and unsubordinated debt rating
from S&P, a long-term unsecured and unsubordinated debt rating or
counterparty rating of "A+" from S&P.
[Remainder of this page intentionally left blank.]
The time of dealing will be confirmed by Party A upon written request. Barclays
is regulated by the Financial Services Authority. Barclays is acting for its own
account in respect of this Transaction.
Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operations,
Fax ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6857, Tel ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6904/6965, and (ii) mailing
the signed copy to Barclays Bank PLC, 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention of Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operation.
Your failure to respond within such period shall not affect the validity or
enforceability of the Transaction against you. This facsimile shall be the only
documentation in respect of the Transaction and accordingly no hard copy
versions of this Confirmation for this Transaction shall be provided unless
Party B requests such a copy.
--------------------------------------------------------------------------------
For and on behalf of For and on behalf of
BARCLAYS BANK PLC EquiFirst Loan Securitization
Trust 2007-1
By: Deutsche Bank National Trust Company, not
individually, but solely as trustee of the Trust
--------------------------------------------------------------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory Title: Authorized Signatory
Date: June 27, 2007 Date: June 27, 2007
--------------------------------------------------------------------------------
Barclays Bank PLC and its Affiliates, including Barclays Capital Inc., may share
with each other information, including non-public credit information, concerning
its clients and prospective clients. If you do not want such information to be
shared, you must write to the Director of Compliance, Barclays Bank PLC, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
SCHEDULE I
Interest Rate
From and including To but excluding Swap Notional Amount ($)
------------------ ---------------- ------------------------
27-Jun-07 25-Jul-07 924,000,000.00
25-Jul-07 25-Aug-07 909,878,804.27
25-Aug-07 25-Sep-07 886,723,741.80
25-Sep-07 25-Oct-07 862,925,373.42
25-Oct-07 25-Nov-07 838,547,151.73
25-Nov-07 25-Dec-07 813,654,321.69
25-Dec-07 25-Jan-08 788,313,623.05
25-Jan-08 25-Feb-08 762,282,330.65
25-Feb-08 25-Mar-08 735,950,494.22
25-Mar-08 25-Apr-08 709,388,105.43
25-Apr-08 25-May-08 682,667,697.60
25-May-08 25-Jun-08 655,937,018.04
25-Jun-08 25-Jul-08 630,197,571.40
25-Jul-08 25-Aug-08 605,479,671.57
25-Aug-08 25-Sep-08 581,741,791.89
25-Sep-08 25-Oct-08 558,944,162.29
25-Oct-08 25-Nov-08 537,048,645.93
25-Nov-08 25-Dec-08 516,018,712.69
25-Dec-08 25-Jan-09 495,759,639.99
25-Jan-09 25-Feb-09 475,558,866.13
25-Feb-09 25-Mar-09 438,727,748.39
25-Mar-09 25-Apr-09 404,100,004.62
25-Apr-09 25-May-09 372,431,977.81
25-May-09 25-Jun-09 343,461,506.48
25-Jun-09 25-Jul-09 316,964,456.92
25-Jul-09 25-Aug-09 293,679,997.34
25-Aug-09 25-Sep-09 273,145,776.52
25-Sep-09 25-Oct-09 254,930,600.73
25-Oct-09 25-Nov-09 238,684,283.83
25-Nov-09 25-Dec-09 224,121,682.86
25-Dec-09 25-Jan-10 211,008,410.49
25-Jan-10 25-Feb-10 199,150,408.34
25-Feb-10 25-Mar-10 188,383,400.74
25-Mar-10 25-Apr-10 178,564,891.45
25-Apr-10 25-May-10 169,579,547.84
25-May-10 25-Jun-10 161,330,408.12
25-Jun-10 25-Jul-10 153,731,533.92
25-Jul-10 25-Aug-10 146,475,552.75
25-Aug-10 25-Sep-10 139,532,255.62
25-Sep-10 25-Oct-10 132,888,512.25
25-Oct-10 25-Nov-10 126,530,681.56
25-Nov-10 25-Dec-10 120,446,287.31
25-Dec-10 25-Jan-11 114,623,406.18
25-Jan-11 25-Feb-11 109,299,170.07
25-Feb-11 25-Mar-11 104,203,197.98
25-Mar-11 25-Apr-11 99,325,451.35
25-Apr-11 25-May-11 94,656,574.39
25-May-11 25-Jun-11 90,187,488.63
25-Jun-11 25-Jul-11 85,909,522.52
25-Jul-11 25-Aug-11 81,814,386.45
25-Aug-11 25-Sep-11 77,894,156.25
25-Sep-11 25-Oct-11 74,141,496.80
25-Oct-11 25-Nov-11 70,548,894.23
25-Nov-11 25-Dec-11 67,109,424.72
25-Dec-11 25-Jan-12 63,816,467.07
25-Jan-12 25-Feb-12 60,850,079.63
25-Feb-12 25-Mar-12 58,009,389.46
25-Mar-12 25-Apr-12 --
Annex A
Paragraph 13 of the Credit Support Annex
ANNEX A
ISDA(R)
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement
dated as of June 27, 2007 between
Barclays Bank PLC (hereinafter referred to as "Party A" or "Pledgor")
and
EquiFirst Loan Securitization Trust 2007-1, Mortgage Pass-Through
Certificates, Series 2007-1 (the "Trust") (hereinafter referred to as "Party
B" or "Secured Party") by Deutsche Bank National Trust Company, not
individually, but solely as trustee (the "Trustee")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Paragraph 13. Elections and Variables.
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations:
With respect to Party A: not applicable.
With respect to Party B: not applicable.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a),
except that:
(I) the words "upon a demand made by the Secured Party on or
promptly following a Valuation Date" shall be deleted
and replaced with the words "not later than the close of
business on each Valuation Date", and
(II) the sentence beginning "Unless otherwise specified in
Paragraph 13" and ending "(ii) the Value as of that
Valuation Date of all Posted Credit Support held by the
Secured Party." shall be deleted in its entirety and
replaced with the following:
"The "Delivery Amount" applicable to the Pledgor for any
Valuation Date will equal the greatest of
(1) the amount by which (a) the S&P Credit Support
Amount for such Valuation Date exceeds (b) the S&P
Value, as of such Valuation Date, of all Posted
Credit Support held by the Secured
Party,
(2) the amount by which (a) the ▇▇▇▇▇'▇ Credit Support
Amount for such Valuation Date exceeds (b) the
▇▇▇▇▇'▇ Value, as of such Valuation Date, of all
Posted Credit Support held by the Secured Party,
and
(3) the amount by which (a) the Fitch Credit Support
Amount for such Valuation Date exceeds (b) the
Fitch Value, as of such Valuation Date, of all
Posted Credit Support held by the
Secured Party."
(B) "Return Amount" has the meaning specified in Paragraph 3(b),
except that:
(I) the sentence beginning "Unless otherwise specified in
Paragraph 13" and ending "(ii) the Credit Support
Amount." shall be deleted in its entirety and replaced
with the following:
"The "Return Amount" applicable to the Secured Party for
any Valuation Date will equal the least of
(1) the amount by which (a) the S&P Value, as of such
Valuation Date, of all Posted Credit Support held
by the Secured Party exceeds (b) the S&P Credit
Support Amount for such
Valuation Date,
(2) the amount by which (a) the ▇▇▇▇▇'▇ Value, as of
such Valuation Date, of all Posted Credit Support
held by the Secured Party exceeds (b) the Moody's
Credit Support Amount for such Valuation Date, and
(3) the amount by which (a) the Fitch Value, as of
such Valuation Date, of all Posted Credit Support
held by the Secured Party exceeds (b) the Fitch
Credit Support Amount for such
Valuation Date."
(C) "Credit Support Amount" shall not apply. For purposes of
calculating any Delivery Amount or Return Amount for any
Valuation Date, reference shall be made to the S&P Credit
Support Amount, the ▇▇▇▇▇'▇ Credit Support Amount, or the
Fitch Credit Support Amount, in each case for such Valuation
Date, as provided in Paragraphs 13(b)(i)(A) and 13(b)(i)(B),
above.
(ii) Eligible Collateral.
On any date, the following items will qualify as "Eligible
Collateral" (for the avoidance of doubt, all Eligible Collateral to
be denominated in USD):
S&P ▇▇▇▇▇'▇ ▇▇▇▇▇'▇
Approved S&P Required First Second
Ratings Ratings Trigger Trigger Fitch
Valuation Valuation Valuation Valuation Valuation
Collateral Percentage Percentage Percentage Percentage Percentage
----------------------------------------------------------------------------------------------------------
(A) Cash 100% 80% 100% 100% 100%
(B) Fixed-rate negotiable debt
obligations issued by the
U.S. Treasury Department
having a remaining maturity
on such date of not more 98.9% 79.1% 100% 100% 97.5%
than one year
(C) Fixed-rate negotiable debt
obligations issued by the
U.S. Treasury Department 92.6% 74.1% 100% 94% 86.3%
having a remaining maturity
on such date of not more
than ten years
(D) Fixed-rate negotiable debt
obligations issued by the
U.S. Treasury Department N/A N/A 100% 87% 79%
having a remaining maturity
on such date of not more
than ten years
Notwithstanding the Valuation Percentages set forth in the preceding
table, upon the first Transfer of Eligible Collateral under this
Annex, the Pledgor may, at the Pledgor's expense, agree the Valuation
Percentages in relation to (B) through (D) above with the relevant
rating agency (to the extent such rating agency is providing a rating
for the Certificates), and upon such agreement (as evidenced in
writing), such Valuation Percentages shall supersede those set forth
in the preceding table.
(iii) Other Eligible Support.
The following items will qualify as "Other Eligible Support" for the
party specified:
Such Other Eligible Support as the Pledgor may designate; provided,
at the expense of the Pledgor, the prior written consent of the
relevant rating agency (to the extent such rating agency is
providing a rating for the Certificates) shall have been obtained.
For the avoidance of doubt, there are no items that qualify as Other
Eligible Support as of the date of this Annex.
(iv) Threshold.
(A) "Independent Amount" means zero with respect to Party A and
Party B.
(B) "Moody's Threshold" means, with respect to Party A and any
Valuation Date, if a Moody's First Trigger Downgrade Event has
occurred and is continuing and such Moody's First Trigger
Downgrade Event has been continuing for at least 30 Local
Business Days or since this Annex was executed, zero;
otherwise, infinity.
"S&P Threshold" means, with respect to Party A and any
Valuation Date, if an S&P Approved Threshold Downgrade Event
has occurred and is continuing and such S&P Approved Threshold
Downgrade Event has been continuing for at least 10 Local
Business Days or since this Annex was executed, zero;
otherwise, infinity.
"Fitch Threshold" means, with respect to Party A and any
Valuation Date, if a Fitch Approved Threshold Downgrade Event
has occurred and is continuing and such Fitch Approved
Threshold Downgrade Event has been continuing for at least 30
calendar days or since this Annex was executed, zero;
otherwise, infinity
"Threshold" means, with respect to Party B and any Valuation
Date, infinity.
(C) "Minimum Transfer Amount" means USD 100,000; provided,
however, that if the aggregate Class Certificate Balance of
Certificates rated by S&P ceases to be more than USD
50,000,000, "Minimum Transfer Amount" means USD 50,000;
provided further, with respect to the Secured Party at any
time when the Secured Party is a Defaulting Party, "Minimum
Transfer Amount" means zero.
(D) Rounding: The Delivery Amount will be rounded up and the
Return Amount will be rounded down to the nearest integral
multiple of USD 1000.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A. The Valuation Agent's calculations
shall be made in accordance with standard market practices using
commonly accepted third party sources such as Bloomberg or Reuters.
(ii) "Valuation Date" means each Local Business Day.
(iii) "Valuation Time" means the close of business in the city of the
Valuation Agent on the Local Business Day immediately preceding the
Valuation Date or date of calculation, as applicable; provided that
the calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "Notification Time" means 11:00 a.m., New York time, on a Local
Business Day.
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the party
specified (that party being the Affected Party if the Termination Event
occurs with respect to that party): None.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. If specified here as applicable, then the Pledgor must
obtain the Secured Party's consent for any substitution pursuant to
Paragraph 4(d): Inapplicable.
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m. New York time on the Local
Business Day following the date on which the notice of the dispute
is given under Paragraph 5.
(ii) Value. Notwithstanding anything to the contrary in Paragraph 12, for
the purpose of Paragraphs 5(i)(C) and 5(ii), the S&P Value, ▇▇▇▇▇'▇
Value, and Fitch Value, on any date, of Eligible Collateral will be
calculated as follows:
For Eligible Collateral comprised of Cash, the amount of such Cash.
For Eligible Collateral comprising securities, the sum of (A) the
product of (1)(x) the bid price at the Valuation Time for such
securities on the principal national securities exchange on which
such securities are listed, or (y) if such securities are not listed
on a national securities exchange, the bid price for such securities
quoted at the Valuation Time by any principal market maker for such
securities selected by the Valuation Agent, or (z) if no such bid
price is listed or quoted for such date, the bid price listed or
quoted (as the case may be) at the Valuation Time for the day next
preceding such date on which such prices were available and (2) the
applicable Valuation Percentage for such Eligible Collateral, and
(B) the accrued interest on such securities (except to the extent
Transferred to the Pledgor pursuant to Paragraph 6(d)(ii) or
included in the applicable price referred to in the immediately
preceding clause (A)) as of such date.
(iii) Alternative. The provisions of Paragraph 5 will apply; provided,
that the obligation of the appropriate party to deliver the
undisputed amount to the other party will not arise prior to the
time that would otherwise have applied to the Transfer pursuant to,
or deemed made, under Paragraph 3 if no dispute had arisen.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians.
Party B is not and will not be entitled to hold Posted Collateral.
Party B's Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(1) The Custodian for Party B shall be the same banking
institution that acts as Trustee for the Certificates.
(2) The Custodian for Party B or such Custodian's parent
shall have a short-term unsecured and unsubordinated
debt rating from S&P of at least "A-1" or, if no
short-term rating is available, a long-term unsecured
debt rating from S&P of "A+." The Trustee is required to
replace the Custodian within 60 calendar days of the
Custodian's rating falling below "A-1," in the case of a
short-term rating, or "A+," in the case of a long-term
rating.
Initially, the Custodian for Party B is: the Trustee.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will not
apply to Party B; therefore, Party B will not have any of the rights
specified in Paragraph 6(c)(i) or 6(c)(ii); provided, however, that
the Trustee shall invest Cash Posted Credit Support in such
investments as designated by Party A, with losses (net of gains)
incurred in respect of such investments to be for the account of
Party A; provided further, that such investments designated by Party
A shall be limited to money market funds rated "AAAm" or "AAAm-G" by
S&P and from which such invested Cash Posted Credit Support may be
withdrawn upon no more than 2 Local Business Day's notice of a
request for withdrawal.
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the actual interest rate
earned on Posted Collateral in the form of Cash pursuant to
Paragraph 13(g)(ii).
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the second Local Business Day following the end of
each calendar month and on any other Local Business Day on which
Posted Collateral in the form of Cash is Transferred to the Pledgor
pursuant to Paragraph 3(b); provided, however, that the obligation
of Party B to Transfer any Interest Amount to Party A shall be
limited to the extent that Party B has earned and received such
funds and such funds are available to Party B.
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). There are no additional representations by
either party.
(j) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support shall have such meaning as the parties shall agree in
writing from time to time pursuant to Paragraph 13(b)(iii).
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support shall have such meaning as the parties shall agree in
writing from time to time pursuant to Paragraph 13(b)(iii).
(k) Demands and Notices.All demands, specifications and notices under this
Annex will be made pursuant to the Notices Section of this Agreement,
except that any demand, specification or notice shall be given to or made
at the following addresses, or at such other address as the relevant party
may from time to time designate by giving notice (in accordance with the
terms of this paragraph) to the other party:
If to Party A:
▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, England
Attention: Swaps Documentation
Facsimile No.: ▇▇▇▇-▇▇▇-▇▇▇▇/6858
Telephone No.: ▇▇▇▇-▇▇▇-▇▇▇▇/6904
with a copy to:
General Counsel's ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices to Party A shall not be deemed effective unless delivered to
the London address set forth above.
If to Party B's Custodian:
EquiFirst Loan Securitization Trust 2007-1
c/o Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Trust Administration - BC07E1
(l) Address for Transfers. Each Transfer hereunder shall be made to the
address specified in writing from time to time by the party to which such
Transfer will be made.
(m) Other Provisions.
