Exhibit 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
XXXXXX LOAN SERVICING LP,
Servicer
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
--------------------------------------
OWNIT MORTGAGE LOAN TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-2
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES....50
SECTION 2.01. Conveyance of Mortgage Loans.....................50
SECTION 2.02. Acceptance by the Trustee of the Mortgage
Loans............................................54
SECTION 2.03. Representations, Warranties and Covenants of
the Depositor....................................55
SECTION 2.04. Representations and Warranties of the Master
Servicer; Representations and Warranties of
the Servicer; Representations and Warranties
of the Securities Administrator..................59
SECTION 2.05. Substitutions and Repurchases of Mortgage
Loans which are not "Qualified Mortgages.".......62
SECTION 2.06. Authentication and Delivery of Certificates......63
SECTION 2.07. REMIC Elections..................................63
SECTION 2.08. [RESERVED].......................................66
SECTION 2.09. Covenants of the Servicer........................66
SECTION 2.10. Consequence of Subsequent Mortgage Loans.........66
SECTION 2.11. Permitted Activities of the Trust................66
SECTION 2.12. Qualifying Special Purpose Entity................66
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................67
SECTION 3.01. Servicer to Service Mortgage Loans...............67
SECTION 3.02. Servicing and Subservicing; Enforcement of
the Obligations of Servicer......................69
SECTION 3.03. Rights of the Depositor, the Securities
Administrator and the Trustee in Respect of
the Servicer.....................................69
SECTION 3.04. Master Servicer to Act as Servicer...............69
SECTION 3.05. Collection of Mortgage Loan Payments;
Collection Account; Certificate Account..........70
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts...........................74
SECTION 3.07. Access to Certain Documentation and
Information Regarding the Mortgage Loans.........74
SECTION 3.08. Permitted Withdrawals from the Collection
Account and Certificate Account..................75
SECTION 3.09. [RESERVED].......................................77
SECTION 3.10. Maintenance of Hazard Insurance..................77
SECTION 3.11. Enforcement of Due-On-Sale Clauses;
Assumption Agreements............................78
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds.................79
SECTION 3.13. Trustee to Cooperate; Release of Mortgage
Files............................................82
SECTION 3.14. Documents, Records and Funds in Possession
of Servicer to be Held for the Trustee...........84
SECTION 3.15. Servicing Compensation...........................84
SECTION 3.16. Access to Certain Documentation..................84
TABLE OF CONTENTS
(continued)
PAGE
SECTION 3.17. Annual Statement as to Compliance................85
SECTION 3.18. Annual Independent Public Accountants'
Servicing Statement; Financial Statements........85
SECTION 3.19. Rights of the NIMs Insurer.......................85
SECTION 3.20. [RESERVED].......................................85
SECTION 3.21. Annual Certificate by Securities
Administrator....................................85
SECTION 3.22. Annual Certificate by Servicer...................86
SECTION 3.23. Prepayment Charge Reporting Requirements.........86
SECTION 3.24. Statements to Securities Administrator...........87
SECTION 3.25. Indemnification..................................87
SECTION 3.26. Nonsolicitation..................................89
ARTICLE IV DISTRIBUTIONS...................................................89
SECTION 4.01. Advances.........................................89
SECTION 4.02. Reduction of Servicing Compensation in
Connection with Prepayment Interest
Shortfalls.......................................90
SECTION 4.03. Distributions on the REMIC Interests.............90
SECTION 4.04. Distributions....................................90
SECTION 4.05. Monthly Statements to Certificateholders.........97
SECTION 4.06. Pre-Funding Account................................
SECTION 4.07. Capital View Interest Account......................
