POOLING AND SERVICING AGREEMENT

Exhibit 4.3

TBALT CORP., as Depositor

[     ],

as Securities Administrator and Master Servicer

[TAYLOR, BEAN & WHITAKER MORTGAGE CORP.], as Seller and Servicer

[     ], as Servicer

and

[     ], as Trustee

 

 

FORM OF

POOLING AND SERVICING AGREEMENT

Dated as of [     ]

 

 

TBW MORTGAGE TRUST

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES [     ]

 

 

TABLE OF CONTENTS

 

 

 

ATTACHMENTS

 

 

This POOLING AND SERVICING AGREEMENT, dated as of [     ] (this “Agreement” or this “Pooling and Servicing Agreement”), is by and among TBALT CORP., a Delaware corporation, as depositor (the “Depositor”), [     ], as trustee (the “Trustee”), [     ], as securities administrator (in such capacity, the “Securities Administrator”) and master servicer (in such capacity, the “Master Servicer”) [, [     ], as a servicer (a “Servicer”)] and [TAYLOR, BEAN & WHITAKER MORTGAGE CORP.], a [Florida] corporation, as seller (in such capacity, the “Seller”) and [a] servicer (in such capacity, [the/a] “Servicer” and together with [     ], the “Servicers”).

PRELIMINARY STATEMENT

WHEREAS, the Depositor has acquired all of the rights, title and interest of the Seller in certain conventional, first and second lien, adjustable rate, residential mortgage loans identified in Schedule A hereto (the “Mortgage Loans”) from the Seller pursuant to the Mortgage Loan Purchase Agreement, and at the Closing Date is the owner of the Mortgage Loans and the other property being conveyed by it to the Trustee hereunder for inclusion in the Trust Fund;

WHEREAS, the Depositor has duly authorized the execution and delivery of this Agreement to provide for the conveyance to the Trustee of the Mortgage Loans and the other property constituting the Trust Fund;

WHEREAS, on the Closing Date, the Depositor will acquire the Certificates from the Trustee as consideration for its transfer to the Trustee of the Mortgage Loans and the other property constituting the Trust Fund;

WHEREAS, the Master Servicer shall be obligated under this Agreement, among other things, to supervise the servicing of the Mortgage Loans on behalf of the Trust Fund, and shall have the right, under certain circumstances, to terminate the rights and obligations of the Servicer[s] under this Agreement upon the occurrence and continuance of a Servicing Event of Default as provided herein;

WHEREAS, the parties hereto acknowledge and agree that, at the direction of the Depositor, the Seller will assign all of its rights with respect to the Mortgage Loans to the Trustee;

WHEREAS, the Depositor desires to have the Securities Administrator perform certain duties consistent with the terms of this Agreement;

WHEREAS, the Securities Administrator has the capacity to provide the services required hereby and is willing to perform such services on the terms set forth herein; and

WHEREAS, the Trustee is accepting the Trust Fund created hereby.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

 

 

PRELIMINARY STATEMENT

[REMIC TAX ANALYSIS TO BE PROVIDED FOR EACH TRANSACTION]

The following table sets forth (or describes) the class designation, Certificate Interest Rate, initial Class Principal Amount and minimum denomination for each Class of Certificates issued pursuant to this Agreement:

 

 

[May vary in accordance with transaction.]

 

 

ARTICLE I

 

DEFINITIONS

Section 1.01. Definitions . 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 loan servicing practices (including collection procedures) of prudent mortgage banking institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with Fannie Mae servicing practices and procedures, for MBS pool mortgages, as defined in the Fannie Mae Guides including future updates.

Accountant : A Person engaged in the practice of accounting who (except when this Agreement provides that an Accountant must be Independent) may be employed by or affiliated with the Depositor or an Affiliate of the Depositor.

Accounts : Any or all of the Custodial Accounts, the Escrow Accounts, the Collection Account, the Certificate Account, [the Capitalized Interest Account], [the Pre-Funding Account], [the Revolving Account] and any other accounts created or maintained by the Master Servicer, the Securities Administrator or the Servicer[s] pursuant to this Agreement.

Accrual Period : With respect to any Distribution Date and any Class of Certificates, the period beginning on immediately preceding Distribution Date (or on the Closing Date, in the case of the first Accrual Period) and ending on the day immediately preceding the related Distribution Date.

[Addition Notice : With respect to each sale of [Subsequent Mortgage Loans] [Additional Mortgage Loans] to the Trustee on behalf of the Trust Fund pursuant to Section [     ] of this Agreement, a notice from the Depositor substantially in the form of Exhibit [     ] hereto delivered to the Trustee, the Master Servicer, the Securities Administrator, the Custodian and each Rating Agency.

[ Additional Mortgage Loan : A Mortgage Loan that is conveyed as of the Transfer Date to the Trust by the Depositor pursuant to a Transfer Supplement to the Mortgage Loan Purchase Agreement, which Mortgage Loan shall be identified in such Transfer Supplement as a Additional Mortgage Loan and added by the Depositor to the Mortgage Loan Schedule.]

Adjustment Date : With respect to any Mortgage Loan, the date on which an adjustment is made to the Monthly Payment to correspond to an adjustment in the related Mortgage Note.

[ Advance Reimbursement Shortfall Amount : As defined in Section 4.02(a).]

Adverse REMIC Event : Either (i) loss of status as a REMIC, within the meaning of Section 860D of the Code, for any group of assets identified as a REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of any tax, including the tax imposed under Section 860F(a)(1) on prohibited transactions, and the tax imposed under Section 860G(d) on certain contributions to a REMIC, on any REMIC created hereunder to the extent such tax would be payable from assets held as part of the Trust Fund.

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.

Agreement : This Pooling and Servicing Agreement and all amendments and supplements hereto.

Applied Loss Amount : The amount by which the aggregate Class Principal Amount of the Offered Certificates exceeds the Pool Balance for any Distribution Date after giving effect to all Realized Losses incurred with respect to the Mortgage Loans during the related Collection Period and distributions of principal on such Distribution Date.

Appraised Value : With respect to any Mortgaged Property, the value thereof as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser who met the requirements of the Servicer[s] and Fannie Mae, or as determined by use of an automated valuation model.

Assignment of Mortgage : An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law.

Available Funds Rate : [With respect to any Distribution Date and the Certificates, the per annum rate equal to the product of (1) (a) 360 divided by (b) the actual number of days in the Accrual Period, and (2) (a) Interest Funds for such Distribution Date, divided by (b) the aggregate Class Principal Amount of the Certificates as of the first day of the related Accrual Period.][May vary in accordance with transaction.]

Authorized Officer : Any Person who may execute an Officer’s Certificate on behalf of the Trustee or the Trust Fund.

Bankruptcy : As to any Person, the making of an assignment for the benefit of creditors, the filing of a voluntary petition in bankruptcy, adjudication as a bankrupt or insolvent, the entry of an order for relief in a bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief, or seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator, dissolution, or termination, as the case may be, of such Person pursuant to the provisions of either the Bankruptcy Code, or any other similar state laws.

Bankruptcy Code : The United States Bankruptcy Code of 1986, as amended.

Bankruptcy Loss : Any loss resulting from a bankruptcy court, in connection with a personal bankruptcy of a borrower, (1) establishing the value of a Mortgaged Property at an amount less than the Outstanding Principal Balance of the Mortgage Loan secured by such Mortgaged Property or (2) reducing the amount of the Monthly Payment on the related Mortgage Loan, in each case, as reported by the Servicer[s] to the Master Servicer.

Basis Risk Payment : With respect to any Distribution Date, an amount equal to the sum of (i) any Basis Risk Shortfall for such Distribution Date, (ii) any Unpaid Basis Risk Shortfall for such Distribution Date and (iii) any Required Reserve Fund Amount for such Distribution Date. The amount of the Basis Risk Payment for any Distribution Date cannot exceed the amount of Monthly Excess Cashflow otherwise available for distribution pursuant to Section [[   ]] of this Agreement.

Basis Risk Reserve Fund : A fund created as part of the Trust Fund pursuant to Section [[   ]] of this Agreement but which is not an asset of any of the REMICs.

Basis Risk Shortfall : [With respect to each Distribution Date and any Class of Certificates, an amount equal to the sum of (1) the excess, if any, of (a) Current Interest calculated without regard to the Available Funds Rate over (b) the aggregate of interest accrued on such Class at an interest rate equal to the Available Funds Rate, (2) any amount described in clause (1) above for such Class remaining unpaid from prior Distribution Dates and (3) interest on the amount in clause (2) above at such Class's applicable Certificate Interest Rate (without regard to the Available Funds Rate).]

Basis Risk Shortfall Carryforward Amount : With respect to each Class of Certificates and any Distribution Date, an amount equal to the aggregate amount of Basis Risk Shortfall for such Class of Certificates on such Distribution Date, plus any unpaid Basis Risk Shortfall for such Class of Certificates from prior Distribution Dates, plus interest thereon at the Certificate Interest Rate for such Distribution Date for such Class for the related Accrual Period, to the extent previously unpaid from Monthly Excess Cashflow [or from proceeds of the Cap Agreements].

Book-Entry Certificates : Beneficial interests in Certificates designated as “Book-Entry Certificates” in this Agreement, ownership and transfers of which shall be evidenced or made through book entries by a Depository; provided that   after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Certificates are to be issued to Certificate Owners, such Book-Entry Certificates shall no longer be “Book-Entry Certificates.” As of the Closing Date, the following Classes of Certificates constitute Book-Entry Certificates: the Class [A], Class [M] and Class [B] Certificates.

Business Day : Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in New York, New York or, if other than New York, the city in which the Corporate Trust Office of the Trustee is located, or the States of Delaware, Florida, Maryland, Massachusetts, Minnesota or Texas are authorized or obligated by law or executive order to be closed.

[ Cap Account : A separate account established and maintained by the Securities Administrator for the benefit of the Certificateholders pursuant to Section 6.05.]

[ Cap Agreement Distribution Date : With respect to any Cap Agreement, one Business Day immediately prior to the related Distribution Date, beginning with the Distribution Date in [     ] and ending with the Distribution Date in [     ].]

[ Cap Agreements : The interest rate cap agreements dated on or before the Closing Date between the Trustee and the Cap Counterparty.]

[Cap Counterparty : [     ].]

[ Capitalized Interest Account : The capitalized interest account established by the [Securities Administrator] for the benefit of the [Certificateholders and the Depositor].]

[ Capitalized Interest Requirement : As to any Distribution Date to and including the Distribution Date following the end of the Pre-Funding Period and each Mortgage Pool, an amount equal to the product of (i) the weighted average Net Mortgage Rate of the Mortgage Loans in such Mortgage Pool divided by 12, multiplied by (ii) the excess of (a) the balance in the related Pre-Funding Account as of the Closing Date over (b) the aggregate Scheduled Principal Balance of the Subsequent Mortgage Loans included in the related Mortgage Pool that will have a scheduled interest payment included in the Interest Funds for such Distribution Date.]

[ Cap Receipt : With respect to any Cap Agreement Distribution Date, any amount received from the Cap Counterparty under any Cap Agreement.]

Carryforward Interest : With respect to any Distribution Date and each Class of Certificates, the sum of (i) the amount, if any, by which (x) the sum of (A) Current Interest for such Class for the immediately preceding Distribution Date and (B) any unpaid Carryforward Interest for such Class from previous Distribution Dates exceeds (y) the amount distributed in respect of interest on such Class on such immediately preceding Distribution Date, and (ii) interest on such amount for the related Accrual Period at the applicable Certificate Interest Rate.

Certificate : Any of the Class [    ], Class [     ] and Class [     ] Certificates and the Residual Certificates issued pursuant to this Agreement.

Certificate Interest Rate : With respect to each Class of Certificates and any Distribution Date, the applicable per annum rate set forth or described in the Preliminary Statement hereto.

Certificate Owner or Owner : With respect to a Book-Entry Certificate, the Person who is the owner of such Book-Entry Certificate, as reflected on the books of the Depository, or on the books of a Person maintaining an account with such Depository (directly or as an indirect participant, in accordance with the rules of such Depository) and with respect to any other Class of Certificates, the Certificateholder.

Certificateholder : The meaning provided in the definition of “Holder.”

Certificate Principal Amount : With respect to any Certificate (other than the Class R   Certificates), the initial Certificate Principal Amount thereof on the Closing Date, less the amount of all principal distributions previously distributed with respect to such Certificate and, in the case of the Subordinate Certificates, any Applied Loss Amount previously allocated to such Certificate; provided, however , that on each Distribution Date on which a Subsequent Recovery is distributed, the Certificate Principal Amount of any Subordinate Certificate whose Certificate Principal Amount has previously been reduced by application of any Applied Loss Amount shall be increased, in order of seniority, by an amount (to be applied pro rata to all Certificates of such Class) equal to the lesser of (i) any Deferred Amount for each such Class immediately prior to such Distribution Date and (ii) the total amount of any Subsequent Recovery distributed on such Distribution Date to Certificateholders, after application (for this purpose) to any more senior Classes of Certificates. The Class R Certificate is issued without a Certificate Principal Amount.

Certificate Register and Certificate Registrar : The register maintained and the registrar appointed pursuant to Section 2.06.

Civil Relief Act : The Servicemembers Civil Relief Act, as such may be amended from time to time, and any similar state or local laws.

Class : All Certificates bearing the same class designation.

