EXHIBIT 10.1
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
DEPOSITOR
WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUSTEE
AND
EMC MORTGAGE CORPORATION
SERVICER, SPONSOR AND COMPANY
________________________________________
POOLING AND SERVICING AGREEMENT
DATED AS OF MARCH 1, 2007
________________________________________
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
Bear Stearns Mortgage Funding Trust 2007-AR3
Mortgage Pass-Through Certificates, Series 2007-AR3
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS................................................................................2
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES...........................72
Section 2.01.
Conveyance of Mortgage Loans to
Trustee..........................................72
Section 2.02.
Acceptance of Mortgage Loans by
Trustee..........................................74
Section 2.03.
Assignment of Interest in the Mortgage Loan Purchase
Agreement...................77
Section 2.04.
Substitution of Mortgage
Loans...................................................78
Section 2.05.
Issuance of
Certificates.........................................................79
Section 2.06.
Representations and Warranties Concerning the
Depositor..........................80
Section 2.07.
Representations and Warranties of the Company and
Sponsor........................81
Section 2.08.
Purposes and Powers of the
Trust.................................................84
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............................................84
Section 3.01.
Servicer to Act as
Servicer......................................................84
Section 3.02.
REMIC-Related
Covenants..........................................................87
Section 3.03.
Monitoring of
Subservicers.......................................................87
Section 3.04.
Fidelity
Bond....................................................................88
Section 3.05.
Power to Act;
Procedures.........................................................88
Section 3.06.
Due-on-Sale Clauses; Assumption
Agreements.......................................89
Section 3.07.
Release of Mortgage
Files........................................................90
Section 3.08.
Documents, Records and Funds in Possession of Servicer To Be Held
for Trustee....91
Section 3.09.
Standard Hazard Insurance and Flood Insurance
Policies...........................91
Section 3.10.
Presentment of Claims and Collection of
Proceeds.................................92
Section 3.11.
Maintenance of the Primary Mortgage Insurance
Policies...........................93
Section 3.12.
Trustee to Retain Possession of Certain Insurance Policies and
Documents.........93
Section 3.13.
Realization Upon Defaulted Mortgage
Loans........................................93
Section 3.14.
Compensation for the
Servicer....................................................94
Section 3.15.
REO
Property.....................................................................94
Section 3.16.
Annual Statement as to Compliance; Annual
Certification..........................96
Section 3.17.
Assessments of Compliance and Attestation
Reports................................97
Section 3.18.
Reports Filed with Securities and Exchange
Commission............................99
Section 3.19.
UCC.............................................................................106
Section 3.20.
Optional Purchase of Defaulted Mortgage
Loans...................................106
Section 3.21.
Books and
Records...............................................................107
Section 3.22.
Intention of the Parties and
Interpretation.....................................107
ARTICLE IV
ACCOUNTS.................................................................................108
Section 4.01.
Custodial
Account...............................................................108
-i-
TABLE OF CONTENTS
(continued)
Section 4.02.
Permitted Withdrawals and Transfers from the Custodial
Account..................109
Section 4.03.
Distribution
Account............................................................110
Section 4.04.
Permitted Withdrawals and Transfers from the Distribution
Account...............111
Section 4.05.
Adjustable Rate Supplemental
Fund...............................................112
Section 4.06.
Statements to the
Trustee.......................................................113
Section 4.07.
Reserved........................................................................114
Section 4.08.
Reserve
Fund....................................................................114
Section 4.09.
Class XP Reserve
Account........................................................115
Section 4.10.
Final Maturity Reserve
Account..................................................116
ARTICLE V
CERTIFICATES.............................................................................117
Section 5.01.
Certificates....................................................................117
Section 5.02.
Registration of Transfer and Exchange of
Certificates...........................117
Section 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates...............................126
Section 5.04.
Persons Deemed
Owners...........................................................129
Section 5.05.
Transfer Restrictions on Residual
Certificates..................................130
Section 5.06.
Restrictions on Transferability of
Certificates.................................131
Section 5.08.
Rule 144A
Information...........................................................132
ARTICLE VI
PAYMENTS TO
CERTIFICATEHOLDERS...........................................................133
Section 6.01.
Distributions on the
Certificates...............................................133
Section 6.02.
Allocation of Losses and Subsequent
Recoveries..................................143
Section 6.03.
Payments........................................................................144
Section 6.04.
Statements to
Certificateholders................................................145
Section 6.05.
Monthly
Advances................................................................147
Section 6.06.
Compensating Interest
Payments..................................................147
Section 6.07.
Distributions on REMIC Regular
Interests........................................148
ARTICLE VII
THE
SERVICER.............................................................................148
Section 7.01.
Liabilities of the
Servicer.....................................................148
Section 7.02.
Merger or Consolidation of the
Servicer.........................................148
Section 7.03.
Indemnification of the
Trustee..................................................149
Section 7.04.
Limitations on Liability of the Servicer and
Others.............................149
Section 7.05.
Servicer Not to
Resign..........................................................150
Section 7.06.
Successor
Servicer..............................................................150
Section 7.07.
Sale and Assignment of
Servicing................................................151
ARTICLE VIII
DEFAULT..................................................................................151
Section 8.01.
Events of
Default...............................................................151
Section 8.02.
Trustee to Act; Appointment of
Successor........................................153
-ii-
TABLE OF CONTENTS
(continued)
Section 8.03.
Notification to
Certificateholders..............................................154
Section 8.04.
Waiver of
Defaults..............................................................154
Section 8.05.
List of
Certificateholders......................................................155
ARTICLE IX
CONCERNING THE
TRUSTEE...................................................................156
Section 9.01.
Duties of
Trustee...............................................................156
Section 9.02.
Certain Matters Affecting the
Trustee...........................................158
Section 9.03.
Trustee Not Liable for Certificates or Mortgage
Loans...........................159
Section 9.04.
Trustee May Own
Certificates....................................................160
Section 9.05.
Trustee's Fees and
Expenses.....................................................160
Section 9.06.
Eligibility Requirements for
Trustee............................................160
Section 9.07.
Insurance.......................................................................160
Section 9.08.
Resignation and Removal of the
Trustee..........................................161
Section 9.09.
Successor
Trustee...............................................................161
Section 9.10.
Merger or Consolidation of
Trustee..............................................162
Section 9.11.
Appointment of Co-Trustee or Separate
Trustee...................................162
Section 9.12.
Federal Information Returns and Reports to Certificateholders;
REMIC
Administration............................................................163
ARTICLE X
TERMINATION..............................................................................166
Section 10.01.
Termination Upon Repurchase by the Depositor or its Designee
or Liquidation of the Mortgage
Loans............................................166
Section 10.02.
Additional Termination
Requirements.............................................168
ARTICLE XI
MISCELLANEOUS
PROVISIONS.................................................................169
Section 11.01.
Intent of
Parties...............................................................169
Section 11.02.
Amendment.......................................................................170
Section 11.03.
Recordation of
Agreement........................................................171
Section 11.04.
Limitation on Rights of
Certificateholders......................................171
Section 11.05.
Acts of
Certificateholders......................................................172
Section 11.06.
Governing
Law...................................................................173
Section 11.07.
Notices.........................................................................173
Section 11.08.
Severability of
Provisions......................................................173
Section 11.09.
Successors and
Assigns..........................................................174
Section 11.10.
Article and Section
Headings....................................................174
Section 11.11.
Counterparts....................................................................174
Section 11.12.
Notice to Rating
Agencies.......................................................174
Section 11.13.
Use of Subservicers and
Subcontractors..........................................174
-iii-
TABLE OF CONTENTS
(continued)
EXHIBITS
Exhibit A-1
-
Form of Class A Certificate
Exhibit A-2
-
Reserved
Exhibit A-3
-
Form of Class I-B Certificate
Exhibit A-4
-
Form of Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4 and
Class
II-B-5 Certificates
Exhibit A-5
-
Form of Class II-B-6 Certificate
Exhibit A-6
-
Form of Class B-IO Certificate
Exhibit A-7
-
Form of Class R Certificate
Exhibit A-8
-
Form of Class R-X Certificate
Exhibit A-9
-
Form of Class X Certificate
Exhibit A-10
-
Form of Class XP Certificate
Exhibit B
-
Mortgage Loan Schedule
Exhibit C
-
Reserved
Exhibit D
-
Request for Release of Documents
Exhibit E
-
Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1
-
Form of Investment Letter (Non-Rule 144A)
Exhibit F-2
-
Form of Rule 144A Investment Representation
Exhibit F-3
-
Form of Transferor Representation Letter
Exhibit G
-
Form of Custodial Agreement
Exhibit H
-
Form of Mortgage Loan Purchase Agreement
Exhibit I
-
Form of Trustee Limited Power of Attorney
Exhibit J
-
Reserved
Exhibit K
-
Loan Level Format for Tape Input, Servicer Period Reporting
Exhibit L
-
Reporting Data for Defaulted Loans
Exhibit M
-
Reserved
Exhibit N
-
Form of Corridor Contracts
Exhibit O
-
Reserved
Exhibit P
-
Servicing Criteria to be Addressed in Assessment of Compliance
Exhibit Q-1
-
Form of Servicer Back-Up Certification
Exhibit Q-2
-
Form of Trustee Back-Up Certification
Exhibit R
-
Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
Exhibit S
-
Additional Disclosure Information
SCHEDULES
Schedule A
-
Coupon Strip Reserve Account Schedule
-iv-
POOLING AND SERVICING AGREEMENT
Pooling and Servicing
Agreement dated as of March 1, 2007, among
Structured
Asset Mortgage
Investments II Inc., a Delaware
corporation,
as depositor (the "Depositor"),
Wells Fargo Bank, National
Association,
a banking association organized under the laws
of the United States, not in its individual
capacity but solely as trustee (the "Trustee") and EMC Mortgage
Corporation,
as servicer
(in such
capacity,
the
"Servicer"),
as company (in such capacity,
the "Company" or "EMC") and, as sponsor (in such
capacity,
the
"Sponsor").
PRELIMINARY STATEMENT
On or prior to the Closing
Date,
the
Depositor
acquired the
Mortgage
Loans from the Sponsor.
On the Closing
Date,
the
Depositor
will
sell the
Mortgage
Loans and
certain
other
property
to the
Trust
Fund and
receive
in
consideration
therefor
Certificates evidencing the entire beneficial ownership interest in
the Trust Fund.
The
Trustee on behalf of the Trust
shall make an
election
for the assets
constituting
REMIC I to be treated
for federal
income tax purposes as a REMIC.
On the Startup Day, the REMIC I Regular
Interests
will be
designated
"regular
interests"
in such
REMIC.
The
Trustee on behalf of the Trust
shall make an
election
for the assets
constituting
REMIC II to be treated for federal
income tax purposes as a REMIC.
On the Startup Day, the REMIC II Regular
Interests
will be
designated
"regular
interests" in such
REMIC.
The
Trustee on behalf of the Trust
shall make an election
for the assets
constituting
REMIC III to be treated for federal
income tax purposes as a REMIC.
On the Startup Day, the REMIC III Regular
Interests
will be designated
"regular
interests" in such
REMIC.
The
Trustee on behalf of the Trust
shall make an
election
for the assets
constituting
REMIC IV to be treated for federal
income tax purposes as a REMIC.
On the Startup Day, the REMIC IV Regular
Interests
will be
designated
"regular
interests" in such
REMIC.
The
Trustee on behalf of the Trust
shall make an
election
for the assets
constituting
REMIC V to be treated
for federal
income tax purposes as a REMIC.
On the Startup Day, the REMIC V Regular
Interests will be designated the "regular
interests" in such
REMIC.
The Class R
Certificates
will
evidence
ownership
of the
"residual
interest" in each of REMIC I, REMIC II, REMIC III and
REMIC IV.
The Class R-X Certificates will evidence ownership of the "residual
interest" in REMIC V.
The Group I Mortgage Loans will have an Outstanding
Principal
Balance as of the Cut-off Date,
after deducting all Scheduled
Principal
due on or before the
Cut-off
Date,
of
$390,231,873.76.
The
Sub-Group
II-1
Mortgage
Loans
will have an
Outstanding
Principal
Balance
as of the
Cut-off
Date,
after
deducting
all
Scheduled
Principal
due
on or
before
the
Cut-off
Date,
of
$668,872,812.99,
and the Sub-Group
II-2
Mortgage
Loans will have an
Outstanding
Principal
Balance as of the Cut-off Date,
after
deducting all Scheduled Principal due on or before the Cut-off
Date, of $267,788,419.01.
1
In consideration of the mutual agreements
herein contained,
the Depositor,
the Servicer,
the Sponsor,
the Company and the
Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement,
the following words and phrases,
unless otherwise
expressly provided or unless the context
otherwise requires, shall have the meanings specified in this
Article.
2007-AR3 REMIC: Any of REMIC I, REMIC II, REMIC III, REMIC IV and
REMIC V.
Accepted
Servicing
Practices:
The procedures,
including prudent
collection and loan
administration
procedures,
and the
standard of care (i) employed by prudent
mortgage
servicers
which service
mortgage
loans of the same type as the Mortgage Loans in
the
jurisdictions in which the related Mortgage
Properties are located or (ii) in accordance with the Fannie Mae
Guide or Freddie Mac
Guide,
subject to any variances
negotiated
with Fannie Mae or Freddie Mac and subject to the express
provisions of this
Agreement.
Such
standard of care shall not be lower than that the Servicer
customarily
employs and
exercises in
servicing
and
administering
similar mortgage loans for its own account and shall be in full
compliance with all federal,
state, and local laws, ordinances,
rules
and regulations.
Account:
The Custodial
Account,
the Adjustable Rate
Supplemental
Fund, the
Distribution
Account,
the Reserve Fund, the
Final Maturity Reserve Account or the Class XP Reserve Account, as
the context may require.
Actual Monthly
Payments:
For any Mortgage Loan and each Due Period,
the actual
monthly
payments of principal and interest
received during such month on such Mortgage Loan.
Additional Disclosure:
As defined in Section 3.18(a)(v).
Additional Form 10-D Disclosure:
As defined in Section 3.18(a)(i).
Additional Form 10-K Disclosure:
As defined in Section 3.18(a)(iv).
Adjustable Rate Supplemental Fund: An "outside reserve fund" within
the meaning of Treasury Regulation
1.860G-2(h),
which is
not an asset of any REMIC and which is established and maintained
pursuant to Section 4.05.
Adjusted Rate Cap: With respect to the Class I-A
Certificates
and Class I-B
Certificates,
each
Distribution
Date and the
related Due
Period,
the sum of (i) the
Scheduled
Payments
owed on the Group I Mortgage
Loans for such Due Period less the related
Servicing Fee and (ii) the related
Actual
Monthly
Payments
received in excess of the Scheduled
Payments,
expressed as a per annum
rate calculated on the basis of the aggregate
Stated
Principal
Balance of the Group I Mortgage Loans for such Due Period and
further
reflecting
the accrual of interest on an actual/360
basis,
minus the sum of (a) the interest
payable to the Class I-X
Certificates
and (b) the Coupon
Strip with
respect to Loan Group I, if any,
payable to the Final
Maturity
Reserve
Account with respect to such
Distribution Date, expressed as a per annum rate.
2
With respect to the Group II
Certificates,
each
Distribution
Date and the related Due Period,
the sum of (i) the
Scheduled
Payments owed on the Group II Mortgage Loans for such Due Period
less the related
Servicing Fee and (ii) the related Actual
Monthly Payments received in excess of the Scheduled
Payments,
expressed as a per annum rate calculated on the basis of the
aggregate
Stated
Principal
Balance of the Group II
Mortgage
Loans for such Due Period and
further
reflecting
the accrual of interest on an
actual/360 basis.
Affiliate:
As to any
Person,
any other
Person
controlling,
controlled
by or under
common
control
with
such
Person.
"Control"
means the power to direct the management
and policies of a Person,
directly or indirectly,
whether
through
ownership of
voting securities,
by contract or otherwise.
"Controlled" and "Controlling" have meanings
correlative to the foregoing.
The Trustee
may
conclusively
presume that a Person is not an Affiliate of another
Person unless a Responsible
Officer of the Trustee has actual
knowledge to the contrary.
Agreement:
This Pooling and Servicing Agreement and all amendments hereof and
supplements hereto.
Annual Certification:
As defined in Section 3.16(b) herein.
Applicable Credit Rating:
For any long-term deposit or security,
a credit rating of "AAA" in the case of S&P or "Aaa" in the
case of Moody's (or with respect to
investments
in money market
funds,
a credit rating of "AAAm" or "AAAm-G" in the case of S&P and
the highest
rating
given by Moody's for money
market funds in the case of Moody's).
For any
short-term
deposit or security,
or a
rating of "A-l+" in the case of S&P or "Prime-1" in the case of
Moody's.
Applicable
State Law:
For purposes of
Section 9.12(d),
the
Applicable
State Law shall be (a) the law of the State of New
York and (b) such
other
state law whose
applicability
shall have been
brought to the
attention
of the
Trustee by either
(i) an
Opinion of Counsel reasonably
acceptable to the Trustee delivered to it by the Servicer or the
Depositor,
or (ii) written notice from
the appropriate taxing authority as to the applicability of such
state law.