ARTICLE V THE CERTIFICATES...............................................100
SECTION 5.01. The Certificates................................100
SECTION 5.02. Certificate Register; Registration of
Transfer and Exchange of Certificates...........101
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates....................................105
SECTION 5.04. Persons Deemed Owners...........................105
SECTION 5.05. Access to List of Certificateholders' Names
and Addresses...................................105
SECTION 5.06. Book-Entry Certificates.........................106
SECTION 5.07. Notices to Depository...........................106
SECTION 5.08. Definitive Certificates.........................107
SECTION 5.09. Maintenance of Office or Agency.................107
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE
SECURITIES ADMINISTRATOR.......................................107
SECTION 6.01. Respective Liabilities of the Depositor, the
Master Servicer, the Servicer and the
Securities Administrator........................107
SECTION 6.02. Merger or Consolidation of the Depositor,
the Master Servicer, the Servicer or the
Securities Administrator........................107
SECTION 6.03. Limitation on Liability of the Depositor,
the Securities Administrator, the Master
Servicer, the Servicer and Others...............108
SECTION 6.04. Limitation on Resignation of Servicer...........109
SECTION 6.05. Errors and Omissions Insurance; Fidelity
Bonds...........................................110
SECTION 6.06. Limitation on Resignation of the Master
Servicer........................................110
SECTION 6.07. Assignment of Master Servicing..................110
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VII DEFAULT; TERMINATION OF SERVICER...............................111
SECTION 7.01. Events of Default...............................111
SECTION 7.02. Servicer Trigger Event..........................112
SECTION 7.03. Master Servicer to Act; Appointment of
Successor.......................................113
SECTION 7.04. Notification to Certificateholders..............114
ARTICLE VIII CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.......115
SECTION 8.01. Duties of the Trustee and the Securities
Administrator...................................115
SECTION 8.02. Certain Matters Affecting the Trustee and
the Securities Administrator....................116
SECTION 8.03. Trustee and Securities Administrator Not
Liable for Certificates or Mortgage Loans.......117
SECTION 8.04. Trustee and Securities Administrator May Own
Certificates....................................118
SECTION 8.05. Trustee's Fees and Expenses.....................118
SECTION 8.06. Indemnification and Expenses of Trustee.........118
SECTION 8.07. Eligibility Requirements for Trustee............119
SECTION 8.08. Resignation and Removal of Trustee..............119
SECTION 8.09. Successor Trustee...............................120
SECTION 8.10. Merger or Consolidation of Trustee..............120
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee...121
SECTION 8.12. Tax Matters.....................................122
ARTICLE IX TERMINATION....................................................124
SECTION 9.01. Termination upon Liquidation or Repurchase
of all Mortgage Loans...........................124
SECTION 9.02. Final Distribution on the Certificates..........124
SECTION 9.03. Additional Termination Requirements.............125
ARTICLE X MISCELLANEOUS PROVISIONS.......................................126
SECTION 10.01. Amendment.......................................126
SECTION 10.02. Counterparts....................................128
SECTION 10.03. Governing Law...................................128
SECTION 10.04. Intention of Parties............................128
SECTION 10.05. Notices.........................................128
SECTION 10.06. Severability of Provisions......................129
SECTION 10.07. Assignment......................................130
SECTION 10.08. Limitation on Rights of Certificateholders......130
SECTION 10.09. Inspection and Audit Rights.....................130
SECTION 10.10. Certificates Nonassessable and Fully Paid.......131
SECTION 10.11. Third Party Rights..............................131
SECTION 10.12. Additional Rights of the NIMs Insurer...........131
SECTION 10.13. Assignment; Sales; Advance Facilities...........131
ARTICLE XI ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS......133
SECTION 11.01. Master Servicer.................................133
SECTION 11.02. Monitoring of Servicer..........................134
SECTION 11.03. Fidelity Bond...................................135
TABLE OF CONTENTS
(continued)
PAGE
SECTION 11.04. Power to Act; Procedures........................135
SECTION 11.05. Documents, Records and Funds in Possession
of Master Servicer To Be Held for Trustee.......136
SECTION 11.06. Trustee to Retain Possession of Certain
Insurance Policies and Documents................137
SECTION 11.07. Compensation for the Master Servicer and the
Securities Administrator........................137
SECTION 11.08. Annual Statement as to Compliance...............137
SECTION 11.09. Periodic Filings................................137