Class [ __] Principal Distribution Amount : [With respect to any Distribution Date on or after the Stepdown Date, as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess of (x) the aggregate Class Principal Amount of the Class [    ] Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) [     ]% and (ii) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day of the related Collection Period and (B) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day of the related Collection Period minus the Overcollateralization Floor.]

Class [     ] Principal Distribution Amount : [With respect to any Distribution Date on or after the Stepdown Date, as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the lesser of (x) the remaining Principal Distribution Amount for that Distribution Date after payment of the Class [    ] Principal Distribution Amount and (y) the excess, if any, of (A) the sum of (1) the aggregate Class Principal Amount of the Class [     ] Certificates (after taking into account the payment of the Class [     ] Principal Distribution Amount for such Distribution Date) and (2) the Class Principal Amount of the Class [     ] Certificates immediately prior to such Distribution Date, over (B) the lesser of (a) the product of (i) approximately [    ]% and (ii) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day of the related Collection Period, and (b) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day of the related Collection Period minus the Overcollateralization Floor.]

Class [     ] Principal Distribution Amount : [With respect to any Distribution Date on or after the Stepdown Date, as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the lesser of (x) the remaining Principal Distribution Amount for that Distribution Date after payment of the Class [     ]Principal Distribution Amount and the Class [     ] Principal Distribution Amount and (y) the excess, if any, of (A) the sum of (1) the aggregate Class Principal Amount of the Class [     ] Certificates (after taking into account the payment of the Class [     ] Principal Distribution Amount for such Distribution Date), (2) the Class Principal Amount of the Class [     ] Certificates (after taking into account the payment of the Class [     ] Principal Distribution Amount for such Distribution Date) and (3) the Class Principal Amount of the Class [     ] Certificates immediately prior to such Distribution Date, over (B) the lesser of (a) the product of (i) approximately [     ]% and (ii) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day of the related Collection Period, and (b) the aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day of the related Collection Period minus the Overcollateralization Floor.

Class Principal Amount : With respect to any Class of Certificates as of any Distribution Date, its initial Class Principal Amount as of the Closing Date, as reduced by all amounts previously paid on that Class in respect of principal prior to such Distribution Date.

Class R Certificate : Each Class R Certificate executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A and evidencing the ownership of the [Class LT1-R Interest], [Class LT2-R Interest], [Class LT3-R Interest] and the residual interest in the Upper Tier REMIC.

Clearing Agency : An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act, as amended. As of the Closing Date, the Clearing Agency shall be The Depository Trust Company.

Closing Date : [     ].

Code : The Internal Revenue Code of 1986, as amended.

Collection Account : A separate account maintained by the Master Servicer established in the name of the Trustee and for the benefit of the Certificateholders pursuant to Section 5.06.

Collection Period : [With respect to any Distribution Date, the one-month period commencing on the second day of the calendar month immediately preceding the month in which such Distribution Date occurs and ending on the first day of the month in which such Distribution Date occurs].

Combined Loan-to-Value Ratio : With respect to a Second Lien Mortgage Loan, at any time, the ratio, expressed as a percentage, of the sum of (1) the principal balance of such Mortgage Loan and (2) the principal balance of the related first lien mortgage loan, each as of the applicable date of determination, to (a) in the case of a purchase, the lesser of the sale price of the Mortgaged Property and its appraised value at the time of sale or (b) 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 Payment : With respect to any Distribution Date, an amount equal to the lesser of (x) the aggregate Prepayment Interest Shortfall Amount with respect to such Distribution Date and (y) the aggregate Servicing Fee payable to the Servicer[s] in respect of such Distribution Date.

[ Conforming Balance Mortgage Loan : A First Lien Mortgage Loan that has a Scheduled Principal Balance as of the Cut-off Date that is less than or equal to the Fannie Mae maximum original loan amount limitation for one-to four-family Mortgaged Properties for the applicable jurisdiction in which the Mortgaged Property is located.]

Control : The meaning specified in Section 8-106 of the New York UCC.

Corporate Trust Office : With respect to (i) the Securities Administrator, the Certificate Registrar, the principal corporate trust office of the Securities Administrator which, for purposes of presentment of Securities for transfer and exchange and final payment, is located at [     ]; and (iii) the Trustee, the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of execution of this Agreement is located at [     ], or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, or the principal corporate trust office of any successor Trustee at the address designated by such successor Trustee by notice to the Certificateholders.

[ Credit Advance Rate : The related per annum interest rate set forth in the related Mortgage Note with respect to any Revolving Credit Loan.]

[ Credit Line : With respect to a Revolving Credit Loan, the maximum principal amount which may be advanced to a Mortgagor under the terms of the related Mortgage Note.]

[Credit Line Advance : With respect to a Revolving Credit Loan, a principal disbursement to a Mortgagor under the terms of the related Mortgage Note (collectively, “Credit Line Advances”).]

Cumulative Loss Trigger Event : A Cumulative Loss Trigger Event shall have occurred with respect to any Distribution Date beginning in [     ] if the fraction, expressed as a percentage, obtained by dividing (x) the aggregate amount of Realized Losses incurred on the Mortgage Loans from the Cut-off Date through the last day of the related Collection Period by (y) the Cut-off Date Balance, exceeds the applicable percentage described below with respect to such Distribution Date:

 

Current Interest : With respect to any Distribution Date and any Class of Certificates, the aggregate amount of interest accrued at the applicable Certificate Interest Rate during the related Accrual Period on the Class Principal Amount of such Class immediately prior to such Distribution Date.

Custodial Account : The separate custodial account (other than an Escrow Account) established and maintained by the Servicer[s] pursuant to Section 4.02(d) of this   Agreement.

Custodial Agreement : The custodial agreement dated as of [     ], relating to the custody of certain of the Mortgage Loans, substantially in the form attached as Exhibit C hereto, among the Custodian, the Master Servicer, the Depositor and the Trustee.

Custodian : The custodian appointed pursuant to the Custodial Agreement, and any successor thereto. The initial Custodian is [      ].

Custodian Fee : The annual on-going fee payable by the Master Servicer on behalf of the Trust Fund to the Custodian from income on funds held in the Collection Account as provided in Section 5.07 and pursuant to the terms of the separate fee letter agreement for TBW Mortgage Trust Mortgage Pass-Through Certificates, Series [      ].

Cut-off Date : [      ].

Cut-off Date Balance : $[      ].

Deferred Amount : With respect to any Distribution Date and each Class of Subordinate Certificates, the amount by which (x) the aggregate of Applied Loss Amounts previously applied in reduction of the Class Principal Amount thereof exceeds (y) the sum of (i) the aggregate of amounts previously reimbursed in respect thereof and (ii) the amount by which the Class Principal Amount of such Class has been increased due to any Subsequent Recovery.

Deficient Valuation : With respect to any Mortgage Loan, a valuation of the Mortgaged Property by a court of competent jurisdiction in an amount less than the unpaid principal balance of the Mortgage Loan secured by such Mortgaged Property.

Deleted Mortgage Loan : A Mortgage Loan that is repurchased from the Trust Fund pursuant to the terms hereof or as to which one or more Qualifying Substitute Mortgage Loans are substituted therefor.

Delinquency Event : A Delinquency Event shall have occurred with respect to any Distribution Date if the Rolling Three Month Delinquency Rate as of the last day of the immediately preceding calendar month equals or exceeds [     ]% of the Senior Enhancement Percentage for such Distribution Date.

Delinquency Rate : With respect to any calendar month, the fraction, expressed as a percentage, the numerator of which is the aggregate Scheduled Principal Balance of all Mortgage Loans 60 days Delinquent or more (including all foreclosures, bankruptcies and REO Properties) as of the close of business on the last day of such month and as reported by the Servicer[s] to the Master Servicer, and the denominator of which is the Pool Balance as of the close of business on the last day of such month.

Delinquent : For reporting purposes, a Mortgage Loan is “delinquent” when any payment contractually due thereon has not been made by the close of business on the Due Date therefor. Such Mortgage Loan is “30 days Delinquent” if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was first due, or, if there is no such corresponding day ( e.g. , as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month), then on the last day of such immediately succeeding month. Similarly for “60 days Delinquent” and the second immediately succeeding month and “90 days Delinquent” and the third immediately succeeding month.

Depositor : TBALT Corp., a Delaware corporation.

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 Agreement : The agreement dated [      ], between the Trustee and The Depository Trust Company, as the initial Clearing Agency, relating to the Book-Entry Certificates.

Determination Date : With respect to each Distribution Date, the [15]th day of the related calendar month, or, if such day is not a Business Day, the immediately preceding Business Day.

Distribution Account : The separate Eligible Account established and maintained by the Securities Administrator in accordance with the provisions of Section 6.01.

Distribution Date : The [25]th day of each month or, if such [25]th day is not a Business Day, the next succeeding Business Day, commencing in [      ].

Due Date : With respect to each Mortgage Loan, the day of the month each Monthly Payment is due.

Eligible Account : Either (i) an account or accounts maintained with a federal or state chartered depository institution or trust company that complies with the definition of Eligible Institution or (ii) an account or accounts the deposits in which are insured by the FDIC to the limits established by such corporation, provided that any such deposits not so insured shall be maintained in an account at a depository institution or trust company whose commercial paper or other short term debt obligations (or, in the case of a depository institution or trust company which is the principal subsidiary of a holding company, the commercial paper or other short term debt or deposit obligations of such holding company or depository institution, as the case may be) have been rated by each Rating Agency in its highest short-term rating category, or (iii) a segregated trust account or accounts (which shall be a “special deposit account”) maintained with the Securities Administrator or any other federal or state chartered depository institution or trust company, acting in its fiduciary capacity, in a manner acceptable to the Rating Agencies. Eligible Accounts may bear interest.

Eligible Institution : Any of the following:

(ii)   the corporate trust department of a federal depositor institution or state-chartered depositor 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;

Eligible Investments : Any one or more of the following obligations or securities:

(i)   direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America (“Direct Obligations”);

(ii)   federal funds, or demand and time deposits in, certificates of deposits of, or bankers’ acceptances issued by, any depository institution or trust company (including U.S. subsidiaries of foreign depositories and the Trustee or the Securities Administrator or any agent of the Trustee or the Securities Administrator, acting in its respective commercial capacity) incorporated or organized under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking authorities, so long as at the time of investment or the contractual commitment providing for such investment the commercial paper or other short-term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is the principal subsidiary of a holding company, the commercial paper or other short-term debt or deposit obligations of such holding company or deposit institution, as the case may be) have been rated by each Rating Agency in its highest short-term rating category or one of its two highest long-term rating categories;

(iii)   repurchase agreements collateralized by Direct Obligations or securities guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac with any registered broker/dealer subject to Securities Investors’ Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated by each Rating Agency in its highest short-term rating category;

(iv)   securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which have a credit rating from each Rating Agency, at the time of investment or the contractual commitment providing for such investment, at least equal to one of the two highest long-term credit rating categories of each Rating Agency; provided, however, that securities issued by any particular corporation will not be Eligible Investments to the extent that investment therein will cause the then outstanding principal amount of securities issued by such corporation and held as part of the Trust Fund to exceed [20]% of the sum of the Pool Balance and the aggregate principal amount of all Eligible Investments in the Collection Account; provided, further , that such securities will not be Eligible Investments if they are published as being under review with negative implications from any Rating Agency;

(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 180 days after the date of issuance thereof) rated by each Rating Agency in its highest short-term rating category;

(vi)   a Qualified GIC;

(vii)   certificates or receipts representing direct ownership interests in future interest or principal payments on obligations of the United States of America or its agencies or instrumentalities (which obligations are backed by the full faith and credit of the United States of America) held by a custodian in safekeeping on behalf of the holders of such receipts; and

(viii)   any other demand, money market, common trust fund or time deposit or obligation, or interest-bearing or other security or investment (including those managed or advised by the Trustee, the Master Servicer, the Securities Administrator, or any Affiliate thereof), (A) rated in the highest rating category by each Rating Agency or (B) that would not adversely affect the then current rating assigned by each Rating Agency of any of the Certificates. Such investments in this subsection (viii) may include money market mutual funds or common trust funds, including any fund for which [     ] (the “Bank”) in its capacity other than as the Master Servicer, the Securities Administrator or an affiliate thereof serves as an investment advisor, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (x) the Bank, the Trustee, the Master Servicer or any affiliate thereof charges and collects fees and expenses from such funds for services rendered, (y) the Bank, the Trustee, the Securities Administrator, the Master Servicer or any affiliate thereof charges and collects fees and expenses for services rendered pursuant to this Agreement, and (z) services performed for such funds and pursuant to this Agreement may converge at any time. The Bank or an affiliate thereof is specifically authorized to charge and collect from the Trustee such fees as are collected from all investors in such funds for services rendered to such funds (but not to exceed investment earnings thereon);

provided, however , that no such instrument shall be an Eligible Investment if such instrument evidences either (i) a right to receive only interest payments with respect to the obligations underlying such instrument, or (ii) both principal and interest payments derived from obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to maturity of greater than 120% of the yield to maturity at par of such underlying obligations, provided that any such investment will be a “permitted investment” within the meaning of Section 860G(a)(5) of the Code.

ERISA : The Employee Retirement Income Security Act of 1974, as amended.

Escrow Account : The separate escrow account (other than a Custodial Account) established and maintained by the Servicer[s] pursuant to Section 4.02(f) of this   Agreement.