Applied
Realized
Loss
Amount:
With
respect
to any
Distribution
Date
and a Class of
Class A
Certificates
or Class B
Certificates,
the sum of the
Realized
Losses with
respect to the Mortgage
Loans in the related
Loan Group or Sub-Loan
Group,
as
applicable,
which are to be applied in
reduction
of the
Current
Principal
Amount of such Class of
Certificates
pursuant to this
Agreement in an amount equal to the amount,
if any, by which,
(i) the aggregate
Current
Principal Amount of all of the Certificates
in the related Loan Group or Sub-Loan Group, as applicable,
(after all distributions of principal on such
Distribution
Date) exceeds
(ii) the aggregate
Stated
Principal
Balance of all of the Mortgage Loans in the related Loan Group or
Sub-Loan Group, as applicable,
for such
Distribution
Date. The Applied
Realized Loss Amount with respect to the Group I Mortgage Loans
shall be allocated
first to
the Class
I-B-9,
Class
I-B-8,
Class
I-B-7,
Class I-B-6,
Class
I-B-5,
Class
I-B-4,
Class
I-B-3,
Class I-B-2 and Class I-B-1
Certificates,
sequentially
in that order,
in each case until the
Current
Principal
Amount of each such Class has been
reduced to
zero.
Thereafter,
the principal
portion of Realized Losses on the Group I Mortgage Loans will be
allocated on any Distribution
Date
first, to the Class I-A-3 Certificates,
then to the Class I-A-2 Certificates,
and then to the Class I-A-1 Certificates,
sequentially
in that order,
until the Current
Principal
Amount of each such Class has been reduced to zero. The Applied
Realized Loss Amount with
respect to the Group II Mortgage Loans shall be allocated first to
the Class II-B-6,
Class II-B-5,
Class II-B-4,
Class II-B-3, Class
II-B-2 and Class II-B-1
Certificates,
sequentially in that order, in each case until the Current
Principal Amount of each such Class
has been reduced to zero.
Thereafter,
(i) the
principal
portion of Realized
Losses on the Sub-Group
II-1
Mortgage
Loans will be
allocated on any
Distribution
Date to the Class II-1A-3,
Class II-1A-2 and Class II-1A-1
Certificates,
sequentially in that order,
until the Current
Principal
Amount of each such Class has been reduced to zero and (ii) the
principal
portion of Realized
Losses on
the Sub-Group
II-2 Mortgage
Loans will be allocated on any
Distribution
Date to the Class
II-2A-1
Certificates
until the Current
Principal Amount of such Class has been reduced to zero.
3
Appraised
Value:
For any Mortgaged
Property related to a Mortgage Loan, the amount set forth as the
appraised value of such
Mortgaged Property in an appraisal made for the mortgage originator
in connection with its origination of the related Mortgage Loan.
Assessment of Compliance:
As defined in Section 3.17.
Attestation Report:
As defined in Section 3.17.
Attesting Party:
As defined in Section 3.17.
Available Funds: With respect to each
Distribution
Date and any Loan Group or Sub-Loan Group, as applicable,
the sum of the
Principal Funds and the Interest Funds for such Distribution Date
and such Loan Group or Sub-Loan Group.
Back-Up Certification:
As defined in Section 3.18(a)(iv).
Bankruptcy Code:
The United States Bankruptcy Code, as amended as codified in 11
U.S.C. §§ 101-1330.
Bankruptcy
Loss: Any loss resulting from a bankruptcy
court,
in connection with a personal
bankruptcy of a mortgagor,
(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.
Basis
Risk
Shortfall:
With
respect
to any
Distribution
Date
and
each
Class
of
Class
A
Certificates
and
Class B
Certificates, the excess, if any, of:
1.
the amount of Current Interest that such Class would have been
entitled to receive on such
Distribution Date had the
applicable
Pass-Through
Rate been
calculated at a per annum rate equal to One-Month
LIBOR plus the related Margin
and (ii) 10.50% per annum, over
4
2.
the amount of Current Interest on such Class
calculated using a Pass-Through
Rate equal to the related Net Rate Cap
for such Distribution Date.
Basis Risk Shortfall Carry Forward Amount:
With respect to any
Distribution
Date and each Class of Class A Certificates and
Class B
Certificates,
the sum of the Basis Risk Shortfall for such
Distribution
Date and the Basis Risk Shortfalls for all previous
Distribution
Dates not
previously
paid from any source
including
the Excess
Cashflow and payments
under the Corridor
Contracts,
together with interest thereon at a rate equal to the related
Pass-Through
Rate for such Class of Certificates for such
Distribution
Date.
Book-Entry
Certificates:
Initially,
all
Classes
of
Certificates
other
than
the
Class
X
Certificates,
the
Private
Certificates and the Residual Certificates.
Business
Day: Any day other than (i) a
Saturday or a Sunday,
or (ii) a day on which the New York Stock
Exchange or Federal
Reserve is closed or on which
banking
institutions
in any
jurisdiction
in which the
Trustee,
the
Custodian
or the Servicer are
authorized or obligated by law or executive order to be closed.
Certificate:
Any mortgage
pass-through
certificate
evidencing a beneficial ownership interest in the Trust Fund signed
and
countersigned
by the Trustee in
substantially
the forms
annexed
hereto as Exhibits A-1, A-3, A-4, A-5, A-6, A-7, A-8, A-9 and A-10
with the blanks therein appropriately completed.
Certificate
Owner:
Any Person who is the beneficial
owner of a Certificate
registered in the name of the Depository or its
nominee.
Certificate Register:
The register maintained pursuant to Section 5.02.
Certificateholder:
A Holder of a Certificate.
Certification Parties:
As defined in Section 3.18(a)(iv).
Certifying Person:
As defined in Section 3.18(a)(iv).
Class: With respect to the Certificates,
any of Class I-A-1,
Class I-A-2,
Class I-A-3, Class I-X, Class I-B-1, Class I-B-2,
Class I-B-3, Class I-B-4,
Class I-B-5,
Class I-B-6,
Class I-B-7,
Class I-B-8, Class I-B-9, Class R, Class R-X, Class I-XP-1,
Class
I-XP-2,
Class I-B-IO,
Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class
II-B-1, Class II-B-2, Class II-B-3, Class II-B-4,
Class II-B-5, Class II-B-6, Class II-XP and Class II-B-IO.
Class I-A Certificates: The Class I-A-1, Class I-A-2 and Class
I-A-3 Certificates.
Class I-A Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group I
Trigger Event is not in effect,
an amount equal to the excess (if any) of (x) the aggregate
Current Principal Amount of the Class I-A
Certificates
immediately
prior to such
Distribution Date over (y) the lesser of (I) the excess of (a) the
aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction for
Principal
Prepayments
and
Realized Losses on the Group I Mortgage Loans incurred during the
related
Prepayment
Period) over (b) the aggregate
Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction for
Principal
Prepayments
and
Realized
Losses
on the Group I
Mortgage
Loans
incurred
during
the
related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April 2013,
27.875% and (ii) on or after the Distribution
Date in April 2013,
22.300%,
and (II) the excess of
(a) the
aggregate
Stated
Principal
Balance
of the Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction for Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred during the related
Prepayment
Period)
over (b) 0.50% of the Stated Principal Balance of the Group I
Mortgage Loans as of the Cut-off Date.
5
Class I-B Certificates:
The Class I-B-1,
Class I-B-2, Class I-B-3, Class I-B-4, Class I-B-5, Class I-B-6,
Class I-B-7, Class
I-B-8 and Class I-B-9 Certificates.
Class I-B-1 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-1
Certificates
immediately
prior to such
Distribution Date over (y) the lesser of (I) the excess of (a) the
aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction for
Principal
Prepayments
and
Realized
Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1) the aggregate
Current Principal Amount of the Class I-A Certificates
(after taking into account the payment of the Class I-A Principal
Distribution
Amount for such
Distribution
Date) and (2) the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of the last day of
the related Due Period (after
reduction for Principal
Prepayments
and Realized
Losses on the Group I Mortgage Loans incurred during
the related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April
2013,
21.750% and (ii) on or after the
Distribution
Date in April 2013,
17.400%,
and (II) the excess of (a) the aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and Realized
Losses on the Group I
Mortgage Loans incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal
Balance of the Group I Mortgage
Loans as of the Cut-off Date.
Class I-B-2 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-2
Certificates
immediately
prior to such
Distribution Date over (y) the lesser of (I) the excess of (a) the
aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction for
Principal
Prepayments
and
Realized
Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1) the aggregate
Current Principal Amount of the Class I-A Certificates
(after taking into account the payment of the Class I-A Principal
Distribution
Amount for such
Distribution
Date), (2) the aggregate
Current
Principal Amount of the Class I-B-1
Certificates
(after taking into
account
the
payment of the Class I-B-1
Principal
Distribution
Amounts for such
Distribution
Date) and (3) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred during the related
Prepayment
Period)
multiplied by (i) prior
to the
Distribution
Date in April 2013,
16.375% and (ii) on or after the
Distribution
Date in April
2013,
13.100%,
and (II) the
excess of (a) the
aggregate
Stated
Principal
Balance of the Group I
Mortgage
Loans as of the last day of the
related
Due Period
(after
reduction for Principal
Prepayments and Realized
Losses on the Group I Mortgage Loans incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal Balance of the Group
I Mortgage Loans as of the Cut-off Date.
6
Class I-B-3 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-3
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2)
the
aggregate
Current
Principal
Amount
of the
Class
I-B-1
Certificates
(after taking into account the payment of the Class I-B-1 Principal
Distribution
Amounts for such
Distribution
Date),
(3) the aggregate
Current Principal Amount of the Class I-B-2
Certificates
(after taking into account the payment of the Class I-B-2
Principal
Distribution
Amounts for such
Distribution
Date) and (4) the aggregate Stated
Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and Realized
Losses on the Group I
Mortgage
Loans
incurred
during the
related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April 2013,
14.750% and (ii) on or after the Distribution
Date in April 2013,
11.800%,
and (II) the excess of (a) the aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction for
Principal
Prepayments
and
Realized Losses on the Group I Mortgage Loans incurred
during the related
Prepayment
Period) over (b) 0.50% of the Stated
Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date.
Class I-B-4 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-4
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2)
the
aggregate
Current
Principal
Amount
of the
Class
I-B-1
Certificates
(after taking into account the payment of the Class I-B-1 Principal
Distribution
Amounts for such
Distribution
Date),
(3) the aggregate
Current Principal Amount of the Class I-B-2
Certificates
(after taking into account the payment of the Class I-B-2
Principal
Distribution
Amounts
for
such
Distribution
Date),
(4) the
aggregate
Current
Principal
Amount
of the
Class
I-B-3
Certificates (after taking into account the payment of the Class
I-B-3 Principal
Distribution
Amounts for such Distribution Date) and
(5) the
aggregate
Stated
Principal
Balance
of the Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction for Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred during the related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April 2013,
11.625% and (ii) on or after the
Distribution
Date in April 2013,
9.300% and (II) the
excess of (a) the
aggregate
Stated
Principal
Balance
of the Group I Mortgage
Loans as of the last day of the
related Due Period (after
reduction for Principal
Prepayments
and Realized
Losses on the Group I Mortgage Loans incurred during the
related Prepayment Period) over (b) 0.50% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date.
7
Class I-B-5 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-5
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2)
the
aggregate
Current
Principal
Amount
of the
Class
I-B-1
Certificates
(after taking into account the payment of the Class I-B-1 Principal
Distribution
Amounts for such
Distribution
Date),
(3) the aggregate
Current Principal Amount of the Class I-B-2
Certificates
(after taking into account the payment of the Class I-B-2
Principal
Distribution
Amounts
for
such
Distribution
Date),
(4) the
aggregate
Current
Principal
Amount
of the
Class
I-B-3
Certificates
(after taking into account the payment of the Class I-B-3 Principal
Distribution
Amounts for such
Distribution
Date),
(5) the aggregate
Current Principal Amount of the Class I-B-4
Certificates
(after taking into account the payment of the Class I-B-4
Principal
Distribution
Amounts for such
Distribution
Date) and (6) the aggregate Stated
Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and Realized
Losses on the Group I
Mortgage
Loans
incurred
during the
related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April 2013,
10.000% and (ii) on or after the
Distribution
Date in April 2013,
8.000%,
and (II) the excess of (a) the aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction for
Principal
Prepayments
and
Realized Losses on the Group I Mortgage Loans incurred
during the related
Prepayment
Period) over (b) 0.50% of the Stated
Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date.
Class I-B-6 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-6
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2)
the
aggregate
Current
Principal
Amount
of the
Class
I-B-1
Certificates
(after taking into account the payment of the Class I-B-1 Principal
Distribution
Amounts for such
Distribution
Date),
(3) the aggregate
Current Principal Amount of the Class I-B-2
Certificates
(after taking into account the payment of the Class I-B-2
Principal
Distribution
Amounts
for
such
Distribution
Date),
(4) the
aggregate
Current
Principal
Amount
of the
Class
I-B-3
Certificates
(after taking into account the payment of the Class I-B-3 Principal
Distribution
Amounts for such
Distribution
Date),
(5) the aggregate
Current Principal Amount of the Class I-B-4
Certificates
(after taking into account the payment of the Class I-B-4
Principal
Distribution
Amounts
for
such
Distribution
Date),
(6) the
aggregate
Current
Principal
Amount
of the
Class
I-B-5
Certificates (after taking into account the payment of the Class
I-B-5 Principal
Distribution
Amounts for such Distribution Date) and
(7) the
aggregate
Stated
Principal
Balance
of the Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction for Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred during the related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April
2013,
8.750% and (ii) on or after the
Distribution
Date in April 2013,
7.000%,
and (II) the excess of (a) the
aggregate
Stated
Principal
Balance of the Group I Mortgage
Loans as of the last day of the
related Due Period (after
reduction for Principal
Prepayments
and Realized
Losses on the Group I Mortgage Loans incurred during the
related Prepayment Period) over (b) 0.50% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date.
8
Class I-B-7 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-7
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2)
the
aggregate
Current
Principal
Amount
of the
Class
I-B-1
Certificates
(after taking into account the payment of the Class I-B-1 Principal
Distribution
Amounts for such
Distribution
Date),
(3) the aggregate
Current Principal Amount of the Class I-B-2
Certificates
(after taking into account the payment of the Class I-B-2
Principal
Distribution
Amounts
for
such
Distribution
Date),
(4) the
aggregate
Current
Principal
Amount
of the
Class
I-B-3
Certificates
(after taking into account the payment of the Class I-B-3 Principal
Distribution
Amounts for such
Distribution
Date),
(5) the aggregate
Current Principal Amount of the Class I-B-4
Certificates
(after taking into account the payment of the Class I-B-4
Principal
Distribution
Amounts
for
such
Distribution
Date),
(6) the
aggregate
Current
Principal
Amount
of the
Class
I-B-5
Certificates
(after taking into account the payment of the Class I-B-5 Principal
Distribution
Amounts for such
Distribution
Date),
(7) the
aggregate
Current
Principal
Amount of the Class B-6
Certificates
(after
taking into account the payment of the Class B-6
Principal
Distribution
Amounts for such
Distribution
Date) and (8) the aggregate Stated
Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and Realized
Losses on the Group I
Mortgage Loans incurred during the related
Prepayment
Period)
multiplied by (i) prior to the Distribution Date in April 2013,
6.625%
and (ii) on or after the Distribution
Date in April 2013,
5.300%,
and (II) the excess of (a) the aggregate Stated Principal
Balance
of the Group I Mortgage
Loans as of the last day of the related Due Period (after
reduction for
Principal
Prepayments
and Realized
Losses on the Group I Mortgage Loans incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal Balance of
the Group I Mortgage Loans as of the Cut-off Date.
Class I-B-8 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-8
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount for such Distribution Date), (2) the aggregate Current
Principal Amount of the Class I-B-1 Certificates
(after
taking into
account the
payment of the Class I-B-1
Principal
Distribution
Amounts
for such
Distribution
Date),
(3) the
aggregate
Current
Principal
Amount of the Class
I-B-2
Certificates
(after
taking
into
account
the
payment of the Class I-B-2
Principal
Distribution
Amounts
for
such
Distribution
Date),
(4) the
aggregate
Current
Principal
Amount
of the
Class
I-B-3
Certificates
(after taking into account the payment of the Class I-B-3 Principal
Distribution
Amounts for such
Distribution
Date),
(5) the aggregate
Current Principal Amount of the Class I-B-4
Certificates
(after taking into account the payment of the Class I-B-4
Principal
Distribution
Amounts
for
such
Distribution
Date),
(6) the
aggregate
Current
Principal
Amount
of the
Class
I-B-5
Certificates
(after taking into account the payment of the Class I-B-5 Principal
Distribution
Amounts for such
Distribution
Date),
(7) the
aggregate
Current
Principal
Amount of the Class B-6
Certificates
(after
taking into account the payment of the Class B-6
Principal
Distribution
Amounts
for
such
Distribution
Date),
(8) the
aggregate
Current
Principal
Amount
of the
Class
I-B-7
Certificates (after taking into account the payment of the Class
I-B-7 Principal
Distribution
Amounts for such Distribution Date) and
(9) the
aggregate
Stated
Principal
Balance
of the Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction for Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred during the related
Prepayment
Period)
multiplied
by (i) prior to the
Distribution
Date in April
2013,
5.375% and (ii) on or after the
Distribution
Date in April 2013,
4.300%,
and (II) the excess of (a) the
aggregate
Stated
Principal
Balance of the Group I Mortgage
Loans as of the last day of the
related Due Period (after
reduction for Principal
Prepayments
and Realized
Losses on the Group I Mortgage Loans incurred during the
related Prepayment Period) over (b) 0.50% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date.