(i) Collateral Account. The Secured Party shall cause any Custodian
appointed hereunder to open and maintain a segregated trust account
and to hold, record and identify all the Posted Collateral in such
segregated trust account and, subject to Paragraph 8(a), such Posted
Collateral shall at all times be and remain the property of the
Pledgor and shall at no time constitute the property of, or be
commingled with the property of, the Secured Party or the Custodian.
(ii) Agreement as to Single Secured Party and Single Pledgor. Party A and
Party B hereby agree that, notwithstanding anything to the contrary
in this Annex, (a) the term "Secured Party" as used in this Annex
means only Party B, (b) the term "Pledgor" as used in this Annex
means only Party A, (c) only Party A makes the pledge and grant in
Paragraph 2, the acknowledgement in the final sentence of Paragraph
8(a) and the representations in Paragraph 9.
(iii) Calculation of Value. Paragraph 4(c) is hereby amended by deleting
the word "Value" and inserting in lieu thereof "S&P Value, ▇▇▇▇▇'▇
Value, Fitch Value". Paragraph 4(d)(ii) is hereby amended by (A)
deleting the words "a Value" and inserting in lieu thereof "an S&P
Value, a ▇▇▇▇▇'▇ Value, and a Fitch Value" and (B) deleting the
words "the Value" and inserting in lieu thereof "S&P Value, ▇▇▇▇▇'▇
Value, and Fitch Value". Paragraph 5 (flush language) is hereby
amended by deleting the word "Value" and inserting in lieu thereof
"S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value". Paragraph 5(i) (flush
language) is hereby amended by deleting the word "Value" and
inserting in lieu thereof "S&P Value, ▇▇▇▇▇'▇ Value, and Fitch
Value". Paragraph 5(i)(C) is hereby amended by deleting the word
"the Value, if" and inserting in lieu thereof "any one or more of
the S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value, as may be". Paragraph
5(ii) is hereby amended by (1) deleting the first instance of the
words "the Value" and inserting in lieu thereof "any one or more of
the S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value" and (2) deleting the
second instance of the words "the Value" and inserting in lieu
thereof "such disputed S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value".
Each of Paragraph 8(b)(iv)(B) and Paragraph 11(a) is hereby amended
by deleting the word "Value" and inserting in lieu thereof "least of
the S&P Value, ▇▇▇▇▇'▇ Value or Fitch Value".
(iv) Form of Annex. Party A and Party B hereby agree that the text of
Paragraphs 1 through 12, inclusive, of this Annex is intended to be
the printed form of ISDA Credit Support Annex (Bilateral Form - ISDA
Agreements Subject to New York Law Only version) as published and
copyrighted in 1994 by the International Swaps and Derivatives
Association, Inc.
(v) Events of Default. Paragraph 7 will not apply to cause any Event of
Default to exist with respect to Party B except that Paragraph 7(i)
will apply to Party B solely in respect of Party B's obligations
under Paragraph 3(b) of the Credit Support Annex. Notwithstanding
anything to the contrary in Paragraph 7, any failure by Party A to
comply with or perform any obligation to be complied with or
performed by Party A under the Credit Support Annex shall only be an
Event of Default if (A) a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has
occurred and been continuing for 30 or more Local Business Days, (B)
an S&P Required Ratings Downgrade Event has occurred and been
continuing for 10 or more Local Business Days, or (C) a Fitch
Required Ratings Downgrade Event has occurred and been continuing
for 30 or more days.
(vi) Expenses. Notwithstanding anything to the contrary in Paragraph 10,
the Pledgor will be responsible for, and will reimburse the Secured
Party for, all transfer and other taxes and other costs involved in
any Transfer of Eligible Collateral.
(vii) Withholding. Paragraph 6(d)(ii) is hereby amended by inserting
immediately after "the Interest Amount" in the fourth line thereof
the words "less any applicable withholding taxes."
(viii) Additional Definitions. As used in this Annex:
"Exposure" has the meaning specified in Paragraph 12, except that
(1) after the word "Agreement" the words "(assuming, for this
purpose only, that Part 1(f)(i)(A)-(E) of the Schedule is deleted)"
shall be inserted and (2) at the end of the definition of Exposure,
the words "with terms that are, in all material respects, no less
beneficial for Party B than those of this Agreement" shall be added.
"Fitch Approved Ratings Downgrade Event" means that no Relevant
Entity has credit ratings from Fitch at least equal to the Fitch
Approved Ratings Threshold.
"Fitch Credit Support Amount" means, for any Valuation Date, the
excess, if any, of
(I) (A) for any Valuation Date on which a Fitch Approved Ratings
Downgrade Event has occurred and been continuing for at
least 30 days, an amount equal to the sum of (1) 100.0%
of the Secured Party's Exposure for such Valuation Date
and (2) the product of the Fitch Volatility Cushion for
each Transaction to which this Annex relates and the
Notional Amount of each such Transaction for the
Calculation Period which includes such Valuation Date,
or
(B) for any other Valuation Date, zero, over
(II) the Threshold for Party A for such Valuation Date.
"Fitch Valuation Percentage" means, for any Valuation Date and each
item of Eligible Collateral, means, with respect to a Valuation Date
and each item of Eligible Collateral, the corresponding percentage
for such Eligible Collateral in the column headed "Fitch Valuation
Percentage".
"Fitch Value" means, on any date and with respect to any Eligible
Collateral other than Cash, the product of (x) the bid price
obtained by the Valuation Agent for such Eligible Collateral and (y)
the Fitch Valuation Percentage for such Eligible Collateral set
forth in paragraph 13(b)(ii). The Fitch Value of Cash will be the
amount of such Cash.
"Fitch Volatility Cushion" means, for any Transaction, the related
percentage set forth in the following table.
-----------------------------------------------------------------------------------------------
The higher of the Fitch
credit rating of (i) Party A Remaining Weighted Average Maturity
and (ii) the Credit Support (years)
Provider of Party A, if
applicable
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
-----------------------------------------------------------------------------------------------
At least "AA-" 0.8% 1.7% 2.5% 3.3% 4.0% 4.7% 5.3% 5.9%
-----------------------------------------------------------------------------------------------
"A+/A" 0.6% 1.2% 1.8% 2.3% 2.8% 3.3% 3.8% 4.2%
-----------------------------------------------------------------------------------------------
"A-/BBB+" or lower 0.5% 1.0% 1.6% 2.0% 2.5% 2.9% 3.3% 3.6%
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
The higher of the Fitch
credit rating of (i) Party A Remaining Weighted Average Maturity
and (ii) the Credit Support (years)
Provider of Party A, if
applicable
-----------------------------------------------------------------------------------------------
9 10 11 12 13 14 Greater than
or equal to 15
-----------------------------------------------------------------------------------------------
At least "AA-" 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5%
-----------------------------------------------------------------------------------------------
"A+/A" 4.6% 5.0% 5.3% 5.7% 6.0% 6.4% 6.7%
-----------------------------------------------------------------------------------------------
"A-/BBB+" or lower 4.0% 4.3% 4.7% 5.0% 5.3% 5.6% 5.9%
-----------------------------------------------------------------------------------------------
"Local Business Day" means, for purposes of this Annex: any day on
which (A) commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in New York and
the location of Party A, Party B and any Custodian, and (B) in
relation to a Transfer of Eligible Collateral, any day on which the
clearance system agreed between the parties for the delivery of
Eligible Collateral is open for acceptance and execution of
settlement instructions (or in the case of a Transfer of Cash or
other Eligible Collateral for which delivery is contemplated by
other means a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign deposits) in New
York and the location of Party A, Party B and any Custodian.
"▇▇▇▇▇'▇ Credit Support Amount" means, for any Valuation Date:
(A) if the ▇▇▇▇▇'▇ Threshold for such Valuation Date is zero and
it is not the case that a ▇▇▇▇▇'▇ Second Trigger Downgrade
Event has occurred and been continuing for at least 30 Local
Business Days, an amount equal to the greater of (x) zero and
(y) the sum of the Secured Party's Exposure and the aggregate
of ▇▇▇▇▇'▇ First Trigger Additional Amounts for each
Transaction and such Valuation Date;
(B) if a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and
been continuing for at least 30 Local Business Days, an amount
equal to the greatest of (x) zero, (y) the aggregate amount of
the Next Payments for each Transaction and such Valuation
Date, and (z) the sum of the Secured Party's Exposure and the
aggregate of ▇▇▇▇▇'▇ Second Trigger Additional Amounts for
each Transaction and such Valuation Date; or
(C) if the ▇▇▇▇▇'▇ Threshold for such Valuation Date is infinity,
zero.
"▇▇▇▇▇'▇ First Trigger Additional Amount" means, for any Valuation
Date and any Transaction, the product of (i) the applicable ▇▇▇▇▇'▇
First Trigger Factor set forth in Table 1, (ii) the Scale Factor, if
any, for such Transaction, or, if no Scale Factor is applicable for
such Transaction, one, and (iii) the Notional Amount for such
Transaction for the Calculation Period for such Transaction (each as
defined in the related Confirmation) which includes such Valuation
Date.
"▇▇▇▇▇'▇ First Trigger Downgrade Event" means that no Relevant
Entity has credit ratings from ▇▇▇▇▇'▇ at least equal to the ▇▇▇▇▇'▇
First Trigger Ratings Threshold.
"▇▇▇▇▇'▇ Second Trigger Additional Amount" means, for any Valuation
Date and any Transaction,
(A) if such Transaction is not a Transaction-Specific Hedge, the
product of (i) the applicable ▇▇▇▇▇'▇ Second Trigger Factor set
forth in Table 2, (ii) the Scale Factor, if any, for such
Transaction, or, if no Scale Factor is applicable for such
Transaction, one, and (iii) the Notional Amount for such Transaction
for the Calculation Period for such Transaction (each as defined in
the related Confirmation) which includes such Valuation Date; or
(B) if such Transaction is a Transaction-Specific Hedge, the product
of (i) the applicable ▇▇▇▇▇'▇ Second Trigger Factor set forth in
Table 3, (ii) the Scale Factor, if any, for such Transaction, or, if
no Scale Factor is applicable for such Transaction, one, and (iii)
the Notional Amount for such Transaction for the Calculation Period
for such Transaction (each as defined in the related Confirmation)
which includes such Valuation Date;
"▇▇▇▇▇'▇ Valuation Percentage" means, with respect to a Valuation
Date and each item of Eligible Collateral, (i) if the ▇▇▇▇▇'▇
Threshold for such Valuation Date is zero and it is not the case
that a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and been
continuing for at least 30 Local Business Days, the corresponding
percentage for such Eligible Collateral in the column headed
"▇▇▇▇▇'▇ First Trigger Valuation Percentage" or (ii) if a ▇▇▇▇▇'▇
Second Trigger Ratings Event has occurred and been continuing for at
least 30 Local Business Days, the corresponding percentage for such
Eligible Collateral in the column headed "▇▇▇▇▇'▇ Second Trigger
Valuation Percentage".
"▇▇▇▇▇'▇ Value" means, on any date and with respect to any Eligible
Collateral other than Cash, the product of (x) the bid price
obtained by the Valuation Agent and (y) the applicable ▇▇▇▇▇'▇
Valuation Percentage set forth in Paragraph 13(b)(ii). The ▇▇▇▇▇'▇
Value of Cash will be the amount of such Cash.
"Next Payment" means, for each Transaction and each Valuation Date,
the greater of (i) the aggregate amount of any payments due to be
made by Party A under Section 2(a) in respect of such Transaction on
the related Next Payment Date less the aggregate amount of any
payments due to be made by Party B under Section 2(a) on such Next
Payment Date (any such payments determined based on rates prevailing
on such Valuation Date) and (ii) zero.
"Next Payment Date" means, for each Transaction, the date on which
the next scheduled payment under such Transaction is due to be paid.
"S&P Approved Ratings Downgrade Event" means that no Relevant
Entity has credit ratings from S&P at least equal to the S&P
Approved Ratings Threshold.
"S&P Credit Support Amount" means, for any Valuation Date:
(A) if the S&P Threshold for such Valuation Date is zero and it is
not the case that an S&P Required Ratings Downgrade Event has
occurred and been continuing for at least 10 Local Business
Days, an amount equal to the Secured Party's Exposure;
(B) if an S&P Required Ratings Downgrade Event has occurred and
been continuing for at least 10 Local Business Days, an amount
equal to 125% of the Secured Party's Exposure; or
(C) if the S&P Threshold for such Valuation Date is infinity,
zero.
"S&P Valuation Percentage" means, with respect to a Valuation Date
and each item of Eligible Collateral, (i) if the S&P Threshold for
such Valuation Date is zero and it is not the case that a S&P
Required Ratings Downgrade Event has occurred and been continuing
for at least 10 Local Business Days, the corresponding percentage
for such Eligible Collateral in the column headed "S&P Approved
Ratings Valuation Percentage" or (ii) if an S&P Required Ratings
Downgrade Event has occurred and been continuing for at least 10
Local Business Days, the corresponding percentage for such Eligible
Collateral in the column headed "S&P Required Ratings Valuation
Percentage".
"S&P Value" means, on any date and with respect to any Eligible
Collateral, the product of (x) the bid price obtained by the
Valuation Agent for such Eligible Collateral and (y) the applicable
S&P Valuation Percentage for such Eligible Collateral set forth in
paragraph 13(b)(ii). The S&P Value of Cash will be the face amount
of such Cash.
"Transaction-Specific Hedge" means any Transaction in respect of
which (x) the notional amount is "balance guaranteed" or (y) the
notional amount for any Calculation Period (as defined in the
related Confirmation) otherwise is not a specific dollar amount that
is fixed at the inception of the Transaction.
"Valuation Percentage" shall mean, for purposes of determining the
S&P Value, ▇▇▇▇▇'▇ Value and Fitch Value with respect to any
Eligible Collateral or Posted Collateral, the applicable S&P
Valuation Percentage, ▇▇▇▇▇'▇ Valuation Percentage, or Fitch
Valuation Percentage for such Eligible Collateral or Posted
Collateral, respectively, in each case as set forth in Paragraph
13(b)(ii).
"Value" shall mean, in respect of any date, the related S&P Value,
the related ▇▇▇▇▇'▇ Value, and the related Fitch Value.