Event of Default : A Servicer Event of Default or a Master Servicer Event of Default, as applicable.

Exchange Act : The Securities Exchange Act of 1934, as amended.

Extra Principal Distribution Amount : [With respect to any Distribution Date, the lesser of (1) the Monthly Excess Interest for such Distribution Date and (2) the excess, if any, of (a) the Overcollateralization Target Amount over (b) the Overcollateralized Amount on such Distribution Date (after giving effect to payment to the Certificates of Principal Funds on such Distribution Date).]

Fannie Mae : Fannie Mae, a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act, or any successor thereto.

Fannie Mae Guide(s) : The Fannie Mae Selling Guide and the Fannie Mae Servicing Guide and all amendments or additions thereto.

FDIC : The Federal Deposit Insurance Corporation or any successor thereto.

FHA Regulations : Regulations promulgated by HUD under the National Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances relating to FHA loans, including the related handbooks, circulars, notices and mortgagee letters.

Final Scheduled Distribution Date : With respect to each Class of Certificates, the Distribution Date occurring in [          ] 20[   ].

[First Lien Mortgage Loans : Mortgage Loans secured by mortgages or deeds of trust or similar security instruments creating a first lien on the related Mortgaged Property.]

Fitch : Fitch, Inc., or any successor in interest.

Freddie 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.

Ginnie Mae : The Government National Mortgage Association, a wholly owned corporate instrumentality of the United States within HUD.

Gross Margin : With respect to a Mortgage Loan, a fixed percentage amount specified in the related mortgage note that is added to an index to determine the related Mortgage Rate.

Guidelines : As defined in Section 4.02(p).

Holder or Certificateholder : The registered owner of any Certificate as recorded on the books of the Certificate Registrar except that, solely for the purposes of taking any action or giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor, the Trustee, the Securities Administrator, the Master Servicer, the Servicer[s], [any Subservicer retained by the [related] Servicer,] or any Affiliate thereof shall be deemed not to be outstanding in determining whether the requisite percentage necessary to effect any such consent has been obtained, except that, in determining whether the Trustee and the Securities Administrator shall be protected in relying upon any such consent, only Certificates which a Responsible Officer of the Trustee knows to be so owned shall be disregarded. The Trustee may request and conclusively rely on certifications by the Depositor, the Securities Administrator, the Master Servicer or the Servicer[s] in determining whether any Certificates are registered to an Affiliate of the Depositor, the Securities Administrator, the Master Servicer or the Servicer[s].

[Home Equity Accepted Servicing Practices : With respect to any Revolving Credit Loan, those mortgage loan servicing practices (including collection procedures) of prudent mortgage banking institutions which service home equity mortgage loans of the same type as such Revolving Credit Loan in the jurisdiction where the related Mortgaged Property is located.]

HUD : 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.

Independent : When used with respect to any Accountants, a Person who is “independent” within the meaning of Rule 2-01(b) of the Commission’s Regulation S-X. When used with respect to any other Person, a Person who (a) is in fact independent of another specified Person and any Affiliate of such other Person, (b) does not have any material direct financial interest in such other Person or any Affiliate of such other Person, and (c) is not connected with such other Person or any Affiliate of such other Person as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.

Index : [Either the One-Month LIBOR Index or the Six-Month LIBOR Index].

[ Initial Mortgage Loan : A Mortgage Loan that is conveyed to the Trustee on behalf of the Trust Fund pursuant to this Agreement on the Closing Date. The Initial Mortgage Loans subject to this Agreement are identified on the Mortgage Loan Schedule.]

Initial Purchase Date : The first Distribution Date following the month in which the Pool Balance is initially reduced to less than [     ]% of the Cut-off Date Balance.

Insurance Policy : Any primary mortgage insurance policy, standard hazard insurance policy, flood insurance policy, earthquake insurance policy or title insurance policy relating to the Mortgage Loans or the Mortgaged Properties, to be in effect as of the Closing Date or thereafter during the term of this Agreement.

Latest Possible Maturity Date : The Distribution Date occurring in [           ] 20[   ].

Lender Paid Mortgage Insurance Rate : The Lender Paid Mortgage Insurance Rate shall be a rate per annum equal to the percentage shown on the Mortgage Loan Schedule.

[ Lender Primary Mortgage Insurance Policy or LPMI Policy : Any Primary Mortgage Insurance Policy for which premiums are paid by the Servicer[s].]

[ Level I LPMI : an LPMI Policy for First Lien Mortgage Loans with Loan-to-Value Ratios at origination ranging from [      ]% to [      ]%.]

[ Level II LPMI : an LPMI Policy for First Lien Mortgage Loans with Loan-to-Value Ratios at origination ranging from [      ]% to [      ]%.]

[ Level III LPMI : an LPMI Policy for First Lien Mortgage Loans with Loan-to-Value Ratios at origination ranging from [      ]% to [      ]%.]

[ Level IV LPMI : an LPMI Policy for First Lien Mortgage Loans with Loan-to-Value Ratios at origination ranging from [      ]% to [      ]%.]

LIBOR : [(a) With respect to the first Accrual Period, the per annum rate of [     ]%. With respect to each subsequent Accrual Period, a per annum rate determined on the LIBOR Determination Date in the following manner by the Securities Administrator on the basis of the “Interest Settlement Rate” set by the British Bankers’ Association (the “BBA”) for one-month United States dollar deposits, as such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.

(b)   If on such a LIBOR Determination Date, the BBA’s Interest Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time), or if the Telerate Page 3750 is not available on such date, the Securities Administrator will determine such rate on the basis of the offered rates of the Reference Banks for one-month United States dollar deposits, as such rates appear on the Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such LIBOR Determination Date.

(c)   If LIBOR is determined under clause (b) above, on each LIBOR Determination Date, LIBOR for the related Accrual Period for the Certificates will be established by the Securities Administrator as follows:

(d)   The establishment of LIBOR by the Securities Administrator and the Securities Administrator’s subsequent calculation of the Certificate Interest Rate applicable to the Certificates for the relevant Accrual Period, in the absence of manifest error, will be final and binding.]

LIBOR Business Day : Any day on which banks in London and New York are open and conducting transactions in foreign currency and exchange.

LIBOR Determination Date : The second LIBOR Business Day immediately preceding the commencement of each Accrual Period.

Liquidated Mortgage Loan : Any defaulted Mortgage Loan as to which [the/a] Servicer has determined that all amounts that it expects to recover from or on account of such Mortgage Loan have been recovered, [and any Second Lien Mortgage Loan that is more than 180 days Delinquent], in each case, as reported by the [related] Servicer to the Master Servicer.

Liquidation Expenses : Expenses that are incurred by the Master Servicer or the Servicer, as applicable, in connection with the liquidation of any defaulted Mortgage Loan and are not recoverable under the applicable primary mortgage insurance policy, if any, including, without limitation, foreclosure and rehabilitation expenses, legal expenses and unreimbursed amounts, if any, expended pursuant to Sections 4.02(c), 4.02(j) or 4.02(o).

Majority Certificateholders : Until such time as the sum of the Class Principal Amounts of all Classes of Certificates has been reduced to zero, the holder or holders of in excess of 50% of the aggregate Class Principal Amount of all Classes of Certificates; and thereafter, the holder of the Ownership Certificate.

Margin : With respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in each related Mortgage Note which is added to the Index in order to determine the related Mortgage Rate, as set forth in the Mortgage Loan Schedule.

Master Servicer : [      ], or any successor in interest, or if any successor master servicer shall be appointed as herein provided, then such successor master servicer.

Master Servicer Errors and Omission Insurance Policy : Any errors and omission insurance policy required to be obtained by the Master Servicer satisfying the requirements of Section 5.02.

Master Servicer Event of Default : Any one of the conditions or circumstances enumerated in Section 8.01(a).

Master Servicer Fidelity Bond : Any fidelity bond to be maintained by the Servicer[s] in accordance with Section 5.02.

Master Servicer Remittance Date : [With respect to each Distribution Date, the Business Day immediately preceding such Distribution Date.]

Material Defect : With respect to any Mortgage Loan, as defined in Section 2.02(c) hereof.

Maximum Mortgage Rate : The maximum level to which a Mortgage Rate can adjust in accordance with its terms, regardless of changes in the applicable Index.

Maximum Certificate Interest Rate : [      ]% per annum.

MERS : Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.

MERS Mortgage Loan : Any Mortgage Loan as to which the related Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name of MERS, as nominee for the holder from time to time of the Mortgage Note.

MIN : The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.

Minimum Mortgage Rate : The minimum level to which a Mortgage Rate can adjust in accordance with its terms, regardless of changes in the applicable Index.

Monthly Advance: An advance made by the Servicer[s] pursuant to Section 4.03(c) or the Master Servicer pursuant to Section 6.04, as applicable, with respect to delinquent payments of principal and interest on the Mortgage Loans, adjusted to the related Net Mortgage Rate.

Monthly Excess Cashflow : [With respect to any Distribution Date, (a) the sum of (1) the Overcollateralization Release Amount for such date, (2) Monthly Excess Interest for such date and (3) any Principal Distribution Amount for such date remaining after application pursuant to either clauses (i)(1) through (7) or clauses (ii)(1) through (7), as applicable, of Section 6.02(b) on such date minus (b) the Extra Principal Distribution Amount for such date.]

Monthly Excess Interest : [With respect to any Distribution Date, the amount of Interest Funds remaining after application pursuant to clauses (i) through (vii) of Section 6.02(a) on such Date.]

Monthly Payment : With respect to any Mortgage Loan and any month, the scheduled payment or payments of principal and interest due during such month on such mortgage loan, which either is payable by a mortgagor in such month under the related mortgage note, or in the case of any Mortgaged Property acquired through foreclosure or deed-in-lieu of foreclosure, would otherwise have been payable under the related Mortgage Note.

[ Moody’s : Moody’s Investors Service, Inc., or any successor in interest.]

Mortgage : A mortgage, deed of trust or other instrument encumbering a fee simple interest in real property securing a Mortgage Note.

Mortgage File : The mortgage documents listed in Section 2.01(b) pertaining to a particular Mortgage Loan required to be delivered to the Trustee (or the Custodian) pursuant to this Agreement.

Mortgage Loan : The conventional, adjustable rate, first and second lien residential mortgage loans sold by the Seller to the Depositor pursuant to the Mortgage Loan Purchase Agreement and subsequently transferred by the Depositor to the Trustee pursuant to this Agreement, [including any [Subsequent Mortgage Loan] [Additional Mortgage Loan]].

Mortgage Loan Purchase Agreement : The mortgage loan purchase agreement dated as of [      ], between the Seller and the Depositor.

Mortgage Loan Schedule : The schedule attached hereto as Schedule A, which shall identify each Mortgage Loan, as such schedule may be amended from time to time to reflect the addition of Mortgage Loans to, or the deletion of Mortgage Loans from, the Trust Fund, including any [Subsequent Mortgage Loan] [Additional Mortgage Loan]]. The Depositor shall be responsible for providing the Master Servicer and the Custodian on behalf of the Trustee with all amendments to the Mortgage Loan Schedule.

 

Mortgage Note : The original executed note or other evidence of the indebtedness of a Mortgagor secured under the Mortgage Loan.

Mortgage Pool : The pool of Mortgage Loans in the Trust Fund.

Mortgaged Property : With respect to any Mortgage Loan, the underlying real property securing such Mortgage Loan.

Mortgage Rate : With respect to any Mortgage Loan, its applicable interest rate determined as provided in the related mortgage note, as reduced by any Relief Act Reduction.

Mortgagor : The obligor on a Mortgage Note.

Net Excess Spread : With respect to any Distribution Date, (A) the fraction, expressed as a percentage, the numerator of which is equal to the product of (i) the amount, if any, by which (a) the aggregate of Interest Funds for such Distribution Date exceeds (b) the Current Interest payable with respect to the Certificates for such date and (ii) twelve, and the denominator of which is the Pool Balance for such Distribution Date, multiplied by (B) a fraction, the numerator of which is thirty and the denominator of which is the greater of thirty and the actual number of days in the immediately preceding calendar month

Net Liquidation Proceeds : All amounts, net of (1) unreimbursed expenses and (2) unreimbursed Monthly Advances and Servicing Advances, received and retained in connection with the liquidation of defaulted Mortgage Loans, through Insurance Proceeds or Condemnation Proceeds, by foreclosure or otherwise, together with any net proceeds received on a monthly basis with respect to any Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure.

Net Mortgage Rate : With respect to any Mortgage Loan at any time, the Mortgage Rate thereof reduced by the Servicing Fee Rate for such Mortgage Loan and any Lender Paid Mortgage Insurance Rate.

New York UCC : The Uniform Commercial Code as in effect in the State of New York.

[ Non-Conforming Balance Mortgage Loan : Any First Lien Mortgage Loan other than a Conforming Balance Mortgage Loan.]

Non-MERS Mortgage Loan : Any Mortgage Loan other than a MERS Mortgage Loan.

Offering Document : The Prospectus.

Officer’s Certificate : A certificate signed by the Chairman of the Board, any Vice Chairman, the President, any Executive Vice President, any Senior Vice President, any Vice President or any Assistant Vice President of a Person.

One-Month LIBOR or One-Month LIBOR Index : The Interest Settlement Rate for U.S. dollar deposits of one-month maturity set by the BBA as of 11:00 a.m. (London time) on the LIBOR Determination Date.