9
Class I-B-9 Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
I Trigger
Event is not in effect,
an amount
equal to the
excess (if any) of (x) the
Current
Principal
Amount of the Class
I-B-9
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the
Group I
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
(after
taking
into
account
the
payment of the Class I-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2)
the
aggregate
Current
Principal
Amount
of the
Class
I-B-1
Certificates
(after taking into account the payment of the Class I-B-1 Principal
Distribution
Amounts for such
Distribution
Date),
(3) the aggregate
Current Principal Amount of the Class I-B-2
Certificates
(after taking into account the payment of the Class I-B-2
Principal
Distribution
Amounts
for
such
Distribution
Date),
(4) the
aggregate
Current
Principal
Amount
of the
Class
I-B-3
Certificates
(after taking into account the payment of the Class I-B-3 Principal
Distribution
Amounts for such
Distribution
Date),
(5) the aggregate
Current Principal Amount of the Class I-B-4
Certificates
(after taking into account the payment of the Class I-B-4
Principal
Distribution
Amounts
for
such
Distribution
Date),
(6) the
aggregate
Current
Principal
Amount
of the
Class
I-B-5
Certificates
(after taking into account the payment of the Class I-B-5 Principal
Distribution
Amounts for such
Distribution
Date),
(7) the aggregate
Current Principal Amount of the Class I-B-6
Certificates
(after taking into account the payment of the Class I-B-6
Principal
Distribution
Amounts
for
such
Distribution
Date),
(8) the
aggregate
Current
Principal
Amount
of the
Class
I-B-7
Certificates
(after taking into account the payment of the Class I-B-7 Principal
Distribution
Amounts for such
Distribution
Date),
(9) the aggregate
Current Principal Amount of the Class I-B-8
Certificates
(after taking into account the payment of the Class I-B-8
Principal
Distribution
Amounts for such
Distribution
Date) and (10) the aggregate Stated Principal
Balance of the Group I Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and Realized
Losses on the Group I
Mortgage Loans incurred during the related
Prepayment
Period)
multiplied by (i) prior to the Distribution Date in April 2013,
4.125%
and (ii) on or after the Distribution
Date in April 2013,
3.300%,
and (II) the excess of (a) the aggregate Stated Principal
Balance
of the Group I Mortgage
Loans as of the last day of the related Due Period (after
reduction for
Principal
Prepayments
and Realized
Losses on the Group I Mortgage Loans incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal Balance of
the Group I Mortgage Loans as of the Cut-off Date.
10
Class
I-B-IO
Distribution
Amount:
With
respect to any
Distribution
Date,
the
Current
Interest
for the Class
I-B-IO
Certificates
for such
Distribution
Date
(from
REMIC IV to REMIC V on account of REMIC IV
Regular
Interest
I-B-IO-I);
provided,
however,
that on and after
the
Distribution
Date on which
the
aggregate
Current
Principal
Amount of the Class I-A or Class I-B
Certificates
has been reduced to zero, the Class I-B-IO
Distribution
Amount shall include the Group I
Overcollateralization
Amount
(which shall be deemed
distributable,
first, from REMIC IV to REMIC V on account of REMIC IV Regular
Interest I-B-IO-I, in respect of
accrued and unpaid
interest
thereon
until such accrued and unpaid
interest
shall have been reduced to zero and,
thereafter,
from
REMIC IV to REMIC V on account of REMIC IV Regular Interest
I-B-IO-P, in respect of the principal balance thereof).
Class I-B-IO Notional Amount:
With respect to any Distribution Date and the Class I-B-IO
Certificates,
the aggregate of the
Uncertificated Principal Balances of the REMIC I Regular Interests.
Class I-B-IO Pass-Through Rate: With respect to the Class I-B-IO
Certificates or REMIC IV Regular Interest I-B-IO-I,
and any
Distribution
Date,
a per annum rate equal to the sum of (a) the Maximum
Coupon
Strip Rate and (b) the
percentage
equivalent
of a
fraction,
the
numerator
of which is the sum of the
amounts
calculated
pursuant
to
clauses
(i)
through
(iii)
below,
and the
denominator of which is the aggregate
Uncertificated
Principal Balance of the REMIC I Regular Interests.
For purposes of calculating
the Pass-Through Rate for the Class I-B-IO Certificates, the
numerator is equal to the sum of the following components:
(i)
the
Uncertificated
Pass-Through
Rate for REMIC I Regular Interest LT1 minus the related Marker
Rate,
applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC I Regular Interest LT1;
11
(ii)
the
Uncertificated
Pass-Through
Rate for REMIC I Regular Interest LT2 minus the related Marker
Rate,
applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC I Regular Interest LT2; and
(iii)
the
Uncertificated
Pass-Through Rate for REMIC I Regular Interest LT4 minus twice the
related Marker Rate,
applied
to a notional amount equal to the Uncertificated Principal Balance
of REMIC I Regular Interest LT4.
Class I-X
Notional
Amount:
With respect to any
Distribution
Date and the Class I-X
Certificates,
the
aggregate
Stated
Principal Balance immediately prior to such Distribution Date of
the Hard Prepayment Charge Loans.
Class I-XP Certificates:
The Class I-XP-1 Certificates and the Class I-XP-2 Certificates.
Class II-1A Certificates: The Class II-1A-1, Class II-1A-2 and
Class II-1A-3 Certificates.
Class II-1A Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
II Trigger Event is not in effect, an amount equal to the product
of the Class II-A Principal
Distribution Amount and a fraction,
the
numerator of which is the
Principal
Funds for Sub-Loan
Group II-1 for such
Distribution
Date and the
denominator
of which is the
Principal Funds for Loan Group II for such Distribution Date.
Class II-2A Principal
Distribution
Amount:
For any Distribution Date on or after the related Stepdown Date on
which a Group
II Trigger Event is not in effect, an amount equal to the product
of the Class II-A Principal
Distribution Amount and a fraction,
the
numerator of which is the
Principal
Funds for Sub-Loan
Group II-2 for such
Distribution
Date and the
denominator
of which is the
Principal Funds for Loan Group II for such Distribution Date.
Class II-A Certificates:
The Class II-1A Certificates and the Class II-2A-1 Certificates.
Class II-A Principal
Distribution
Amount:
For any Distribution
Date on or after the related Stepdown Date on which a Group
II Trigger Event is not in effect,
an amount equal to the excess (if any) of (x) the aggregate
Current
Principal Amount of the Class
II-A
Certificates
immediately
prior to such
Distribution
Date over (y) the
lesser of (I) the excess of (a) the
aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred
during the related
Prepayment
Period) over (b) the aggregate
Stated
Principal
Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after
reduction for Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) multiplied by (i) prior
to the
Distribution
Date in April 2013,
24.375% and (ii) on or after the
Distribution
Date in April
2013,
19.500%,
and (II) the
excess of (a) the
aggregate
Stated
Principal
Balance of the Group II
Mortgage
Loans as of the last day of the
related Due Period
(after
reduction for Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal Balance of the Group
II Mortgage Loans as of the Cut-off Date.
Class II-B
Certificates:
The Class
II-B-1,
Class
II-B-2,
Class
II-B-3,
Class
II-B-4,
Class
II-B-5 and Class
II-B-6
Certificates.
12
Class II-B-1 Principal
Distribution
Amount: For any Distribution Date on or after the related Stepdown
Date on which a Group
II Trigger
Event is not in effect,
an amount
equal to the excess (if any) of (x) the Current
Principal
Amount of the Class
II-B-1
Certificates
immediately
prior to such
Distribution Date over (y) the lesser of (I) the excess of (a) the
aggregate Stated Principal
Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after
reduction for
Principal
Prepayments
and
Realized
Losses on the Group II Mortgage Loans incurred
during the related
Prepayment
Period) over (b) the sum of (1) the aggregate
Current
Principal
Amount of the Class
II-A
Certificates
(after
taking
into
account
the
payment
of the Class
II-A
Principal
Distribution
Amount for such
Distribution
Date) and (2) the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after
reduction for Principal
Prepayments
and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period)
multiplied by (i) prior to the Distribution
Date in April 2013,
16.000% and (ii) on
or after the Distribution Date in April 2013,
12.800%,
and (II) the excess of (a) the aggregate Stated Principal Balance
of the Group
II Mortgage Loans as of the last day of the related Due Period
(after
reduction for Principal
Prepayments
and Realized Losses on the
Group II Mortgage Loans incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal Balance of the Group
II
Mortgage Loans as of the Cut-off Date.
Class II-B-2 Principal
Distribution
Amount: For any Distribution Date on or after the related Stepdown
Date on which a Group
II Trigger
Event is not in effect,
an amount
equal to the excess (if any) of (x) the Current
Principal
Amount of the Class
II-B-2
Certificates
immediately
prior to such
Distribution Date over (y) the lesser of (I) the excess of (a) the
aggregate Stated Principal
Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after
reduction for
Principal
Prepayments
and
Realized
Losses on the Group II Mortgage Loans incurred
during the related
Prepayment
Period) over (b) the sum of (1) the aggregate
Current
Principal
Amount of the Class
II-A
Certificates
(after
taking
into
account
the
payment
of the Class
II-A
Principal
Distribution
Amount for such Distribution
Date), (2) the aggregate Current Principal Amount of the Class
II-B-1
Certificates
(after
taking into account the payment of the Class II-B-1 Principal
Distribution
Amounts for such Distribution
Date) and (3) the aggregate
Stated
Principal
Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after
reduction for Principal
Prepayments
and Realized
Losses on the Group II Mortgage
Loans
incurred
during the related
Prepayment
Period)
multiplied by (i)
prior to the Distribution Date in April 2013,
11.125% and (ii) on or after the Distribution Date in April 2013,
8.900%,
and (II) the
excess of (a) the
aggregate
Stated
Principal
Balance of the Group II
Mortgage
Loans as of the last day of the
related Due Period
(after
reduction for Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) over (b) 0.50% of the Stated Principal Balance of the Group
II Mortgage Loans as of the Cut-off Date.
Class II-B-3 Principal
Distribution
Amount: For any Distribution Date on or after the related Stepdown
Date on which a Group
II Trigger
Event is not in effect,
an amount
equal to the excess (if any) of (x) the Current
Principal
Amount of the Class
II-B-3
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class II-A
Certificates
(after
taking
into
account the payment of the Class II-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2) the
aggregate
Current
Principal
Amount
of the
Class
II-B-1
Certificates
(after taking into account the payment of the Class II-B-1
Principal
Distribution
Amounts for such Distribution
Date),
(3) the
aggregate
Current
Principal
Amount of the Class
II-B-2
Certificates
(after
taking into account the payment of the Class
II-B-2 Principal
Distribution
Amounts for such
Distribution
Date) and (4) the aggregate
Stated
Principal
Balance of the Group II
Mortgage
Loans as of the last day of the related Due Period
(after
reduction for Principal
Prepayments
and Realized
Losses on the
Group II Mortgage
Loans incurred
during the related
Prepayment
Period)
multiplied by (i) prior to the
Distribution
Date in April
2013,
9.875%
and (ii) on or after the
Distribution
Date in April
2013,
7.900%,
and (II) the excess of (a) the
aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments
and Realized Losses on the Group II Mortgage Loans incurred
during the related
Prepayment
Period) over (b) 0.50% of the
Stated Principal Balance of the Group II Mortgage Loans as of the
Cut-off Date.
13
Class II-B-4 Principal
Distribution
Amount: For any Distribution Date on or after the related Stepdown
Date on which a Group
II Trigger
Event is not in effect,
an amount
equal to the excess (if any) of (x) the Current
Principal
Amount of the Class
II-B-4
Certificates
immediately
prior
to such
Distribution
Date
over
(y) the
lesser
of (I) the
excess
of (a) the
aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class II-A
Certificates
(after
taking
into
account the payment of the Class II-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2) the
aggregate
Current
Principal
Amount
of the
Class
II-B-1
Certificates
(after taking into account the payment of the Class II-B-1
Principal
Distribution
Amounts for such Distribution
Date),
(3) the
aggregate
Current
Principal
Amount of the Class
II-B-2
Certificates
(after
taking into account the payment of the Class
II-B-2 Principal
Distribution
Amounts for such
Distribution
Date), (4) the aggregate
Current
Principal Amount of the Class II-B-3
Certificates
(after taking into account the payment of the Class II-B-3
Principal
Distribution
Amounts for such
Distribution
Date)
and (5) the
aggregate
Stated
Principal
Balance of the Group II Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and
Realized
Losses on the Group II Mortgage
Loans
incurred
during the related
Prepayment
Period)
multiplied by (i) prior to the Distribution
Date in April 2013,
8.375% and (ii) on or after the
Distribution
Date in April
2013,
6.700%,
and (II) the excess of (a) the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after
reduction for Principal
Prepayments
and Realized Losses on the Group II Mortgage Loans incurred during
the related Prepayment Period) over (b) 0.50% of the Stated
Principal Balance of the Group II Mortgage Loans as of the Cut-off
Date.
Class II-B-5
Principal
Distribution
Amount:
For any
Distribution
Date on or after the related
Stepdown
Date on which a
Group II Trigger
Event is not in effect,
an amount
equal to the excess
(if any) of (x) the
Current
Principal
Amount of the Class
II-B-5
Certificates
immediately
prior to such
Distribution
Date over (y) the lesser of (I) the excess of (a) the aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class II-A
Certificates
(after
taking
into
account the payment of the Class II-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2) the
aggregate
Current
Principal
Amount
of the
Class
II-B-1
Certificates
(after taking into account the payment of the Class II-B-1
Principal
Distribution
Amounts for such Distribution
Date),
(3) the
aggregate
Current
Principal
Amount of the Class
II-B-2
Certificates
(after
taking into account the payment of the Class
II-B-2 Principal
Distribution
Amounts for such
Distribution
Date), (4) the aggregate
Current
Principal Amount of the Class II-B-3
Certificates
(after taking into account the payment of the Class II-B-3
Principal
Distribution
Amounts for such Distribution
Date),
(5) the
aggregate
Current
Principal
Amount of the Class
II-B-4
Certificates
(after
taking into account the payment of the Class
II-B-4 Principal
Distribution
Amounts for such
Distribution
Date) and (6) the aggregate
Stated
Principal
Balance of the Group II
Mortgage
Loans as of the last day of the related Due Period
(after
reduction for Principal
Prepayments
and Realized
Losses on the
Group II Mortgage
Loans incurred
during the related
Prepayment
Period)
multiplied by (i) prior to the
Distribution
Date in April
2013,
7.000%
and (ii) on or after the
Distribution
Date in April
2013,
5.600%,
and (II) the excess of (a) the
aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments
and Realized Losses on the Group II Mortgage Loans incurred
during the related
Prepayment
Period) over (b) 0.50% of the
Stated Principal Balance of the Group II Mortgage Loans as of the
Cut-off Date.
14
Class II-B-6
Principal
Distribution
Amount:
For any
Distribution
Date on or after the related
Stepdown
Date on which a
Group II Trigger
Event is not in effect,
an amount
equal to the excess
(if any) of (x) the
Current
Principal
Amount of the Class
II-B-6
Certificates
immediately
prior to such
Distribution
Date over (y) the lesser of (I) the excess of (a) the aggregate
Stated
Principal
Balance
of the Group II
Mortgage
Loans as of the last day of the
related
Due
Period
(after
reduction
for
Principal
Prepayments and Realized Losses on the Group II Mortgage Loans
incurred during the related
Prepayment
Period) over (b) the sum of (1)
the
aggregate
Current
Principal
Amount of the Class II-A
Certificates
(after
taking
into
account the payment of the Class II-A
Principal
Distribution
Amount
for
such
Distribution
Date),
(2) the
aggregate
Current
Principal
Amount
of the
Class
II-B-1
Certificates
(after taking into account the payment of the Class II-B-1
Principal
Distribution
Amounts for such Distribution
Date),
(3) the
aggregate
Current
Principal
Amount of the Class
II-B-2
Certificates
(after
taking into account the payment of the Class
II-B-2 Principal
Distribution
Amounts for such
Distribution
Date), (4) the aggregate
Current
Principal Amount of the Class II-B-3
Certificates
(after taking into account the payment of the Class II-B-3
Principal
Distribution
Amounts for such Distribution
Date),
(5) the
aggregate
Current
Principal
Amount of the Class
II-B-4
Certificates
(after
taking into account the payment of the Class
II-B-4 Principal
Distribution
Amounts for such
Distribution
Date), (6) the aggregate
Current
Principal Amount of the Class II-B-5
Certificates
(after taking into account the payment of the Class II-B-5
Principal
Distribution
Amounts for such
Distribution
Date)
and (7) the
aggregate
Stated
Principal
Balance of the Group II Mortgage
Loans as of the last day of the related Due Period
(after
reduction
for
Principal
Prepayments
and
Realized
Losses on the Group II Mortgage
Loans
incurred
during the related
Prepayment
Period)
multiplied by (i) prior to the Distribution
Date in April 2013,
2.250% and (ii) on or after the
Distribution
Date in April
2013,
1.800%,
and (II) the excess of (a) the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after
reduction for Principal
Prepayments
and Realized Losses on the Group II Mortgage Loans incurred during
the related Prepayment Period) over (b) 0.50% of the Stated
Principal Balance of the Group II Mortgage Loans as of the Cut-off
Date.
15
Class II-B-IO Advances:
As defined in Section 6.01(c).
Class
II-B-IO
Distribution
Amount:
With respect to any
Distribution
Date,
the Current
Interest
for the Class
II-B-IO
Certificates for such
Distribution Date (which shall be deemed
distributable
from REMIC IV to REMIC V on account of REMIC IV Regular
Interest
II-B-IO-I);
provided,
however,
that on and after the Distribution
Date on which the aggregate Current Principal Amount of
the Class II-A or Class II-B
Certificates has been reduced to zero, the Class II-B-IO
Distribution
Amount shall include the Group II
Overcollateralization
Amount
(which
shall be deemed
distributable,
first,
from REMIC IV to REMIC V on account of REMIC IV Regular
Interest
II-B-IO-I,
in respect of accrued and unpaid interest
thereon until such accrued and unpaid interest shall have been
reduced
to zero and,
thereafter,
from
REMIC IV to REMIC V on account of REMIC IV Regular
Interest
II-B-IO-P,
in respect of the
principal
balance thereof).