[Remainder of this page intentionally left blank]
Table 1
------------------------------------------------------------------------------------------------------
Remaining ▇▇▇▇▇'▇ First Trigger
Weighted Average Life Factor--Single Currency ▇▇▇▇▇'▇ First Trigger
of Hedge in Years Interest Rate ▇▇▇▇▇▇ Factor--Currency ▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------
Equal to or less than 1 0.15% 1.10%
------------------------------------------------------------------------------------------------------
Greater than 1 but less than or
equal to 2 0.30% 1.20%
------------------------------------------------------------------------------------------------------
Greater than 2 but less than or
equal to 3 0.40% 1.30%
------------------------------------------------------------------------------------------------------
Greater than 3 but less than or
equal to 4 0.60% 1.40%
------------------------------------------------------------------------------------------------------
Greater than 4 but less than or
equal to 5 0.70% 1.50%
------------------------------------------------------------------------------------------------------
Greater than 5 but less than or
equal to 6 0.80% 1.60%
------------------------------------------------------------------------------------------------------
Greater than 6 but less than or
equal to 7 1.00% 1.60%
------------------------------------------------------------------------------------------------------
Greater than 7 but less than or
equal to 8 1.10% 1.70%
------------------------------------------------------------------------------------------------------
Greater than 8 but less than or
equal to 9 1.20% 1.80%
------------------------------------------------------------------------------------------------------
Greater than 9 but less than or
equal to 10 1.30% 1.90%
------------------------------------------------------------------------------------------------------
Greater than 10 but less than or
equal to 11 1.40% 1.90%
------------------------------------------------------------------------------------------------------
Greater than 11 but less than or
equal to 12 1.50% 2.00%
------------------------------------------------------------------------------------------------------
Greater than 12 but less than or
equal to 13 1.60% 2.10%
------------------------------------------------------------------------------------------------------
Greater than 13 but less than or
equal to 14 1.70% 2.10%
------------------------------------------------------------------------------------------------------
Greater than 14 but less than or
equal to 15 1.80% 2.20%
------------------------------------------------------------------------------------------------------
Greater than 15 but less than or
equal to 16 1.90% 2.30%
------------------------------------------------------------------------------------------------------
Greater than 16 but less than or
equal to 17 2.00% 2.30%
------------------------------------------------------------------------------------------------------
Greater than 17 but less than or
equal to 18 2.00% 2.40%
------------------------------------------------------------------------------------------------------
Greater than 18 but less than or
equal to 19 2.00% 2.40%
------------------------------------------------------------------------------------------------------
Greater than 19 but less than or
equal to 20 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 20 but less than or
equal to 21 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 21 but less than or
equal to 22 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 22 but less than or
equal to 23 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 23 but less than or
equal to 24 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 24 but less than or
equal to 25 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 25 but less than or
equal to 26 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 26 but less than or
equal to 27 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 27 but less than or
equal to 28 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 28 but less than or
equal to 29 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Greater than 29 2.00% 2.50%
------------------------------------------------------------------------------------------------------
Table 2
-------------------------------------------------------------------------------------------------
Remaining ▇▇▇▇▇'▇ Second Trigger
Weighted Average Life Factor--Single Currency ▇▇▇▇▇'▇ Second Trigger
of Hedge in Years Interest Rate Swaps Factor--Currency Swaps
-------------------------------------------------------------------------------------------------
Equal to or less than 1 0.50% 6.10%
-------------------------------------------------------------------------------------------------
Greater than 1 but less than or
equal to 2 1.00% 6.30%
-------------------------------------------------------------------------------------------------
Greater than 2 but less than or 1.50% 6.40%
equal to 3
-------------------------------------------------------------------------------------------------
Greater than 3 but less than or
equal to 4 1.90% 6.60%
-------------------------------------------------------------------------------------------------
Greater than 4 but less than or
equal to 5 2.40% 6.70%
-------------------------------------------------------------------------------------------------
Greater than 5 but less than or
equal to 6 2.80% 6.80%
-------------------------------------------------------------------------------------------------
Greater than 6 but less than or
equal to 7 3.20% 7.00%
-------------------------------------------------------------------------------------------------
Greater than 7 but less than or
equal to 8 3.60% 7.10%
-------------------------------------------------------------------------------------------------
Greater than 8 but less than or
equal to 9 4.00% 7.20%
-------------------------------------------------------------------------------------------------
Greater than 9 but less than or
equal to 10 4.40% 7.30%
-------------------------------------------------------------------------------------------------
Greater than 10 but less than or
equal to 11 4.70% 7.40%
-------------------------------------------------------------------------------------------------
Greater than 11 but less than or
equal to 12 5.00% 7.50%
-------------------------------------------------------------------------------------------------
Greater than 12 but less than or
equal to 13 5.40% 7.60%
-------------------------------------------------------------------------------------------------
Greater than 13 but less than or
equal to 14 5.70% 7.70%
-------------------------------------------------------------------------------------------------
Greater than 14 but less than or
equal to 15 6.00% 7.80%
-------------------------------------------------------------------------------------------------
Greater than 15 but less than or
equal to 16 6.30% 7.90%
-------------------------------------------------------------------------------------------------
Greater than 16 but less than or
equal to 17 6.60% 8.00%
-------------------------------------------------------------------------------------------------
Greater than 17 but less than or
equal to 18 6.90% 8.10%
-------------------------------------------------------------------------------------------------
Greater than 18 but less than or
equal to 19 7.20% 8.20%
-------------------------------------------------------------------------------------------------
Greater than 19 but less than or
equal to 20 7.50% 8.20%
-------------------------------------------------------------------------------------------------
Greater than 20 but less than or
equal to 21 7.80% 8.30%
-------------------------------------------------------------------------------------------------
Greater than 21 but less than or
equal to 22 8.00% 8.40%
-------------------------------------------------------------------------------------------------
Greater than 22 but less than or
equal to 23 8.00% 8.50%
-------------------------------------------------------------------------------------------------
Greater than 23 but less than or
equal to 24 8.00% 8.60%
-------------------------------------------------------------------------------------------------
Greater than 24 but less than or
equal to 25 8.00% 8.60%
-------------------------------------------------------------------------------------------------
Greater than 25 but less than or
equal to 26 8.00% 8.70%
-------------------------------------------------------------------------------------------------
Greater than 26 but less than or
equal to 27 8.00% 8.80%
-------------------------------------------------------------------------------------------------
Greater than 27 but less than or
equal to 28 8.00% 8.80%
-------------------------------------------------------------------------------------------------
Greater than 28 but less than or
equal to 29 8.00% 8.90%
-------------------------------------------------------------------------------------------------
Greater than 29 8.00% 9.00%
Table 3
Remaining ▇▇▇▇▇'▇ Second Trigger ▇▇▇▇▇'▇ Second Trigger
Weighted Average Life Factor--Single Currency Factor--Currency ▇▇▇▇▇▇
of Hedge in Years Interest Rate ▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------
Equal to or less than 1 0.65% 6.30%
-------------------------------------------------------------------------------------------------
Greater than 1 but less than or 1.30% 6.60%
equal to 2
-------------------------------------------------------------------------------------------------
Greater than 2 but less than or 1.90% 6.90%
equal to 3
-------------------------------------------------------------------------------------------------
Greater than 3 but less than or 2.50% 7.10%
equal to 4
-------------------------------------------------------------------------------------------------
Greater than 4 but less than or 3.10% 7.40%
equal to 5
-------------------------------------------------------------------------------------------------
Greater than 5 but less than or 3.60% 7.70%
equal to 6
-------------------------------------------------------------------------------------------------
Greater than 6 but less than or 4.20% 7.90%
equal to 7
-------------------------------------------------------------------------------------------------
Greater than 7 but less than or 4.70% 8.20%
equal to 8
-------------------------------------------------------------------------------------------------
Greater than 8 but less than or 5.20% 8.40%
equal to 9
-------------------------------------------------------------------------------------------------
Greater than 9 but less than or 5.70% 8.60%
equal to 10
-------------------------------------------------------------------------------------------------
Greater than 10 but less than or 6.10% 8.80%
equal to 11
-------------------------------------------------------------------------------------------------
Greater than 11 but less than or 6.50% 9.00%
equal to 12
-------------------------------------------------------------------------------------------------
Greater than 12 but less than or 7.00% 9.20%
equal to 13
-------------------------------------------------------------------------------------------------
Greater than 13 but less than or 7.40% 9.40%
equal to 14
-------------------------------------------------------------------------------------------------
Greater than 14 but less than or 7.80% 9.60%
equal to 15
-------------------------------------------------------------------------------------------------
Greater than 15 but less than or 8.20% 9.80%
equal to 16
-------------------------------------------------------------------------------------------------
Greater than 16 but less than or 8.60% 10.00%
equal to 17
-------------------------------------------------------------------------------------------------
Greater than 17 but less than or 9.00% 10.10%
equal to 18
-------------------------------------------------------------------------------------------------
Greater than 18 but less than or 9.40% 10.30%
equal to 19
-------------------------------------------------------------------------------------------------
Greater than 19 but less than or 9.70% 10.50%
equal to 20
-------------------------------------------------------------------------------------------------
Greater than 20 but less than or 10.00% 10.70%
equal to 21
-------------------------------------------------------------------------------------------------
Greater than 21 but less than or 10.00% 10.80%
equal to 22
-------------------------------------------------------------------------------------------------
Greater than 22 but less than or 10.00% 11.00%
equal to 23
-------------------------------------------------------------------------------------------------
Greater than 23 but less than or 10.00% 11.00%
equal to 24
-------------------------------------------------------------------------------------------------
Greater than 24 but less than or 10.00% 11.00%
equal to 25
-------------------------------------------------------------------------------------------------
Greater than 25 but less than or 10.00% 11.00%
equal to 26
-------------------------------------------------------------------------------------------------
Greater than 26 but less than or 10.00% 11.00%
equal to 27
-------------------------------------------------------------------------------------------------
Greater than 27 but less than or 10.00% 11.00%
equal to 28
-------------------------------------------------------------------------------------------------
Greater than 28 but less than or 10.00% 11.00%
equal to 29
-------------------------------------------------------------------------------------------------
Greater than 29 10.00% 11.00%
EXHIBIT U
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇ AND VIA OVERNIGHT MAIL TO THE
ADDRESS IMMEDIATELY BELOW AND TO THE ADDRESS NOTED AT THE BOTTOM OF THIS FORM
Deutsche Bank National Trust Company,
as Trustee
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇
Attn: Trust & Securities Services - BC07E1
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 Fo
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:
with a copy to:
BCAP LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [_________]
EXHIBIT V
FORM OF TRUSTEE'S LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust
Company, a national banking association organized and existing under the laws of
the United States, having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, as Trustee (the "Trustee") pursuant
to that ____________ ____ Agreement dated as of _______ (the "Agreement") by and
between _________ and_________ (the "Servicer"), [INSERT ADDITIONAL PARTIES
AND/OR AGREEMENTS AS NECESSARY] 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 Agreement solely for the purpose of performing such acts and executing
such documents in the name of the Trustee necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust"
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which _________ is acting as the
Servicer.
This Appointment shall apply only to the following enumerated
transactions and nothing herein or in the Agreement shall be construed to the
contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose of
correcting the Mortgage or Deed of Trust to conform same to the
original intent of the parties thereto or to correct title errors
discovered after such title insurance was issued; provided that (i)
said modification or re-recording, in either instance, does not
adversely affect the lien of the Mortgage or Deed of Trust as
insured and (ii) otherwise conforms to the provisions of the
Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency
or unit with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfactions/releases,
partial reconveyances or the execution or requests to trustees to
accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment
of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation or
rescission of any such foreclosure, including, without limitation,
any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e. above.
9. With respect to the sale of property acquired through a foreclosure
or deed-in lieu of foreclosure, including, without limitation, the
execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
▇. ▇▇▇▇▇/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to
purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established for
repairs to the mortgaged property or reserves for replacement of
personal property.
The undersigned gives said Attorney-in-Fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney-in-Fact shall
be effective as of _________.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by the Servicer to the Trustee under the Agreement, or
(ii) be construed to grant the Servicer the power to initiate or defend any
suit, litigation or proceeding in the name of Deutsche Bank National Trust
Company except as specifically provided for herein. If the Servicer receives any
notice of suit, litigation or proceeding in the name of Deutsche Bank National
Trust Company, then the Servicer shall promptly forward a copy of same to the
Trustee.
This limited power of attorney is not intended to extend the powers
granted to the Servicer under the Agreement or to allow the Servicer to take any
action with respect to Mortgages, Deeds of Trust or Mortgage Notes not
authorized by the Agreement.
The Servicer hereby agrees to indemnify and hold the Trustee and its
directors, officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by the Servicer of the
powers granted to it hereunder. The foregoing indemnity shall survive the
termination of this Limited Power of Attorney and the Agreement or the earlier
resignation or removal of the Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be governed
by the laws of the State of New York, without regard to conflicts of law
principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as
Trustee has caused its corporate seal to be hereto affixed and these presents
to be signed and acknowledged in its name and behalf by a duly elected and
authorized signatory this ___________ day of ____________.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:
Title:
Acknowledged and Agreed
[INSERT NAME OF THE SERVICER]
By:___________________________________
Name:
Title:
STATE OF CALIFORNIA )
) ss.:
COUNTY OF )
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared
________________________________ of Deutsche Bank National Trust Company, as
Trustee for [INSERT REFERENCE TO ISSUANCE], 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)
My commission expires:
_______________________________________
_____________________________________
Notary Public, State of California
EXHIBIT W
FORM OF IRREVOCABLE INSTRUCTION
Barclays Capital Real Estate Inc. d/b/a HomEq Servicing
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Deutsche Bank National Trust Company,
as Trustee
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Trust & Securities Services - BC07E1
The undersigned (the "Residual Holder") hereby authorizes, directs
and instructs Barclays Capital Real Estate Inc. d/b/a HomEq Servicing, a
Delaware corporation (the "Servicer"), as servicer under that certain Pooling
and Servicing Agreement, dated as of June 1, 2007 (the "PSA"), among BCAP LLC, a
Delaware limited liability company, as depositor, the Servicer, Deutsche Bank
National Trust Company, a national banking association, as trustee, and The Bank
of New York Trust Company, N.A., a national banking association, as custodian,
as follows:
1. The Residual Holder hereby represents and warrants to the
Servicer as follows:
a. The Residual Holder is the holder of all of the Class R-I
Certificates issued under the PSA.
b. The Residual Holder has not delivered to the Servicer any
other Irrevocable Instruction under Section 4.07(vii)(A) of
the PSA that is currently in effect.
c. The Residual Holder has the power and authority to make and
deliver this Irrevocable Instruction and has taken all
necessary action to authorize the execution and delivery of
this Irrevocable Instruction. This Irrevocable Instruction is
the valid obligation of the Residual Holder, legally binding
upon the Residual Holder and enforceable in accordance with
its terms. No consent or approval of any other person or
entity and no consent, license, approval or authorization of
any governmental authority, bureau or agency is required in
connection with the execution, delivery, validity and
enforceability of this Irrevocable Instruction.
2. The Servicer shall establish and maintain a Supplemental Float
Reserve Account pursuant to Section 4.07(vii)(A) of the PSA, effective as of the
date hereof.
3. The Supplemental Float Reserve Beneficiary is hereby designated
to be:
________________________________
________________________________
________________________________
4. While this Irrevocable Instruction remains in effect, the
Servicer shall not (and shall not be required by the provisions hereof or
otherwise to) honor or follow any instruction (other than the instructions and
directions given herein) the Servicer may receive from the Residual Holder or
any other party with regard to the Supplemental Float Reserve Account, other
than those of the Supplemental Float Reserve Beneficiary in the form attached
hereto as Annex 1.
5. This Irrevocable Instruction may not be terminated other than by
the Supplemental Float Reserve Beneficiary pursuant to a written termination
certificate in the form attached hereto as Annex 2.
6. This Irrevocable Instruction shall be governed by and construed
in all respects under the laws of the State of New York.
IN WITNESS WHEREOF, the Residual Holder by its duly authorized
officer has executed and delivered this Irrevocable Instruction as of
_____________, 20__.
[RESIDUAL HOLDER]
By:___________________________________
Name:
Title:
ANNEX 1 TO EXHIBIT W
FORM OF PAYMENT CERTIFICATE
[DATE]
[SERVICER]
____________________
____________________
____________________
Attention:
Ladies and Gentlemen:
The undersigned ______________ is the beneficiary (the
"Supplemental Float Reserve Beneficiary") pursuant to Section 4.07 of that
certain Pooling and Servicing Agreement, dated as of June 1, 2007, among BCAP
LLC, a Delaware limited liability company, as depositor, Barclays Capital
Real Estate Inc. d/b/a HomEq Servicing, a Delaware corporation, as servicer,
Deutsche Bank National Trust Company, a national banking association, as
trustee (the "Trustee"), and The Bank of New York Trust Company, N.A., a
national banking association, as custodian. The Supplemental Float Reserve
Beneficiary was designated as such pursuant to that certain irrevocable
instruction to you dated ___________, 20__ (the "Irrevocable Instruction").
The Supplemental Float Reserve Beneficiary hereby directs and
instructs the Servicer to pay to the Supplemental Float Reserve Beneficiary,
out of the Supplemental Float Reserve Account, an amount equal to
____________________________ Dollars ($_________________).
Payment to the Supplemental Float Reserve Beneficiary shall be made
as follows:
___________________________
___________________________
___________________________
___________________________
The Supplemental Float Reserve Beneficiary hereby certifies that
such amounts are due and owing to the Supplemental Float Reserve Beneficiary
hereby pursuant to that certain ___________________________.
Sincerely yours,
___________________________
By:_____________________________________
Name:
Title:
ANNEX 2 TO EXHIBIT W
FORM OF TERMINATION CERTIFICATE
[DATE]
Deutsche Bank National Trust Company,
as Trustee
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration - BC07E1
[SERVICER]
____________________
____________________
____________________
Attention:
Ladies and Gentlemen:
The undersigned ______________ is the beneficiary (the
"Supplemental Float Reserve Beneficiary") pursuant to Section 4.07 of that
certain Pooling and Servicing Agreement, dated as of June 1, 2007 (the
"PSA"), among BCAP LLC, a Delaware limited liability company, as depositor,
Barclays Capital Real Estate Inc. d/b/a HomEq Servicing, a Delaware
corporation, as servicer, Deutsche Bank National Trust Company, a national
banking association, as trustee, The Bank of New York Trust Company, N.A., a
national banking association, as custodian. The Supplemental Float Reserve
Beneficiary was designated as such pursuant to that certain irrevocable
instruction to you dated ___________, 20__ (the "Irrevocable Instruction").
In accordance with Section 4.07 of the PSA, the Supplemental Float
Reserve Beneficiary hereby terminates the Irrevocable Instruction and all of its
rights thereunder.