Operative Agreements : This Agreement, the Mortgage Loan Purchase Agreement, the Custodial Agreement, the Depository Agreement, [any Cap Agreement], and each other document contemplated by any of the foregoing to which the Depositor, the Seller, the Master Servicer, the Servicer[s], the Securities Administrator, the Trustee or the Custodian is a party.

Opinion of Counsel : A written opinion of counsel, reasonably acceptable in form and substance to the Seller, the Securities Administrator, the Trustee and/or the Master Servicer, as applicable, and who may be in-house or outside counsel to the Seller, the Servicer[s], the Depositor, the Master Servicer, the Securities Administrator or the Trustee but which must be Independent outside counsel with respect to any such opinion of counsel concerning federal income tax or ERISA matters.

[ Original Capitalized Interest Amount : $[        ].]

 

Overcollateralized Amount : With respect to any Distribution Date, the amount, if any, by which (1) the aggregate Scheduled Principal Balance of the Mortgage Loans exceeds (2) the aggregate Class Principal Amount of the Certificates as of such Distribution Date (assuming that 100% of Principal Funds is applied as a principal payment on the Certificates on such Distribution Date).

 

Overcollateralization Deficiency : [With respect to any Distribution Date, the amount, if any, by which (1) the Overcollateralization Target Amount for such Distribution Date exceeds (2) the Overcollateralized Amount for such Distribution Date, calculated for this purpose after giving effect to the reduction on such Distribution Date of the Class Principal Amounts of the Certificates resulting from the payment of Principal Funds on such Distribution Date].

Overcollateralization Floor : $[      ].

Overcollateralization Release Amount : [With respect to any Distribution Date, the lesser of (x) the Principal Funds for such Distribution Date and (y) the excess, if any, of (1) the Overcollateralization Amount for such Distribution Date (assuming that 100% of such Principal Funds is applied as a principal payment on such Distribution Date) over (2) the Overcollateralization Target Amount for such Distribution Date (with the amount determined pursuant to clause (y) deemed to be $0 if the Overcollateralization Amount is less than or equal to the Overcollateralization Target Amount on that Distribution Date)].

Overcollateralization Target Amount : [With respect to any Distribution Date (a) prior to the Stepdown Date, [      ]% of the aggregate Scheduled Principal Balance of the Mortgage Loans as of the Cut-off Date, (b) on or after the Stepdown Date and if a Trigger Event is not in effect, the greater of (i) the lesser of (1) [      ]% of the aggregate Scheduled Principal Balance of the Mortgage Loans as of the Cut-off Date and (2) [      ]% of the then current aggregate Scheduled Principal Balance of the Mortgage Loans as of that Distribution Date and (ii) $[      ] and (c) on or after the Stepdown Date and if a Trigger Event is in effect, the Overcollateralization Target Amount for the immediately preceding Distribution Date.]

Payahead : Any Monthly Payment intended by the related borrower to be applied in a Collection Period subsequent to the Collection Period in which such payment was received.

Paying Agent : Initially, the Securities Administrator, in its capacity as paying agent under this Agreement, or any successor to the Securities Administrator in such capacity.

Percentage Interest : With respect to any Certificate, its percentage interest in the undivided beneficial ownership interest in the Trust Fund evidenced by all Certificates of the same Class as such Certificate. With respect to any Certificate other than the Class R Certificate, the Percentage Interest evidenced thereby shall equal the initial Certificate Principal Amount thereof divided by the initial Class Principal Amount of all Certificates of the same Class. With respect to the Class R Certificate, the Percentage Interest evidenced thereby shall be as specified on the face thereof, or otherwise be equal to 100%.

Permitted Transferee : Any person other than a “disqualified organization” as defined in section 860E(e)(5) of the Code.

Periodic Cap : With respect to each Mortgage Loan, the maximum adjustment that can be made to the Mortgage Rate on each Adjustment Date in accordance with its terms, regardless of changes in the applicable Index.

Person : Any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Pool Balance : As of any date of determination, the aggregate of the Scheduled Principal Balances of the Mortgage Loans in the Mortgage Pool as of such date [plus, during the [Pre-Funding Period] [Revolving Period], the amount of the [Pre-Funding Amount] [Revolving Amount] applicable to such Mortgage Pool which has not been previously applied towards the purchase of [Subsequent Mortgage Loans] [Additional Mortgage Loans].

[Pre-Funding Account: The pre-funding account established by the Securities Administrator pursuant to Section [      ].]

[Pre-Funding Amount: The amount deposited by the Securities Administrator into the Pre-Funding Account on the Closing Date.]

[Pre-Funding Period: The period beginning on the Closing Date and ending on [      ].]

Prepayment Interest Shortfall : The amount by which one month's interest at the Mortgage Rate (as reduced by the Servicing Fee Rate) on a Mortgage Loan as to which a voluntary prepayment has been made exceeds the amount of interest actually received in connection with such prepayment.

Prepayment Period : [With respect to any Distribution Date, the immediately preceding calendar month].

Primary Mortgage Insurance Policy : Any primary mortgage guaranty insurance policy issued in connection with a Mortgage Loan which provides compensation to a Mortgage Note holder in the event of default by the obligor under such Mortgage Note or the related Mortgage, or any replacement policy therefor through the related Accrual Period for such Class relating to a Distribution Date.

Prime Rate : The prime rate of the United States money center commercial banks as published in The Wall Street Journal , Northeast Edition.

Principal Distribution Amount : [With respect to any Distribution Date, (a) the sum of (1) the Principal Funds for such Distribution Date and (2) the Extra Principal Distribution Amount for such Distribution Date minus (b) the Overcollateralization Release Amount for such date].

Principal Funds : [With respect to any Distribution Date, the sum of (1) the principal portion of all scheduled monthly payments on the related Mortgage Loans due on the related Due Date, to the extent received or advanced; (2) the principal portion of all proceeds of the repurchase of a Mortgage Loan (or, in the case of a substitution, certain amounts representing a principal adjustment) as required by the Mortgage Loan Purchase Agreement during the preceding calendar month; (3) the principal portion of all other unscheduled collections received during the preceding calendar month in respect of the related mortgage loans, including full and partial prepayments, the proceeds of any purchase of Mortgage Loans by the Seller, the Servicer[s], Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds; net of any fees payable to, and other amounts reimbursable to, the Master Servicer, the Servicer[s], the Securities Administrator, the Trustee and the Custodian as provided in the Operative Agreements (to the extent not reimbursed from Interest Funds)]. [On the first Distribution Date after the end of the Revolving Period, Principal Funds shall include amounts allocable to principal that were deposited in the Revolving Account during the Revolving Period and not withdrawn to purchase Additional Mortgage Loans.] [On the first Distribution Date after the end of the Pre-Funding Period, Principal Funds shall include amounts allocable to principal that were deposited in the Pre-Funding Account during the Pre-Funding Period and not withdrawn to purchase Subsequent Mortgage Loans.]

Principal Prepayment : Any payment or other recovery of principal on a Mortgage Loan which is received in advance of its scheduled Due Date to the extent that it is not accompanied by an amount as to interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment, including Insurance Proceeds and Repurchase Proceeds, but excluding the principal portion of Net Liquidation Proceeds received at the time a mortgage loan becomes a Liquidated Mortgage Loan.

 

Proceeding : Any suit in equity, action at law or other judicial or administrative proceeding.

Prospectus : The prospectus supplement dated [      ], together with the accompanying prospectus dated [      ], relating to the Class [      ], Class [      ] and Class [      ] Certificates.

Purchase Price : [With respect to the purchase of a Mortgage Loan or related REO Property pursuant to this Agreement, an amount equal to the sum of (a) 100% of the unpaid principal balance of such Mortgage Loan, (b) accrued interest thereon at the applicable Mortgage Rate, from the date as to which interest was last paid to (but not including) the Due Date in the Collection Period immediately preceding the related Distribution Date, (c) the amount of any costs and damages incurred by the Trust Fund in connection with any violation of any applicable federal, state or local predatory or abusive lending law in connection with the origination of such Mortgage Loan and (d) the fair market value of all other property being purchased. The Servicer[s] and the Master Servicer shall be reimbursed from the Purchase Price for any Mortgage Loan or related REO Property for any Monthly Advances and Servicing Advances made or other amounts advanced with respect to such Mortgage Loan that are reimbursable to the Servicer[s] or the Master Servicer under this Agreement, together with any accrued and unpaid compensation due to the Servicer[s] or the Master Servicer hereunder].

Qualified GIC : A guaranteed investment contract or surety bond providing for the investment of funds in the Collection Account and insuring a minimum, fixed or floating rate of return on investments of such funds, which contract or surety bond shall:

Qualified Insurer : An insurance company duly qualified as such under the laws of the states in which the related Mortgaged Properties are located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided and whose claims paying ability is rated by each Rating Agency in its highest rating category or whose selection as an insurer will not adversely affect the rating of the Certificates.

Qualifying Substitute Mortgage Loan : [A mortgage loan tendered to the Trustee or the Custodian pursuant to the Mortgage Loan Purchase Agreement or this Agreement, as applicable, in each case, (i) which has an outstanding principal balance not greater nor materially less than the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage Rate and Net Mortgage Rate not less than, and not materially greater than, such Mortgage Loan; (iii) which has a maturity date not materially earlier or later than such Mortgage Loan and not later than the latest maturity date of any Mortgage Loan or the Final Scheduled Distribution Date; (iv) which is of the same property type and occupancy type as such Mortgage Loan; (v) with respect to a First Lien Mortgage Loan, which has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi) with respect to a Second Lien Mortgage Loan, which has a Combined Loan-to-Value Ratio not greater than the Combined Loan-to-Value Ratio of such Mortgage Loan (vii) which is current in payment of principal and interest as of the date of substitution; (viii) as to which the payment terms do not vary in any material respect from the payment terms of the Mortgage Loan for which it is to be substituted and (ix) which has a Gross Margin and Maximum Mortgage Rate no less than those of such Mortgage Loan, has the same Index and interval between Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan].

Rating Agency : Each of [      ] and [      ].

Realized Loss : With respect to a Mortgage Loan is (1) a Bankruptcy Loss or (2) as to any Liquidated Mortgage Loan, the unpaid principal balance thereof plus accrued and unpaid interest thereon at the related Mortgage Rate through the last day of the month of liquidation less the Net Liquidation Proceeds with respect to such Mortgage Loan and the related Mortgaged Property.

Reference Banks : Leading banks selected by the Securities Administrator and engaged in transactions in Eurodollar deposits in the international Eurocurrency market (1) with an established place of business in London, (2) whose quotations appear on the Reuters Screen LIBO Page on the Determination Date in question, (3) which have been designated as such by the Securities Administrator and (4) not controlling, controlled by, or under common control with, the Depositor, the Trustee, the Securities Administrator, the Master Servicer, the Servicer[s], the Seller or any successor servicer.

Regulation AB : Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

Relevant UCC : The Uniform Commercial Code as in effect in the applicable jurisdiction.

Relief Act Reduction : With respect to a Mortgage Loan, a reduction of the applicable Mortgage Rate by application of the Servicemembers Civil Relief Act or similar state or local laws.

REMIC : Each of REMIC [      ] and REMIC [      ], as described in the Preliminary Statement hereto.

REMIC Provisions : The provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at sections 860A through 86OG of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations, including proposed regulations and rulings, and administrative pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.

REO Property : A Mortgaged Property acquired by the Servicer[s] through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

Repurchase Proceeds : The purchase price proceeds in connection with any repurchase of a Mortgage Loan by the Seller and any cash deposit in connection with the substitution of a Mortgage Loan.

Request for Release : A request for release in the form attached hereto as Exhibit A-5.

Required Reserve Fund Amount : With respect to any Distribution Date on which the Net Excess Spread for such date is less than [0.25]%, the excess, if any, of (i) the product of [0.50]% and the aggregate Scheduled Principal Balance of the Mortgage Loans over (ii) the amount of funds on deposit in the Basis Risk Reserve Fund prior to deposits thereto on such Distribution Date. With respect to any Distribution Date on which the Net Excess Spread for such date is equal to or greater than [0.25]%, the amount, if any, by which (i) $1,000 exceeds (ii) the amount on deposit in the Basis Risk Reserve Fund immediately prior to such date; provided, however , that on any Distribution Date on which the Class Principal Amount of each Class of LIBOR Certificates has been reduced to zero, the Required Reserve Fund Amount shall be zero.

Residual Certificates : The Class R Certificates.

Responsible Officer : Any vice president, any assistant vice president, any assistant secretary, any associate, any assistant treasurer, or any other officer of the Trustee or the Securities Administrator, as applicable, customarily performing functions similar to those performed by any of the above-designated officers and, in each case, having direct responsibility for the administration of the Operative Agreements and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

Restricted Certificate : Any Class [B], Class [      ] or Class R Certificate.

[ Revolving Account : The revolving account maintained by the Securities Administrator in which Revolving Deposits are deposited by the Securities Administrator to be used to acquire Additional Mortgage Loans during the Revolving Period.]

[ Revolving Amount : With respect to each Distribution Date during the Revolving Period, the total amount of Revolving Deposits deposited in the Revolving Account on such Distribution Date.]

[ Revolving Credit Loan Schedule : A schedule of the Revolving Credit Loans setting forth information with respect to such Revolving Credit Loans (including any MERS identification number (if available) with respect to each MERS Mortgage Loan, attached hereto as [Schedule B].]