Class II-B-IO Notional
Amount:
With respect to any Distribution
Date and the Class II-B-IO
Certificates,
the aggregate of
the Uncertificated Principal Balances of the REMIC III Regular
Interests.
Class II-B-IO
Pass-Through Rate: With respect to the Class II-B-IO
Certificates or REMIC IV Regular Interest II-B-IO-I,
and
any
Distribution
Date, a per annum rate equal to the
percentage
equivalent of a fraction,
the numerator of which is the sum of the
amounts
calculated
pursuant to clauses
(i) through
(viii)
below,
and the
denominator
of which is the
aggregate
Uncertificated
Principal
Balance of the REMIC III Regular
Interests.
For
purposes
of
calculating
the
Pass-Through
Rate for the Class
II-B-IO
Certificates or REMIC IV Regular Interest II-B-IO-I, the numerator
is equal to the sum of the following components:
(i)
the
Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT5 minus the
related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC III Regular Interest LT5;
(ii)
the
Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT6 minus the
related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC III Regular Interest LT6;
(iii)
the Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT8 minus twice
the related Marker Rate, applied
to a notional amount equal to the Uncertificated Principal Balance
of REMIC III Regular Interest LT8;
(iv)
the
Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT9 minus the
related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC III Regular Interest LT9;
(v)
the Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT10 minus the
related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC III Regular Interest LT10;
16
(vi)
the
Uncertificated
Pass-Through
Rate for
REMIC III
Regular
Interest
LT12 minus twice the related
Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC III Regular Interest LT12;
(vii)
the
Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT-Y1 minus the
related Marker Rate, applied to
a notional amount equal to the Uncertificated Principal Balance of
REMIC III Regular Interest LT-Y1; and
(viii)
the
Uncertificated
Pass-Through Rate for REMIC III Regular Interest LT-Y2 minus the
related Marker Rate, applied to
a notional amount equal to the Uncertificated Principal Balance of
REMIC III Regular Interest LT-Y2.
Class A Certificates: The
Class I-A Certificates and the Class II-A Certificates.
Class B Certificates:
The Class I-B Certificates and the Class II-B Certificates.
Class B-IO Certificates:
The Class I-B-IO Certificates and the Class II-B-IO Certificates.
Class R
Certificates:
The Class R
Certificates
substantially
in the form
annexed
hereto as Exhibit
A-7 and
evidencing
ownership
of
interests
designated
as "residual
interests"
in REMIC I,
REMIC II, REMIC III and REMIC IV for purposes of the REMIC
Provisions.
Component I of the Class R Certificates
is designated as the sole class of "residual
interest" in REMIC I,
Component II
of the
Class R
Certificates
is
designated
as the sole
class of
"residual
interest"
in REMIC II,
Component III
of the Class R
Certificates
is designated
as the sole class of "residual
interest" in REMIC III and
Component IV
of the Class R
Certificates
is
designated as the sole class of "residual interest" in REMIC IV.
Class R-X
Certificates:
The Class R-X
Certificates
substantially
in the form annexed hereto as Exhibit A-8 and evidencing
ownership of the "residual interest" in REMIC V for purposes of the
REMIC Provisions.
Class X Certificates:
The Class I-X Certificates.
Class XP Certificates:
The Class I-XP Certificates and the Class II-XP Certificates.
Class XP Reserve Account: The account established and maintained by
the Trustee pursuant to Section 4.09.
Closing Date:
March 30, 2007.
Code:
The United States Internal Revenue Code of 1986, as amended.
Commission or SEC:
The U.S. Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office:
The designated office of the Trustee,
where at any particular time its corporate trust business with
respect to this Agreement shall be
administered.
For the purpose of registration
and transfer and exchange only, the Corporate Trust
Office of the Trustee shall be located at Sixth Street and
Marquette Avenue, Minneapolis,
Minnesota 55479, Attention:
Corporate Trust
Group,
Bear Stearns
Mortgage
Funding Trust 2007-AR3.
The Corporate Trust Office of the Trustee at the date of the
execution of this
Agreement for all other purposes is located at 9062 Old Annapolis
Road,
Columbia,
Maryland 21045,
Attention:
Corporate Trust Group,
Bear Stearns Mortgage Funding Trust 2007-AR3.
17
Corridor Contracts:
With respect to the Group II Offered Certificates and Class II-B-6
Certificates,
the respective interest
rate corridor
contracts,
dated as of the Closing Date, between the Trustee,
on behalf of the Trust for the benefit of the Holders of
the related
Certificates,
and the Corridor
Counterparty,
together with any scheduling,
confirmations or other
agreements
related
thereto, a form of which is attached hereto as Exhibit N.
Corridor Contract Payment Amount:
With respect to any Distribution Date and any Corridor Contract,
any amounts received from
such Corridor Contract on such Distribution Date.
Corridor Counterparty:
Bear Stearns Financial Products Inc.
Coupon
Strip:
With
respect to Loan Group I, shall be an amount
equal to the lesser of (a) the
product of (i) 1.00%,
(ii)
the aggregate
Stated
Principal
Balance of the Group I Mortgage Loans with original terms to
maturity in excess of 30 years as of the
Due Date
occurring in the month prior to such
Distribution
Date and (iii)
one-twelfth
and (b) the excess of (i) the Final Maturity
Reserve Account Target for such
Distribution
Date over (ii) the amount on deposit in the Final Maturity
Reserve Account
immediately
prior to such Distribution Date.
Coupon
Strip
Rate:
With
respect to Loan
Group I, shall
equal the Coupon
Strip,
if any,
payable to the Final
Maturity
Reserve
Account on any
Distribution
Date,
expressed as a per annum rate calculated on the basis of the
aggregate
Stated
Principal
Balance of the Group I Mortgage Loans as of such Distribution Date.
Credit
Enhancement
Percentage:
For any Distribution
Date is the percentage
obtained by dividing (x) the aggregate Current
Principal
Amount of the
Subordinate
Certificates
in the related Loan Group
(including
the related
Overcollateralization
Amount)
thereto by (y) the aggregate
Principal
Balance of the Mortgage Loans in the related Loan Group,
calculated after taking into account
distributions of principal on the related Mortgage Loans and
distribution of the Principal
Distribution
Amounts to the holders of the
related Certificates then entitled to distributions of principal on
such Distribution Date.
Cumulative
Loss Test
Violation:
The Group I Cumulative
Loss Test Violation or the Group II Cumulative Loss Test Violation,
as applicable.
Current
Interest:
As of any Distribution
Date, with respect to each Class of Class A Certificates and Class
B Certificates,
(i) the
interest
accrued on the
Current
Principal
Amount or Notional
Amount
during the related
Interest
Accrual
Period at the
applicable
Pass-Through
Rate plus any amount
previously
distributed
with
respect to interest for such
Certificate
that has been
recovered as a voidable
preference by a trustee in bankruptcy
minus with respect to the Class A Certificates or Class B
Certificates,
(ii) the sum of (a) any Prepayment
Interest Shortfall for such Distribution
Date, to the extent not covered by Compensating
Interest
Payments and (b) any shortfalls
resulting from the
application
of the Relief Act during the related Due Period;
provided,
however,
that for purposes of calculating
Current Interest for any such Class,
amounts specified in clauses (ii)(a) and (ii)(b) hereof for any
such Distribution
Date shall be allocated first to the related Class B-IO
Certificates and the Residual
Certificates in reduction of
amounts
otherwise
distributable to such
Certificates on such
Distribution Date and then any excess shall be allocated to each
other
Class of Certificates
in the related Loan Group pro rata based on the respective
amounts of interest
accrued
pursuant to clause (i)
hereof for each such Class on such
Distribution
Date,
(c) any Net Deferred
Interest
allocated to such Class,
and (d) the interest
portion of any Realized Losses on the related Mortgage Loans
allocated to such Class in the manner as described herein.
18
Current
Principal
Amount:
As of any
Distribution
Date,
with
respect to each Class of Class A
Certificates
and Class B
Certificates,
the initial principal amount of such Certificate plus the amount of
any Net Deferred
Interest
allocated thereto on the
related Distribution Date and all previous
Distribution Dates plus any Subsequent
Recoveries added to the Current Principal Amount of
such
Certificates
pursuant to Section
6.02(h),
and reduced by (i) all amounts
distributed on previous
Distribution
Dates on such
Certificate
with respect to principal
and (ii) any
Applied
Realized Loss Amounts
allocated to such Class on previous
Distribution
Dates.
With respect to each Class of Class A Certificates
and Class B Certificates,
the Current
Principal Amount thereof will equal
the sum of the Current
Principal
Amounts of all
Certificates in such Class.
The initial Current
Principal Amount for each Class of
Certificates is set forth in Section 5.01(c)(iv).
Curtailment:
Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in full.
Custodial
Account:
The trust account or accounts
created and
maintained by the Servicer
pursuant to
Section 4.01,
which
shall be denominated
"Wells Fargo Bank,
National
Association,
as Trustee f/b/o holders of Structured Asset Mortgage
Investments II
Inc., Bear Stearns Mortgage Funding Trust 2007-AR3,
Mortgage
Pass-Through
Certificates,
Series
2007-AR3,
Custodial
Account." The
Custodial Account shall be an Eligible Account.
Custodial
Agreement:
An
agreement,
dated as of the Closing Date among the
Depositor,
the
Servicer,
the Trustee and the
Custodian in substantially the form attached hereto as Exhibit G.
Custodian:
Wells Fargo Bank,
National
Association,
or any successor
custodian appointed pursuant to the provisions hereof
and of the Custodial Agreement.
Cut-off Date:
March 1, 2007.
Cut-off Date Balance:
$1,326,893,105.76.
Deferred
Interest:
The amount of accrued
interest on the Mortgage Loans,
the payment of which is deferred and added to the
Outstanding Principal Balance of a Mortgage Loan due to negative
amortization on such Mortgage Loan.
Deficient
Valuation:
A Bankruptcy
Loss that results if a court,
in connection
with a personal
bankruptcy of a Mortgagor,
establishes
the value of a Mortgaged
Property at an amount less than the unpaid
principal
balance of the
Mortgage
Loan secured by
such Mortgaged Property.
19
Delinquency
Recognition
Policies:
The
generally
accepted
industry
standard
that
defines the proper means of reporting
delinquency
status
when a loan is
determined
to be
delinquent
if the payment is not
received
by the end of the day
immediately
preceding the loan's next due date.
Delinquency Test Violation:
A Group I Delinquency Test Violation or a Group II Delinquency Test
Violation, as applicable.
Delinquent:
The delinquency
method used for
calculations
with respect to the Mortgage Loans will be in accordance with the
methodology used by lenders
regulated by the Office of Thrift
Supervision.
Under this method, a mortgage loan is considered "30 days
or more
Delinquent"
if the borrower
fails to make a scheduled
payment
prior to the close of business on the mortgage
loan's first
succeeding
due date.
For
example,
if a
securitization
had a closing
date
occurring
in August and a cut-off date of August 1, a
mortgage
loan with a payment due on July 1 that
remained
unpaid as of the close of business on July 31 would not be
described as 30
days
delinquent
as of the cut-off
date.
Such
mortgage
loan with a payment due on June 1 that
remained
unpaid as of the close of
business on July 31 would be described as 30 days
delinquent as of the cut-off
date. A mortgage loan would be considered
"60 days or
more Delinquent" with respect to such scheduled
payment if such scheduled
payment were not made prior to the close of business on the
mortgage
loan's second
succeeding due date (or, in the preceding
example,
if the mortgage loan with a payment due on May 1 remained
unpaid as of the close of business on July 31).
Similarly
for "90 days or more
Delinquent"
and so on. Unless
otherwise
specified,
with respect to any date of
determination,
determinations
of delinquency
are made as of the last day of the prior
calendar
month.
Mortgage
Loans
with Due Dates
which are not the first of the
month are
treated
as if the Due Date was the first of the
following
month.
Depositor:
Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.
Depository:
The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.
Depository Agreement:
The meaning specified in Section 5.01(a).
Depository
Participant:
A broker,
dealer,
bank or other
financial
institution or other Person for whom from time to time
the Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Designated Depository
Institution:
A depository
institution
(commercial bank, federal savings bank, mutual savings bank or
savings and loan
association)
or trust company
(which may include the Trustee),
the deposits of which are fully insured by the FDIC
to the extent provided by law.
Determination
Date:
The 15th day (or if such 15th day is not a Business
Day, the Business Day
immediately
preceding
such
15th day) of the month of the Distribution Date.
20
Disqualified
Organization:
Any of the following:
(i) the United States,
any State or political
subdivision
thereof,
any
possession of the United States, or any agency or
instrumentality
of any of the foregoing (other than an
instrumentality
which is a
corporation
if all of its activities are subject to tax and,
except for the Freddie Mac or any successor
thereto,
a majority of its
board of directors is not selected by such governmental unit),
(ii) any foreign
government,
any international
organization,
or any
agency or
instrumentality
of any of the foregoing,
(iii) any
organization
(other than certain farmers'
cooperatives
described in
Section 521
of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code
(including
the tax imposed by
Section 511 of
the Code on unrelated business taxable income), (iv) rural electric
and telephone
cooperatives described in
Section 1381(a)(2)(C)
of
the Code or (v) any other
Person so
designated
by the
Trustee
based upon an Opinion of Counsel
that the
holding of an
ownership
interest
in a Residual
Certificate
by such
Person
may cause any
2007-AR3
REMIC
contained
in the Trust or any Person
having an
ownership
interest in the Residual
Certificate
(other than such Person) to incur a liability
for any federal tax imposed
under the
Code that would not otherwise be imposed but for the transfer of an
ownership
interest in a Residual
Certificate to such Person.
The
terms "United
States,"
"State" and
"international
organization"
shall have the meanings set forth in
Section 7701
of the Code or
successor provisions.
Distribution
Account:
The trust account or accounts created and maintained by the Trustee
pursuant to
Section 4.03,
which
shall be denominated
"Wells Fargo Bank,
National
Association,
as Trustee f/b/o holders of Structured Asset Mortgage
Investments II
Inc., Bear Stearns Mortgage Funding Trust 2007-AR3,
Mortgage Pass-Through
Certificates,
Series 2007-AR3 - Distribution Account." The
Distribution Account shall be an Eligible Account.
Distribution Account Deposit Date:
The second Business Day prior to each Distribution Date.
Distribution
Date:
The 25th day of any month,
beginning in the month
immediately
following the month of the Closing Date,
or, if such 25th day is not a Business Day, the Business Day
immediately following.
Distribution Report:
The Asset-Backed Issuer Distribution Report pursuant to Section 13
or 15(d) of the Exchange Act.
DTC Custodian:
Wells Fargo Bank, National Association, or its successors in
interest as custodian for the Depository.
Due Date:
With respect to each Mortgage Loan,
the date in each month on which its Scheduled
Payment is due if such due date
is the first day of a month and otherwise is deemed to be the first
day of the following month.
Due Period:
With respect to any
Distribution
Date and each Mortgage
Loan,
the period
commencing on the second day of the
month
preceding the calendar month in which the
Distribution
Date occurs and ending at the close of business on the first day of
the
month in which the Distribution Date occurs.
21
Eligible Account:
Any of (i) a segregated
account
maintained with a federal or state chartered
depository
institution (A)
the
short-term
obligations
of which are rated A-1 or better by
Standard
& Poor's
and P-1 by
Moody's
at the time of any
deposit
therein or (B) insured by the FDIC (to the limits
established
by such
Corporation),
the
uninsured
deposits
in which
account are
otherwise
secured
such that,
as
evidenced
by an Opinion of Counsel
(obtained
by the Person
requesting
that the account be held
pursuant to this clause (i)) delivered to the Trustee prior to the
establishment of such account,
the
Certificateholders
will have a
claim with respect to the funds in such account and a perfected
first priority
security
interest against any collateral
(which shall
be
limited
to
Permitted
Investments,
each of which
shall
mature
not later
than the
Business
Day
immediately
preceding
the
Distribution
Date next following the date of investment in such collateral or
the
Distribution
Date if such Permitted
Investment is
an obligation of the institution that maintains the Distribution
Account)
securing such funds that is superior to claims of any other
depositors or general
creditors of the depository
institution with which such account is maintained,
(ii) a segregated trust account
or accounts
maintained
with a federal or state
chartered
depository
institution
or trust
company with trust powers acting in its
fiduciary
capacity or (iii) a
segregated
account or accounts of a
depository
institution
acceptable
to the Rating
Agencies
(as
evidenced in writing by the Rating
Agencies that use of any such account as the
Distribution
Account will not have an adverse effect
on the then-current
ratings assigned to the Classes of Certificates
then rated by the Rating
Agencies).
Eligible
Accounts may bear
interest.
EMC: EMC Mortgage Corporation, and any successor thereto.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: As defined in Section 8.01.
Excess
Cashflow:
With respect to any
Distribution
Date and each Loan Group, the sum of (i) the Remaining Excess
Spread for
such Loan
Group
and such
Distribution
Date and (ii) the
Overcollateralization
Release
Amount
for such
Loan
Group and for such
Distribution Date.
Excess Liquidation
Proceeds:
To the extent that such amount is not required by law to be paid to
the related Mortgagor,
the
amount,
if any, by which
Liquidation
Proceeds
with
respect to a
Liquidated
Mortgage
Loan exceed the sum of (i) the
Outstanding
Principal
Balance of such Mortgage Loan and accrued but unpaid interest at
the related Mortgage
Interest Rate through the last day of
the month in which the related Liquidation Date occurs, plus (ii)
related Liquidation Expenses.
Excess
Overcollateralization:
With
respect
to any
Distribution
Date and each Loan
Group,
the
excess,
if any,
of the
Overcollateralization Amount for such Loan Group over the
Overcollateralization Target Amount for such Loan Group.