Sincerely yours,
___________________________
By:_____________________________________
Name:
Title:
EXHIBIT X
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR IS THE SERVICER UNDER THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF ANY OTHER PERSON SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : SC-1
Cut-off Date : June 1, 2007
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
Mortgage Pass-Through Certificates, Series 2007-1
Servicing Fee Certificate
evidencing the undivided 100% interest in the servicing fee payable
pursuant to the Agreement (as defined below).
Distributions in respect of this Servicing Fee Certificate are
distributable monthly according to the provisions in Section 3.11 of the
Agreement and are subject to the Servicer's obligation to pay Compensating
Interest as set forth herein. For the avoidance of doubt, no distributions will
be paid through this certificate, but rather shall be distributed in accordance
with Section 3.11 of the Agreement. This Servicing Fee Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Custodian or the Trustee referred to below or any of their
respective affiliates. Neither this Servicing Fee Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that Barclays Capital Real Estate Inc. d/b/a HomEq
Servicing, as servicer (the "Servicer"), is the registered owner of the interest
evidenced by this Servicing Fee Certificate, which interest is the entire
interest in the Servicing Fee payable pursuant to a Pooling and Servicing
Agreement dated as of June 1, 2007 (the "Agreement") among BCAP LLC, as
depositor (the "Depositor"), the Servicer, Deutsche Bank National Trust Company,
as trustee (the "Trustee"), and The Bank of New York Trust Company, N.A., as
custodian (the "Custodian"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Servicing
Fee Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Servicing Fee
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Servicing
Fee Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Servicing Fee Certificate shall not be entitled to any benefit
under the Agreement or be valid for any purpose unless manually authenticated by
an authorized signatory of the Trustee, except that the Servicer shall be
entitled to the Servicing Fee whether or not this Servicing Fee Certificate has
been executed, authenticated or delivered to the Servicer.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Servicing Fee
Certificate to be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
BCAP LLC
EquiFirst Loan Securitization Trust 2007-1
This Servicing Fee Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Custodian and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Servicing Fee Certificate, as Servicer, shall be conclusive
and binding on such Holder and upon all future Holders of this Servicing Fee
Certificate and of any Servicing Fee Certificate issued upon the transfer hereof
or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Servicing Fee Certificate. The Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Servicing Fee Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Servicing Fee
Certificate for registration of transfer at the offices designated by the
Trustee for such purposes, accompanied by a written instrument of transfer in
form satisfactory to the Trustee duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one new Servicing
Fee Certificate evidencing an interest in all of the Servicing Fee will be
issued to the designated transferee or transferees.
This Servicing Fee Certificate is issuable only as a registered
Servicing Fee Certificate without coupons.
The Servicer shall deliver the Servicing Fee Certificate to the
Trustee on the date hereof as security for the Servicer's obligation to
surrender the Servicing Fee Certificate upon resignation, termination or merger
or consolidation of the Servicer, as applicable.
No service charge will be made for any such registration of
transfer, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
EXHIBIT Y
EQUIFIRST AGREEMENTS
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated June
27, 2007 ("Agreement"), is among ▇▇▇▇▇▇ Funding LLC, a Delaware limited
liability company ("Assignor"), BCAP LLC, a Delaware limited liability company
("Assignee"), EquiFirst Corporation, a Delaware corporation ("EquiFirst Corp."),
and EquiFirst Mortgage Corporation of Minnesota, a Minnesota corporation
(together with EquiFirst Corp., the "Companies").
For and in consideration of good and valuable consideration the
receipt and sufficiency of which hereby are acknowledged, and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
Assignment, Assumption and Conveyance
-------------------------------------
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest (other than those rights
specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) those certain mortgage loans listed
on the schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans"), and (b) solely insofar as it relates to the Mortgage Loans,
that certain Mortgage Loan Purchase Agreement, dated as of March 1, 2007 (the
"Purchase Agreement"), among the Assignor, as purchaser (in such capacity, the
"Purchaser"), and the Companies, as sellers. The Assignor hereby agrees that it
will (i) deliver possession of the notes evidencing the Mortgage Loans to, or at
the direction of, the Assignee or its designee, and (ii) take in a timely manner
all necessary steps under all applicable laws to convey and to perfect the
conveyance of the Mortgage Loans as required under the Pooling Agreement (as
defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement that are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement, or (ii) the
rights of the Purchaser under Subsection 9.04, Section 13 and Subsection 14.01
of the Purchase Agreement.
The Assignee hereby assumes all of the Assignor's obligations from
and after the date hereof under the Mortgage Loans and the Purchase Agreement
solely insofar as such obligations relate to the Mortgage Loans. The Assignee
does not assume hereby such obligations of Assignor prior to the date hereof.
Recognition of the Companies
----------------------------
2. From and after the date hereof (the "Securitization Closing
Date"), the Companies shall and do hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to Deutsche Bank
National Trust Company, as trustee (including its successors in interest and any
successor trustees under the Pooling Agreement (as defined below), the
"Trustee"), of EquiFirst Loan Securitization Trust 2007-1 (the "Trust") created
pursuant to a Pooling and Servicing Agreement, dated as of June 1, 2007 (the
"Pooling Agreement"), among the Assignee, the Trustee, Barclays Capital Real
Estate Inc. d/b/a HomEq Servicing, as servicer (the "Servicer"), and The Bank of
New York Trust Company, N.A., as custodian (the "Custodian"). The Companies
hereby acknowledge and agree that from and after the date hereof (i) the Trust
will be the owner of the Mortgage Loans, the Servicer will be the servicer of
the Mortgage Loans and the Custodian will maintain custody of the notes
evidencing the Mortgage Loans and certain other documents relating to the
Mortgage Loans, in each case pursuant to the terms set forth in the Pooling
Agreement, (ii) the Companies shall look solely to the Trust (including the
Trustee, the Servicer and the Custodian acting on the Trust's behalf) for
performance of any obligations of the Assignor under the Mortgage Loans and the
Purchase Agreement (solely insofar as they relate to the Mortgage Loans), (iii)
the Trust (including the Trustee, the Servicer and the Custodian acting on the
Trust's behalf) shall have all the rights and remedies available to the Assignor
(except for those rights the Assignor specifically reserves and does not assign
to the Assignee under this Agreement), insofar as they relate to the Mortgage
Loans, under the Purchase Agreement, including, without limitation, the
enforcement of the document delivery requirements set forth in Section 6 of the
Purchase Agreement, and shall be entitled to enforce all of the obligations of
the Companies thereunder insofar as they relate to the Mortgage Loans, including
without limitation, the remedies for breaches of representations and warranties
set forth in Subsection 9.03 of the Purchase Agreement, and (iv) all references
to the Purchaser under the Purchase Agreement as they relate to the Mortgage
Loans shall be deemed to refer to the Trust (including the Trustee, the Servicer
and the Custodian acting on the Trust's behalf). Neither the Companies nor the
Assignor shall amend or agree to amend, modify, waive, or otherwise alter any of
the terms or provisions of the Purchase Agreement which amendment, modification,
waiver or other alteration would in any way affect the Mortgage Loans or the
Companies' performance or the Assignor's performance under the Purchase
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
Representations and Warranties of the Companies
-----------------------------------------------
3. Each Company warrants and represents to and covenants with, the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) The Company has full power and authority to execute and deliver
this Agreement and to perform its obligations under this Agreement and the
Purchase Agreement. The execution by the Company of this Agreement is in
the ordinary course of the Company's business and will not conflict with,
or result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any material
agreement or instrument to which the Company is now a party or by which it
is bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject. The
execution, delivery and performance by the Company of this Agreement have
been duly authorized by all necessary corporate actions on the part of the
Company. This Agreement has been duly executed and delivered by the
Company, and, upon the due authorization, execution and delivery by the
Assignor and the Assignee, will constitute the valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement or the consummation by it
of the transaction contemplated hereby; and
(d) Except as publicly disclosed in press releases issued by the
ultimate parent of the Company, there is no action, suit, proceeding or
investigation pending or to its knowledge threatened against the Company,
before any court, administrative agency or other tribunal, which would
draw into question the validity of this Agreement or the Purchase
Agreement, or which, either in any one instance or in the aggregate, is
likely to result in any material adverse change in the ability of the
Company to perform its obligations under this Agreement or the Purchase
Agreement.
4. Pursuant to Section 13 of the Purchase Agreement, each Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee,
the Trust and Barclays Bank PLC, a public limited company registered in England
and Wales under company number 102616 ("Barclays"), that the representations and
warranties set forth in Subsections 9.01 and 9.02 of the Purchase Agreement are
true and correct as of April 23, 2007 (the servicing transfer date).
Remedies for Breach of Representations and Warranties of the Companies
----------------------------------------------------------------------
5. Each Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee, the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) and Barclays in connection with any
breach of the representations and warranties made by each Company set forth in
Sections 3 and 4 hereof shall be as set forth in Subsection 9.03 of the Purchase
Agreement as if they were set forth herein (including without limitation the
repurchase and indemnity obligations set forth therein).
Notices
-------
6. Any notice hereunder to the Companies shall be given in
accordance with the Purchase Agreement. Any notice hereunder to the Assignee or
any other party in interest in the EquiFirst Loan Securitization Trust 2007-1
transaction shall be given in accordance with the Pooling Agreement.
Miscellaneous
-------------
7. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
8. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
9. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto, (ii) the Trust (including the Trustee, the
Servicer and the Custodian acting on the Trust's behalf) and (iii) Barclays. Any
entity into which the Assignor, the Assignee or either Company may be merged or
consolidated shall, without the requirement for any further writing, be deemed
to be the Assignor, the Assignee or such Company, respectively, hereunder.
10. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by the Assignor to the Assignee and
by the Assignee to the Trust and, except as expressly set forth herein, nothing
contained herein shall supersede or amend the terms of the Purchase Agreement.
11. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
12. In the event that any provision of this Agreement conflicts with
any provision of any of the Purchase Agreement with respect to the Mortgage
Loans, the terms of this Agreement shall control.
13. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
BCAP LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
▇▇▇▇▇▇ FUNDING LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Associate Director
EQUIFIRST CORPORATION
By: /s/ ▇▇▇▇▇▇ Bandonieri
----------------------------------
Name: ▇▇▇▇▇▇ Bandonieri
Title: Vice President - Secondary
Marketing
EQUIFIRST MORTGAGE CORPORATION OF
MINNESOTA
By: /s/ ▇▇▇▇▇▇ Bandonieri
----------------------------------
Name: ▇▇▇▇▇▇ Bandonieri
Title: Vice President - Secondary
Marketing
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(Available upon request to the Depositor)
EXECUTION COPY
==============================================================================
▇▇▇▇▇▇ FUNDING LLC,
Purchaser
EQUIFIRST CORPORATION,
Seller
and
EQUIFIRST MORTGAGE CORPORATION OF MINNESOTA
Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March 1, 2007
==============================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.................................................
ARTICLE II
AGREEMENT TO PURCHASE
Section 2.01 Agreement to Purchase.........................................
ARTICLE III
MORTGAGE SCHEDULES
Section 3.01 Preliminary Mortgage Schedule.................................
Section 3.02 Delivery of Mortgage Loan Schedule............................
ARTICLE IV
PURCHASE PRICE
Section 4.01 Purchase Price................................................
ARTICLE V
EXAMINATION OF MORTGAGE FILES
Section 5.01 Examination of Mortgage Files.................................
ARTICLE VI
CONVEYANCE FROM SELLERS TO PURCHASER
Section 6.01 Conveyance of Mortgage Loans..................................
Section 6.02 Books and Records.............................................
Section 6.03 Delivery of Mortgage Loan Documents...........................
Section 6.04 Quality Control Procedures....................................
Section 6.05 MERS Designated Loans.........................................
ARTICLE VII
SERVICING OF THE MORTGAGE LOANS
Section 7.01 Servicing.....................................................
Section 7.02 Transfer of Servicing.........................................
ARTICLE VIII
[RESERVED]
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH
Section 9.01 Representations and Warranties Regarding the Seller...........
Section 9.02 Representations and Warranties Regarding Individual
Mortgage Loans...............................................
Section 9.03 Remedies for Breach of Representations and Warranties.........
Section 9.04 Repurchase of Mortgage Loans with First Payment Defaults......
Section 9.05 Premium Recapture.............................................
ARTICLE X
CLOSING
Section 10.01 Conditions to Closing........................................
ARTICLE XI
CLOSING DOCUMENTS
Section 11.01 Required Closing Documents...................................
ARTICLE XII
COSTS
Section 12.01 Costs........................................................
ARTICLE XIII
COOPERATION OF SELLERS WITH A RECONSTITUTION
Section 13.01 Reconstitution of Mortgage Loans.............................
ARTICLE XIV
THE SELLERS
Section 14.01 Additional Indemnification by the Sellers; Third Party
Claims......................................................
Section 14.02 Merger or Consolidation of a Seller..........................
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.01 Financial Statements.........................................
Section 15.02 Mandatory Delivery...........................................
Section 15.03 Notices......................................................
Section 15.04 Severability Clause..........................................
Section 15.05 Counterparts.................................................
Section 15.06 Governing Law................................................
Section 15.07 Intention of the Parties.....................................
Section 15.08 Successors and Assigns; Assignment of Purchase Agreement.....
Section 15.09 Waivers......................................................
Section 15.10 Exhibits.....................................................
Section 15.11 General Interpretive Principles..............................
Section 15.12 Reproduction of Documents....................................
Section 15.13 Further Agreements...........................................
Section 15.14 Recordation of Assignments of Mortgage.......................
Section 15.15 No Solicitation..............................................
Section 15.16 Waiver of Trial by Jury......................................
Section 15.17 Governing Law Jurisdiction; Consent to Service of Process....
ARTICLE XVI
COMPLIANCE WITH REGULATION AB
Section 16.01 Intent of the Parties; Reasonableness........................
Section 16.02 Additional Representations and Warranties of the Sellers.....
Section 16.03 Information to Be Provided by the Seller.....................
Section 16.04 Indemnification; Remedies....................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLERS' OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLERS
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
--------------------------------
This MORTGAGE LOAN PURCHASE AGREEMENT (the "Agreement"), dated as of
March 1, 2007, is by and among ▇▇▇▇▇▇ Funding LLC, a Delaware limited liability
company, c/o Global Securitization Services, LLC, having an office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"), EquiFirst
Corporation, a North Carolina corporation, having an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and EquiFirst Mortgage Corporation of
Minnesota, a Minnesota Corporation, having an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (each a "Seller" and, together, the "Sellers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sellers desire to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Sellers, certain first and second lien, adjustable-rate and fixed-rate subprime
residential mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Sellers wish to prescribe the manner
of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Sellers, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated Securitization Transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and each
of the Sellers agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Mortgage Loan Purchase Agreement and all amendments
hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees, and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Section 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage Loan or (b)
for which Monthly Payments of principal (not including the payment due on its
stated maturity date) are based on an amortization schedule that would be
insufficient to fully amortize the principal thereof by the stated maturity date
of the Mortgage Loan.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Sellers from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: The Bank of New York Trust Company, N.A., a national
banking association, and its successors in interest or permitted assigns or any
successor to the Custodian under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Section 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
applicable Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the last
day of the preceding month (or, if such last day is not a Business Day, the
preceding Business Day) of the month in which such Remittance Date occurs.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: Either (a) a segregated account or accounts
maintained with an institution whose deposits are insured by the FDIC, the
unsecured and uncollateralized short term debt obligations of which institution
shall be rated "A-1" or higher by Standard & Poor's Ratings Group and "P-1" or
higher by ▇▇▇▇▇'▇ Investors Service, Inc., or (b) a segregated trust account or
accounts maintained with the trust department of a federal or state chartered
depository institution, having capital and surplus of not less than
$100,000,000, acting in its fiduciary capacity. Eligible Accounts may bear
interest.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide, and all amendments or additions thereto.