[ Revolving Credit Loan : A Mortgage Loan that is identified as a Revolving Credit Loan on the Revolving Credit Loan Schedule, which Revolving Credit Loan includes without limitation the Revolving Credit Loan documents, the monthly payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO disposition proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Revolving Credit Loan.]

[ Revolving Deposits : With respect to any Distribution Date during the Revolving Period, all payments that would otherwise be made to Certificateholders in respect of principal [and excess interest] that is deposited in the Revolving Account on such Distribution Date.]

Reuters Screen LIBO Page : The display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).

Rolling Three Month Delinquency Rate : With respect to any Distribution Date, the average of the Delinquency Rates for each of the three (or one and two, in the case of the first and second Distribution Dates, respectively) immediately preceding calendar months.

[ S&P : Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor in interest.]

Scheduled Principal Balance : [With respect to any Mortgage Loan and any Distribution Date (1) the unpaid principal balance of such mortgage loan as of the close of business on the related Due Date (giving effect to the principal payment to be made on such Due Date and irrespective of any delinquency in its payment), as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any bankruptcy or similar proceeding occurring after the Cut-off Date (other than a Deficient Valuation) or any moratorium or similar waiver or grace period) less (2) any Principal Prepayments and the principal portion of any Net Liquidation Proceeds received during or prior to the immediately preceding Prepayment Period; provided that the Scheduled Principal Balance of any Liquidated Mortgage Loan is zero].

[ Second Lien Mortgage Loans : Mortgage Loans secured by mortgages or deeds of trust or similar security instruments creating a second lien on the related Mortgaged Property.]

Securities Act: The Securities Act of 1933, as amended.

Securities Administrator: [      ], not in its individual capacity but solely as Securities Administrator, or any successor in interest.

Securities Intermediary : The Person acting as Securities Intermediary under this Agreement (which is the Securities Administrator), its successor in interest, and any successor Securities Intermediary appointed pursuant to Section 6.03.

Seller : [Taylor, Bean & Whitaker Mortgage Corp.]

Senior Enhancement Percentage : With respect to any Distribution Date, the fraction, expressed as a percentage, the numerator of which is the sum of the aggregate Class Principal Amount of the Subordinate Certificates and the Overcollateralization Amount (which, for purposes of this definition only, will not be less than zero) after giving effect to payments on such Distribution Date, and the denominator of which is the Pool Balance for such Distribution Date.

Senior Certificates : The Class [     ] Certificates.

Servicer[s] : [Each of] [Taylor, Bean & Whitaker Mortgage Corp.] [and [      ]], or [its/their] successor[s] in interest or assigns or any successor[s] to the Servicer[s] under this Agreement as herein provided.

Servicer Errors and Omission Insurance Policy : Any errors and omission insurance policy required to be obtained by the Servicer[s] satisfying the requirements of Section 4.02(l).

Servicer Event of Default : Any one of the conditions or circumstances enumerated in Section 4.07 with respect to the Servicer[s].

Servicer Fidelity Bond : Any fidelity bond to be maintained by the Servicer[s] in accordance with Section 4.02(l).

Servicer Remittance Date : The [18]th day of any month, or if such [18]th day is not a Business Day, the first Business Day immediately preceding such [18]th day.

Servicing Advances : All reasonable and customary “out-of-pocket” costs and expenses, including costs and expenses of foreclosures (including reasonable attorneys' fees and disbursements) incurred in the performance by the Servicer[s] of [its/their] servicing obligations, including, but not limited to, the cost of (1) the preservation, restoration, inspection and protection of the Mortgaged Properties, (2) any enforcement or judicial proceedings and (3) the management and liquidation of Mortgaged Properties acquired in satisfaction of the related mortgage.

Servicing Criteria : The “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

Servicing Fee : The monthly fee calculated at the Servicing Fee Rate on the outstanding principal balance of each Mortgage Loan, including any Liquidated Mortgage Loan.

Servicing Fee Rate : [For each Second Lien Mortgage Loan, [      ]% per annum; for each Non-Conforming Balance Mortgage Loan without an LPMI Policy, [      ]% per annum; for each Non-Conforming Balance Mortgage Loan with Level I LPMI, [      ]%; for each Non-Conforming Balance Mortgage Loan with Level II LPMI, [      ]%; for each Non-Conforming Balance Mortgage Loan with Level III LPMI, [      ]%; for each Non-Conforming Balance Mortgage Loan with Level IV LPMI, [      ]%; for each Conforming Balance Mortgage Loan without an LPMI Policy but with a Mortgage Rate that adjusts every one month or six months from origination, [      ]% per annum; for each Conforming Balance Mortgage Loan with Level I LPMI and with a Mortgage Rate that adjusts every one month or six months from origination, [      ]% per annum; for each Conforming Balance Mortgage Loan with Level II LPMI and with a Mortgage Rate that adjusts every one month or six months from origination, [      ]% per annum; for each Conforming Balance Mortgage Loan with Level III LPMI and with a Mortgage Rate that adjusts every one month or six months from origination, [      ] % per annum; for each Conforming Balance Mortgage Loan with Level IV LPMI and with a Mortgage Rate that adjusts every one month or six months from origination, [      ]% per annum; for each Conforming Balance Mortgage Loan without an LPMI Policy but with an initial fixed rate period of three, five or seven years, [      ] % per annum until the first Adjustment Date and thereafter [      ]% per annum; for each Conforming Balance Mortgage Loan with Level I LPMI and with an initial fixed rate period of three, five or seven years, [      ]% per annum until the first Adjustment Date and thereafter [      ]% per annum; for each Conforming Balance Mortgage Loan with Level II LPMI and with an initial fixed rate period of three, five or seven years, [      ]% per annum until the first Adjustment Date and thereafter [      ]% per annum; for each Conforming Balance Mortgage Loan with Level III LPMI and with an initial fixed rate period of three, five or seven years, [      ]% per annum until the first Adjustment Date and thereafter [      ]% per annum; and for each Conforming Balance Mortgage Loan with Level IV LPMI and with an initial fixed rate period of three, five or seven years, [0.65]% per annum until the first Adjustment Date and thereafter [0.775]% per annum.]

 

 

Servicing File : With respect to each Mortgage Loan, the file retained by the Servicer[s], which may be in electronic media so long as original documents are not required for purposes of realization of Liquidation Proceeds, Condemnation Proceeds or Insurance Proceeds, consisting of all documents in the Mortgage File which are not delivered to the Custodian, the originals of such mortgage loan documents which are held in trust for the Trustee by the Servicer[s].

Stepdown Date : [The earlier to occur of (1) the first Distribution Date on which the Class Principal Amount of the Class [      ] Certificates has been reduced to zero and (2) the later to occur of (a) the Distribution Date occurring in [      ] and (b) the first Distribution Date on which the Senior Enhancement Percentage (calculated for this purpose after giving effect to payments or other recoveries in respect of the Mortgage Loans during the related Collection Period but before giving effect to payments on the Certificates on such Distribution Date) is greater than or equal to approximately [      ]%].

Step-up Date : [The first Distribution Date after the Initial Purchase Date].

Subcontractor : Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities market) of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the Servicer[s] [or a Subservicer].

Subordinate Certificates : The Class [      ] Certificates.

[ Subsequent Cut-off Date : The date specified as the Cut-off Date with respect to a [Subsequent Mortgage Loan] [Additional Mortgage Loan] in the related Transfer Supplement, which shall be no later than [      ].]

[ Subsequent Mortgage Loan : A Mortgage Loan that is conveyed as of the Transfer Date to the Trust by the Depositor pursuant to a Transfer Supplement to the Mortgage Loan Purchase Agreement, which Mortgage Loan shall be identified in such Transfer Supplement as a Subsequent Mortgage Loan and added by the Depositor to the Mortgage Loan Schedule.]

[ Subsequent Mortgage Loans : Those Mortgage Loans which are intended to be acquired by the Trust Fund from time to time subsequent to the Closing Date but prior to [      ].]

Subsequent Recovery : With respect to any Mortgage Loan, any collection or other recovery of amounts owed thereunder after such Mortgage Loan becomes a Liquidated Mortgage Loan.

[ Subservicer : Any Person that services Mortgage Loans on behalf of [the/a] Servicer or any Subservicer, performing the substantial majority of the material functions required to be performed by [the/such] Servicer under this Agreement or any Reconstitution Agreement that are identified in Item 1122(d) of Regulation AB.]

[Subservicing Agreement: The subservicing agreement dated as of [      ], between the [related] Servicer and the Subservicer.]

Substitution Amount : [The amount, if any, by which the Scheduled Principal Balance of a Deleted Mortgage Loan exceeds the Scheduled Principal Balance of the related Qualifying Substitute Mortgage Loan, or aggregate Scheduled Principal Balance, if applicable, plus unpaid interest thereon, any related unpaid Monthly Advances or Servicing Advances or unpaid Servicing Fees and the amount of any costs and damages incurred by the Trust Fund associated with a violation of any applicable federal, state or local predatory or abusive lending law in connection with the origination of such Deleted Mortgage Loan].

Superior Lien : With respect to any Mortgage Loan, any other mortgage relating to the corresponding Mortgaged Property which creates a lien on the Mortgaged Property which is senior to the lien of the Mortgage Loan.

Tax Matters Person : [      ]

Telerate Page 3750 : The display currently so designated as “Page 3750” on the Moneyline Telerate Service (or such other page selected by the Master Servicer as may replace Page 3750 on that service for the purpose of displaying daily comparable rates on prices).

Termination Price : [The sum, as calculated by the Servicer[s], of (a) 100% of the aggregate outstanding principal balance of the Mortgage Loans, plus accrued interest thereon at the applicable Mortgage Rate, (b) the fair market value of the REO Property and all other property being purchased, (c) any unreimbursed Servicing Advances, (d) any costs and damages incurred by the Trust Fund as a result of violation of any applicable federal, state or local predatory or abusive lending law in connection with the origination of any Mortgage Loan and (e) all other amounts to be paid or reimbursed to the Master Servicer, the Securities Administrator, the Trustee and the Custodian under the Operative Agreements].

Title Insurance Policy : A title insurance policy maintained with respect to a Mortgage Loan.

[ Transfer Date : Any date during the [Pre-Funding Period] [Revolving Period] on which [Subsequent Mortgage Loans] [Additional Mortgage Loans] are conveyed by the Depositor to the Trust Fund pursuant to Section [      ], as specified in the applicable Transfer Supplement.

[ Transfer Price : With respect to any [Subsequent Mortgage Loan] [Additional Mortgage Loan], the price specified in the Transfer Supplement which shall be no less than the outstanding principal balance of such [Subsequent Mortgage Loan] [Additional Mortgage Loan] as of the Subsequent Cut-off Date specified in the Transfer Supplement.]

[ Transfer Supplement : With respect to each sale of [Subsequent Mortgage Loans] [Additional Mortgage Loans] from the Seller to the Depositor pursuant to the Mortgage Loan Purchase Agreement, the transfer supplement entered into between the Seller and the Depositor, substantially in the form of Exhibit [      ] to the Mortgage Loan Purchase Agreement.

Trigger Event : [A Trigger Event shall have occurred with respect to any Distribution Date if (a) a Delinquency Event has occurred for such Distribution Date or (b) a Cumulative Loss Trigger Event has occurred for such Distribution Date.

Trust Accounts : The Collection Account, the Distribution Account, [the Capitalized Interest Account], [the Pre-Funding Account] and [the Revolving Account].

Trust Account Property : The Trust Accounts, all amounts and investments held from time to time in the Trust Accounts (whether in the form of deposit accounts, physical property, book-entry securities, uncertificated securities, securities entitlements, investment property or otherwise) and all proceeds of the foregoing.

Trustee : [      ], not in its individual capacity but solely as Trustee, or any successor in interest.

Trustee Fee : The annual on-going fee payable by the Master Servicer on behalf of the Trust Fund to the Trustee from income on funds held in the Collection Account as provided in Section 5.07 and pursuant to the terms of the separate fee letter agreement for TBW Mortgage Trust Mortgage Pass-Through Certificates Series [      ].

Trust Fund : The corpus of a trust created pursuant to this Agreement and designated as the “Trust Fund,” consisting of the Mortgage Loans, the assignment of the Depositor’s rights under the Mortgage Loan Purchase Agreement, such amounts as shall from time to time be held in the Collection Account, the Distribution Account, [Capitalized Interest Account], [Pre-Funding Account], [Revolving Account] and any Escrow Account, the Basis Risk Reserve Fund, any Insurance Policies, any REO Property and the other items referred to in, and conveyed to the Trustee under, Section [[      ]].

UCC : The Uniform Commercial Code as enacted in the relevant jurisdiction.

Underwriters : [      ].

Upper Tier REMIC : [      ].

Voting Interests : The portion of the voting rights of all the Certificates that is allocated to any Certificate for purposes of the voting provisions of this Agreement. At all times during the term of this Agreement, 98% of all Voting Interests shall be allocated to the Class [A], Class [M] and Class [B] Certificates. Voting Interests shall be allocated among such Certificates based on the product of (i) 98% and (ii) the fraction, expressed as a percentage, the numerator of which is the aggregate Class Principal Amount of all Certificates then outstanding and the denominator of which is the Pool Balance then outstanding. The remainder of the Voting Interests not otherwise allocated below shall be allocated to the Class R Certificates. Voting Interests shall be allocated among the other Classes of Certificates (and among the Certificates within each such Class) in proportion to their Class Principal Amounts (or Certificate Principal Amounts) or Percentage Interests.