Excess Spread:
With respect to any Distribution
Date and each Loan Group, the excess,
if any, of the related Interest Funds
for such
Distribution
Date over the sum (i) with respect to Loan Group I only,
the Coupon
Strip,
if
applicable,
(ii) the Current
Interest on the related Offered
Certificates
and, if applicable,
the Class II-B-6
Certificates and (iii) any Interest Carry Forward
Amounts on the related Senior Certificates on such Distribution
Date.
22
Exchange Act:
The Securities Exchange Act of 1934, as amended.
Exchange Act Reports:
Any reports required to be filed pursuant to Sections 3.17 and
3.18.
Extra
Principal
Distribution
Amount:
With
respect to any
Distribution
Date and each Loan
Group,
the lesser of (i) the
excess,
if
any,
of
the
Overcollateralization
Target
Amount
for
such
Loan
Group
and
such
Distribution
Date
over
the
Overcollateralization
Amount for such Loan Group and such
Distribution
Date and (ii) the Excess
Spread for such Loan Group and such
Distribution Date.
Fannie Mae:
Federal National Mortgage Association and any successor thereto.
Fannie Mae Guide:
The Fannie Mae Selling Guide and the Fannie Mae Servicing Guide and
all amendments or additions thereto.
FDIC:
Federal Deposit Insurance Corporation and any successor thereto.
Final Certification:
The certification substantially in the form of Exhibit Three to the
Custodial Agreement.
Final Maturity
Reserve
Account:
The separate
account
established and maintained by the Trustee
pursuant to Section 4.10.
Amounts on deposit in the Final Maturity Reserve Account will not
be an asset of any 2007-AR3 REMIC.
Final Maturity
Reserve Account Target:
For any
Distribution
Date beginning with the
Distribution
Date in April 2017, the
lesser of (a) the product of (i) the
aggregate
principal
balance of the Group I Mortgage
Loans with
original
terms to maturity in
excess of 30 years as of the Due Date occurring in the month prior
to such
Distribution
Date and (ii) the fraction,
the numerator of
which is 1.00 and the denominator of which is 0.85, and (b)
$15,832,991.
Fiscal
Quarter:
December 1 through the last day of February,
March 1 through May 31, June 1 through August 31, or September
1 through November 30, as applicable.
Form 8-K Disclosure Information:
As defined in Section 3.18(a)(iii).
Fractional
Undivided
Interest:
With
respect to any
Class of
Certificates
(other
than the Class XP
Certificates),
the
fractional
undivided
interest
evidenced by any Certificate of such Class the
numerator of which is the Current
Principal Amount of
such
Certificate
and the
denominator
of which
is the
Current
Principal
Amount
of such
Class.
With
respect
to the
Class XP
Certificates,
the percentage
interest stated thereon.
With respect to the
Certificates in the aggregate,
the fractional
undivided
interest
evidenced by (i) the
Residual
Certificates
will be deemed to equal 1.0% and (ii) a Certificate of any other
Class will be
deemed to equal 99.0%
multiplied by a fraction,
the numerator of which is the Current
Principal
Amount of such
Certificate and the
denominator of which is the aggregate Current Principal Amount of
all the Certificates of such Class.
23
Freddie Mac:
Freddie Mac, formerly the Federal Home Loan Mortgage Corporation,
and any successor thereto.
Freddie Mac Guide:
The
Freddie
Mac Selling
Guide and the Freddie
Mac
Servicing
Guide and all
amendments
or
additions
thereto.
Global Certificate:
Any Private
Certificate
registered in the name of the Depository or its nominee,
beneficial
interests
in which are
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).
Gross Margin:
As to each Mortgage
Loan,
the fixed
percentage
set forth in the related
Mortgage Note and indicated on the
Mortgage
Loan Schedule
which
percentage is added to the related
Index on each
Interest
Adjustment
Date to determine
(subject to
rounding,
the minimum and
maximum
Mortgage
Interest
Rate and the
Periodic
Rate Cap) the
Mortgage
Interest
Rate until the next
Interest Adjustment Date.
Group I Certificates:
The Class I-A, Class I-X and Class I-B Certificates.
Group I Cumulative Loss Test Violation:
If on any
Distribution
Date if the aggregate amount of Realized Losses on the Group
I Mortgage
Loans
incurred
since the Cut-off
Date through the last day of the related
Prepayment
Period
divided by the
aggregate
Principal
Balance of the Group I Mortgage
Loans as of the
Cut-off
Date
exceeds
the
applicable
percentages
set forth below with
respect to such Distribution Date:
Distribution Date Occurring in
Percentage
_______________________________________________________________
April 2010 through March 2011
0.50%
April 2011 through March 2012
0.90%
April 2012 through March 2013
1.30%
April 2013 through March 2014
1.80%
April 2014 and thereafter
2.00%
Group I Delinquency
Test
Violation:
If on any
Distribution
Date,
the
percentage
obtained by dividing (x) the aggregate
Outstanding
Principal
Balance of Group I Mortgage
Loans that are 60 days or more
Delinquent or are in bankruptcy or
foreclosure or
are REO Properties by (y) the aggregate
Outstanding
Principal Balance of the Group I Mortgage Loans, in each case, as
of the last day
of the previous calendar month,
exceeds (i) prior to the Distribution Date in April 2013, 25.00% of
the Credit Enhancement
Percentage
and (ii) on or after the Distribution Date in April 2013, 31.25%.
Group I Mortgage Loans:
The Mortgage Loans identified as such on the Mortgage Loan
Schedule.
24
Group I Offered
Certificates:
The Class I-X, Class I-A-1,
Class I-A-2, Class I-A-3,
Class I-X,
Class I-B-1,
Class I-B-2,
Class I-B-3, Class I-B-4, Class I-B-5, Class I-B-6, Class I-B-7,
Class I-B-8 and Class I-B-9 Certificates.
Group I
Overcollateralization
Amount:
With
respect to any
Distribution
Date,
the excess,
if any, of (i) the
aggregate
principal
balance
of the Group I Mortgage
Loans as of the last day of the
related
Due Period
(after
giving
effect to
scheduled
payments of principal due during the related Due Period, to the
extent received or advanced,
and unscheduled
collections of principal
received during the related
Prepayment
Period,
and after reduction for Realized Losses on the Group I Mortgage
Loans incurred during
the related
Prepayment
Period) over (ii) the
aggregate
Current
Principal
Amount of the Class I-A
Certificates
and the Class I-B
Certificates,
taking
into
account the
distributions
of
principal,
less the related
Net
Deferred
Interest,
to be made on such
Distribution Date.
Group I
Overcollateralization
Release Amount:
With respect to Loan Group I and any Distribution
Date for which the related
Excess
Overcollateralization
Amount
is,
or
would
be,
after
taking
into
account
all
other
distributions
to be made on that
Distribution
Date,
greater than zero, an amount equal to the lesser of (i) the related
Excess
Overcollateralization
Amount for such
Distribution Date and (ii) related Principal Funds for that
Distribution Date.
Group I
Overcollateralization
Target
Amount:
With
respect to Loan Group I and any
Distribution
Date,
(i) prior
to the
Stepdown
Date,
an amount equal to 1.650% of the
aggregate
principal
balance of the Group I Mortgage
Loans as of the Cut-off Date,
(ii) on or after the
related
Stepdown
Date
provided a Group I Trigger
Event is not in effect,
the greater of (x) (1) prior to the
Distribution Date in April 2013, 4.125% of the then current
aggregate
outstanding
Principal Balance of the Group I Mortgage Loans as
of the last day of the related Due Period (after
giving
effect to scheduled
payments of principal due during the related Due Period,
to the extent received or advanced,
and unscheduled
collections of principal received during the related Prepayment
Period, and after
reduction for Realized
Losses on the Group I Mortgage Loans
incurred
during the related
Prepayment
Period) and (2) on or after the
Distribution Date in April 2013, 3.300% of the then current
aggregate
Outstanding
Principal Balance of the Group I Mortgage Loans as
of the last day of the related Due Period (after
giving
effect to scheduled
payments of principal due during the related Due Period,
to the extent received or advanced,
and unscheduled
collections of principal received during the related Prepayment
Period, and after
reduction
for
Realized
Losses on the Group I Mortgage
Loans
incurred
during the related
Prepayment
Period) and (y) 0.50% of the
aggregate
principal
balance of the Group I Mortgage
Loans as of the Cut-Off
Date
($1,951,159.37)
or (iii) on or after the related
Stepdown
Date and if a Group I Trigger
Event is in
effect,
the Group I
Overcollateralization
Target
Amount
for the
immediately
preceding Distribution Date.
Group I Principal
Distribution
Amount:
With respect to each
Distribution
Date, an amount equal to (i) the Principal Funds
for Loan Group I for such
Distribution
Date plus (ii) any Extra Principal
Distribution
Amount with respect to Loan Group I for such
Distribution Date minus (iii) any Group I Overcollateralization
Release Amount for such Distribution Date.
Group I Trigger
Event:
The
occurrence
of either a Group I
Delinquency
Test
Violation or a Group I Cumulative
Loss Test
Violation.
25
Group II Certificates:
The Class II-A Certificates and the Class II-B Certificates.
Group II Cumulative Loss Test Violation:
If on any
Distribution
Date, the aggregate
amount of Realized Losses on the Group
II Mortgage
Loans
incurred
since the Cut-off Date through the last day of the related
Prepayment
Period
divided by the
aggregate
Principal
Balance of the Group II
Mortgage
Loans as of the Cut-off
Date
exceeds the
applicable
percentages
set forth below with
respect to such Distribution Date:
Distribution Date Occurring in
Percentage
_______________________________________________________________
April 2010 through March 2011
0.35%
April 2011 through March 2012
0.65%
April 2012 through March 2013
0.90%
April 2013 through March 2014
1.25%
April 2014 and thereafter
1.35%
Group II Delinquency
Test
Violation:
If on any
Distribution
Date,
the percentage
obtained by dividing (x) the aggregate
Outstanding
Principal
Balance of Group II Mortgage
Loans that are 60 days or more
Delinquent or are in bankruptcy or foreclosure or
are REO Properties by (y) the aggregate
Outstanding
Principal
Balance of the Group II Mortgage
Loans,
in each case, as of the last
day of the
previous
calendar
month,
exceeds
(i) prior to the
Distribution
Date in April 2013,
27.00% of the Credit
Enhancement
Percentage and (ii) on or after the Distribution Date in April
2013, 33.75%.
Group II Mortgage Loans:
The Mortgage Loans identified as such on the Mortgage Loan
Schedule.
Group II Offered
Certificates:
The Class II-A,
Class
II-B-1,
Class II-B-2,
Class
II-B-3,
Class II-B-4 and Class II-B-5
Certificates.
Group II
Overcollateralization
Amount:
With respect to any
Distribution
Date,
the excess,
if any, of (i) the
aggregate
principal
balance of the Group II Mortgage
Loans as of the last day of the
related
Due Period
(after
giving
effect to
scheduled
payments of principal due during the related Due Period, to the
extent received or advanced,
and unscheduled
collections of principal
received during the related
Prepayment
Period, and after reduction for Realized Losses on the Group II
Mortgage Loans incurred during
the related
Prepayment
Period) over (ii) the aggregate
Current
Principal
Amount of the Class II-A
Certificates and the Class II-B
Certificates,
after taking into account the
distributions of principal,
less the related Net Deferred
Interest,
to be made on such
Distribution Date.
Group II
Overcollateralization
Release Amount: With respect to Loan Group II and any Distribution
Date for which the related
Excess
Overcollateralization
Amount
is,
or
would
be,
after
taking
into
account
all
other
distributions
to be made on that
Distribution
Date,
greater than zero, an amount equal to the lesser of (i) the related
Excess
Overcollateralization
Amount for that
Distribution Date and (ii) related Principal Funds for that
Distribution Date.
26
Group II
Overcollateralization
Target Amount: With respect to any Distribution Date, (i) prior to
the related Stepdown Date,
an amount equal to 0.900% of the aggregate
principal
balance of the Group II Mortgage Loans as of the Cut-off Date,
(ii) on or after
the related
Stepdown Date provided a Group II Trigger Event is not in effect,
the greater of (x) (1) prior to the
Distribution
Date
in April 2013,
2.250% of the then current
aggregate
outstanding
Principal Balance of the Group II Mortgage Loans as of the last day
of the related Due Period
(after giving
effect to scheduled
payments of principal
due during the related Due Period,
to the extent
received or advanced,
and unscheduled
collections of principal received during the related Prepayment
Period, and after reduction for
Realized
Losses on the Group II Mortgage Loans incurred
during the related
Prepayment
Period) and (2) on or after the
Distribution
Date in April 2013,
1.800% of the then current aggregate
Outstanding
Principal Balance of the Group II Mortgage Loans as of the last
day of the related Due Period
(after
giving
effect to
scheduled
payments of
principal
due during the related Due Period,
to the
extent
received or advanced,
and
unscheduled
collections of principal
received
during the related
Prepayment
Period,
and after
reduction
for Realized
Losses on the Group II Mortgage
Loans
incurred
during the related
Prepayment
Period) and (y) 0.50% of the
aggregate
principal
balance of the Group II Mortgage
Loans as of the Cut-Off Date
($4,683,306.16)
or (iii) on or after the related
Stepdown Date and if a Trigger Event is in effect,
the Group II
Overcollateralization
Target
Amount for the
immediately
preceding
Distribution Date.
Group II Principal
Distribution
Amount:
The Sub-Group II-1 Principal
Distribution
Amount and the Sub-Group II-2 Principal
Distribution Amount, collectively.
Group II
Significance
Estimate:
With respect to any
Distribution
Date, and in accordance with Item 1115 of Regulation AB,
shall be an amount determined based on the reasonable
good-faith
estimate by the Depositor of the aggregate maximum probable
exposure
of the outstanding Group II Certificates to the related Corridor
Contract.
Group II Significance
Percentage:
With respect to any Distribution
Date, and in accordance with Item 1115 of Regulation AB,
shall be an percentage equal to the Group II Significance Estimate
divided by the aggregate
outstanding
Certificate Principal Balance
of the Group II Certificates, prior to the distribution of the
related Principal Distribution Amount on such Distribution Date.
Group II Trigger
Event:
The occurrence of either a Group II
Delinquency
Test Violation or a Group II Cumulative
Loss Test
Violation.
Hard
Prepayment
Charge
Loan:
Any
Group I
Mortgage
Loan
with a
three-year
prepayment
charge
term for which a "hard"
Prepayment Charge may be assessed, as indicated on the Mortgage
Loan Schedule.
Holder:
The Person in whose name a Certificate is registered in the
Certificate
Register,
except that,
subject to Sections
11.02(b) and 11.05(e),
solely for the purpose of giving any consent
pursuant to this
Agreement,
any
Certificate
registered in the
name of the Depositor,
the Servicer or the Trustee or any Affiliate
thereof shall be deemed not to be outstanding
and the Fractional
Undivided
Interest
evidenced
thereby shall not be taken into account in determining
whether the requisite
percentage of Fractional
Undivided Interests necessary to effect any such consent has been
obtained.
27
Indemnified
Persons: The Trustee and the Custodian and their officers,
directors,
agents and employees and, with respect to
the Trustee, any separate co-trustee and its officers, directors,
agents and employees.
Independent:
When used with respect to any specified
Person,
this term means that such Person (a) is in fact independent of
the Depositor or the Servicer and of any Affiliate of the Depositor
or the Servicer,
(b) does not have any direct
financial
interest
or any material
indirect
financial
interest in the
Depositor or the Servicer or any
Affiliate of the Depositor or the Servicer and
(c) is not connected
with the
Depositor or the Servicer or any Affiliate as an officer,
employee,
promoter,
underwriter,
trustee,
partner, director or person performing similar functions.
Index:
The index,
if any,
specified in a Mortgage
Note by reference to which the related
Mortgage
Interest
Rate will be
adjusted from time to time.
Individual
Certificate:
Any
Private
Certificate
registered
in the name of the Holder
other than the
Depository
or its
nominee.
Initial Certification:
The certification substantially in the form of Exhibit One to the
Custodial Agreement.
Institutional
Accredited
Investor:
Any Person meeting the requirements of
Rule 501(a)(l),
(2), (3) or (7) of Regulation D
under the Securities Act or any entity all of the equity holders in
which come within such paragraphs.
Insurance
Policy:
With respect to any Mortgage Loan, any standard hazard insurance
policy,
flood insurance policy or title
insurance policy.
Insurance
Proceeds:
Amounts paid by the insurer under any Insurance Policy covering any
Mortgage Loan or Mortgaged
Property
other than amounts required to be paid over to the Mortgagor
pursuant to law or the related
Mortgage Note or Security
Instrument and
other than amounts used to repair or restore the Mortgaged
Property or to reimburse insured
expenses,
including the Servicer's costs
and expenses incurred in connection with presenting claims under
the related Insurance Policies.
Interest Accrual Period:
For each Class of Class A Certificates
and the Class B Certificates and for any Distribution
Date,
the period
commencing on the
Distribution
Date in the month preceding the month in which a Distribution
Date occurs (or the Closing
Date, in the case of the first Interest
Accrual Period) and ending on the day
immediately
prior to such
Distribution
Date. For the
Class X Certificates and for any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
Interest
Adjustment
Date:
With respect to a Mortgage
Loan,
the date,
if any,
specified in the related
Mortgage Note on
which the Mortgage Interest Rate is subject to adjustment.
28
Interest Carry Forward
Amount:
As of any
Distribution
Date and with respect to each Class of Class A Certificates
and the
Class B Certificates
and as of the first
Distribution
Date,
zero, and for each
Distribution
Date
thereafter,
the sum of (i) the
excess of (a) the Current
Interest for such Class with respect to prior
Distribution
Dates over (b) the amount actually
distributed
to such Class of
Certificates
with respect to interest on or after such prior
Distribution
Dates,
and (ii) interest on such excess
(to the extent
permitted by
applicable
law) at the
applicable
Pass-Through
Rate for such Class for the related
Interest
Accrual
Period including the Interest Accrual Period relating to such
Distribution Date.