▇▇▇▇▇▇ Mae Transfer: As defined in Article XIII.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Article XIII.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with the exception of purchase
money loans, with an "annual percentage rate" or total "points and fees" payable
by the related Mortgagor (as each such term is calculated under HOEPA) that
exceed the thresholds set forth by HOEPA and its implementing regulations,
including 12 C.F.R. ss. 226.32(a)(1)(i) and (ii), (c) classified as a "high cost
home," "threshold," "covered," (excluding New Jersey "Covered Home Loans" as
that term was defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002 that were originated between November
26, 2003 and July 7, 2004), "high risk home," "predatory" or similar loan under
any other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (d) categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that this definition shall apply to any law regardless of whether such law
is presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that requires only
payments of interest for a period of time specified in the related Mortgage
Note.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicer: EquiFirst Corporation, or its successor in
interest or assigns.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Sellers have designated or will designate MERS as, and have taken or will take
such action as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the Seller, in accordance with MERS Procedure Manual and (b) the
Sellers have designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Identification Number: The eighteen digit number permanently
assigned to each MERS Designated Mortgage Loan.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create, with
respect to a First Lien Loan, a first lien, and with respect to a Second Lien
Loan, a second lien, in each case, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 with respect to any Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied, investment property or a second home; (6) the number and type of
residential units constituting the Mortgaged Property (e.g., single family
residence, a two- to four-family dwelling, condominium, planned unit development
or cooperative); (7) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the first Monthly Payment
was due on the Mortgage Loan and, if such date is not consistent with the Due
Date currently in effect, the Due Date; (11) the stated maturity date; (12) the
amount of the Monthly Payment as of the related Cut-off Date; (13) the last
payment date on which a payment was actually applied to the outstanding
principal balance; (14) the original principal amount of the Mortgage Loan; (15)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (16) with respect to each Adjustable Rate
Mortgage Loan, the Interest Rate Adjustment Date; (17) with respect to each
Adjustable Rate Mortgage Loan, the Gross Margin; (18) with respect to each
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the terms of the
Mortgage Note; (19) with respect to each Adjustable Rate Mortgage Loan, a code
indicating the type of Index; (20) the type of Mortgage Loan (i.e., Fixed Rate
or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (21) a code
indicating the purpose of the loan (i.e., purchase, rate/term refinance, equity
take-out refinance); (22) a code indicating the documentation style (i.e. no
documents, full, alternative, reduced, no income/no asset, stated income, no
ratio, reduced or NIV); (23) asset verification (Y/N); (24) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate ceiling; (25) whether
such Mortgage Loan provides for a Prepayment Penalty; (26) the Prepayment
Penalty period of such Mortgage Loan, if applicable; (27) a description of the
Prepayment Penalty, if applicable; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate adjustment period; (32) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) the Mortgage Interest Rate calculation method (i.e., 30/360, simple
interest, other); (35) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap as of the first Interest Rate Adjustment Date; (36) a code
indicating whether the Mortgage Loan is a Balloon Mortgage Loan; (37) a code
indicating whether the Mortgage Loan is a Home Loan; (38) the original Monthly
Payment due; (39) the Appraised Value; (40) appraisal verification (Y/N); (41)
type of appraisal verification, if any; (42) a code indicating whether the
Mortgage Loan is covered by a PMI Policy and, if so, identifying the PMI Policy
provider; (43) in connection with a condominium unit, a code indicating whether
the condominium project where such unit is located is low-rise or high-rise;
(44) a code indicating whether the Mortgaged Property is a leasehold estate;
(45) the MERS Identification Number, if applicable and (46) a code indicating
the documentation style, as required by Standard & Poor's criteria. With respect
to the Mortgage Loans in the aggregate, the related Mortgage Loan Schedule shall
set forth the following information, as of the related Cut-off Date: (1) the
number of Mortgage Loans; (2) the current aggregate outstanding principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate
of the Mortgage Loans; (4) the weighted average maturity of the Mortgage Loans;
(5) the average principal balance of the Mortgage Loans; (6) the applicable
Cut-off Date; and (7) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan, the Mortgagor's
real property (or leasehold estate, if applicable) securing repayment of a
related Mortgage Note, consisting of an unsubordinated estate in fee simple or,
with respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice, a
leasehold estate, in a single parcel or multiple parcels of real property
improved by a Residential Dwelling.
Mortgagor: The obligor on the related Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the applicable Seller, and delivered to the Purchaser
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the applicable Seller, reasonably acceptable to the Purchaser, provided that
any Opinion of Counsel relating to (a) the qualification of any account required
to be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the applicable Seller or any servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the
applicable Seller or any servicer of the Mortgage Loans as an officer, employee,
director or person performing similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: If applicable, a policy of primary mortgage guaranty
insurance issued by an insurer acceptable under the Underwriting Guidelines and
qualified to do business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Article III.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Sellers in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Article IV of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and among the Sellers and the Purchaser.
Purchaser: ▇▇▇▇▇▇ Funding LLC, a Delaware limited liability company,
and its successors in interest and assigns, or any successor to the Purchaser
under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the broker, who
had no interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Correspondent: Any Person from which the Sellers purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Sellers and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Sellers, in accordance with underwriting
guidelines designated by the Sellers ("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 Sellers within 180 days after origination; (iii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Sellers in origination of mortgage loans of the same type as the
Mortgage Loans for the Sellers' own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Sellers on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Sellers; and (iv) the Sellers employed, at the time such
Mortgage Loans were acquired by the Sellers, 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
Sellers.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the applicable Seller for a Deleted Mortgage Loan which must, on
the date of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in the
case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate principal balance), not in excess of the outstanding
principal balance of the Deleted Mortgage Loan (the amount of any shortfall will
be deposited in the account created pursuant to Section 7 by the Seller in the
month of substitution); (ii) have a Mortgage Interest Rate not less than and not
more than 1% greater than the Mortgage Interest Rate of the Deleted Mortgage
Loan; (iii) have a remaining term to maturity not greater than and not more than
one year less than that of the Deleted Mortgage Loan; (iv) be of the same type
as the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with same
Mortgage Interest Rate Caps); and (v) comply with each representation and
warranty (respecting individual Mortgage Loans) set forth in Article IX.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Sellers and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Article XIII, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transaction.
Reconstitution Date: As defined in Article XIII.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1506-1631 (Jan. 7, 2005)) or by
the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day of any month (or, if such 18th day is
not a Business Day, the following Business Day).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Section 16.04(a).
Sellers: As defined in the initial paragraph of the Agreement.
Servicing Fee: With respect to each Mortgage Loan, a fee payable
monthly equal to $15 per Mortgage Loan. Such fee shall be payable monthly and
shall be pro-rated for any portion of a month during which the Mortgage Loan is
serviced by the Interim Servicer hereunder.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Sellers for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Sellers
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Sellers with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Item 1101(l) of
Regulation AB, with respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Sellers.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Interim Servicer shall cease all servicing responsibilities.
Underwriting Guidelines: The underwriting guidelines of the
applicable Seller, a copy of which is attached as an exhibit to the related
Assignment and Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
ARTICLE II
AGREEMENT TO PURCHASE
---------------------
Section 2.01 Agreement to Purchase.
The Sellers agree to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Sellers as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
ARTICLE III
MORTGAGE SCHEDULES
------------------
Section 3.01 Preliminary Mortgage Schedule.
The Sellers from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
Section 3.02 Delivery of Mortgage Loan Schedule.
The applicable Seller shall deliver the related Mortgage Loan
Schedule for the Mortgage Loans to be purchased on a particular Closing Date to
the Purchaser at least five (5) Business Days prior to the related Closing Date.
The related Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with those Mortgage Loans which have not been funded prior to the
related Closing Date deleted.
ARTICLE IV
PURCHASE PRICE
--------------
Section 4.01 Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Sellers, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans from the date
through which interest on each Mortgage Loan was last paid through the day prior
to the related Closing Date, inclusive. The Purchase Price plus accrued interest
as set forth in the preceding paragraph shall be paid to the Sellers by wire
transfer of immediately available funds to an account designated by the Sellers
in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees. The outstanding principal
balance of each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal due on or before the related Cut-off Date,
to the extent actually collected, together with any unscheduled principal
prepayments collected prior to such Cut-off Date.
ARTICLE V
EXAMINATION OF MORTGAGE FILES
-----------------------------
Section 5.01 Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Sellers shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before the related Closing Date. If the
Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
ARTICLE VI
CONVEYANCE FROM SELLERS TO PURCHASER
------------------------------------
Section 6.01 Conveyance of Mortgage Loans.
The Sellers, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Sellers shall cause the Servicing File retained by
the Interim Servicer pursuant to this Agreement to be appropriately identified
in the applicable Seller's computer system and/or books and records, as
appropriate, to clearly reflect the sale of the related Mortgage Loan to the
Purchaser. The Sellers shall cause the Interim Servicer to release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement, except when such release is required in connection with a
repurchase of any such Mortgage Loan pursuant to Section 9.03.
Section 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the applicable Seller, an Affiliate of such Seller, the
Purchaser or one or more designees of the Purchaser, as the Purchaser shall
select. Notwithstanding the foregoing, each Mortgage and related Mortgage Note
shall be possessed solely by the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller or the Interim
Servicer after the related Cut-off Date on or in connection with a Mortgage Loan
shall be vested in the Purchaser or one or more designees of the Purchaser;
provided, however, that all funds received on or in connection with a Mortgage
Loan shall be received and held by the Sellers or the Interim Servicer in trust
for the benefit of the Purchaser or the appropriate designee of the Purchaser,
as the case may be, as the owner of the Mortgage Loans pursuant to the terms of
this Agreement.
The Sellers shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Sellers
shall or shall cause the Interim Servicer to maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, including but not limited to documentation as to the
method used in determining the applicability of the provisions of the National
Flood Insurance Act of 1968, as amended, to the Mortgaged Property. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Sellers
or the Interim Servicer may be in the form of microfilm or microfiche.
The sale of each Mortgage Loan shall be reflected on the Sellers'
balance sheet and other financial statements as a sale of assets by the Seller.
Section 6.03 Delivery of Mortgage Loan Documents.
The Sellers shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Sellers shall comply with
the terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Sellers shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Sellers shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
provide the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within one hundred twenty (120) days of its
submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within one hundred twenty (120) days following the related
Closing Date (other than with respect to the Assignments of Mortgage which, for
any Mortgage Loans not registered on MERS, shall be delivered to the Custodian
in blank and recorded subsequently by the Purchaser or its designee), and in the
event that the applicable Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by such Seller at the price and in the manner specified in Section
9.03. The foregoing repurchase obligation shall not apply in the event that such
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that
such Seller shall instead deliver a recording receipt of such recording office
or, if such recording receipt is not available, an officer's certificate of an
officer of such Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to such Seller of a schedule of the related Mortgage Loans, the
applicable Seller shall reissue and deliver to the Purchaser or its designee
said officer's certificate. At the Purchaser's discretion the Sellers may
provide a court certified copy of such document in place of an original copy if
such original has not been returned within one hundred eighty (180) days of the
related Closing Date.
The Sellers shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. For any Mortgage Loans not registered on
MERS, the Purchaser or the Purchaser's designee shall be responsible for
recording the Assignments of Mortgage and shall be reimbursed by the applicable
Seller for the costs associated therewith pursuant to the preceding sentence.
Section 6.04 Quality Control Procedures.
The Sellers shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating and
monitoring the overall quality of the Sellers' loan production and the servicing
activities of the Interim Servicer. The program is to ensure that the Mortgage
Loans are originated and serviced in accordance with Accepted Servicing
Standards and the Underwriting Guidelines; guard against dishonest, fraudulent,
or negligent acts; and guard against errors and omissions by officers,
employees, or other authorized persons.
Section 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Sellers
shall, within one (1) Business Day of the related Closing Date, designate the
Purchaser as the Investor, and no Person shall be listed as Interim Funder on
the MERS System.
ARTICLE VII
SERVICING OF THE MORTGAGE LOANS
-------------------------------
Section 7.01 Servicing.
The Mortgage Loans have been sold by the Sellers to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement, the Sellers hereby sell, transfer, assign, convey and deliver to
the Purchaser the Servicing Rights.
The Purchaser shall retain EquiFirst Corporation (in such capacity,
the "Interim Servicer") as contract servicer of the Mortgage Loans for an
interim period pursuant to and in accordance with the terms and conditions set
forth in this section provided that if the related Transfer Date has not
occurred on or prior to the date which is 60 days after the related Closing
Date, the Purchaser and the Interim Servicer hereby agree to negotiate in good
faith and enter into a more detailed interim servicing agreement mutually
acceptable to the parties. The Interim Servicer shall service the Mortgage Loans
on an "actual/actual" basis and otherwise in accordance with the Accepted
Servicing Practices and the following provisions of this section. The Interim
Servicer shall be entitled to a Servicing Fee as provided in the related
Purchase Price and Terms Agreement.
In servicing the Mortgage Loans, the Interim Servicer shall comply
with all applicable laws, rules and regulations with respect thereto. The
Interim Servicer shall take no action, and shall not refrain from taking action,
which, in either case, (a) would impair the ability of the Purchaser to realize
on or enforce the Mortgage Note or the lien of the Mortgage or any other
document related thereto or (b) would jeopardize the rights or remedies
available to the Purchaser with respect to any Mortgage Loan or otherwise impair
the ability of the Purchaser to realize on the Mortgaged Property with respect
to such Mortgage Loan.
The Interim Servicer shall be entitled to reimbursement for
"Servicing Advances" (as defined below) incurred by Interim Servicer (or its
subservicer) through the day prior to the Transfer Date that are subsequently
recovered from the applicable Mortgagor or any other source. If such subsequent
recovery of a Servicing Advance incurred by the Interim Servicer with respect to
such Mortgage Loans on or prior to the related Cut-off Date occurs during the
period that the Interim Servicer (or its subservicer) is servicing such Mortgage
Loans, Interim Servicer (or its subservicer) shall apply the amount of any such
recovery in reduction of the aggregate amount of Servicing Advances for which
the Interim Servicer (or its subservicer) shall be entitled to reimbursement.
Following the Transfer Date, the Interim Servicer shall not be reimbursed for
any Servicing Advances in relation to any Mortgage Loan until the Interim
Servicer or the successor servicer receives a Monthly Payment or Liquidation
Proceeds in relation to such Mortgage Loan. At such time, the Interim Servicer
shall be entitled to be reimbursed for all unreimbursed Servicing Advances with
respect to such Mortgage Loan on a first priority basis from the Monthly Payment
or Liquidation Proceeds received with respect to such Mortgage Loan. "Servicing
Advances" shall mean any and all customary, reasonable and necessary "out of
pocket" costs and expenses, including reasonable attorney's fees and
disbursements, incurred in the performance by the Interim Servicer (or its
subservicer), including, but not limited to, any escrow advances, the cost of
the preservation, restoration and protection of any Mortgaged Property and any
enforcement or judicial proceedings, including foreclosures; provided, however,
that "Servicing Advances" shall not include any payment of principal and/or
interest on a Mortgage Loan that is delinquent.
The Interim Servicer shall segregate and hold all funds collected
and received pursuant to the Mortgage Loans, including Escrow Payments, separate
and apart from any of their own funds and general assets in one or more Eligible
Accounts. The Interim Servicer shall be entitled to reimburse itself for
Servicing Advances made on account of the Mortgage Loans from the funds
collected by the Interim Servicer.
The Interim Servicer shall remit to the Purchaser on each Remittance
Date all amounts received from any source with respect to the Mortgage Loans. On
or prior to each Remittance Date the Interim Servicer shall deliver to the
Purchaser a remittance advice in electronic format acceptable to the Purchaser
as to the accompanying remittance and the period ending on the related
Determination Date and shall additionally specify the number of days which each
Mortgage Loan is delinquent, and shall contain an explanation of all Servicing
Advances made, the status of all Mortgage Loans in foreclosure or otherwise the
subject of litigation, and the status of all other collection efforts with
respect to each Mortgage Loan.
Section 7.02 Transfer of Servicing.
The Purchaser may transfer the servicing from the Interim Servicer
with respect to any Mortgage Loan on such Transfer Date as the Purchaser shall
inform the Interim Servicer by providing written notice to the Interim Servicer
at least twenty-five (25) days prior to the related Transfer Date of its intent
to transfer the servicing of the related Mortgage Loans from the Interim
Servicer on the related Transfer Date, provided that, in any event, the Interim
Servicer shall be given timely notice to allow the Interim Servicer to notify
the related mortgagors of the transfer of servicing in accordance with the
requirements of the RESPA and the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing
Act of 1990, as amended.
On or prior to the applicable Transfer Date, the Interim Servicer
shall, at its sole cost and expense, take such steps as may be necessary or
appropriate to effectuate and evidence the transfer of the servicing of the
related Mortgage Loans to the Purchaser, or its designee, including but not
limited to the following:
(a) Notice to Mortgagors. The Interim Servicer shall mail to the
Mortgagor of each related Mortgage Loan a letter advising such Mortgagor of the
transfer of the servicing of the related Mortgage Loan to the Purchaser, or its
designee, in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing
Act of 1990; provided, however, the content and format of the letter shall have
the prior approval of the Purchaser. The Interim Servicer shall provide the
Purchaser with copies of all such related notices no later than 10 Business Days
following the Transfer Date.