SECTION 11.10. Obligation of the Master Servicer in Respect
of Prepayment Interest Shortfalls...............138
TABLE OF CONTENTS
(continued)
PAGE
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B-1 MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2 MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE 144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J FORM OF ADDITION NOTICE
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF DELINQUENCY REPORT
EXHIBIT M-2 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT M-3 FORM OF REALIZED LOSS REPORT
EXHIBIT N-1 FORM OF CLASS A-1 CAP CONTRACT
EXHIBIT N-2 FORM OF CLASS A-2 CAP CONTRACT
EXHIBIT N-3 FORM OF SUBORDINATED CERTIFICATE CAP CONTRACT
EXHIBIT O-1 ONE-MONTH LIBOR CAP TABLE - CLASS A-1 CAP CONTRACT
EXHIBIT O-2 ONE MONTH LIBOR CAP TABLE - CLASS A-2 CAP CONTRACT
EXHIBIT O-3 ONE MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP
CONTRACT
EXHIBIT P FORM OF POWER OF ATTORNEY
EXHIBIT Q FORM OF SUBSEQUENT TRANSFER INSTRUMENT
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of March 1,
2005, among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), XXXXX FARGO BANK, N.A, a national banking
association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), XXXXXX LOAN SERVICING LP, a
Delaware limited partnership, as servicer (the "Servicer") and HSBC BANK USA,
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) two real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) each Cap Contract and the Cap
Contract Account, (iv) the grantor trusts described in Section 2.07 hereof and
(v) the Pre-Funding Account and the Capitalized Interest Account. The Lower Tier
REMIC will consist of all of the assets constituting the Trust Fund (other than
the assets described in clauses (ii), (iii), (iv) and (v) above and the Lower
Tier REMIC Regular Interests) and will be evidenced by the Lower Tier REMIC
Regular Interests (which will be uncertificated and will represent the "regular
interests" in the Lower Tier REMIC) and the Class LTR Interest as the single
"residual interest" in the Lower Tier REMIC. The Trustee will hold the Lower
Tier REMIC Regular Interests. The Upper Tier REMIC will consist of the Lower
Tier REMIC Regular Interests and will be evidenced by the REMIC Regular
Interests (which will represent the "regular interests" in the Upper Tier REMIC)
and the Residual Interest as the single "residual interest" in the Upper Tier
REMIC. The Class R Certificate will represent beneficial ownership of the Class
LTR Interest and the Residual Interest. The "latest possible maturity date" for
federal income tax purposes of all interests created hereby will be the Latest
Possible Maturity Date.
All covenants and agreements made by the Transferor in the Transfer
Agreement, by the Seller in the Sale Agreement and by the Depositor and the
Trustee herein with respect to the Mortgage Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates and, to the extent provided herein, the NIMs Insurer.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, the Servicer and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent master servicing institutions that master service mortgage loans of the
same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in Section 11.01 hereof, but in no event below the standard set forth
in clause (x) of this definition.
Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions that service for their own account mortgage loans of the
same type as the Mortgages Loans in the jurisdictions in which the related
Mortgaged Properties (or Underlying Mortgaged Properties in the case of Co-op
Loans) are located.
Accrual Period: With respect to each Class of Certificates and the Lower
Tier REMIC Interests and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.
Addition Notice: With respect to the transfer of Subsequent Mortgage Loans
to the Trust Fund pursuant to Section 2.10, a notice of the Depositor's
designation of the Subsequent Mortgage Loans to be sold to the Trust Fund, the
proposed Mortgage Group to which such Mortgage Loans are to be added, the
proposed Subsequent Cut-off Date, the proposed Subsequent Transfer Date and the
aggregate Stated Principal Balance of such Subsequent Mortgage Loans as of the
Subsequent Cut-off Date. The Addition Notice shall be given to the Servicer, the
Trustee and the Securities Administrator not later than three Business Days
prior to the related Subsequent Transfer Date and shall be substantially in the
form of Exhibit J.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate amount of all payments
of principal and interest (net of the Servicing Fee) on the Mortgage Loans that
were due during the applicable Due Period and not received as of the close of
business on the related Determination Date (other than the principal portion of
any Balloon Amount), less the aggregate amount of any such Delinquent payments
that the Servicer has determined would constitute a Non-Recoverable Advance were
an advance to be made with respect thereto; provided, however, that with respect
to any Mortgage Loan (x) which is a second lien Mortgage Loan or (y) that has
been converted to an REO Property, the obligation to make advances shall be
limited to payments of interest.