Interest
Funds:
With respect to each Loan Group or Sub-Loan Group, as applicable,
and any
Distribution
Date, (i) the sum,
without
duplication,
of (a) all scheduled
interest
collected in respect to the related Mortgage Loans during the
related Due Period
less the related
Servicing Fee if any, (b) all Monthly
Advances
relating to interest with respect to the related Mortgage Loans
made
on or prior to the related
Distribution
Account
Deposit Date,
(c) all
Compensating
Interest
Payments with respect to the related
Mortgage
Loans and required to be remitted by the Servicer
pursuant to this
Agreement
with respect to such
Distribution
Date, (d)
Insurance
Proceeds,
Liquidation
Proceeds and Subsequent
Recoveries with respect to the Mortgage Loans collected
during the related
Prepayment Period, to the extent such proceeds relate to interest,
less all
Nonrecoverable
Advances relating to interest and certain
expenses,
in each case,
with
respect to the Mortgage
Loans in the related
Loan Group or Sub-Loan
Group,
as
applicable,
(e) all
amounts
relating to interest with respect to each Mortgage Loan in the
related Loan Group or Sub-Loan Group, as applicable,
purchased
by the Depositor
pursuant to Sections 2.02, 2.03 or 3.21 during the related Due
Period less all
Non-Recoverable
Advances relating to
interest,
(f) all amounts in respect of interest paid by the Depositor
pursuant to Section 10.01
allocated to the related Loan Group
or Sub-Loan Group,
as applicable,
in each case to the extent remitted by the Servicer to the
Distribution
Account
pursuant to this
Agreement,
(g) the amount of any Principal Prepayments in full, partial
Principal
Prepayments,
Net Liquidation Proceeds,
Repurchase
Proceeds and
scheduled
principal
payments,
in that order,
allocated to the related Loan Group or Sub-Loan
Group,
as
applicable,
included in Available Funds for such
Distribution
Date that are applied in connection
with any Deferred
Interest in accordance with
the
definition
of Net Deferred
Interest to EMC,
the
Depositor,
the
Servicer or the Trustee and (h) any amounts
deposited in the
Adjustable Rate
Supplemental
Fund and available for
distribution
to the Group I Certificates
(other than the Class X Certificates)
and the Group II
Certificates,
as
applicable,
on such
Distribution
Date in accordance
with Section 4.05,
minus (ii) all amounts
relating to interest
required to be reimbursed
pursuant to Sections 4.01, 4.03, 4.04 and 4.05 and allocated to the
related Loan Group
or Sub-Loan Group, as applicable, or as otherwise set forth in this
Agreement.
Interest
Shortfall:
With respect to any Distribution
Date and each Mortgage Loan that during the related
Prepayment Period
was the subject of a Principal Prepayment or constitutes a Relief
Act Mortgage Loan, an amount determined as follows:
(a)
Partial
principal
prepayments
(other than any
collections
on REO Property
treated as a Curtailment
pursuant to
Section
3.15(b))
received
during
the
related
Prepayment
Period:
The
difference
between
(i) one
month's
interest
at
the
applicable
Net Rate on the amount of such
prepayment
and
(ii) the
amount of interest
for the
calendar
month of such
prepayment
(adjusted to the applicable Net Rate) received at the time of such
prepayment;
29
(b)
Principal
prepayments
in full received
during the relevant
Prepayment
Period:
The
difference
between
(i) one
month's interest at the applicable Net Rate on the Stated Principal
Balance of such Mortgage Loan immediately prior to such prepayment
and (ii) the
amount of interest for the calendar month of such
prepayment
(adjusted to the applicable Net Rate) received at the time
of such prepayment; and
(c)
Relief Act Mortgage
Loans:
As to any Relief Act Mortgage Loan, the excess of (i) 30 days'
interest (or, in the case
of a principal
prepayment in full,
interest to the date of prepayment) on the Stated Principal
Balance thereof (or, in the case of a
principal
prepayment
in part,
on the amount so prepaid) at the related Net Rate over (ii) 30
days'
interest
(or, in the case of a
principal
prepayment in full,
interest to the date of
prepayment) on such Stated
Principal
Balance (or, in the case of a Principal
Prepayment
in part,
on the
amount so
prepaid)
at the annual
interest
rate
required
to be paid by the
Mortgagor
as limited by
application of the Relief Act.
Interest-Only Certificates: The Class X Certificates.
Interim Certification:
The certification substantially in the form of Exhibit Two to the
Custodial Agreement.
Investment
Letter: The letter to be furnished by each
Institutional
Accredited
Investor which purchases any of the Private
Certificates in connection with such purchase, substantially in the
form set forth as Exhibit F-1 hereto.
IRS: The United States Internal Revenue Service.
LIBOR
Business Day: Any day other than a Saturday or a Sunday or a day on
which banking
institutions
in the city of London,
England are required or authorized by law to be closed.
LIBOR
Determination
Date:
With respect to each Class of Class A
Certificates
and Class B
Certificates
and for the first
Interest
Accrual Period,
March 28, 2007. With respect to each Class of Class A Certificates
and Class B Certificates and any Interest
Accrual Period thereafter, the second LIBOR Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated
Mortgage
Loan: Any defaulted
Mortgage Loan as to which the Servicer has
determined
that all amounts it expects
to recover from or on account of such Mortgage Loan have been
recovered.
Liquidation
Date:
With respect to any
Liquidated
Mortgage
Loan,
the date on which the Servicer has
certified
that such
Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation
Expenses:
With respect to a Mortgage Loan in liquidation,
unreimbursed
expenses paid or incurred by or for the
account of the Servicer in connection
with the
liquidation of such Mortgage Loan and the related
Mortgaged
Property,
such expenses
including (a) property
protection
expenses,
(b) property sales expenses,
(c) foreclosure and sale costs,
including court costs and
reasonable attorneys' fees, and (d) similar expenses reasonably
paid or incurred in connection with liquidation.
30
Liquidation
Proceeds:
Cash received in
connection
with the
liquidation
of a defaulted
Mortgage
Loan,
whether
through
trustee's sale, foreclosure sale, Insurance Proceeds, condemnation
proceeds or otherwise and Subsequent Recoveries.
Loan Group:
Each of Loan Group I or Loan Group II.
Loan Group I:
The group of Mortgage Loans designated as belonging to Loan Group I
on the Mortgage Loan Schedule.
Loan
Group II: The group of
Mortgage
Loans
designated
as
belonging
to
Sub-Loan
Group II-1 and
Sub-Loan
Group
II-2,
collectively, on the Mortgage Loan Schedule.
Loan-to-Value
Ratio:
With respect to any Mortgage Loan, the fraction,
expressed as a percentage,
the numerator of which is
the
original
principal
balance of the
related
Mortgage
Loan and the
denominator
of which is the
Original
Value of the related
Mortgaged Property.
Loss Allocation Limitation:
The meaning specified in Section 6.02(c).
Lost Notes:
The original Mortgage Notes that have been lost, as indicated on
the Mortgage Loan Schedule.
Margin:
With respect to any
Distribution
Date on or prior to the first possible
Optional
Termination Date for the related
Loan Group and the Class I-A-1,
Class I-A-2,
Class I-A-3,
Class I-B-1,
Class I-B-2,
Class I-B-3,
Class I-B-4,
Class I-B-5, Class
I-B-6, Class I-B-7, Class I-B-8, Class I-B-9, Class II-1A-1,
Class II-1A-2,
Class II-1A-3, Class II-2A-1, Class II-B-1, Class II-B-2,
Class II-B-3,
Class II-B-4,
Class II-B-5 and Class II-B-6
Certificates
will be 0.650%,
0.700%,
0.750%,
1.500%,
2.000%,
2.100%,
0.150%, 0.190%, 0.210%,
0.160%, 0.450%, 0.750%, 1.500%, 2.150%, 2.150% and 2.150%, per
annum,
respectively,
provided that, after the
first possible
related
Optional
Termination
Date, the related Margin for the Class I-A-1,
Class I-A-2,
Class I-A-3,
Class I-B-1,
Class I-B-2, Class I-B-3,
Class I-B-4, Class I-B-5, Class I-B-6, Class I-B-7, Class I-B-8,
Class I-B-9, Class II-1A-1,
Class II-1A-2,
Class II-1A-3,
Class II-2A-1,
Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4, Class
II-B-5 and Class II-B-6 Certificates will
be 0.280%,
0.360%,
0.420%,
0.540%,
0.570%,
0.750%, 0.975%, 1.050%, 1.125%, 2.250%, 3.000%, 3.150%, 0.300%,
0.380%, 0.420%, 0.320%,
0.675%, 1.125%, 2.250%, 3.225%, 3.225% and 3.225%, per annum,
respectively.
Marker Rate: With respect to the Class I-B-IO
Certificates or REMIC IV Regular Interest
I-B-IO-I and any Distribution
Date,
a per annum
rate
equal to two
times the
weighted
average
of the
Uncertificated
REMIC I
Pass-Through
Rates for REMIC I Regular
Interest LT2 and REMIC I Regular Interest LT3. With respect to the
Class II-B-IO
Certificates or REMIC IV Regular
Interest
II-B-IO-I
and any
Distribution
Date, in relation to REMIC III Regular
Interests
LT5,
LT6, LT7, LT8 and LT-Y1,
a per annum rate equal to two
times the
weighted
average of the
Uncertificated
REMIC III
Pass-Through
Rates for REMIC III
Regular
Interest
LT6 and REMIC III
Regular
Interest LT7, and in relation to REMIC III Regular
Interests LT9, LT10,
LT11,
LT12 and LT-Y2, a per annum rate equal to two
times the
weighted
average of the
Uncertificated
REMIC III
Pass-Through
Rates for REMIC III Regular
Interest
LT10 and REMIC III
Regular Interest LT11.
31
Material Defect:
The meaning specified in Section 2.02(a).
Maximum
Coupon
Strip:
With
respect
to Loan
Group I,
shall be an amount
equal to the
product
of
(i) 1.00%,
(ii) the
aggregate
Stated Principal
Balance of the Group I Mortgage Loans
with original terms to maturity in excess of 30 years as of the Due
Date occurring in the month prior to such Distribution Date and
(iii) one-twelfth.
Maximum
Coupon Strip Rate: On any
Distribution
Date occurring in or after April 2017 and for Loan Group I, the
Coupon Strip
Rate
modified by replacing
the term "Coupon
Strip" with the term "Maximum
Coupon
Strip"
wherever it appears in the
definition of
"Coupon Strip Rate."
Maximum
Lifetime
Mortgage
Rate:
The maximum
level to which a Mortgage
Interest
Rate can adjust in
accordance
with its
terms, regardless of changes in the applicable Index.
MERS:
Mortgage Electronic
Registration
Systems,
Inc., a corporation
organized and existing under the laws of the State of
Delaware, or any successor thereto.
MERS® System:
The system of recording transfers of Mortgage Loans electronically
maintained by MERS.
MIN:
The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS® System.
Minimum
Lifetime
Mortgage
Rate:
The minimum
level to which a Mortgage
Interest
Rate can adjust in
accordance
with its
terms, regardless of changes in the applicable Index.
Modified Net Rate Cap:
For any
Distribution
Date and Loan Group I, the related Net Rate Cap modified by
replacing
the term
"Coupon Strip Rate" with the term "Maximum
Coupon Strip Rate"
wherever it appears in the definition of "Net Rate Cap" with
respect to
Loan Group I.
MOM Loan:
With respect to any Mortgage Loan,
MERS acting as the mortgagee of such Mortgage
Loan,
solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at
the origination thereof.
Monthly
Advance:
An advance of
principal
or
interest
required to be made by the
Servicer
or the
Trustee as
successor
servicer pursuant to Section 6.05.
Monthly
Payments:
For any Mortgage Loan and any month, the minimum
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.
32
Monthly Statement:
The statement delivered to the Certificateholders pursuant to
Section 6.04.
Moody's:
Moody's Investors Service, Inc. or its successor in interest.
Mortgage:
The
mortgage,
deed of trust or other
instrument
creating
a first
priority
lien on an estate in fee simple or
leasehold interest in real property securing a Mortgage Loan.
Mortgage File: The mortgage
documents listed in Section 2.01(b)
pertaining to a particular
Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to
this Agreement.
Mortgage
Interest
Rate:
The annual rate at which
interest
accrues from time to time on any Mortgage
Loan pursuant to the
related
Mortgage Note,
which rate is initially
equal to the "Mortgage
Interest Rate" set forth with respect thereto on the Mortgage
Loan Schedule.
Mortgage
Loan: A mortgage
loan
transferred
and assigned to the Trust
pursuant to
Section 2.01
and held as a part of the
Trust Fund, as identified in the Mortgage Loan Schedule (which
shall include,
without limitation,
with respect to each Mortgage Loan,
each related Mortgage Note,
Mortgage and Mortgage File and all rights
appertaining
thereto),
including a mortgage loan the property
securing which has become an REO Property.
Mortgage
Loan
Purchase
Agreement:
The Mortgage
Loan
Purchase
Agreement
dated as of the Closing
Date,
between EMC, as
mortgage loan seller,
and Structured
Asset Mortgage
Investments II Inc., as purchaser,
and all amendments
thereof and
supplements
thereto, attached as Exhibit H.
Mortgage Loan Documents:
The original Mortgage Loan legal documents held by the Custodian.
Mortgage Loan Schedule:
The schedule,
attached
hereto as Exhibit B with respect to the Mortgage Loans, as amended
from time
to time to reflect the
repurchase
or
substitution
of Mortgage
Loans
pursuant to this
Agreement
or the
Mortgage
Loan
Purchase
Agreement, as the case may be.
Mortgage Note: The originally
executed note or other evidence of the
indebtedness of a Mortgagor under the related
Mortgage
Loan.
Mortgaged
Property:
Land and
improvements
securing the
indebtedness of a Mortgagor under the related Mortgage Loan or, in
the case of REO Property, such REO Property.
Mortgagor:
The obligor on a Mortgage Note.
Net Deferred Interest:
On any Distribution
Date, for each Loan Group or Sub-Loan Group, as applicable,
Deferred Interest on
the related
Mortgage Loans during the related Due Period net of Principal
Prepayments in full,
partial
Principal
Prepayments,
Net
Liquidation
Proceeds,
Repurchase Proceeds and scheduled principal payments,
in that order, included in Available Funds for such Loan
Group or Sub-Loan
Group,
as
applicable,
and such
Distribution
Date and available to be distributed
on the
Certificates
on such
Distribution
Date.
With respect to any Class A
Certificate
or Class B Certificate
as of any
Distribution
Date,
the Net Deferred
Interest will be an amount equal to the product of (1) the
difference,
if any,
between (a) the lesser of (i) the
Pass-Through
Rate
for such
Class
without
regard
to the
related
Net Rate Cap on such
Distribution
Date and (ii) the
related
Net Rate Cap on such
Distribution
Date and (b) the Adjusted Rate Cap for such
Distribution
Date,
(2) the Current
Principal
Amount of such
Certificate
immediately prior to such Distribution Date, and (3) the actual
number of days in such Interest Accrual Period divided by 360.
33
Net Interest
Shortfall:
With respect to any Distribution
Date, the Interest
Shortfall,
if any, for such Distribution Date
net of Compensating Interest Payments made with respect to such
Distribution Date.
Net Liquidation
Proceeds:
As to any Liquidated
Mortgage Loan,
Liquidation
Proceeds net of (i) Liquidation
Expenses which
are
payable
therefrom
to the
Servicer in
accordance
with this
Agreement
and
(ii) unreimbursed
advances
by the
Servicer
and
unreimbursed Monthly Advances.
Net Rate:
With respect to each Mortgage Loan,
the Mortgage
Interest Rate in effect from time to time less the Servicing Fee
Rate, expressed as a per annum rate.
Net Rate Cap: For any Distribution
Date, (A) with respect to the Class I-A Certificates
and the Class I-B
Certificates,
is
equal to the
weighted
average of the Net Rates of the Group I Mortgage
Loans (less the Coupon
Strip Rate,
if
applicable,
and the
Pass-Through Rate on the Class X Certificates),
(B) with respect to the Class II-1A Certificates,
is equal to the weighted average of
the Net Rates of the
Sub-Group
II-1 Mortgage
Loans,
(C) with respect to the Class
II-2A-1
Certificates,
is equal to the weighted
average of the Net Rates of the Sub-Group
II-2
Mortgage
Loans and (D) with respect to the Class II-B
Certificates,
is equal to the
weighted
average of the weighted
average Net Rates of the Sub-Group
II-1
Mortgage
Loans and the
Sub-Group
II-2
Mortgage
Loans,
weighted in
proportion
to the results of
subtracting
from the
aggregate
Stated
Principal
Balance of the Mortgage
Loans of each
Sub-Loan Group the aggregate
Certificate
Principal Balance of the related Group II Senior
Certificates,
in each case as adjusted to
an effective rate reflecting the accrual of interest on an
actual/360 basis.
NIM Issuer:
The entity established as the issuer of the NIM Securities.
NIM
Securities:
Any debt
securities
issued
by the NIM
Issuer
and
secured
or
otherwise
backed
by some or all of the
Certificates.
NIM Trustee:
The trustee for the NIM Securities.
Non-Offered
Certificates:
The Class II-B-6, Class I-XP-1,
Class I-XP-2,
Class I-B-IO, Class II-XP, Class II-B-IO,
Class R
and Class R-X Certificates.