(b) Notice to Insurance Companies. The Interim Servicer shall
transmit to the applicable insurance companies (including primary mortgage
insurance policy insurers, if applicable) and/or agents, notification of the
transfer of the servicing to the Purchaser, or its designee, and instructions to
deliver all notices, tax bills and insurance statements, as the case may be, to
the Purchaser from and after the Transfer Date. The Interim Servicer shall
provide the Purchaser with copies of all such notices no later than the Transfer
Date.
(c) Delivery of Servicing Records. The Interim Servicer shall
forward to the Purchaser, or its designee, all servicing records and the
Servicing File in the Interim Servicer's possession relating to each related
Mortgage Loan.
(d) Escrow Payments. Within five (5) Business Days of the Transfer
Date, the Interim Servicer shall provide the Purchaser, or its designee, with
immediately available funds by wire transfer in the amount of the net Escrow
Payments and suspense balances and all loss draft balances associated with the
related Mortgage Loans. The Interim Servicer shall provide the Purchaser with an
accounting statement, in electronic format acceptable to the Purchaser in its
sole discretion, of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Interim
Servicer shall wire transfer to the Purchaser the amount of any agency, trustee
or prepaid Mortgage Loan payments and all other similar amounts held by the
Seller, if any.
(e) Payoffs and Assumptions. The Interim Servicer shall provide to
the Purchaser, or its designee, copies of all assumption statements generated by
the Interim Servicer on the related Mortgage Loans from 60 days prior to the
related Transfer Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer on each related
Mortgage Loan shall be properly applied by the Interim Servicer to the account
of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by wire transfer weekly. The Interim
Servicer shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Interim Servicer forward with
their payment sufficient information to permit appropriate processing of the
payment by the Purchaser.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party in writing;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage, the Interim Servicer shall be liable for the amount of such
shortage. The Interim Servicer shall reimburse the Purchaser for the
amount of such shortage within thirty (30) days after receipt of written
demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within seven (7) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 7.02(h)
shall be accompanied by a statement indicating the corresponding Interim
Servicer and/or the Purchaser Mortgage Loan identification number and an
explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Interim Servicer with respect to the related Mortgage Loans
shall be in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Interim Servicer shall, on or before the
Transfer Date, reconcile principal balances and make any monetary adjustments
reasonably required by the Purchaser. Any such monetary adjustments will be
transferred between the Interim Servicer and the Purchaser as appropriate.
(k) IRS Forms. The Interim Servicer shall file all IRS forms 1099,
1099A, 1098 or 1041 and K-1 which are required to be filed before the Transfer
Date in relation to the servicing and ownership of the related Mortgage Loans.
The Interim Servicer shall provide copies of such forms to the Purchaser upon
request and shall reimburse the Purchaser for any costs or penalties reasonably
incurred by the Purchaser due to either Interim Servicer's failure to comply
with this paragraph.
(l) Insufficient Funds Checks from a Mortgagor. Pursuant to Section
7.01, mortgage payment checks received from a Mortgagor by the Interim Servicer
will be deposited into an Eligible Account and be remitted to the Purchaser.
From time to time mortgage payment checks will be returned to the Interim
Servicer due to the fact that the check was not honored by the borrower's
financial institution after the Interim Servicer has remitted funds in the
Eligible Account to the Purchaser. Upon written notification by the Interim
Servicer to the Purchaser of an insufficient fund/uncollected mortgage payment,
Purchaser shall remit such funds back to the Interim Servicer within 30 calendar
years.
ARTICLE VIII
[RESERVED]
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH
---------------------------
Section 9.01 Representations and Warranties Regarding the Seller.
Each Seller, as to itself, represents, warrants and covenants to the
Purchaser that as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. EquiFirst Corporation is a duly
organized, validly existing, and in good standing under the laws of North
Carolina and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in the states where
the Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Seller.
EquiFirst Mortgage Corporation of Minnesota is a duly organized, validly
existing, and in good standing under the laws of Minnesota and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in the states where the Mortgaged Property is
located if the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Seller. The Seller has corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement has been duly
executed and delivered and constitutes the valid, legal, binding and enforceable
obligation of the Seller, except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or
other similar laws affecting the enforcement of the rights of creditors and (ii)
general principles of equity, whether enforcement is sought in a proceeding in
equity or at law. All requisite corporate action has been taken by the Seller to
make this Agreement valid and binding upon the Seller in accordance with its
terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws, regulations and executive orders,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. Additionally, no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of Treasury (the "OFAC
Regulations") or in violation of the Executive Order or the OFAC Regulations;
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability to
perform its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Section 9.02 could be made and such selection was not made in a manner
so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage, if applicable, and any other documents required to be
delivered with respect to each Mortgage Loan pursuant to the Custodial
Agreement, shall be delivered to the Custodian all in compliance with the
specific requirements of the Custodial Agreement. With respect to each Mortgage
Loan, the Seller will be in possession of a complete Mortgage File in compliance
with Exhibit A hereto, except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Article XI on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transaction or Whole Loan Transfer) contains or will contain
any untrue statement of fact or omits or will omit to state a fact necessary to
make the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;
(r) [Reserved];
(s) Seasoned Mortgage Loans. The Seller currently operates or
actively participates in an on-going and active program or business to originate
Mortgages; and
(t) Nonpetition. The Seller shall not institute against, or join any
other Person in instituting against, the Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day after the related Closing Date.
Section 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
Each Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet thirty (30) days delinquent, have been made and
credited. No payment required under the Mortgage Loan is thirty (30) days or
more delinquent nor has any payment under the Mortgage Loan been thirty (30)
days or more delinquent at any time since the origination of the Mortgage Loan.
The first Monthly Payment shall be made with respect to the Mortgage Loan on its
related Due Date or prior to the subsequent Due Date, all in accordance with the
terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the issuer of any related PMI Policy and the
title insurer, if any, to the extent required by the policy, and its terms are
reflected on the related Mortgage Loan Schedule, if applicable. No Mortgagor has
been released, in whole or in part, except in connection with an assumption
agreement, approved by the issuer of any related PMI Policy and the title
insurer, to the extent required by the policy, and which assumption agreement is
part of the Mortgage Loan File delivered to the Custodian or to such other
Person as the Purchaser shall designate in writing and the terms of which are
reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as provided for by prudent lenders in the secondary
mortgage market. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which conforms to those of prudent lenders in the secondary
mortgage market. All individual insurance policies contain a standard mortgagee
clause naming the Seller and its successors and assigns as mortgagee, and all
premiums thereon have been paid. The Mortgage obligates the Mortgagor thereunder
to maintain the hazard insurance policy at the Mortgagor's cost and expense, and
on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to Prepayment Penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements. This
representation and warranty is a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely accepted practice
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development; provided, however, that any condominium unit or
planned unit development shall conform with the Underwriting Guidelines. No
portion of the Mortgaged Property is used for commercial purposes, and since the
date of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a home
office, daycare or other business as allowed by the Underwriting Guidelines
shall not be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. None of the Mortgaged
Properties are Manufactured Homes, log homes, mobile homes, geodesic domes or
other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(i) with respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments not
yet due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(iv) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected first lien (with respect
to a First Lien Loan) or second lien (with respect to a Second Lien Loan) and
first priority (with respect to a First Lien Loan) or second priority (with
respect to a Second Lien Loan) security interest on the property described
therein and the Seller has full right to sell and assign the same to the
Purchaser.
(k) [Reserved];
(l) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has requested notification of any action to be taken against the
Mortgagor by such senior lienholder. Either (a) no consent for the Second Lien
Loan is required by the holder of the related first lien or (b) such consent has
been obtained and is contained in the Mortgage File. This representation and
warranty is a Deemed Material and Adverse Representation;
(m) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(n) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(o) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(p) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(q) LTV. No Mortgage Loan has an LTV greater than 100%;
(r) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to prudent lenders in the secondary mortgage market and each such
title insurance policy is issued by a title insurer acceptable to prudent
lenders in the secondary mortgage market and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first (with respect to a First Lien Loan) or
second (with respect to a Second Lien Loan) priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to the exceptions
contained in clauses (i), (ii) and (iii) of paragraph (j) of this Section 9.02,
and in the case of Adjustable Rate Mortgage Loans, against any loss by reason of
the invalidity or unenforceability of the lien resulting from the provisions of
the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Seller, its successor and assigns, are the sole insureds
of such lender's title insurance policy, and such lender's title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender's title insurance policy, and no
prior holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(s) No Defaults. Other than payments due but not yet thirty (30)
days or more delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note and
no event which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or event
which would permit acceleration, and neither the Seller nor any of its
Affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(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 or
coordinate with, the lien of the related Mortgage;
(u) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(v) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Except with respect to the Interest Only Mortgage Loans,
principal payments on the Mortgage Loan commenced no more than seventy days
after funds were disbursed in connection with the Mortgage Loan. The Mortgage
Interest Rate as well as, in the case of an Adjustable Rate Mortgage Loan, the
Lifetime Rate Cap and the Periodic Cap are as set forth on the related Mortgage
Loan Schedule. As to each Mortgage Loan which is not an Interest Only Mortgage
Loan or a Balloon Mortgage Loan, the Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date. Unless otherwise specified on
the related Mortgage Loan Schedule, the Mortgage Loan is payable on the first
day of each month. The Mortgage Loan does not require a balloon payment on its
stated maturity date unless specified on the related Mortgage Loan Schedule;
(w) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(x) Conformance with Market and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to prudent lenders in the
secondary mortgage market and the Seller has not made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used;
(y) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property was lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(z) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(aa) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(bb) Acceptable Investment. To the best of the Seller's knowledge,
there are no circumstances or conditions with respect to the Mortgage, the
Mortgaged Property, the Mortgagor, the Mortgage File or the Mortgagor's credit
standing that can reasonably be expected to cause private institutional
investors who invest in mortgage loans similar to the Mortgage Loan to regard
the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value or marketability of the
Mortgage Loan;
(cc) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(dd) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and meets the
guidelines set forth in the Originator's Underwriting Guidelines;
(ee) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(ff) Due-On-Sale. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and to the best of the
Seller's knowledge, such provision is enforceable;
(gg) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(hh) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(ii) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to prudent lenders
in the secondary mortgage market. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(jj) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(kk) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and, if elected by the borrower, has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(ll) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from an adjustable rate to a fixed rate;
(mm) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(nn) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(oo) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act, or other similar state statute;
(pp) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the broker, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of prudent lenders in the secondary mortgage market 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;
(qq) Disclosure Materials. The Mortgagor has received a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain a copy of such statement in the
Mortgage File;
(rr) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, to the best of Seller's knowledge the related First Lien Loan is in full
force and effect, and there is no default, lien, breach, violation or event
which would permit acceleration existing under such first lien Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration under such First Lien Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(vv) [Reserved];
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) 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; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
Prepayment Penalty feature, each such Prepayment Penalty is enforceable and will
be enforced by the Seller for the benefit of the Purchaser, and each Prepayment
Penalty is permitted pursuant to federal, state and local law. Each such
Prepayment Penalty is in an amount not more than the maximum amount permitted
under applicable law and no such Prepayment Penalty may provide for a term in
excess of five (5) years with respect to Mortgage Loans originated prior to
October 1, 2002. With respect to Mortgage Loans originated on or after October
1, 2002, the duration of the Prepayment Penalty period shall not exceed three
(3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in Prepayment Penalty period. With respect to any
Mortgage Loan that contains a provision permitting imposition of a Prepayment
Penalty upon a prepayment prior to maturity: (i) the Mortgage Loan provides some
benefit to the Mortgagor (e.g., a rate or fee reduction) in exchange for
accepting such Prepayment Penalty, (ii) prior to the Mortgage Loan's
origination, the Mortgagor was offered the option of obtaining a mortgage loan
that did not require payment of such a penalty, (iii) the Prepayment Penalty was
adequately disclosed to the Mortgagor in the mortgage loan documents pursuant to
applicable state, local and federal law, and (iv) notwithstanding any state,
local or federal law to the contrary, the Seller shall not impose such
Prepayment Penalty in any instance when the mortgage debt is accelerated or paid
off in connection with the workout of a delinquent Mortgage Loan or as a result
of the Mortgagor's default in making the Mortgage Loan payments. This
representation and warranty is a Deemed Material and Adverse Representation;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(bbb) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage
under Section 860G(a)(3) of the Code;
(ccc) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by a provider chosen by the
Seller and acceptable to the Purchaser in its sole discretion, and such contract
is transferable at no cost to the Purchaser or any successor servicer;
(ddd) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(eee) Recordation. Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the original
Mortgage (other than the assignment to the Purchaser) have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the process of being
recorded;
(fff) [Reserved];
(ggg) Mortgagor Bankruptcy. On or prior to the related Closing Date,
the Mortgagor has not filed a bankruptcy petition or has not become the subject
of involuntary bankruptcy proceedings or has not consented to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) [Reserved];
(iii) [Reserved];
(jjj) [Reserved];
(kkk) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Seller which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account such facts as, without limitation, the Mortgage Loan's requirements
and the Mortgagor's credit history, income, assets and liabilities and
debt-to-income ratios for a lower-cost credit product then offered by the
Seller. For a Mortgagor who seeks financing through a Mortgage Loan originator's
higher-priced subprime lending channel, the Mortgagor was directed towards or
offered the Mortgage Loan originator's standard mortgage line if the Mortgagor
was able to qualify for one of the standard products. This representation and
warranty is a Deemed Material and Adverse Representation;
(lll) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely solely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such extension of credit. The methodology
employed objective criteria such as the Mortgagor's income, assets and
liabilities, to the proposed mortgage payment and, based on such methodology,
the Mortgage Loan's originator made a reasonable determination that at the time
of origination the Mortgagor had the ability to make timely payments on the
Mortgage Loan. Such underwriting methodology confirmed that at the time of
origination (application/approval) the related Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment, or health insurance) in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan. This representation and warranty is a Deemed
Material and Adverse Representation;
(nnn) Points and Fees. No Mortgagor was charged broker and lender
fees (whether or not financed) in an amount greater than (i) $1,000, or (ii) 8%
of the principal amount of such Mortgage Loan, whichever is greater. This
representation and warranty is a Deemed Material and Adverse Representation;
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(ppp) Balloon Mortgage Loans. No Balloon Mortgage Loan has an
original stated maturity of less than seven (7) years;
(qqq) No Arbitration. No Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation;
(rrr) No Negative Amortization of Related First Lien Loan. With
respect to each Second Lien Loan, the related First Lien Loan does not permit
negative amortization. This representation and warranty is a Deemed Material and
Adverse Representation;
(sss) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property is the Mortgagor's principal residence. This
representation and warranty is a Deemed Material and Adverse Representation; and
(ttt) Simple Interest Mortgage Loans. With respect to each Mortgage
Loan that is a simple interest Mortgage Loan, the Mortgage Loan is identified on
the related Mortgage Loan Schedule as a simple interest Mortgage Loan, the
Mortgage Loan is required to be serviced as a simple interest Mortgage Loan
pursuant to the terms of the related Mortgage Note, and the servicing and
collection practices used in connection therewith have been in accordance with
legal, proper, prudent and customary practices for servicing simple interest
Mortgage Loans.