Section 1.02. Calculations With Respect to the Mortgage Loans . Calculations required to be made pursuant to this Agreement with respect to any Mortgage Loan in the Trust Fund shall be made based upon current information as to the terms of the Mortgage Loans and reports of payments received from the Mortgagor on such Mortgage Loans provided by the Servicer[s] to the Master Servicer.

Section 1.03. Calculations With Respect to Accrued Interest . [Accrued interest, if any, on any Certificate shall be calculated based upon a 360-day year and the actual number of days in each Accrual Period].

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS

Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans .

(a)   Initial Mortgage Loans . As of the Closing Date, in consideration of the Trustee’s delivery of the Certificates to the Depositor or its designee, and concurrently   with the execution and delivery of this Agreement, the Depositor does hereby transfer, assign, set over, deposit with and otherwise convey to the Trustee, without recourse, subject to Section 3.01, in trust, all the right, title and interest of the Depositor in and to all accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, money, deposit accounts, certificates of deposit, goods, notes, drafts, letters of credit, advices of credit, investment property, uncertificated securities claims and rights to payment of any and every kind consisting of, arising from or relating to any of the following: (a) the Mortgage Loans listed in the Mortgage Loan Schedule, and principal due and payable after the Cut-off Date, but not including interest and principal due and payable on any Mortgage Loans on or before the Cut-off Date, together with the Mortgage Files relating to such Mortgage Loans, (b) any Insurance Proceeds, REO Property, Liquidation Proceeds and other recoveries (in each case, subject to clause (a) above), (c) all Escrow Payments, (d) any Insurance Policies, (e) the rights of the Depositor under the Mortgage Loan Purchase Agreement, (f) the Depositor’s security interest in any collateral pledged to secure the Mortgage Loans, including the Mortgaged Properties, [(g) all Credit Line Advances created with respect to Revolving Credit Loans] and [(h)] all income, revenues, issues, products, revisions, substitutions, replacements, profits, rents and all cash and non-cash proceeds of the foregoing to have and to hold, in trust; and the Trustee declares that, subject to the review provided for in Section 2.02, it has received and shall hold the Trust Fund, as Trustee, in trust, for the benefit and use of the Certificateholders and for the purposes and subject to the terms and conditions set forth in this Agreement, and, concurrently with such receipt, the Trustee has issued and delivered the Certificates and the Ownership Certificate to or upon the order of the Depositor, in exchange for the Mortgage Loans and the other property of the Trust Fund.

(b)   [[ Subsequent Mortgage Loans] [Additional Mortgage Loans] . On each Transfer Date occurring during the [Pre-Funding Period] [Revolving Period], provided that each condition set forth in this Section 2.01(b) is satisfied, the Depositor shall convey to the Trust Fund, and the Trustee on behalf of the Trust Fund shall purchase pursuant to this Section 2.01(b), all [Subsequent Mortgage Loans] [Additional Mortgage Loans] which satisfy the criteria set forth in this Section 2.01(b) then offered for sale by the Depositor; provided, however , that the related aggregate Transfer Price shall not exceed the [Pre-Funding Amount] [Revolving Amount].

Subject to the conditions set forth in this Section 2.01(b), in consideration of the Securities Administrator’s delivery on the related Transfer Date to the Depositor or its designee, or upon the order of the Depositor, of the Transfer Price for the related [Subsequent Mortgage Loans] [Additional Mortgage Loans] from amounts on deposit in the related [Pre-Funding Account] [Revolving Amount], the Depositor shall, on each Transfer Date, sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse, but subject to the other terms and provisions of this Agreement, all of the right, title and interest of the Depositor in and to each [Subsequent Mortgage Loan] [Additional Mortgage Loan] (including all interest and principal thereon received after the related Subsequent Cut-off Date specified in the Transfer Supplement) identified in the Addition Notice delivered by the Depositor on such Transfer Date and all items in the related Mortgage File. In connection therewith, the Depositor shall amend the Mortgage Loan Schedule to reflect the inclusion of such [Subsequent Mortgage Loan] [Additional Mortgage Loan] in the Mortgage Pool as part of the assets of the Trust Estate. The Depositor shall promptly deliver to the Trustee, the Securities Administrator and the Master Servicer a copy of the Mortgage Loan Schedule as so amended.

Concurrently with the execution and delivery of each Transfer Supplement, the Depositor does hereby assign to the Trust Fund all of its rights and interest under the Mortgage Loan Purchase Agreement with respect to the [Subsequent Mortgage Loans] [Additional Mortgage Loans] added to the Mortgage Loan Purchase Agreement pursuant to such Transfer Supplement, but only to the extent assigned under the Mortgage Loan Purchase Agreement. The Trustee on behalf of the Trust Fund hereby accepts such assignment, and shall be entitled to exercise all the rights of the Depositor under the Mortgage Loan Purchase Agreement as amended by the related Transfer Supplement as if, for such purpose, it were the Depositor.

The Depositor shall on any Transfer Date transfer to the Trust Fund the applicable [Subsequent Mortgage Loans] [Additional Mortgage Loans] and the other property and rights related thereto described in the immediately preceding paragraph, as applicable, and the Trustee on behalf of the Trust Fund shall purchase such [Subsequent Mortgage Loans] [Additional Mortgage Loans], property and rights only upon the satisfaction of each of the following conditions on or prior to the related Transfer Date:

[To be added for each transaction with Subsequent Mortgage Loans or Additional Mortgage Loans]

Concurrently with the execution and delivery of this Agreement, the Depositor does hereby assign to the Trustee all of its rights and interest under the Mortgage Loan Purchase Agreement but without delegation of any of its obligations thereunder. The Trustee hereby accepts such assignment, and shall be entitled to exercise all the rights of the Depositor under the Mortgage Loan Purchase Agreement as if, for such purpose, it were the Depositor. Upon the issuance of the Certificates, ownership in the Trust Fund shall be vested in the Trustee for the benefit of the Certificateholders. The foregoing sale, transfer, assignment, set-over, deposit and conveyance does not and is not intended to result in creation or assumption by the Trustee of any obligation of the Depositor, the Seller, or any other Person in connection with the Mortgage Loans or any other agreement or instrument relating thereto except as specifically set forth herein.

It is agreed and understood by the Seller, the Depositor and the Trustee (and the Depositor so represents and recognizes) that it is not intended that any Mortgage Loan to be included in the Trust Fund be (i) a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a “High-Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 or (iv) a “High Cost Home Loan” as defined in the Indiana Home Loan Practices Act effective January 1, 2005.

(c)   In connection with such transfer and assignment, the Depositor does hereby deliver to, and deposit with, or cause to be delivered to and deposited with, the Trustee, and/or the Custodian acting on the Trustee’s behalf, the following documents or instruments with respect to each Mortgage Loan (each a “Mortgage File”) so transferred and assigned:

The Depositor and the Seller acknowledge and agree that the form of endorsement attached hereto as Exhibit A-4 is intended to effect the transfer to the Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and the Mortgages.

(d)   Assignments of Mortgage with respect to each Non-MERS Mortgage Loan shall be recorded; provided, however, that such Assignments of Mortgage need not be recorded if, on or prior to the Closing Date, the Seller delivers an Opinion of Counsel (which must be Independent counsel) acceptable to the Rating Agencies, to the effect that recording in such states is not required to protect the Trustee’s interest in the related Non-MERS Mortgage Loans.

(e)   In instances where a Title Insurance Policy is required to be delivered to the Trustee or the Custodian on behalf of the Trustee under clause (b)(vi) above and is not so delivered, the Seller will provide a copy of such Title Insurance Policy to the Trustee, or to the Custodian on behalf of the Trustee no later than ninety (90) days of the receipt by the Seller of the recorded documents from the applicable public recording office.

(f)   For Mortgage Loans (if any) that have been prepaid in full after the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering the above documents, herewith delivers to the Trustee, or to the Custodian on behalf of the Trustee, an Officer’s Certificate which shall include a statement to the effect that all amounts received in connection with such prepayment that are required to be deposited in the Collection Account pursuant to Section 5.06 have been so deposited. All original documents that are not delivered to the Trustee or the Custodian on behalf of the Trustee shall be held by the Servicer[s] in trust for the benefit of the Trustee and the Certificateholders.

Section 2.02. Acceptance of Trust Fund; Review of Documentation . 

(a)   Subject to the provisions of Section 2.01, the Trustee acknowledges receipt of the assets transferred by the Depositor of the assets included in the Trust Fund and has directed that the documents referred to in Section 2.01 and all other assets included in the definition of “Trust Fund” be delivered to the Trustee (or the Custodian) on its behalf.

 

 

The Trustee, by execution and delivery hereof, acknowledges receipt by it or by the Custodian on its behalf of the Mortgage Files pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof by the Trustee, or by the Custodian on behalf of the Trustee, under this Section 2.02. The Trustee, or the Custodian on behalf of the Trustee, will execute and deliver to the Depositor, the Master Servicer, the Servicer[s] (and the Trustee if delivered by the Custodian) on the Closing Date an Initial Certification in the form annexed hereto as Exhibit A-1.

(b)   Within 90 days after the Closing Date, the Trustee or the Custodian on behalf of the Trustee, will, for the benefit of Certificateholders, review each Mortgage File to ascertain that all required documents set forth in Section 2.01 have been received and appear on their face to contain the requisite signatures by or on behalf of the respective parties thereto, and shall deliver to the Depositor, the Seller (and the Trustee if delivered by the Custodian) an Interim Certification in the form annexed hereto as Exhibit A-2 to the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan prepaid in full or any specifically identified in such certification as not covered by such certification), (i) all of the applicable documents specified in Section 2.01(c) are in its possession and (ii) such documents have been reviewed by it and appear to relate to such Mortgage Loan. The Trustee, or the Custodian on behalf of the Trustee, shall determine whether such documents are executed and endorsed, but shall be under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine that the same are valid, binding, legally effective, properly endorsed, genuine, enforceable or appropriate for the represented purpose or that they have actually been recorded or are in recordable form or that they are other than what they purport to be on their face. Neither the Trustee nor the Custodian shall have any responsibility for verifying the genuineness or the legal effectiveness of or authority for any signatures of or on behalf of any party or endorser or for the perfection or priority of any document.

(c)   If in the course of the review described in paragraph (b) above the Trustee discovers any document or documents constituting a part of a Mortgage File that is missing, does not appear regular on its face ( i.e. , is mutilated, damaged, defaced, torn or otherwise physically altered) or appears to be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule, as applicable (each, a “Material Defect”), the Trustee or the Custodian, discovering such Material Defect shall identify the Mortgage Loan to which such Material Defect relates in the Interim Certification delivered to the Depositor and the Master Servicer. Within 90 days of its receipt of such notice, the Seller shall be required to cure such Material Defect (and, in such event, the Seller shall provide the Trustee and the Custodian with an Officer’s Certificate confirming that such cure has been effected). If the Seller does not so cure such Material Defect, if a loss has been incurred with respect to such Mortgage Loan that would, if such Mortgage Loan were not purchased from the Trust Fund, constitute a Realized Loss, and such loss is attributable to the failure of the Seller to cure such Material Defect, the Seller shall repurchase the related Mortgage Loan from the Trust Fund at the Purchase Price. A loss shall be deemed to be attributable to the failure of the Seller to cure a Material Defect if, as determined by the Seller acting in good faith, absent such Material Defect, such loss would not have been incurred. The Seller may, in lieu of repurchasing a Mortgage Loan pursuant to this Section 2.02, substitute for such Mortgage Loan a Qualifying Substitute Mortgage Loan subject to the provisions of Section 3.03. The failure of the Trustee or the Custodian to deliver the Interim Certification within 90 days after the Closing Date shall not affect or relieve the Seller of its obligation to repurchase any Mortgage Loan pursuant to this Section 2.02 or any other Section of this Agreement requiring the repurchase of Mortgage Loans from the Trust Fund.

 

(d)   Within 180 days following the Closing Date, the Trustee, or the Custodian, shall deliver to the Depositor, the Master Servicer and the Servicer[s] (and the Trustee if delivered by the Custodian) a Final Certification substantially in the form attached as Exhibit A-3 evidencing the completeness of the Mortgage Files in its possession or control, with any exceptions noted thereto.

(e)   Nothing in this Agreement shall be construed to constitute an assumption by the Trust Fund, the Trustee, the Custodian or the Certificateholders of any unsatisfied duty, claim or other liability on any Mortgage Loan or to any Mortgagor.

(f)   Notwithstanding anything to the contrary contained herein, each of the parties hereto acknowledges that the Custodian shall perform the applicable review of the Mortgage Loans and respective certifications thereof as provided in the Custodial Agreement.

(g)   Upon execution of this Agreement, the Depositor hereby delivers to the Trustee and the Trustee acknowledges a receipt of the Mortgage Loan Purchase Agreement.