Nonrecoverable
Advance:
Any
advance or Monthly
Advance
(i) which
was
previously
made or is
proposed to be made by the
Servicer or the Trustee (as successor
Servicer) and
(ii) which,
in the good faith judgment of the Servicer or the Trustee,
will not
or, in the case of a proposed
advance or Monthly
Advance,
would not, be
ultimately
recoverable
by the Servicer or the Trustee (as
successor
Servicer) from Liquidation
Proceeds,
Insurance
Proceeds or future payments on the Mortgage Loan for which such
advance or
Monthly Advance was made or is proposed to be made.
34
Notional
Amount:
The Class I-X Notional Amount,
the Class I-B-IO Notional Amount or the Class II-B-IO
Notional Amount,
as
applicable.
Offered Certificates:
The Group I Offered Certificates and the Group II Offered
Certificates.
Officer's
Certificate:
A certificate
signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or
a Vice
President or Assistant
Vice
President
or other
authorized
officer of the Servicer or the
Depositor,
as
applicable,
and
delivered to the Trustee, as required by this Agreement.
One-Month
LIBOR:
With
respect to any Interest
Accrual
Period,
the rate
determined
by the Trustee on the related
LIBOR
Determination
Date on the basis of the rate for U.S.
dollar
deposits for one month that appears on Reuters Screen LIBOR01 Page
as of
11:00 a.m. (London time) on such LIBOR
Determination
Date;
provided that the parties hereto acknowledge that One-Month LIBOR
for the
first
Interest
Accrual
Period shall be the rate
determined by the Trustee two Business Days prior to the Closing
Date. If such rate
does not appear on such page (or such other page as may replace
that page on that
service,
or if such
service is no longer
offered,
such other service for displaying
One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee),
One-Month LIBOR
for the applicable
Interest
Accrual Period will be the Reference Bank Rate. If no such
quotations can be obtained by the Trustee and
no Reference Bank Rate is available,
One-Month
LIBOR will be One-Month
LIBOR
applicable to the preceding
Interest
Accrual Period.
The
Trustee's
determination
of
One-Month
LIBOR for each
Class of
Offered
Certificates
and the Class
II-B-6
Certificates,
as
applicable, for any Interest Accrual Period shall, in the absence
of manifest error, be final and binding.
Opinion of Counsel:
A written
opinion of counsel who is or are
acceptable
to the
Trustee and who,
unless
required to be
Independent (an "Opinion of Independent Counsel"), may be internal
counsel for the Company, the Servicer or the Depositor.
Optional
Termination
Date:
With respect to Loan Group I, the
Distribution
Date on which the
aggregate
Stated
Principal
Balance of the Group I Mortgage Loans is less than 10% of the
Cut-off Date Balance of the Group I Mortgage
Loans,
and with respect to
Loan Group II, the Distribution
Date on which the aggregate
Stated Principal
Balance of the Group II Mortgage Loans is less than 10%
of the Cut-off Date Balance of the Group II Mortgage Loans.
Original
Value:
The lesser of (i) the
Appraised
Value or
(ii) the
sales
price of a
Mortgaged
Property
at the time of
origination
of a Mortgage
Loan,
except in instances
where
either
clauses
(i) or
(ii) is
unavailable,
the other may be used to
determine the Original
Value,
or if both clauses (i) and
(ii) are
unavailable,
Original Value may be determined from other sources
reasonably acceptable to the Depositor.
35
Outstanding
Mortgage Loan:
With respect to any Due Date, a Mortgage Loan which,
prior to such Due Date, was not the subject
of a Principal Prepayment in full, did not become a Liquidated
Mortgage Loan and was not purchased or replaced.
Outstanding
Principal
Balance:
As of the time of any
determination,
the principal balance of a Mortgage Loan remaining to
be paid by the Mortgagor,
or, in the case of an REO Property,
the principal balance of the related Mortgage Loan remaining to be
paid
by the Mortgagor at the time such
property was acquired by the Trust Fund less any Net
Liquidation
Proceeds with respect
thereto to
the extent applied to principal.
Overcollateralization
Amount:
The Group I
Overcollateralization
Amount or the Group II
Overcollateralization
Amount,
as
applicable.
Overcollateralization
Release Amount: The Group I Overcollateralization
Release Amount or the Group II Overcollateralization
Release Amount, as applicable.
Overcollateralization
Target Amount: The Group I
Overcollateralization
Target Amount or the Group II
Overcollateralization
Target Amount, as applicable.
Pass-Through
Rate: As to each Class of
Certificates,
the rate of interest
determined
as provided with respect
thereto in
Section 5.01(c).
The Trustee's
determination of the Pass-Through
Rate for each Class of Certificates for any Interest Accrual Period
shall, in the absence of manifest error, be final and binding.
Paying Agent:
The Trustee.
Periodic
Rate Cap: With respect to each
Mortgage
Loan,
the maximum
adjustment
that can be made to the Mortgage
Interest
Rate on each Interest Adjustment Date in accordance with its terms,
regardless of changes in the applicable Index.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i)
obligations
of the United
States or any agency
thereof,
provided
such
obligations
are backed by the full faith and
credit of the United States;
(ii)
general
obligations
of or
obligations
guaranteed
by any state of the
United
States or the
District
of
Columbia
receiving
the highest
long-term
debt rating of each Rating
Agency,
or such lower rating as will not result in the
downgrading
or
withdrawal of the ratings then assigned to the Certificates by each
Rating Agency;
(iii)
commercial or finance
company paper which is then receiving the highest
commercial or finance company paper rating of
each Rating
Agency,
or such lower rating as will not result in the
downgrading
or
withdrawal
of the ratings then
assigned to the
Certificates by each Rating Agency;
(iv) certificates of deposit,
demand or time deposits, or bankers' acceptances issued by any
depository
institution or trust
company
incorporated
under the laws of the United
States or of any state
thereof
and subject to
supervision
and
examination
by
federal
and/or state banking
authorities
(including the Trustee in its commercial
banking
capacity),
provided that the commercial
paper and/or long term
unsecured
debt
obligations
of such
depository
institution
or trust
company are then rated one of the two
highest
long-term and the highest
short-term
ratings of each such Rating Agency for such
securities,
or such lower ratings as will
not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency;
36
(v) demand or time
deposits or
certificates
of deposit
issued by any bank or trust company or savings
institution
to the
extent that such deposits are fully insured by the FDIC;
(vi) guaranteed
reinvestment
agreements issued by any bank, insurance company or other
corporation
containing,
at the time
of the issuance of such
agreements,
such terms and conditions as will not result in the
downgrading or withdrawal of the rating then
assigned to the Certificates by any such Rating Agency;
(vii)
repurchase
obligations
with respect to any security
described in clauses (i) and (ii) above,
in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (iv) above;
(viii)
securities
(other than stripped bonds,
stripped coupons or instruments sold at a purchase price in excess
of 115% of
the face amount thereof)
bearing
interest or sold at a discount issued by any corporation
incorporated
under the laws of the United
States or any state
thereof
which,
at the time of such
investment,
have one of the two
highest
long term
ratings of each Rating
Agency
(except if the Rating
Agency is Moody's,
such rating
shall be the highest
commercial
paper
rating of Moody's for any such
securities),
or such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the
Certificates
by any Rating Agency, as evidenced by a signed writing delivered by
each Rating Agency;
(ix) interests in any money market fund
(including any such fund managed or advised by the Trustee or
Master
Servicer or any
affiliate
thereof)
which at the date of
acquisition of the interests in such fund and throughout the time
such interests are held in
such fund has the
highest
applicable
long
term
rating
by each
Rating
Agency
or such
lower
rating
as will not
result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(x) short term
investment
funds
sponsored by any trust company or banking
association
incorporated
under the laws of the
United States or any state thereof
(including
any such fund managed or advised by the Trustee or any affiliate
thereof) which on the
date of acquisition has been rated by each Rating Agency in their
respective
highest
applicable
rating category or such lower rating
as will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by each Rating Agency; and
(xi) such other investments
having a specified stated maturity and bearing interest or sold at
a discount
acceptable to each
Rating
Agency as will not result in the
downgrading
or
withdrawal
of the rating then
assigned to the
Certificates
by any Rating
Agency, as evidenced by a signed writing delivered by each Rating
Agency;
37
provided,
that no such
instrument
shall be a Permitted
Investment
if such
instrument
(i) evidences the right to receive
interest
only
payments
with
respect to the
obligations
underlying
such
instrument,
(ii) is
purchased at a premium or (iii) is
purchased
at a deep
discount;
provided
further
that no such
instrument
shall be a Permitted
Investment
(A) if such
instrument
evidences
principal and interest
payments derived from obligations
underlying such instrument and the 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,
or (B) if it may be redeemed at a price below the purchase
price (the
foregoing
clause (B) not to apply to
investments
in units of
money market funds pursuant to clause (viii) above);
provided further that no amount
beneficially
owned by any 2007-AR3 REMIC may be
invested in
investments
(other than money market
funds)
treated as equity
interests for federal
income tax
purposes,
unless the
Trustee
shall
receive an Opinion of Counsel,
at the expense of the Trustee,
to the effect that such
investment
will not adversely
affect
the
status
of any such
REMIC as a REMIC
under
the Code or
result
in
imposition
of a tax on any such
REMIC.
Permitted
Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted
Transferee:
Any Person other than a Disqualified
Organization or an "electing large
partnership"
(as defined by
Section 775 of the Code).
Person:
Any
individual,
corporation,
partnership,
joint venture,
association,
limited
liability
company,
joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Physical Certificates:
The Private Certificates.
Plan: The meaning specified in Section 5.07(a).
Prepayment
Charges:
With respect to any Mortgage Loan, the charges or premiums,
if any, due in connection
with a Principal
Prepayment of such Mortgage Loan in accordance with the terms
thereof.
Prepayment
Charge Loan: Any Mortgage Loan for which a Prepayment
Charge may be assessed and to which such Prepayment
Charge
the related Class XP Certificates are entitled, as indicated on the
Mortgage Loan Schedule.
Prepayment
Interest
Shortfalls:
With respect to any
Distribution
Date,
for each
Mortgage Loan that was the subject of a
Principal
Prepayment during the prior calendar month or that became a
Liquidated
Mortgage Loan during the related
Prepayment Period,
(other than a Principal
Prepayment in full
resulting
from the purchase of a Mortgage Loan
pursuant to Section 2.02,
2.03,
3.21 or
10.01),
the amount, if any, by which (i) one month's interest at the
applicable Net Rate on the Stated Principal
Balance
immediately
prior to such
prepayment
(or
liquidation)
or in the case of a partial
Principal
Prepayment on the amount of such
prepayment
(or
liquidation
proceeds)
exceeds (ii) the amount of interest
paid or collected in
connection
with such
Principal
Prepayment or such
Liquidation Proceeds less the sum of (a) any Prepayment Charges and
(b) the Servicing Fee.
Prepayment
Period:
With
respect to any
Distribution
Date and (i)
Principal
Prepayments
in full,
the
period
from the
sixteenth day of the calendar month preceding the calendar month in
which such
Distribution
Date occurs through the close of business
on the fifteenth day of the calendar month in which such
Distribution
Date occurs and (ii)
Liquidation
Proceeds,
Realized
Losses,
Subsequent Recoveries and partial Principal Prepayments, the prior
calendar month.
38
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
Security
Instrument,
if any or any replacement
policy therefore through the related Interest Accrual Period for
such
Class relating
to a Distribution Date.
Prime Rate: The prime rate of U.S. money center banks as published
from time to time in The Wall Street Journal.
Principal Distribution Amount: The Group I Principal
Distribution Amount, Group II Principal
Distribution Amount,
Sub-Group
II-1 Principal Distribution Amount or Sub-Group II-2 Principal
Distribution Amount, as applicable.
Principal
Funds:
With respect to each Loan Group or Sub-Loan
Group,
as
applicable,
and each
Distribution
Date, (i) the
greater of zero and the sum, without
duplication,
of (a) all scheduled
principal collected on the Mortgage Loans in the related Loan
Group or Sub-Loan
Group,
as applicable,
during the related Due Period,
(b) all Monthly
Advances
relating to principal made on the
Mortgage Loans in the related Loan Group or Sub-Loan
Group,
as applicable,
on or before the
Distribution
Account Deposit Date, (c)
Principal
Prepayments
on the Mortgage
Loans in the related Loan Group or Sub-Loan
Group,
as
applicable,
exclusive of
Prepayment
Charges
collected during the related
Prepayment
Period,
(d) the Stated Principal
Balance of each Mortgage Loan in the related Loan
Group or Sub-Loan Group, as applicable,
that was repurchased by the Sponsor
pursuant to Section 2.02, 2.03 or 3.21 during the related
Due Period,
(e) the aggregate of all
Substitution
Adjustment
Amounts in connection
with the
substitution of Mortgage Loans in the
related Loan Group or Sub-Loan
Group,
as applicable,
pursuant to Section 2.04 during the related Due Period,
(f) amounts in respect
of principal
paid by the Depositor
pursuant to Section 10.01
allocated to the related Loan Group or Sub-Loan
Group,
as applicable,
(g) Insurance Proceeds,
Liquidation Proceeds and Subsequent
Recoveries collected during the related Prepayment Period on the
Mortgage
Loans in the related Loan Group or Sub-Loan
Group,
as applicable,
to the extent such proceeds
relate to principal,
in each case to
the extent
remitted by the Servicer to the
Distribution
Account
pursuant to this
Agreement and (h) the
principal
portions of the
amounts,
if any,
transferred from the Final Maturity Reserve Account
allocated to Loan Group or Sub-Loan Group, as applicable,
I on
such
Distribution
Date minus (ii) (a) all amounts required to be reimbursed
pursuant to Sections 4.01, 4.03 and 4.05 or as otherwise
set forth in this Agreement and (b) the amount of any Principal
Prepayments in full,
partial Principal
Prepayments,
Net Liquidation
Proceeds,
Repurchase
Proceeds and payments of
Scheduled
Principal,
in that order,
included in
Available
Funds
allocated to the
related Loan Group or Sub-Loan Group, as applicable,
for such
Distribution Date that are applied as Interest Funds in connection
with
any Deferred Interest in accordance with the definition of Net
Deferred Interest.
Principal
Prepayment:
Any payment
(whether
partial or full) 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.
39
Private Certificates:
The Non-Offered Certificates.
Prospectus:
The prospectus,
dated March 20, 2007, as supplemented by the prospectus
supplement dated March 29, 2007 (as the
same may be supplemented from time to time), relating to the
offering of the Offered Certificates.
QIB:
A Qualified Institutional Buyer as defined in Rule 144A promulgated
under the Securities Act.
Qualified
Insurer:
Any insurance
company duly
qualified as such under the laws of the state or states in which
the related
Mortgaged
Property or Mortgaged
Properties is or are located,
duly
authorized
and licensed in such state or states to transact the
type of insurance
business in which it is engaged and approved as an insurer by the
Servicer,
so long as the claims paying ability of
which is
acceptable to the Rating
Agencies for
pass-through
certificates
having the same rating as the
Certificates
rated by the
Rating Agencies as of the Closing Date.
Rating Agency:
Each of Moody's and S&P.
Realized Loss: Any (i) Bankruptcy
Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding
Principal Balance of
such
Liquidated
Mortgage
Loan plus accrued and unpaid
interest
thereon at the Mortgage
Interest
Rate through the last day of the
month of such
liquidation,
less (y) the Net
Liquidation
Proceeds
with
respect to such
Mortgage
Loan and the
related
Mortgaged
Property.
In addition,
to the extent the Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the
Realized
Loss with
respect to that
Mortgage
Loan will be reduced to the extent
such
recoveries
are applied to reduce the Current
Principal
Amount of any Class of
Certificates
(other
than the Class XP,
Class X,
Class
B-IO and
Residual
Certificates)
on any
Distribution Date.
With respect to each Mortgage Loan which has become the subject of
a Deficient
Valuation,
if the principal
amount due under
the related
Mortgage Note has been reduced,
then
"Realized
Loss" is the difference
between the principal
balance of such Mortgage
Loan
outstanding
immediately
prior to such
Deficient
Valuation and the
principal
balance of such Mortgage Loan as reduced by the
Deficient Valuation.
With respect to each
Mortgage Loan which is the subject of a Servicing
Modification
during the calendar
month
immediately
preceding the related
Distribution
Date, the sum of (a) the total amount of interest and principal
which is forgiven with respect to
the related
Mortgage
Loan and (b) the amount of any Monthly
Advances
made by the Servicer
with respect to such Mortgage Loan which
are reimbursable from the Trust to the Servicer with respect to
such Servicing Modification.
Record Date:
For each Class
of Certificates
(other than the Class X Certificates) and for any Distribution
Date, the close
of
business
on the
Business
Day
prior to such
Distribution
Date.
For the Class X
Certificates
and each
Class of
Non-Offered
Certificates,
and for any
Distribution
Date,
the last
Business
Day of the
calendar
month
preceding
the
month
in which
such
Distribution Date occurs.
40
Reference
Bank:
A leading
bank
selected by the
Trustee
that is engaged in
transactions
in
Eurodollar
deposits in the
international Eurocurrency market.
Reference Bank Rate: With respect to any Interest Accrual Period,
the arithmetic mean, rounded upwards,
if necessary,
to the
nearest
whole
multiple of
0.03125%,
of the offered
rates for United
States
dollar
deposits for one month that are quoted by the
Reference
Banks as of 11:00
a.m.,
New York City
time,
on the
related
interest
determination
date to prime
banks in the London
interbank
market for a period of one month in amounts
approximately
equal to the aggregate
Current
Principal Amount of the Offered
Certificates
for such Interest
Accrual
Period,
provided that at least two such Reference Banks provide such rate.