Advance Facility: A financing or other facility as described in Section
10.13.
Advance Facility Notice: As defined in Section 10.13(b).
Advance Financing Person: As defined in Section 10.13(a).
Advance Reimbursement Amount: As defined in Section 10.13(b).
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "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; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination,
the sum of the Class A-1A Certificate Principal Balance, the Class A-1B
Certificate Principal Balance, the Class A-2A Certificate Principal Balance, the
Class A-2B Certificate Principal Balance, the Class A-2C Certificate Principal
Balance, the Class R Certificate Principal Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate Principal Balance, the Class M-4
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Certificate Principal Balance, the Class M-5 Certificate Principal Balance, the
Class M-6 Certificate Principal Balance, the Class B-1 Certificate Principal
Balance, the Class B-2 Certificate Principal Balance, the Class B-3 Certificate
Principal Balance, the Class B-4 Certificate Principal Balance and the Class B-5
Certificate Principal Balance, in each case as of such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the sum of (x) the aggregate
Stated Principal Balance of the Mortgage Loans as of such Distribution Date and
(y) the amount on deposit in the Pre-Funding Account as of such Distribution
Date (disregarding income or loss on investments of amounts on deposit in the
Pre-Funding Account).
Appraised Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan),
the "Appraised Value" of a Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan)
is the lesser of (1) the appraised value based on an appraisal made for the
Seller by an independent fee appraiser at the time of the origination of the
related Mortgage Loan, and (2) the sales price of such Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property in
the case of a Co-op Loan) at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property in
the case of a Co-op Loan) based upon the appraisal obtained at the time of
refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
(or UCC-3 assignment (or equivalent instrument) with respect to each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is endorsed in
blank), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the Class
A-2 Available Funds Cap or the Subordinated Certificate Available Funds Cap.
Balloon Loan: A Mortgage Loan having an original term to stated maturity
of approximately 10 years which provides for level monthly payments of principal
and interest based on a 30-year amortization schedule, with a balloon payment of
the remaining outstanding principal balance due on such Mortgage Loan at its
stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant," or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A (other than the Class R Certificate), Class M and Class B
Certificates constitutes a Class of Book-Entry Certificates.
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Bring Down Letter: Those certain letter agreements, dated as of April 17,
2005 between Ownit and the Seller, with respect to the Initial Mortgage Loans
and with respect to the Subsequent Mortgage Loans, the date of the related
Subsequent Transfer Instrument.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Maryland,
State of Minnesota, State of Texas and in the City of New York, New York are
authorized or obligated by law or executive order to be closed.
Cap Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract or the Subordinated Certificate Cap Contract.
Cap Contract Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 4.04(k)(i) in the name of
the Trustee for the benefit of the Trust Fund and designated "Xxxxx Fargo Bank,
N.A., as securities administrator for HSBC Bank USA, National Association, as
trustee, in trust for registered holders of Ownit Mortgage Loan Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-2." Funds in the Cap Contract
Account shall be held in trust for the Trust Fund for the uses and purposes set
forth in this Agreement.
Cap Contract Counterparty: Credit Suisse First Boston International.
Cap Contract Notional Balance: Any of the Class A-1 Cap Contract Notional
Balance, the Class A-2 Cap Contract Notional Balance or the Subordinated
Certificate Cap Contract Notional Balance.
Cap Contract Termination Date: Any of the Class A-1 Cap Contract
Termination Date, the Class A-2 Cap Contract Termination Date or the
Subordinated Certificate Cap Contract Termination Date.
Capitalized Interest Account: The account defined in Section 4.07 herein.
Capitalized Interest Amount: The amount paid by the Seller to the
Securities Administrator for deposit into the Capitalized Interest Account on
the Closing Date pursuant to Section 4.07, which amount is $1,566,327.31.
Certificate: Any one of the certificates of any Class executed by the
Securities Administrator and authenticated by the Securities Administrator in
substantially the forms attached hereto as Exhibits A.