(h)   For purposes of the determinations required to be made by the Trustee or the Custodian pursuant to paragraphs (a) through (d) of this Section 2.02, the Trustee or the Custodian, as applicable, shall be entitled to conclusively rely upon the diskette, tape or other electronic media provided by or on behalf of the Seller with respect to the Mortgage Loans as to whether (i) any guarantee was executed in connection with any Mortgage Loan, (ii) any assumption, modification or substitution agreement was executed in connection with any Mortgage Loan, (iii) primary mortgage guaranty insurance is required with respect to any Mortgage Loan or (iv) any security agreement or equivalent instrument was executed in connection with any Mortgage Loan.

Section 2.03. Grant Clause .

(a)   It is intended that the conveyance by the Depositor to the Trustee of the Mortgage Loans, as provided for in Section 2.01 be construed as a sale by the Depositor to the Trustee of the Mortgage Loans and other assets in the Trust Fund for the benefit of the Certificateholders. Further, it is not intended that any such conveyance be deemed to be a pledge of the Mortgage Loans by the Depositor to the Trustee to secure a debt or other obligation of the Depositor. However, in the event that the Mortgage Loans are held to be property of the Depositor or if for any reason this Agreement is held or deemed to create a security interest in the Mortgage Loans and other assets in the Trust Fund, then it is intended that (a) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the New York UCC (or the Relevant UCC if not the New York UCC); (b) the conveyances provided for in Section 2.01 shall be deemed to be (1) a grant by the Depositor to the Trustee of a security interest in all of the Depositor’s right (including the power to convey title thereto), title and interest, whether now owned or hereafter acquired, in and to (A) the Mortgage Loans, including the Mortgage Notes, the Mortgages, any related insurance policies and all other documents in the related Mortgage Files, (B) all amounts payable pursuant to the Mortgage Loans in accordance with the terms thereof and (C) any and all general intangibles consisting of, arising from or relating to any of the foregoing, and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including without limitation all Liquidation Proceeds, all Insurance Proceeds, all amounts from time to time held or invested in the Collection Account, whether in the form of cash, instruments, securities or other property and (2) an assignment by the Depositor to the Trustee of any security interest in any and all of the Depositor’s right (including the power to convey title thereto), title and interest, whether now owned or hereafter acquired, in and to the property described in the foregoing clauses (1)(A) through (C); (c) the possession by the Trustee or any other agent of the Trustee of Mortgage Notes, and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party,” or possession by a purchaser or a person designated by such secured party, for purposes of perfecting the security interest pursuant to the New York UCC and any other Relevant UCC (including, without limitation, Section 9-313, 8-313 or 8-321 thereof); and (d) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Trustee for the purpose of perfecting such security interest under applicable law.

 

(b)   The Depositor and, at the Depositor’s direction, the Trustee shall, to the extent consistent with this Agreement, take such reasonable actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans and the other property of 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 this Agreement. Without limiting the generality of the foregoing, the Depositor shall prepare and file any UCC financing statements that are necessary to perfect the Trustee’s security interest in or lien on the Mortgage Loans, as evidenced by an Officer’s Certificate of the Depositor, and furnish a copy of each such filed financing statement to the Securities Administrator. The Trustee shall prepare and file, at the expense of the Depositor, all filings necessary to maintain the effectiveness of any original filings necessary under the Relevant UCC to perfect the Trustee’s security interest in or lien on the Mortgage Loans, including without limitation (x) continuation statements, and (y) to the extent that a Responsible Officer of the Trustee has received written notice of such change or transfer, such other statements as may be occasioned by (1) any change of name of the Seller or the Depositor, (2) any change of location of the place of business or the chief executive office of the Seller or the Depositor or (3) any transfer of any interest of the Seller or the Depositor in any Mortgage Loan.

The Depositor shall not organize under the law of any jurisdiction other than the State under which each is organized as of the Closing Date (whether changing its jurisdiction of organization or organizing under an additional jurisdiction) without giving thirty (30) days prior written notice of such action to its immediate and mediate transferee, including the Trustee. Before effecting such change, the Depositor proposing to change its jurisdiction of organization shall prepare and file in the appropriate filing office any financing statements or other statements necessary to continue the perfection of the interests of its immediate and mediate transferees, including the Trustee, in the Mortgage Loans. In connection with the transactions contemplated by this Agreement, the Depositor authorizes its immediate or mediate transferee to file in any filing office any initial financing statements, any amendments to financing statements, any continuation statements, or any other statements or filings described in this Section 2.03(b).

 

(c)   The Depositor shall not take any action inconsistent with the sale by the Depositor of all of its right, title and interest in and to the Trust Fund and shall indicate or shall cause to be indicated in its records and records held on its behalf that ownership of each Mortgage Loan and the other property of the Trust Fund is held by the Trustee. In addition, the Depositor shall respond to any inquiries from third parties with respect to ownership of a Mortgage Loan or any other property of the Trust Fund by stating that it is not the owner of such Mortgage Loan and that ownership of such Mortgage Loan or other property of the Trust Fund is held by the Trustee on behalf of the Certificateholders.

Section 2.04. Option to Contribute Derivative Instrument

At any time on or after the Closing Date, the Seller shall have the right to contribute to, and deposit into, the Trust Fund a derivative contract or comparable instrument (a “Derivative Instrument”). The Derivative Instrument may have a notional amount in excess of the sum of the beneficial interests in the Trust. Any such instrument shall constitute a fully prepaid agreement. The Securities Administrator shall have no tax reporting duties with respect to any such Derivative Instrument.

The Certificates shall be substantially in the forms attached as Exhibit A hereto. The Certificates shall be issuable in registered form, in the minimum denominations per Class set forth in the Preliminary Statement and, to the extent applicable, in integral multiples of $1 in excess thereof.

Subject to Section 9.03 hereof respecting the final distribution on the Certificates, on each Distribution Date the Securities Administrator 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 (i) such Holder has so notified the Securities Administrator not later than the applicable Record Date and (ii) such Holder shall hold (A) 100% of the Class Principal Amount of any Class of Certificates or (B) Certificates of any Class with aggregate principal Denominations of not less than $1,000,000 or (y) by check mailed by first class mail to such Certificateholder at the address of such Holder appearing in the Certificate Register.

 

The Certificates shall be executed by manual or facsimile signature on behalf of the Securities Administrator by an authorized signatory of the Securities Administrator. Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Securities Administrator shall bind the Securities Administrator, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the countersignature and delivery of such Certificates or did not hold such offices at the date of such Certificate. No Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless countersigned by the Securities Administrator by manual signature, and such countersignature upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly executed and delivered hereunder. All Certificates shall be dated the date of their countersignature. On the Closing Date, the Securities Administrator shall countersign the Certificates to be issued at the direction of the Depositor, or any Affiliate thereof.

The Depositor shall provide, or cause to be provided, to the Securities Administrator on a continuous basis, an adequate inventory of specimen Certificates to facilitate transfers.

Section 2.06. Certificate Register; Registration of Transfer and Exchange of Certificates .

(a)   The Securities Administrator shall maintain, or cause to be maintained, 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 Securities Administrator shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided. Upon surrender for registration of transfer of any Certificate, the Securities Administrator shall execute and deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same Class and aggregate Percentage Interest.

At the option of a Certificateholder, Certificates may be exchanged for other Certificates of the same Class in authorized denominations and evidencing the same aggregate Percentage Interest upon surrender of the Certificates to be exchanged at the office or agency of the Securities Administrator. Whenever any Certificates are so surrendered for exchange, the Securities Administrator shall execute, authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder thereof or his attorney duly authorized in writing.

No service charge to the Certificateholders shall be made for any registration of transfer or exchange of Certificates, but payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates may be required.

 

All Certificates surrendered for registration of transfer or exchange shall be cancelled and subsequently destroyed by the Securities Administrator in accordance with the Securities Administrator’s customary procedures.

(b)   No Person shall transfer a Restricted Certificate unless such transfer (i) is made pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, (ii) is exempt from the registration requirements under said Act and such state securities laws and (iii) is made in compliance with the provisions of this Section. In the event that a transfer 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 and such Certificateholder’s prospective transferee shall each certify to the Securities Administrator in writing the facts surrounding the transfer in substantially the forms set forth in Exhibit [     ] (the “Transferor Certificate”) and deliver a letter in substantially the form of either Exhibit [     ] (the “Investment Letter”) or Exhibit [     ] (the “Rule 144A Letter”). The Depositor shall provide to any Holder of a Restricted Certificate and any prospective transferee designated by any such Holder, information regarding the related Certificates and the Mortgage Loans and such other information as shall be necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate without registration thereof under the Securities Act pursuant to the registration exemption provided by Rule 144A. The Securities Administrator shall cooperate with the Depositor in providing the Rule 144A information referenced in the preceding sentence, including providing to the Depositor such information regarding the Certificates, the Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall reasonably request to meet its obligation under the preceding sentence. Each Holder of a Restricted Certificate desiring to effect such transfer shall, and does hereby agree to, indemnify the Securities Administrator, the Trustee, the Depositor, the Seller, the Servicer[s] and the Master Servicer against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of an ERISA-Restricted Certificate shall be made unless the Securities Administrator shall have received either (i) a representation from the transferee of such Certificate acceptable to and in form and substance satisfactory to the Securities Administrator (in the event such Certificate is a Restricted Certificate, such requirement is satisfied only by the Securities Administrator’s receipt of a representation letter from the transferee substantially in the form set forth in Exhibit [     ] (or Exhibit [     ], in the case of a Residual Certificate)), to the effect that such transferee is not an employee benefit plan or other retirement arrangement subject to Section 406 of ERISA or Section 4975 of the Code (collectively, a “Plan”), nor a Person acting on behalf of any such Plan or using the assets of any such Plan to effect such transfer, (ii) if the ERISA-Restricted Certificate was the subject of an ERISA-Qualifying underwriting and the purchaser is an insurance company, a representation substantially in the form set forth in Exhibit [     ], to the effect that the purchaser is an insurance company which is purchasing such 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 acquisition and holding of the ERISA-Restricted Certificate are covered under Sections I and III of PTCE 95-60; or (iii) in the case of any such ERISA-Restricted Certificate presented for registration in the name of a Plan or a Person acting on behalf of such Plan or using such Plan’s assets, an Opinion of Counsel satisfactory to the Trustee and the Securities Administrator to the effect that the acquisition or holding of such ERISA-Restricted Certificate will not result in prohibited transactions under Section 406 of ERISA and Section 4975 of the Code and will not subject the Trustee, the Securities Administrator, the Depositor, the Seller, the Master Servicer or the Servicer[s] to any obligation in addition to those expressly undertaken in this Agreement, which Opinion of Counsel will not be at the expense of any of the above parties or the Trust Fund. Notwithstanding anything else to the contrary herein, any purported transfer of an ERISA-Restricted Certificate to or on behalf of a Plan without the delivery to the Securities Administrator of a representation letter or an Opinion of Counsel satisfactory to the Securities Administrator as described above shall be void and of no effect. If the ERISA-Restricted Certificate is a Book-Entry Certificate, the transferee will be deemed to have made a representation as provided in (i) or (ii) of this paragraph, as applicable.

 

To the extent permitted under applicable law (including, but not limited to, ERISA), the Securities Administrator 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 [[     ]] 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 Securities Administrator in accordance with the foregoing requirements.

(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:

The restrictions on transfers of a Residual Certificate set forth in this Section 206(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 Securities Administrator of an Opinion of Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund, the Securities Administrator or the Depositor, to the effect that the elimination of such restrictions will not cause an Adverse REMIC Event. 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 Securities Administrator 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 not a 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 not a 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 2.06(d) 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator in writing that the Depository is no longer willing or able to properly discharge its responsibilities as Depository, and (ii) the Securities Administrator or the Depositor is unable to locate a qualified successor, or (y) after the occurrence of an Event of Default, Certificate Owners representing at least 51% of the Certificate Balance of the Book-Entry Certificates together advise the Securities Administrator and the Depository through the Depository Participants in writing that the continuation of a book-entry system through the Depository is no longer in the best interests of the Certificate Owners, the Securities Administrator shall notify all Certificate Owners, through the Depository, of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the Securities Administrator of the related Class of Certificates by the Depository, accompanied by the instructions from the Depository for registration, the Securities Administrator shall issue the Definitive Certificates. Neither the Depositor nor the Securities Administrator 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 Securities Administrator 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 Securities Administrator, to the extent applicable with respect to such Definitive Certificates and the Securities Administrator shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder; provided that the Securities Administrator 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.

 

If (a) any mutilated Certificate is surrendered to the Securities Administrator, or the Securities Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and (b) there is delivered to the Depositor and the Securities Administrator such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Securities Administrator that such Certificate has been acquired by a bona fide purchaser, the Securities Administrator shall execute, countersign and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor and Percentage Interest. In connection with the issuance of any new Certificate under this Section 2.07, the Securities Administrator may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Securities Administrator) connected therewith. Any replacement Certificate issued pursuant to this Section 2.07 shall constitute complete and indefeasible evidence of ownership, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

The Securities Administrator and any agent of the Trustee and the Securities Administrator 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 Securities Administrator nor any agent of the Securities Administrator shall be affected by any notice to the contrary.

If three or more Certificateholders (a) request such information in writing from the Securities Administrator, (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 shall request such information in writing from the Securities Administrator, then the Securities Administrator shall, within ten Business Days after the receipt of such request, provide the Depositor or such Certificateholders at such recipients’ expense the most recent list of the Certificateholders of such Trust Fund held by the Securities Administrator, if any. The Depositor and every Certificateholder, by receiving and holding a Certificate, agree that the Securities Administrator 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.