Section 9.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties
set forth in Sections 9.01 and 9.02 shall survive the sale of the Mortgage Loans
to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either Seller or the Purchaser of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the applicable Seller of any such breach of a representation or warranty, which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Purchaser therein (or which materially and adversely affects the value of
the applicable Mortgage Loan or the interest of the Purchaser therein in the
case of a representation and warranty relating to a particular Mortgage Loan),
such Seller shall use its best efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, such Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, (i) within sixty (60) days after the earlier
of either discovery by, or notice to, the Seller of any breach of the
representation and warranty set forth in clause (bbb) of Section 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii) any
breach of a Deemed Material and Adverse Representation shall automatically be
deemed to materially and adversely affect the value of the Mortgage Loans or the
interest of the Purchaser therein. In the event that a breach shall involve any
representation or warranty set forth in Section 9.01, and such breach cannot be
cured within 60 days of the earlier of either discovery by or notice to the
applicable Seller of such breach, all of the Mortgage Loans affected by such
breach shall, at the Purchaser's option, be repurchased by such Seller at the
Repurchase Price. However, if the breach shall involve a representation or
warranty set forth in Section 9.02 (other than the representation and warranty
set forth in clause (bbb) of such Section or any Deemed Material Breach
Representation) and the applicable Seller discovers or receives notice of any
such breach within 120 days of the related Closing Date, such Seller may, at the
Purchaser's option and provided that such Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan at the Repurchase Price. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
9.03 shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
applicable Seller shall arrange for the reassignment of the Deleted Mortgage
Loan to such Seller and the delivery to such Seller of any documents held by the
Custodian relating to the Deleted Mortgage Loan within ten (10) Business Days of
repurchase or substitution. In the event of a repurchase or substitution, the
applicable Seller shall, simultaneously with such reassignment, amend the
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan
from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to reflect
the addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the applicable Seller shall be deemed to
have made as to such Qualified Substitute Mortgage Loan the representations and
warranties set forth in this Agreement except that all such representations and
warranties set forth in this Agreement shall be deemed made as of the date of
such substitution. The applicable Seller shall effect such substitution by
delivering to the Custodian or to such other party as the Purchaser may
designate in writing for such Qualified Substitute Mortgage Loan the documents
required by Section 6.03 and the Custodial Agreement, with the Mortgage Note
endorsed as required by Section 6.03 and the Custodial Agreement. No
substitution will be made in any calendar month after the Determination Date for
such month. The applicable Seller shall cause the Interim Servicer to remit
directly to the Purchaser, or its designee in accordance with the Purchaser's
instructions the Monthly Payment less the Servicing Fee due, if any, on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by the applicable
Seller. For the month of substitution, distributions to the Purchaser shall
include the Monthly Payment due on any Deleted Mortgage Loan in the month of
substitution, and the applicable Seller shall thereafter be entitled to retain
all amounts subsequently received by such Seller in respect of such Deleted
Mortgage Loan.
For any month in which either Seller substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, the applicable Seller
shall determine the amount (if any) by which the aggregate principal balance of
all Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the applicable Seller
directly to the Purchaser or its designee in accordance with the Purchaser's
instructions within two (2) Business Days of such substitution. Accordingly, on
the date of such substitution, the applicable Seller will deposit from its own
funds into the Eligible Account designated by the Purchaser an amount equal to
the amount of such shortfall plus one month's interest thereon.
In addition to such repurchase or substitution obligation, the
applicable Seller shall indemnify the Purchaser and its present and former
directors, officers, employees and agents and hold such parties harmless against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of any representation or warranty contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the obligations of
the Sellers set forth in this Section 9.03 to cure, substitute for or repurchase
a defective Mortgage Loan and to indemnify the Purchaser as provided in this
Section 9.03 and in Section 14.01 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and warranties. For
purposes of this paragraph "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement.
Any cause of action against either Seller relating to or arising out
of the breach of any representations and warranties made in Sections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the applicable Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon such Seller by the Purchaser for
compliance with this Agreement.
Section 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. If the related Mortgagor does not make two of the Mortgage Loan's
first three Monthly Payments due to the Purchaser after the related Closing Date
by the scheduled Due Date of the fourth payment following the related Closing
Date, unless otherwise set forth in the related Purchase Price and Terms
Agreement, the applicable Seller, at the Purchaser's option, shall repurchase
such Mortgage Loan from the Purchaser at a price equal to the Repurchase Price,
which price shall include any Servicing Fees previously paid prior to the
related Transfer Date. The Purchaser shall notify such Seller and request a
repurchase within seventy-five (75) days after the related Mortgagor's failure
to make such payment and such Seller shall repurchase such delinquent Mortgage
Loan within twenty (20) days of such request.
Section 9.05 Premium Recapture. With respect to any Mortgage Loan
without a Prepayment Penalty that prepays in full during the first three months
following the related Closing Date, the Seller shall pay the Purchaser, within
twenty (20) days after such notification of prepayment in full, an amount equal
to the excess of the Purchase Price Percentage for such Mortgage Loan over par,
multiplied by the outstanding principal balance of such Mortgage Loan as of the
related prepayment date.
ARTICLE X
CLOSING
-------
Section 10.01 Conditions to Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
i. at least two Business Days prior to the related Closing Date,
the Sellers shall deliver to the Purchaser a magnetic diskette
or transmit an electronic data file containing a listing on a
loan-level basis of the necessary information to compute the
Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan
Schedule;
ii. all of the representations and warranties of the Sellers under
this Agreement shall be true and correct as of the related
Closing Date;
iii. the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Article XI of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
iv. the Sellers shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
v. all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Sellers on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Article IV of this Agreement, by wire transfer of immediately
available funds to the account designated by the Sellers.
ARTICLE XI
CLOSING DOCUMENTS
-----------------
Section 11.01 Required Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(3) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(4) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(5) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Sellers, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(6) with respect to the initial Closing Date, an Opinion
of Counsel of each Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of Counsel
of the Seller"); with respect to subsequent Closing Dates, an
Opinion of Counsel of each Seller upon request of the
Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(8) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(9) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by
either Seller by merger or acquired or originated by either
Seller while conducting business under a name other than its
present name, if applicable;
(10) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit G and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance; and
(11) Assignment and Conveyance Agreement in the form of
Exhibit H hereto, and all exhibits thereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
ARTICLE XII
COSTS
-----
Section 12.01 Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Sellers' attorney's fees, shall be paid by the Sellers.
ARTICLE XIII
COOPERATION OF SELLERS WITH A RECONSTITUTION
--------------------------------------------
Section 13.01 Reconstitution of Mortgage Loans.
The Sellers and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS
Program (Special Servicing Option) (each, a "▇▇▇▇▇▇ Mae
Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole
Loan Transfers; or
(iv) one or more trusts or other entities to be formed as
part of one or more Securitization Transactions.
The Sellers agree to execute in connection with a Whole Loan
Transfer or a Securitization Transaction, an Assignment and Recognition
Agreement substantially in the form attached hereto as Exhibit I; provided, the
Sellers will receive reasonable advance notice of such Reconstitutions and will
be given a reasonable amount of time to review and execute the Assignment and
Recognition Agreement.
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Sellers agree (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in Sections 9.01 and 9.02
as of the related Transfer Date, or such representations or warranties as may be
required by any rating agency or prospective purchaser of the related securities
or such Mortgage Loans in connection with such Reconstitution. The Sellers shall
provide to such servicer or issuer, as the case may be, and any other
participants or purchasers in such Reconstitution: (i) any and all information
and appropriate verification of information which may be reasonably available to
the Sellers, whether through letters of its auditors and counsel or otherwise,
as the Purchaser or any such other participant shall request; (ii) such opinions
of counsel, letters from auditors, and certificates of public officials or
officers of the Sellers as are reasonably believed necessary by the Purchaser or
any such other participant; and (iii) to execute, deliver and satisfy all
conditions set forth in any indemnity agreement required by the Purchaser or any
such participant, including, without limitation, an Indemnification and
Contribution Agreement in substantially the form attached hereto as Exhibit B.
Moreover, the Sellers agree to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution Agreements, including, among other
things, any reasonable requests to assist the Purchaser in obtaining from third
parties any static pool information as described in Item 1105(a)(1)-(3) and
1105(c) of Regulation AB. The Sellers shall indemnify the Purchaser, each
Affiliate of the Purchaser participating in the Reconstitution and each Person
who controls the Purchaser or such Affiliate and their respective present and
former directors, officers, employees and agents, and hold each of them harmless
from and against any losses, damages, penalties, fines, forfeitures, legal fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering document
prepared in connection with any Reconstitution. For the purposes of the previous
sentence, the "Purchaser" shall mean the Person then acting as the Purchaser
under this Agreement and all persons who previously were "Purchasers" under this
Agreement. The Purchaser shall indemnify the Seller and its present and former
directors, officers, employees and agents, and hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that each of them may sustain arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the information
provided by or on behalf of the Purchaser set forth in any offering document
prepared in connection with any Reconstitution.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement.
ARTICLE XIV
THE SELLERS
-----------
Section 14.01 Additional Indemnification by the Sellers; Third Party
Claims.
(a) The Sellers shall indemnify the Purchaser and its present and
former directors, officers, employees and agents, and hold such parties harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and expenses (including legal fees and expenses incurred in
connection with the enforcement of the Sellers' indemnification obligation under
this Section 14.01) and related costs, judgments, and any other costs, fees and
expenses that such parties may sustain in any way related to the failure of the
Sellers to perform its duties in strict compliance with the terms of this
Agreement or any Reconstitution Agreement entered into pursuant to Article XIII
or any breach of any of either Seller's representation, warranties and covenants
set forth in this Agreement. For purposes of this paragraph "Purchaser" shall
mean the Person then acting as the Purchaser under this Agreement and any and
all Persons who previously were "Purchasers" under this Agreement.
(b) Promptly after receipt by an indemnified party under this
Section 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 14.01, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party under this Section 14.01, except to the extent that it has
been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Section 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Section 14.02 Merger or Consolidation of a Seller.
The Sellers will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which either Seller may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which either Seller shall be a party, or any Person succeeding to the business
of a Seller, shall be the successor of the applicable Seller hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall have a net worth of at
least $10,000,000.
ARTICLE XV
MISCELLANEOUS PROVISIONS
------------------------
Section 15.01 Financial Statements.
The Sellers understand that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Sellers for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of each Seller at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Sellers shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). Each Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Sellers
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Sellers also agrees to allow reasonable access to a
knowledgeable financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Sellers or the financial statements of the Sellers.
Section 15.02 Mandatory Delivery.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Sellers' failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
Section 15.03 Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Sellers:
EquiFirst Corporation
EquiFirst Mortgage Corporation of Minnesota
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Secondary
With a copy to:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
(ii) if to the Purchaser:
▇▇▇▇▇▇ Funding LLC
c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
With a copy to:
Barclays Bank PLC, as administrator
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E mail: ▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 15.04 Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section 15.05 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 15.06 Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
Section 15.07 Intention of the Parties.
(a) It is the intention of the parties that the Purchaser is
purchasing, and the Sellers are selling the Mortgage Loans and not a debt
instrument of the Sellers or another security. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes as a sale
by the Sellers, and a purchase by the Purchaser, of the Mortgage Loans.
Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Sellers shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
(b) To the extent that any transfer of any Mortgage Loan hereunder
from a Seller is characterized as a loan by the Purchaser to such Seller secured
by such Mortgage Loan, each of Purchaser and each Seller represents and warrants
as to itself that each receipt by the Purchaser of collections in respect of
such Mortgage Loan, to the extent deemed to constitute a remittance of such
collections by the applicable Seller to the Purchaser, will have been (i) in
payment of a debt incurred by such Seller in the ordinary course of business or
financial affairs of such Seller and the Purchaser and (ii) made in the ordinary
course of business or financial affairs of such Seller and the Purchaser.
Section 15.08 Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Sellers and the Purchaser and the respective permitted
successors and assigns of the Sellers and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Sellers to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Sellers. There shall be no limitation on the number of
assignments or transfers allowable by the Purchaser with respect to the Mortgage
Loans and this Agreement. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Sellers
acknowledge and agree to look solely to such assignee, and not to the Purchaser,
for performance of the obligations so assumed and the Purchaser shall be
relieved from any liability to the Sellers with respect thereto.
Section 15.09 Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
Section 15.10 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 15.11 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
Section 15.12 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 15.13 Further Agreements.
The Sellers and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section 15.14 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, unless a Mortgage Loan is
registered on MERS, each of the Assignments of Mortgage is subject to
recordation in all appropriate public offices for real property records in all
the counties or their comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected at the applicable Seller's
expense in the event recordation is either necessary under applicable law or
requested by the Purchaser at its sole option.
Section 15.15 No Solicitation.
From and after the related Closing Date, the Sellers agrees that
they will not take any action or permit or cause any action to be taken by any
of its agents or Affiliates, or by any independent contractors on the Sellers'
behalf, to personally, by telephone or mail (via electronic means or otherwise),
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that each
Seller, or any of their respective Affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms
it has available for such refinancings, through the sending of
letters or promotional material, so long as it does not
specifically target Mortgagors and so long as such promotional
material either is sent to the mortgagors for all of the
mortgages in the servicing portfolio of the Seller and any of
its Affiliates (those it owns as well as those serviced for
others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their
mortgages by advising them of refinancing terms and
streamlined origination arrangements that are available.
Promotions undertaken by the Sellers or by any Affiliate of a Seller
which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 15.15.
Section 15.16 Waiver of Trial by Jury.
THE SELLERS AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 15.17 Governing Law Jurisdiction; Consent to Service of
Process.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE (SUBJECT TO THE PARTIES' RIGHT TO APPEAL) AND MAY
BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY
MAILING A COPY THEREOF BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES
HEREUNDER.
ARTICLE XVI
COMPLIANCE WITH REGULATION AB
-----------------------------
Section 16.01 Intent of the Parties; Reasonableness.
The Purchaser and the Sellers acknowledge and agree that the purpose
of Section 16 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Sellers acknowledge that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Sellers acknowledge that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Sellers shall cooperate
fully with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Sellers, any Third-Party Originator and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the
Purchaser or any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Sellers by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
Section 16.02 Additional Representations and Warranties of the
Sellers.
(a) The Sellers shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Section 16.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) there are no
material legal or governmental proceedings pending (or known to be contemplated)
against the Seller or any Third-Party Originator; and (ii) there are no
affiliations, relationships or transactions relating to the Seller or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Section 16.03, the Sellers shall, within five Business Days
following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
Section 16.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Sellers shall
(i) within ten (10) Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the applicable
Seller, provide to the Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Sellers
shall provide such information regarding (i) the applicable Seller, as
originator of the Mortgage Loans (including as an acquirer of Mortgage Loans
from a Qualified Correspondent), or (ii) each Third-Party Originator, as is
requested for the purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117
and 1119 of Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and
how long the originator has been engaged in originating residential
mortgage loans, which description shall include a discussion of the
originator's experience in originating mortgage loans of a similar
type as the Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and
information that may be material, in the good faith judgment of the
Purchaser or any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s) as the
Mortgage Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance with
Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Seller
and each Third-Party Originator; and
(D) a description of any affiliation or relationship between
the Seller, each Third-Party Originator and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) [Reserved].
(c) [Reserved].
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Sellers shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any Depositor
in writing of (A) any material litigation or governmental proceedings pending
against such Seller or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between such Seller or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, but only to the extent that such affiliation or
relationships do not include the Purchaser or Depositor, and (ii) provide to the
Purchaser and any Depositor a description of such proceedings, affiliations or
relationships. The Sellers agree that the servicing of each Mortgage Loan shall
be transferred from the Sellers to the Purchaser or its designee prior to the
closing date of any related Securitization Transaction, and the Sellers shall
not have any responsibilities or obligations with respect to the servicing
related provisions of Regulation AB.
Section 16.04 Indemnification; Remedies.
(a) The Sellers shall indemnify the Purchaser, each affiliate of the
Purchaser, the Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction; each
broker dealer acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of each
of the foregoing and of the Depositor, and shall hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(A) (1) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants'
letter or other material provided in written or electronic form under this
Section 16 by or on behalf of either Seller, or provided under this
Section 16 by or on behalf of any Third-Party Originator (collectively,
the "Seller Information"), or (2) the omission or alleged omission to
state in the Seller Information a material fact required to be stated in
the Seller Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (2) of this
paragraph shall be construed solely by reference to the Seller Information
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Seller Information
or any portion thereof is presented together with or separately from such
other information;
(B) any failure by a Seller or any Third-Party Originator to deliver
any information, report, certification, accountants' letter or other
material when and as required under this Section 16; or
(C) any breach by a Seller of a representation or warranty set forth
in Section 16.02(a) or in a writing furnished pursuant to Section 16.02(b)
and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Seller of a representation or
warranty in a writing furnished pursuant to Section 16.02(b) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the applicable Seller shall promptly
reimburse the Purchaser, any Depositor, as applicable, and each
Person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act
with respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other
material not delivered as required by such Seller or any Third-Party
Originator.
(b) Any failure by a Seller or any Third-Party Originator to deliver
any information, report, certification, accountants' letter or other material
when and as required under this Section 16, or any breach by a Seller of a
representation or warranty set forth in Section 16.02(a) or in a writing
furnished pursuant to Section 16.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by a Seller of a
representation or warranty in a writing furnished pursuant to Section 16.02(b)
to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the applicable Seller under this Agreement and
any applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Interim Servicer; provided that to the
extent that any provision of this Agreement and/or any applicable Reconstitution
Agreement expressly provides for the survival of certain rights or obligations
following termination of the Interim Servicer as servicer, such provision shall
be given effect.