If fewer than two
offered
rates appear,
the Reference
Bank Rate will be the
arithmetic
mean,
rounded
upwards,
if necessary,
to the nearest whole
multiple of 0.03125%,
of the rates quoted by one or more major banks in New York City,
selected by the Trustee, as of 11:00 a.m., New
York City time, on such date for loans in U.S.
dollars to leading
European
banks for a period of one month in amounts
approximately
equal to the aggregate Current Principal Amount of the Offered
Certificates.
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.
Reinvestment
Agreements:
One or more
reinvestment
agreements,
acceptable to the Rating Agencies,
from a bank,
insurance
company or other corporation or entity (including the Trustee).
Relief Act:
The Servicemembers' Civil Relief Act, as amended, or similar state
law.
Relief
Act
Mortgage
Loan:
Any
Mortgage
Loan as to which
the
Scheduled
Payment
thereof
has been
reduced
due to the
application of the Relief Act.
Remaining
Excess Spread:
With respect to any
Distribution
Date and each Loan Group or Sub-Loan Group,
as applicable,
the
related Excess Spread remaining after the distribution of any
related Extra Principal Distribution Amount for such Distribution
Date.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Administrator:
The Trustee;
provided that if the REMIC Administrator is found by a court of
competent
jurisdiction to
no longer be able to fulfill its obligations as REMIC
Administrator
under this Agreement the Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator
obligations under this Agreement.
41
REMIC Opinion:
An Opinion of Independent
Counsel,
to the effect that the proposed action described therein would not,
under
the REMIC
Provisions,
(i) cause any 2007-AR3 REMIC to fail to qualify as a REMIC while
any regular interest in such 2007-AR3 REMIC is
outstanding,
(ii) result
in a tax on
prohibited
transactions
with
respect to any
2007-AR3
REMIC or
(iii) constitute
a taxable
contribution to any 2007-AR3 REMIC after the Startup Day.
REMIC
Provisions:
The
provisions
of the federal
income tax law relating to REMICs,
which appear at Sections 860A through
860G of the Code, and related provisions and regulations
promulgated thereunder, as the foregoing may be in effect from time
to time.
REMIC Regular Interest: Any of the REMIC I Regular Interests,
REMIC II Regular Interests,
REMIC III Regular Interests, REMIC
IV Regular Interests and REMIC V Regular Interests.
REMIC I:
The
segregated
pool of
assets,
with
respect
to which a REMIC
election
is made
pursuant
to this
Agreement,
exclusive of any assets held in the Final Maturity Reserve Account,
consisting of:
(a)
the Group I Mortgage Loans and the related Mortgage Files and
collateral securing such Mortgage Loans,
(b)
all payments on and
collections
in respect of the Group I Mortgage
Loans due after the Cut-off Date as shall be on
deposit in the Custodial
Account or in the
Distribution
Account (other than amounts
representing
Prepayment
Charges in respect of
Prepayment Charge Loans) and identified as belonging to the Trust
Fund,
(c)
property that secured a Group I Mortgage
Loan and that has been
acquired for the benefit of the
Certificateholders
by foreclosure or deed in lieu of foreclosure,
(d)
the hazard insurance policies and Primary Mortgage Insurance
Policy, if any, and
(e)
all proceeds of clauses (a) through (d) above.
REMIC I Available Distribution Amount:
For any Distribution Date, the Available Funds with respect to Loan
Group I.
REMIC I Distribution
Amount: On each
Distribution
Date, the REMIC I Available
Distribution
Amount, in the following order
of priority,
shall be distributed
by REMIC I to REMIC IV on account of the REMIC I Regular
Interests and to the Holders of the Class
R Certificates in respect of Component I thereof:
(i)
to REMIC IV as the holder of REMIC I Regular
Interests,
pro rata,
in an amount
equal to (A) the
Uncertificated
Accrued Interest for each such REMIC I Regular Interest for such
Distribution
Date reduced,
in each case, by
any Net Deferred
Interest
allocated to such REMIC I Regular
Interest for such
Distribution
Date,
plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
42
(ii)
to REMIC IV as the holder of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4, in an amount equal
to the
remainder of the REMIC I Available
Distribution
Amount after the
distributions
made
pursuant to clause (i) above,
allocated as follows:
(A)
in
respect of REMIC I Regular
Interests
LT2,
LT3 and LT4,
their
respective
Principal
Distribution Amounts;
(B)
in
respect
of
REMIC I
Regular
Interest
LT1 any
remainder
until
the
Uncertificated
Principal Balance thereof is reduced to zero;
(C)
any remainder in respect of each of REMIC I Regular
Interests
(other than REMIC I Regular
Interests LT1 and W), pro rata according to their respective
Uncertificated
Principal
Balances as reduced
by the
distributions
deemed made pursuant to (A) above,
until their respective
Uncertificated
Principal
Balances are reduced to zero; and
(iii)
any remaining amounts to the Holders of the Class R Certificates in
respect of Component I thereof.
REMIC I Interest:
The REMIC I Regular Interests and Component I of the Class R
Certificates.
REMIC I Net Deferred
Interest:
Net Deferred
Interest for Loan Group I for any Distribution Date shall be
allocated to REMIC
I Regular
Interest
LT1 in
reduction of the portion of the
Uncertificated
Accrued
Interest
thereon
distributable
on the related
Distribution Date and shall result in an increase in the
Uncertificated Principal Balance thereof to the extent of such
reduction.
REMIC I Principal
Reduction Amounts:
For any Distribution
Date, the amounts by which the Uncertificated
Principal Balances
of the REMIC I
Regular
Interests will be reduced on such
Distribution
Date by the allocation of REMIC I Realized Losses and REMIC I
Net Deferred Interest and the distribution of principal, determined
as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y1 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT1 after
distributions and the allocation
of REMIC I Net Deferred Interest and REMIC I Realized Losses on the
prior Distribution Date.
Y2 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT2 after
distributions and the allocation
of REMIC I Realized Losses on the prior Distribution Date.
Y3 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT3 after
distributions and the allocation
of REMIC I Realized Losses on the prior Distribution Date.
43
Y4 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT4 after
distributions and the allocation
of REMIC I Realized Losses on the prior Distribution Date (note:
Y3 = Y4).
ΔY1 =
the REMIC I Regular Interest LT1 Principal Reduction Amount.
ΔY2 =
the REMIC I Regular Interest LT2 Principal Reduction Amount.
ΔY3 =
the REMIC I Regular Interest LT3 Principal Reduction Amount.
ΔY4 =
the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 =
the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
after distributions and the
allocation of REMIC I Realized Losses and REMIC I Net Deferred
Interest on the prior Distribution Date.
P1 =
the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
after distributions and the
allocation of REMIC I Realized Losses and REMIC I Net Deferred
Interest to be made on such Distribution Date.
ΔP =
P0 - P1 = the aggregate of the REMIC I Principal Reduction Amounts.
=
the aggregate of the REMIC I Net Deferred
Interest and principal
portions of REMIC I Realized Losses to be
allocated
to,
and the
principal
distributions
to be made
on,
the
Group I
Certificates
on such
Distribution
Date
(including
distributions of accrued and unpaid interest on the Class I-X and
Class I-B-IO Certificates for prior Distribution Dates).
R0 =
the
Modified
Net Rate Cap for the
Certificates
related
Loan
Group I after
giving
effect
to
amounts
distributed and REMIC I Realized Losses and REMIC I Net Deferred
Interest allocated on the prior Distribution Date.
R1 =
the Modified Net Rate Cap for the Certificates
related to Loan Group I after giving effect to amounts to be
distributed and REMIC I Realized Losses and REMIC I Net Deferred
Interest to be allocated on such Distribution Date.
α =
(Y2 + Y3)/P0.
The initial
value of α on the Closing Date for use on the first
Distribution
Date shall be
0.0001.
γ0 =
the lesser of (A) the sum for all Classes of Group I Certificates
(other than the Class I-B-IO Certificates
and the Class I-X
Certificates)
of the product for each Class of (i) the monthly
interest
rate (as limited by the Modified Net Rate
Cap, if applicable) for such Class applicable for
distributions to be made on such
Distribution
Date and (ii) the aggregate
Current
Principal
Amount for such Class after
distributions
and the allocation of REMIC I Realized Losses and REMIC I Net
Deferred
Interest
on the prior Distribution Date and (B) R0*P0.
γ1
=
the lesser of (A) the sum for all Classes of Group I Certificates
(other than the Class I-B-IO Certificates
and the Class I-X
Certificates)
of the product for each Class of (i) the monthly
interest
rate (as limited by the Modified Net Rate
Cap, if applicable)
for such Class
applicable for
distributions
to be made on the next
succeeding
Distribution
Date and (ii) the
aggregate
Current
Principal Amount for such Class after
distributions
and the allocation of REMIC I Realized Losses and REMIC I Net
Deferred Interest to be made on such Distribution Date and (B)
R1*P1.
44
Then, based on the foregoing definitions:
ΔY1 =
ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 =
(α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 =
αΔP - ΔY2; and
ΔY4 =
ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative
numbers.
Otherwise:
(1)
If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2)
If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{ γ0R1P1 - γ1R0P0 }/{2R1R0P1 -
γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
REMIC I Realized
Losses:
For any
Distribution
Date,
Realized Losses on Mortgage Loans in Loan Group I for the related
Due
Period
shall be allocated to REMIC I Regular
Interests
LT1,
LT2,
LT3 and LT4 as follows:
The
interest
portion of such
Realized
Losses, if any, shall be allocated to such REMIC I Regular
Interests,
pro rata according to the amount of interest accrued but unpaid
thereon,
in
reduction
thereof.
Any
interest
portion of such
Realized
Losses in excess of the amount
allocated
pursuant to the
preceding
sentence
shall be treated as a principal
portion of Realized
Losses not
attributable
to any specific
Mortgage Loan and
allocated
pursuant to the
succeeding
sentences.
The principal
portion of such
Realized
Losses shall be allocated to such REMIC I
Regular
Interests as follows:
(1) first, to REMIC I Regular
Interests LT2, LT3 and LT4, pro rata according to their respective
REMIC
I Principal
Reduction
Amounts,
provided that such
allocation to such REMIC I Regular
Interests
shall not exceed their
respective
REMIC I Principal
Reduction
Amounts for such
Distribution
Date, and (2) second,
any Realized
Losses not allocated to such REMIC I
Regular Interests pursuant to the proviso of clause (1) above shall
be allocated to REMIC I Regular Interest LT1.
45
REMIC I
Regular
Interest:
Any of the
separate
non-certificated
beneficial
ownership
interests
in REMIC I set forth in
Section 5.01(c)
and issued
hereunder and designated as a "regular
interest" in REMIC I.
Each REMIC I Regular
Interest shall accrue
interest at the
Uncertificated
Pass-Through
Rate
specified
for such
REMIC I
Regular
Interest in
Section 5.01(c),
and shall be
entitled to
distributions
of
principal,
subject to the terms and
conditions
hereof,
in an aggregate
amount equal to its initial
Uncertificated
Principal Balance as set forth in
Section 5.01(c).
The designations for the respective
REMIC I Regular Interests are
set forth in Section 5.01(c).
REMIC I Regular Interest LT1 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular Interest LT1 Principal
Reduction Amount for such
Distribution
Date over the REMIC I Realized Losses and REMIC I Net Deferred
Interest allocated to REMIC I Regular Interest LT1 on such
Distribution Date.
REMIC I Regular Interest LT2 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT2 Principal
Reduction
Amount for such
Distribution
Date over the REMIC I Realized
Losses
allocated to REMIC I
Regular Interest LT2 on such Distribution Date.
REMIC I Regular Interest LT3 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT3 Principal
Reduction
Amount for such
Distribution
Date over the REMIC I Realized
Losses
allocated to REMIC I
Regular Interest LT3 on such Distribution Date.
REMIC I Regular Interest LT4 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT4 Principal
Reduction
Amount for such
Distribution
Date over the REMIC I Realized
Losses
allocated to REMIC I
Regular Interest LT4 on such Distribution Date.
REMIC II:
The
segregated
pool of assets,
with
respect
to which a REMIC
election
is made
pursuant
to this
Agreement,
consisting of:
(a)
the Group II Mortgage Loans and the related Mortgage Files and
collateral securing such Mortgage Loans,
(b)
all payments on and
collections
in respect of the Group II Mortgage Loans due after the Cut-off
Date as shall be on
deposit in the Custodial
Account or in the
Distribution
Account (other than amounts
representing
Prepayment
Charges in respect of
Prepayment Charge Loans) and identified as belonging to the Trust
Fund,
(c)
property that secured a Group II Mortgage
Loan and that has been acquired for the benefit of the
Certificateholders
by foreclosure or deed in lieu of foreclosure,
(d)
the hazard insurance policies and Primary Mortgage Insurance
Policy, if any, and
46
(e)
all proceeds of clauses (a) through (d) above.
REMIC II Available
Distribution
Amount:
For each Sub-Loan Group and for any Distribution Date, the
Available Funds for such
Sub-Loan Group or, if the context so requires, the aggregate
Available Funds for both Sub-Loan Groups.
REMIC II Distribution
Amount: On each Distribution Date, the REMIC II Available
Distribution
Amount shall be distributed by
REMIC II to REMIC III on account of the REMIC II Regular
Interests and to Holders of the Class R Certificates
in respect of Component
II thereof in the following amounts and priority:
(a)
To the extent of the REMIC II Available Distribution Amount for
Sub-Loan Group II-1:
(i)
first,
to
REMIC
II
Regular
Interest
Y-1
and
REMIC
II
Regular
Interest
Z-1,
concurrently,
the
Uncertificated
Accrued Interest for such Classes remaining unpaid from previous
Distribution
Dates,
reduced in the case of
REMIC II Regular Interest Z-1 by any portion thereof
representing
Net Deferred
Interest
allocated to such REMIC II Regular
Interest on such previous Distribution Date, pro rata according to
their respective shares of such unpaid amounts;
(ii)
second,
to
REMIC
II
Regular
Interest
Y-1
and
REMIC
II
Regular
Interest
Z-1,
concurrently,
the
Uncertificated
Accrued Interest for such Classes for the current
Distribution
Date, reduced in the case of REMIC II Regular
Interest Z-1 by any portion thereof
representing
Net Deferred
Interest
allocated to such REMIC II Regular Interest on such
Distribution Date, pro rata according to their respective
Uncertificated Accrued Interest; and
(iii)
third,
to REMIC II Regular
Interest
Y-1 and REMIC II Regular
Interest
Z-1,
the REMIC II Y-1
Principal
Distribution Amount and the REMIC II Z-1 Principal Distribution
Amount, respectively.
(b)
To the extent of the REMIC II Available Distribution Amount for
Sub-Loan Group II-2:
(i)
first,
to
REMIC
II
Regular
Interest
Y-2
and
REMIC
II
Regular
Interest
Z-2,
concurrently,
the
Uncertificated
Accrued Interest for such Classes remaining unpaid from previous
Distribution
Dates,
reduced in the case of
REMIC II Regular Interest Z-2 by any portion thereof
representing
Net Deferred
Interest
allocated to such REMIC II Regular
Interest on such previous Distribution Date, pro rata according to
their respective shares of such unpaid amounts;
(ii)
second,
to
REMIC
II
Regular
Interest
Y-2
and
REMIC
II
Regular
Interest
Z-2,
concurrently,
the
Uncertificated
Accrued Interest for such Classes for the current
Distribution
Date, reduced in the case of REMIC II Regular
Interest Z-2 by any portion thereof
representing
Net Deferred
Interest
allocated to such REMIC II Regular Interest on such
Distribution Date, pro rata according to their respective
Uncertificated Accrued Interest; and
47
(iii)
third,
to REMIC II Regular
Interest
Y-2 and REMIC II Regular
Interest
Z-2,
the REMIC II Y-2
Principal
Distribution Amount and the REMIC II Z-2 Principal Distribution
Amount, respectively.
(c)
To the extent of the REMIC II Available
Distribution
Amount for such
Distribution
Date remaining after payment of
the amounts pursuant to paragraphs (a) through (b) of this
definition of "REMIC II Distribution Amount":
(i)
first,
to each REMIC II Y Regular
Interest
and REMIC II Z Regular
Interest,
pro rata
according
to the
amount of unreimbursed
Realized Losses allocable to principal
previously
allocated to each such REMIC II Regular
Interest,
the aggregate
amount of any
distributions
to the Group I Certificates as
reimbursement
of Unpaid Realized Loss Amounts on
such
Distribution
Date
pursuant
to Section
6.01(a);
provided,
however,
that any amounts
distributed
pursuant to this
paragraph
(c)(i) of this
definition
of "REMIC II
Distribution
Amount"
shall not cause a reduction in the
Uncertificated
Principal Balances of any of the REMIC II Y Regular Interests and
REMIC II Z Regular Interests; and
(ii)
second, to Component II of the Class R Certificates, any remaining
amounts.
REMIC II Interest: The REMIC II Regular Interests and Component II
of the Class R Certificates.
REMIC II Net Deferred
Interest:
Net Deferred Interest
for Sub-Loan
Group II-1 for any Distribution Date shall be allocated
to REMIC II Regular
Interest Z-1 in reduction of the portion of the
Uncertificated
Accrued
Interest
thereon
distributable
on the
related
Distribution
Date and shall
result in an
increase in the
Uncertificated
Principal
Balance
thereof to the extent of such
reduction.
Net Deferred
Interest
for Sub-Loan
Group II-2 for any Distribution
Date shall be allocated to REMIC II Regular Interest
Z-2 in reduction of the portion of the
Uncertificated
Accrued Interest thereon
distributable
on the related
Distribution
Date and
shall result in an increase in the Uncertificated Principal Balance
thereof to the extent of such reduction.
REMIC II Realized
Losses:
For any
Distribution
Date,
Realized Losses on the Group II Mortgage Loans shall be 