 

Certificates may be surrendered for registration of transfer or exchange at the Corporate Trust Office of the Securities Administrator. The Securities Administrator will give prompt written notice to the Certificateholders of any change in such location of any such office or agency.

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

Section 3.01. Representations and Warranties of the Depositor and the Seller . 

(a)   The Depositor hereby represents and warrants to the Trustee for the benefit of Certificateholders, the Securities Administrator, the Master Servicer, the Seller and the Servicer[s] as of the Closing Date or such other date as is specified, that:

(b)   The Seller hereby represents and warrants to the Trustee for the benefit of Certificateholders, the Securities Administrator, the Master Servicer and the Depositor as of the Closing Date or such other date as is specified, that:

(c)   The Seller hereby makes for the benefit of the Trustee for the benefit of Certificateholders, the Securities Administrator, the Master Servicer and the Depositor as of the Closing Date or such other date as is specified, with respect to the Mortgage Loans, the representations and warranties set forth in Exhibit A of the Mortgage Loan Purchase Agreement.

 

 

(d)   To the extent that any fact, condition or event with respect to a Mortgage Loan constitutes a breach of a representation or warranty of the Seller under subsection (c) above or the Mortgage Loan Purchase Agreement, the only right or remedy of the Trustee or any Certificateholder hereunder shall be their rights to enforce the obligations of the Seller under any applicable representation or warranty made by it. The Trustee on behalf of the Trust Fund acknowledges that the Depositor shall have no obligation or liability with respect to any breach of any representation or warranty with respect to the Mortgage Loans (except as set forth in Section 3.01(a)(ii)) under any circumstances.

Section 3.02. Discovery of Breach . It is understood and agreed that the representations and warranties (i) of the Depositor set forth in Section 3.01(a), (ii) of the Seller set forth in Section 3.01(b) and (c) and (iii) of the Servicer[s] pursuant to Section 4.05 of this Agreement, shall each survive delivery of the Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue throughout the term of this Agreement. With respect to the representations and warranties which are made to the best of the Seller’s knowledge, if it is discovered by the Depositor, the Seller, the Securities Administrator, the Trustee, the Master Servicer, the Underwriters or the Servicer[s] that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the Mortgage Loans or the interests of the Certificateholders or the Trustee therein, notwithstanding such Seller’s lack of knowledge with respect to the substance of such representation or warranty, remedies for breach will apply to such inaccuracy. Any breach of the representation and warranty set forth in clauses (cc), (ee) and (ff) of Exhibit A of the Mortgage Loan Purchase Agreement shall be deemed to materially and adversely affect the interest of the Trust Fund in that Mortgage Loan, notwithstanding the Seller’s lack of knowledge with respect to the substance of such representation and warranty. Upon discovery by any of the Depositor, the Master Servicer, the Securities Administrator or the Trustee of a breach of any of such representations and warranties made by the Seller that adversely and materially affects the value of the related Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties. Within 90 days of the discovery by the Seller of a breach of any representation or warranty given to the Trustee by the Seller or the Seller’s receipt of written notice of such a breach, the Seller shall either (a) cure such breach in all material respects, (b) repurchase such Mortgage Loan or any property acquired in respect thereof from the Trustee at the Purchase Price or (c) substitute a Qualifying Substitute Mortgage Loan for the affected Mortgage Loan.

Section 3.03. Repurchase, Purchase or Substitution of Mortgage Loans . 

(a)   [With respect to any Mortgage Loan repurchased by the Seller pursuant to Section 3.02(b) of this Agreement, the principal portion of the funds in respect of such repurchase of a Mortgage Loan will be considered a Principal Prepayment and the Purchase Price shall be deposited in the Collection Account. Upon receipt by the Securities Administrator of the full amount of the Purchase Price for a Deleted Mortgage Loan and notification thereof has been made to the Trustee, or upon receipt of notification from the Custodian that it had received the Mortgage File for a Qualifying Substitute Mortgage Loan substituted for a Deleted Mortgage Loan (and any applicable Substitution Amount), the Trustee shall release or cause to be released and reassign to the Depositor or the Seller, as applicable, the related Mortgage File for the Deleted Mortgage Loan and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, representation or warranty, as shall be necessary to vest in such party or its designee or assignee title to any Deleted Mortgage Loan released pursuant hereto, free and clear of all security interests, liens and other encumbrances created by this Agreement, which instruments shall be prepared by the Servicer[s] and the Trustee shall have no further responsibility with respect to the Mortgage File relating to such Deleted Mortgage Loan.

 

(b)   With respect to each Qualifying Substitute Mortgage Loan to be delivered to the Trustee (or the Custodian) in exchange for a Deleted Mortgage Loan: (i) the Depositor or the Seller, as applicable, must deliver to the Trustee (or a Custodian) the Mortgage File for the Qualifying Substitute Mortgage Loan containing the documents set forth in Section 2.01(c) along with a written certification certifying as to the delivery of such Mortgage File and containing the granting language set forth in Section 2.01(a); and (ii) the Seller and the Depositor will be deemed to have made, with respect to such Qualifying Substitute Mortgage Loan, each of the representations and warranties made by it with respect to the related Deleted Mortgage Loan. As soon as practicable after the delivery of any Qualifying Substitute Mortgage Loan hereunder, the Trustee, at the expense of the Depositor and at the direction and with the cooperation of the Servicer[s] shall (i) with respect to a Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage Loan, cause the Assignment of Mortgage to be recorded by the Servicer[s] if required pursuant to Section 2.01(d), or (ii) with respect to a Qualifying Substitute Mortgage Loan that is a MERS Mortgage Loan, cause to be taken such actions as are necessary to cause the Trustee (on behalf of the Trust Fund) to be clearly identified as the owner of each such Mortgage Loan on the records of MERS if required pursuant to Section 2.01(d).]

ARTICLE IV

ADMINISTRATION AND SERVICING OF THE

MORTGAGE LOANS BY THE SERVICER[S]

Section 4.01. Servicer[s] to Perform Servicing Responsibilities .

(a)   Contract for Servicing; Possession of Servicing Files . The Trustee does hereby contract with the Servicer[s] for the servicing of the Mortgage Loans for the benefit of the Trust Fund and the Trustee. The Servicer[s] shall maintain a Servicing File with respect to each Mortgage Loan in order to service such Mortgage Loans pursuant to this Agreement and each Servicing File delivered to the Servicer[s] shall be held in trust by the Servicer[s] for the benefit of the Trust Fund and the Trustee. [The/Each] Servicer’s possession of any portion of the Mortgage Loan documents shall be at the will of the Trustee for the sole purpose of facilitating servicing of the related Mortgage Loan pursuant to this Agreement, and such retention and possession by the [related] Servicer shall be in a custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the contents of the Servicing File shall be vested in the Trustee 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 Servicer[s] shall immediately vest in the Trustee and shall be retained and maintained, in trust, by the Servicer[s] at the will of the Trustee in such custodial capacity only. The Servicing File retained by the Servicer[s] pursuant to this Agreement shall be identified in accordance with the [related] Servicer’s file tracking system to reflect the ownership of the related Mortgage Loan by the Trustee. [The/Each] Servicer shall release from its custody the contents of any Servicing File retained by it only in accordance with this Agreement.

 

(b)   Books and Records . All rights arising out of the Mortgage Loans shall be vested in the Trustee, subject to the [Servicer’s/Servicers’] rights to service and administer the Mortgage Loans hereunder in accordance with the terms of this Agreement. All funds received on or in connection with a Mortgage Loan, other than the Servicing Fee and other compensation and reimbursement to which the Servicer[s] and the Master Servicer are entitled as set forth herein, including but not limited to Section 4.04(c), shall be received and held by them in trust for the benefit of the Trustee pursuant to the terms of this Agreement.

Section 4.02. Servicing of the Mortgage Loans . 

(a)   Servicer[s] to Service . The Servicer[s], acting directly [or through one or more Subservicers as provided in Section 4.09], shall service and administer the Mortgage Loans from and after the Closing Date and, except where prior consent of the Master Servicer is required under this Agreement, in accordance with this Agreement and with Accepted Servicing Practices, and shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which the Servicer[s] may deem necessary or desirable and consistent with the terms of this Agreement and with Accepted Servicing Practices and exercise the same care that it customarily employs for its own account. Except as set forth in this Agreement, the Servicer[s] shall service the Mortgage Loans in strict compliance with the servicing provisions of the Fannie Mae Guides (special servicing option), which include, but are not limited to, provisions regarding the liquidation of Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes, insurance and other charges, the maintenance of hazard insurance with a Qualified Insurer, the maintenance of mortgage impairment insurance, the maintenance of fidelity bond and errors and omissions insurance, inspections, the restoration of Mortgaged Property, the maintenance of Primary Mortgage Insurance Policies and Lender Primary Mortgage Insurance Policies, insurance claims, the title, management and disposition of REO Property, permitted withdrawals with respect to REO Property, liquidation reports, and reports of foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged Property, the release of Mortgage Files, annual statements, and examination of records and facilities. In the event of any conflict, inconsistency or discrepancy between any of the servicing provisions of this Agreement and any of the servicing provisions of the Fannie Mae Guides, the provisions of this Agreement shall control and be binding upon the Servicer[s] and the other parties hereto.

 

 

[[The/Each] Servicer, at its discretion and in accordance with Home Equity Accepted Servicing Practices, may perform any of the following actions in connection with a Revolving Credit Loan:

 

[Notwithstanding anything to the contrary contained herein, the Servicer[s] shall, in servicing the Revolving Credit Loans, follow and comply with the servicing guidelines established by Fannie Mae, and the Servicer[s] may waive, modify or vary any term of any Revolving Credit Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the [related] Servicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is in the best interests of the Certificateholders and is consistent with the terms of this Agreement; provided, however , that if the Mortgagor is in default with respect to the Revolving Credit Loan or such default is, in the judgment of the [related] Servicer, reasonably foreseeable, the [related] Servicer shall not permit any modification of any material term of any Revolving Credit Loan, including any modification that would change the mortgage interest rate, defer or forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal) or change the final maturity date on such Revolving Credit Loan. In the event of any such modification which permits the deferral of interest or principal payments on any Revolving Credit Loan, the [related] Servicer shall, on the Business Day immediately preceding the Servicer Remittance Date in any month in which any such principal or interest payment has been deferred, make a Monthly Advance pursuant to the provisions of Section 4.03(c), in an amount equal to the difference between (i) such month’s principal and one month’s interest at the Mortgage Rate on the unpaid principal balance of such Revolving Credit Loan and (ii) the amount paid by the Mortgagor. The Servicer[s] shall be entitled to reimbursement for such Monthly Advances to the same extent as for all other Monthly Advances made pursuant to Section 4.03(c). Without limiting the generality of the foregoing, [the/each] Servicer shall continue, and is hereby authorized and empowered, to execute and deliver on behalf of itself and the [Master Servicer and the Securities Administrator], all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Revolving Credit Loans and with respect to the Mortgaged Properties. Upon the request of [the/a] Servicer, the [Master Servicer and the Securities Administrator] shall execute and deliver to the [related] Servicer any powers of attorney and other documents, furnished to it by the Servicer and reasonably satisfactory to the [Master Servicer and the Securities Administrator], necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement. Notwithstanding anything contained herein to the contrary, the Servicer[s] shall not, without the [Master Servicer’s and the Securities Administrator’s] written consent: (i) initiate any action suit or proceeding solely under the [Master Servicer’s or the Securities Administrator’s] name without indicating the [related] Servicer’s representative capacity; or (ii) take any action with the intent to cause, and that actually causes, the [Master Servicer and the Securities Administrator] to be registered to do business in any state. Promptly after the execution of any assumption, modification, consolidation or extension of any Revolving Credit Loan, the [related] Servicer shall forward to the [Master Servicer] copies of any documents evidencing such assumption, modification, consolidation or extension.

In servicing and administering the Revolving Credit Loans, [the/each] Servicer shall employ procedures (including collection procedures) and exercise the same care that it customarily employs and exercises in servicing and administering mortgage loans for its own account, giving due consideration to Home Equity Accepted Servicing Practices where such practices do not conflict with the requirements of this Agreement and the Fannie Mae Guides.]

 

 

(b)   Servicer Discretion . In managing the liquidation of defaulted Mortgage Loans, the Servicer[s] will have sole discretion, subject to the terms of this Agreement, to sell defaulted Mortgage Loans; provided, however , that the Servicer[s] shall not take any action that is inconsistent with or prejudices the interests of the Certificateholders in any Mortgage Loan or the rights and interests of the Depositor, the Trustee and the Certificateholders under this Agreement.

(c)   Collection and Liquidation of Mortgage Loans . Continuously from the date hereof until the date each Mortgage Loan ceases to be subject to this Agreement, [the/each] Servicer will proceed diligently to collect all payments due under each Mortgage Loan when the same shall become due and payable and shall, to the extent such procedures shall be consistent with this Agreement, Accepted Servicing Practices, and the terms and provisions of any related Primary Mortgage Insurance Policy and Lender Primary Mortgage Insurance Policy, follow such collection procedures as it follows with respect to mortgage loans comparable to the Mortgage Loans and held for its own account. Further, the Servicer[s] will take special care in ascertaining and estimating annual escrow payments, and all other charges that, as provided in the Mortgage, will become due and payable, so that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

 

(d)   Establishment of and Deposits to Custodial Account .