(c) The Purchaser shall cause the issuing entity in any
Securitization Transaction to indemnify the Seller and its present and former
directors, officer, employees and agents and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs reasonably incurred, judgments, and any other costs,
fees and expenses that any of them may sustain from any untrue statement or
alleged untrue statement of material fact or the omission or the alleged
omission to state a material fact required to be stated in order to make the
statement therein, in light of the circumstances under which they were made, not
misleading, contained in any offering document containing Seller Information
(not arising out of or based upon the Seller Information).
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
▇▇▇▇▇▇ FUNDING LLC
(Purchaser)
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Associate Director
EQUIFIRST CORPORATION
(Seller)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President-Secondary Marketing
EQUIFIRST MORTGAGE CORPORATION OF
MINNESOTA
(Seller)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President-Secondary Marketing
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Article VI of the Mortgage Loan Purchase Agreement to which this
Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer or a
lost note affidavit as described in the Custodial Agreement. To the extent that
there is no room on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the applicable Seller that state law so allows. If
the Mortgage Loan was acquired by either Seller in a merger, the endorsement
must be by "[Last Endorsee], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by the Last Endorsee while doing
business under another name, the endorsement must be by "[Last Endorsee],
formerly known as [previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian a copy of such Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Loans). The Assignment of Mortgage must be duly recorded only if
recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the applicable Seller to the
Last Endorsee (or, in the case of a MERS Designated Loan, MERS) 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, such
Seller shall deliver or cause to be delivered to the Custodian, a photocopy of
such intervening assignment, together with a copy of such intervening assignment
certified by such public recording office to be a true and complete copy of the
original recorded intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a copy of the related policy
binder or commitment for title;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power of attorney.
With respect to the above delivery requirements, any recorded
document shall in no event be delivered later than one year following the
related Closing Date. An extension of this date may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among Securitized Asset Backed Receivables LLC, a Delaware
limited liability company (the "Depositor"), [______________], a
[______________] (the "Underwriter"), and [______________], a [______________]
(the "Indemnifying Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to ▇▇▇▇▇▇ Funding LLC (the
"Purchaser"), an affiliate of the Depositor, in anticipation of the
securitization transaction;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
ABS Informational and Computational Material means any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act and
the 1934 Act, as may be amended from time to time.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Free Writing Prospectus: Any written communication that constitutes
a "free writing prospectus," as defined in Rule 405 under the 1933 Act.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement, the Offering Circular, any Free Writing Prospectus or any amendment
or supplement thereto (i) contained under the headings "Summary--Relevant
Parties--Responsible Party [and Servicer,"] "The Mortgage Loan
Pool--Underwriting Guidelines" [and "The Servicer"] and (ii) regarding the
Mortgage Loans, the related mortgagors and/or the related Mortgaged Properties
(but in the case of this clause (ii), only to the extent any untrue statement or
omission arose from or is based upon errors or omissions in the information
concerning the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties, as applicable, provided to the Depositor or any affiliate
by or on behalf of the Indemnifying Party).
Offering Circular: The offering circular, dated [ ], 200_, relating
to the private offering of the Privately Offered Certificates, including any
structural term sheets, collateral terms sheets and computational materials used
in connection with such offering.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor and
[______________].
Privately Offered Certificates: SABR Trust [_______], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: SABR Trust [_______], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1506-1631 (Jan. 7, 2005)) or by
the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 (a) Each party hereto represents and warrants that it has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement;
(b) Each party hereto represents and warrants that this Agreement
has been duly authorized, executed and delivered by such party; and
(c) Each party hereto represents and warrants that assuming the due
authorization, execution and delivery by each other party hereto, this Agreement
constitutes the legal, valid and binding obligation of such party.
2.2 The Indemnifying Party hereunder represents and warrants that
the Due Diligence Answers given by the Indemnifying Party are true, correct and
complete in all material respects. "Due Diligence Answers" means the answers
given by the Indemnifying Party to due diligence questions asked by ▇▇▇▇▇▇
Funding LLC, which questions were prepared by ▇▇▇▇▇▇ Funding LLC's counsel based
upon the requirements of Regulation AB. Due Diligence Answers and the related
due diligence questions are evidenced by a writing that is attached hereto as
Exhibit A.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Offering Circular, the ABS
Informational and Computational Materials, any Free Writing Prospectus or any
amendment or supplement thereto, or arise out of or are based upon (i) any
breach of the representation and warranty set forth in Section 2.2 above or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred and as incurred by
such Indemnified Party in connection with investigating or defending any such
loss, claim, damage, penalty, fine, forfeiture, liability or action. The
Indemnifying Party's liability under this Section 3.1 shall be in addition to
any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
(c) The Depositor shall indemnify and hold harmless the Indemnifying
Party and its present and former directors, officers, employees and agents
(collectively, "EquiFirst") against any and all losses, claims, damages,
penalties, fines, forfeitures or liabilities, joint or several, to which
EquiFirst may become subject, under the 1933 Act, the 1934 Act or otherwise, to
the extent that such losses, claims, damages, penalties, fines, forfeitures or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus Supplement, the Offering Circular, the ABS Informational and
Computational Materials, any Free Writing Prospectus or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission relates to information
other than the Indemnifying Party Information, and the Depositor shall in each
case reimburse EquiFirst for any legal or other costs, fees, or expenses
reasonably incurred and as incurred by EquiFirst in connection with
investigating or defending any such loss, claim, damage, penalty, fine,
forfeiture, liability or action.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party (which counsel may be counsel
to the Indemnifying Party); provided, however, that if the defendants in any
such action include both the Indemnified Party and the Indemnifying Party and
the Indemnified Party or parties shall reasonably have concluded that there may
be legal defenses available to it or them and/or other Indemnified Parties that
are different from or additional to those available to the Indemnifying Party,
or if the use of counsel chosen by the Indemnifying Party to represent the
Indemnified Parties would present such counsel with a conflict of interest, the
Indemnified Party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such Indemnified Party or parties. Upon receipt of notice
from the Indemnifying Party to such Indemnified Party of its election so to
assume the defense of such action and approval by the Indemnified Party of such
counsel, the Indemnifying Party shall not be liable to such Indemnified Party
under this paragraph for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof, unless (i) the
Indemnified Party shall have employed separate counsel (plus any local counsel)
in connection with the assertion of legal defenses in accordance with the
proviso to the immediately preceding sentence, (ii) the Indemnifying Party shall
not have employed counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after notice of
commencement of the action or (iii) the Indemnifying Party shall have authorized
the employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party. No party shall be liable for contribution with respect to
any action or claim settled without its consent, which consent shall not be
unreasonably withheld. In no event shall the Indemnifying Party be liable for
the fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for all Indemnified Parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
▇▇▇▇▇▇ Funding LLC
c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
c/o Barclays Bank PLC, as administrator
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of the Underwriter:
[______________]
[______________]
[______________]
Attention:
Telephone:
In the case of the Indemnifying Party:
[______________]
[______________]
[______________]
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:____________________________________
Name:
Title:
[UNDERWRITER]
By:____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By:____________________________________
Name:
Title:
EXHIBIT C
SELLERS' OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver (a) the Mortgage Loan
Purchase Agreement, dated as of _______ __, 200_ (the "Purchase
Agreement"), by and between ▇▇▇▇▇▇ Funding LLC (the "Purchaser") and the
Company (b) the Custodial Agreement, dated as of _______ __, 200_ (the
"Custodial Agreement"), by and among the Purchaser, the Company,
________________________ (the "Interim Servicer") and [CUSTODIAN] (the
"Custodian"), [and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original [or facsimile] signature], and such
resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification since ____________.
The Purchase Agreement and the Custodial Agreement may be referred to
herein as the "Agreements."
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Agreements, [the sale of the mortgage loans] or the consummation
of the transactions contemplated by the agreements; or (ii) any required
consent, approval, authorization or order has been obtained by the
Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Agreements conflicts or will conflict
with or results or will result in a breach of or constitutes or will
constitute a default under the charter or by-laws of the Company or, to
the best of my knowledge, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the
Agreements, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Agreements.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Agreements, and
(b) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
10. Nothing in this Officer's Certificate is intended to (a) create
any remedy other than the remedies provided under the Purchase Agreement
or (b) impose personal liability upon the officer executing this Officer's
Certificate.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Date:________________________________ By:____________________________________
Name:
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Date:________________________________ By:____________________________________
Name:
[Seal] Title: [Assistant] Secretary
EXHIBIT 5a to
Company's Officer's Certificate
EQUIFIRST CORPORATION
NAME TITLE SIGNATURE
---- ----- ---------
▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President
-------------------- -------------------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Vice President
-------------------- -------------------------------- --------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President, Chief
Legal Counsel, & Secretary
-------------------- -------------------------------- --------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Financial Officer, Senior
Vice President & Treasurer
-------------------- -------------------------------- --------------------
▇▇▇▇ ▇. ▇▇▇▇▇ Vice President
-------------------- -------------------------------- --------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Assistant Secretary
-------------------- -------------------------------- --------------------
-------------------- -------------------------------- --------------------
EXHIBIT 5b to
Company's Officer's Certificate
EQUIFIRST MORTGAGE CORPORATION OF MINNESOTA
NAME TITLE SIGNATURE
---- ----- ---------
▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President
-------------------- -------------------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Vice President
-------------------- -------------------------------- --------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President, Chief
Legal Counsel, & Secretary
-------------------- -------------------------------- --------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Financial Officer, Senior
Vice President & Treasurer
-------------------- -------------------------------- --------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Assistant Secretary
-------------------- -------------------------------- --------------------
-------------------- -------------------------------- --------------------
-------------------- -------------------------------- --------------------
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLERS
-----------------------------------------
[To be inserted.]
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
___________________________
___________________________
___________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
▇▇▇▇▇▇ Funding LLC under a Mortgage Loan Purchase Agreement, dated as of ______
__, 200_. The Company warrants that the mortgage loans to be sold to ▇▇▇▇▇▇
Funding LLC are in addition to and beyond any collateral required to secure
advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇ Funding LLC shall not be used as additional or substitute collateral for
advances made by the Association. ▇▇▇▇▇▇ Funding LLC understands that the
balance of the Company's mortgage loan portfolio may be used as collateral or
additional collateral for advances made by the Association, and confirms that it
has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇ Funding
LLC.
[Signature Page Follows]
Very truly yours,
_____________________________
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by ▇▇▇▇▇▇ Funding LLC from the company named on the next page (the
"Company") pursuant to that certain Mortgage Loan Purchase Agreement, dated as
of ______ __, 200_, and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company or its designees, as of the date and time
of the sale of such Mortgage Loans to ▇▇▇▇▇▇ Funding LLC. Such release shall be
effective automatically without any further action by any party upon payment in
one or more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
________________________________
________________________________
________________________________
By:_____________________________
II. Certification of Release
------------------------
The Company named below hereby certifies to ▇▇▇▇▇▇ Funding LLC that,
as of the date and time of the sale of the above-mentioned Mortgage Loans to
▇▇▇▇▇▇ Funding LLC the security interests in the Mortgage Loans released by the
above-named financial institution comprise all security interests relating to or
affecting any and all such Mortgage Loans. The Company warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Mortgage Loans.
______________________________
By:___________________________
Title:________________________
Date:_________________________
EXHIBIT G
UNDERWRITING GUIDELINES
-----------------------
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
-------------------------------------------
On this ___ day of ____________, 200_, EquiFirst Corporation and
EquiFirst Mortgage Corporation of Minnesota ("Sellers"), as the Sellers under
(i) that certain Purchase Price and Terms Agreement, dated as of _________, 200_
(the "PPTA"), and (ii) that certain Mortgage Loan Purchase Agreement, dated as
of _________, 200_ (the "Purchase Agreement"), do hereby sell, transfer, assign,
set over and convey to ▇▇▇▇▇▇ Funding LLC ("Purchaser") as the Purchaser under
the Agreements (as defined below) without recourse, but subject to the terms of
the Agreements, all right, title and interest of, in and to the Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto as Exhibit A (the "Mortgage
Loans"), together with the Mortgage Files and the related Servicing Rights and
all rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with, and
conforms to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant
to Article VI of the Purchase Agreement, the Sellers have delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Purchase Agreement. The contents of each Servicing File required to be
retained by the EquiFirst Corporation (or its subservicer) ("Interim Servicer"),
as interim servicer under the Purchase Agreement, to service the Mortgage Loans
and thus not delivered to the Purchaser are and shall be held in trust by the
Interim Servicer for the benefit of the Purchaser as the owner thereof. The
Interim Servicer's possession of any portion of the Servicing File is at the
will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to the Purchase Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only. The ownership
of each Mortgage Note, Mortgage, the Servicing Rights and the contents of the
Mortgage File and Servicing File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or which come into the possession of the Seller or the Interim Servicer shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in a custodial capacity only.
The PPTA and the Purchase Agreement shall collectively be referred to as the
"Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B attached hereto.
In accordance with Article VI of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
___________________________________
By: __________________________________
Name: _____________________________
Title: ____________________________
By: __________________________________
Name: _____________________________
Title: ____________________________
Accepted and Agreed:
▇▇▇▇▇▇ FUNDING LLC
By:__________________________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
------------------
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
[Pool Characteristics of the Mortgage Loan Package as
delivered on the related Closing Date:]
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
-----------------------
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among ▇▇▇▇▇▇ Funding LLC ("Assignor"), [__________________]
("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
-------------------------
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase Agreement (the "Purchase Agreement"), dated as of March 1, 2007,
between the Assignor, as purchaser (the "Purchaser"), and the Company, as
seller, solely insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
--------------------------
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to [_______________]
(the "Trust") created pursuant to a Pooling and Servicing Agreement, dated as of
[______], 200_ (the "Pooling Agreement"), among the Assignee, the Assignor,
[___________________], as trustee (including its successors in interest and any
successor trustees under the Pooling Agreement, the "Trustee"),
[____________________], as servicer (including its successors in interest and
any successor servicer under the Pooling Agreement, the "Servicer"). The Company
hereby acknowledges and agrees that from and after the date hereof (i) the Trust
will be the owner of the Mortgage Loans, (ii) the Company shall look solely to
the Trust for performance of any obligations of the Assignor insofar as they
relate to the Mortgage Loans, (iii) the Trust (including the Trustee and the
Servicer acting on the Trust's behalf) shall have all the rights and remedies
available to the Assignor, insofar as they relate to the Mortgage Loans, under
the Purchase Agreement, including, without limitation, the enforcement of the
document delivery requirements set forth in Section 6 of the Purchase Agreement,
and shall be entitled to enforce all of the obligations of the Company
thereunder insofar as they relate to the Mortgage Loans, and (iv) all references
to the Purchaser, the Custodian or the Bailee under the Purchase Agreement
insofar as they relate to the Mortgage Loans, shall be deemed to refer to the
Trust (including the Trustee and the Servicer acting on the Trust's behalf).
Neither the Company nor the Assignor shall amend or agree to amend, modify,
waiver, or otherwise alter any of the terms or provisions of the Purchase
Agreement which amendment, modification, waiver or other alteration would in any
way affect the Mortgage Loans or the Company's performance under the Purchase
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
Representations and Warranties of the Company
---------------------------------------------
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement. The
execution by the Company of this Agreement is in the ordinary course of
the Company's business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Company's charter or
bylaws or any legal restriction, or any material agreement or instrument
to which the Company is now a party or by which it is bound, or result in
the violation of any law, rule, regulation, order, judgment or decree to
which the Company or its property is subject. The execution, delivery and
performance by the Company of this Agreement have been duly authorized by
all necessary corporate action on part of the Company. This Agreement has
been duly executed and delivered by the Company, and, upon the due
authorization, execution and delivery by the Assignor and the Assignee,
will constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity
regardless of whether enforceability is considered in a proceeding in
equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency or
other tribunal, which would draw into question the validity of this
Agreement or the Purchase Agreement, or which, either in any one instance
or in the aggregate, would result in any material adverse change in the
ability of the Company to perform its obligations under this Agreement or
the Purchase Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.02
of the Purchase Agreement are true and correct as of the Transfer Date as
defined in the Purchase Agreement).
Remedies for Breach of Representations and Warranties
-----------------------------------------------------
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Section 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
-------------
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By: __________________________________
Name:_______________________________
Its:________________________________
▇▇▇▇▇▇ FUNDING LLC
By: __________________________________
Name:_______________________________
Its:________________________________
By: __________________________________
Name:_______________________________
Its:________________________________
[__________________________]
By: __________________________________
Name:_______________________________
Its:________________________________
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
-------------------------------------------------
Mortgage Loan Schedule