Certificate Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 3.05(e) in the name of the
Trustee for the benefit of the Certificateholders and designated "Xxxxx Fargo
Bank, N.A., as securities administrator for HSBC Bank USA, National Association,
as trustee, in trust for registered holders of Ownit Mortgage Loan Trust,
Mortgage Loan Asset-Backed Certificates, Series 2005-2." Funds in the
Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or Certificate Group
Two.
Certificate Group One: The Class A-1A, Class A-1B and Class R
Certificates. For purposes of Section 2.07 hereof, Certificate Group One shall
be related to Group One.
Certificate Group Two: The Class A-2A, Class A-2B and Class A-2C
Certificates. For purposes of Section 2.07 hereof, Certificate Group Two shall
be related to Group Two.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
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Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the sum of the Stated Principal Balance
of the Mortgage Loans as of the Cut-Off Date and the Original Pre-Funded
Amount)) will be added to the aggregate Certificate Principal Balance of the
Class C Certificates (on a pro rata basis). Notwithstanding the foregoing on any
Distribution Date relating to a Due Period in which a Subsequent Recovery has
been received by the Servicer, the Certificate Principal Balance of any Class of
Certificates then outstanding for which any Applied Realized Loss Amount has
been allocated will be increased, in order of seniority, by an amount equal to
the lesser of (i) the Unpaid Realized Loss Amount for such Class of Certificates
and (ii) the total of any Subsequent Recovery distributed on such date to the
Certificateholders (reduced by the amount of the increase in the Certificate
Principal Balance of any more senior Class of Certificates pursuant to this
sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Securities Administrator and the Trustee are entitled to rely
conclusively on a certification of the Depositor or any Affiliate of the
Depositor in determining which Certificates are registered in the name of an
Affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set
forth in Section 5.01 hereof.
Class A Certificate Principal Balance: For any date of determination, the
sum of the Class A-1A Certificate Principal Balance, the Class A-1B Certificate
Principal Balance, the Class A-2A Certificate Principal Balance, the Class A2-B
Certificate Principal Balance, the Class A-2C Certificate Principal Balance and
the Class R Certificate Principal Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class A-2
Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal Distribution Amount for such
Distribution Date and (2) on or after the Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the Class A Certificate Principal
Balance immediately prior to such Distribution Date over (B) the lesser of (i)
56.80% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (ii) the excess
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of the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount; provided, however, that in no event will the Class A Principal
Distribution Amount with respect to any Distribution Date exceed the aggregate
Certificate Principal Balance of the Class A Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Included Mortgage Loans in Group One based on
the Net Mortgage Rates in effect on the related Due Date divided by (y) the
aggregate Stated Principal Balance of the Included Mortgage Loans in Group One
as of the first day of the related Accrual Period (or, in the case of the first
Distribution Date, as of the Cut-off Date) and (iii) a fraction, the numerator
of which is 30, and the denominator of which is the actual number of days in the
related Accrual Period.
Class A-1 Cap Contract: The amended confirmation and agreement and any
related confirmation thereto, between the Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of Exhibit N-1 hereto).
Class A-1 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-1 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-1 One-Month LIBOR Cap Table attached hereto as
Exhibit O-1.
Class A-1 Cap Contract Termination Date: The day after the Distribution
Date in February 2008.
Class A-1 Certificates: Any of the Class A-1A and Class A-1B Certificates.
Class A-1 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate, adjusted to reflect the length of the related Accrual Period, equal
to the weighted average of the maximum lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group One and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group One (in each case, disregarding Mortgage
Loans that are not Included Mortgage Loans). The Class A-1 Maximum Rate Cap
shall relate to the Class A-1 and Class R Certificates.
Class A-1 Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
Distribution Date Occurring In Class A-1 Required Loss Percentage
April 2005 - March 2008 3.00%
April 2008 - March 2009 3.00% with respect to April 2008, plus an
additional 1/12th of 1.75% for each month
thereafter
April 2009 - March 2010 4.75% with respect to April 2009, plus an
additional 1/12th of 1.50% for each month
thereafter
April 2010 - March 2011 6.25% with respect to April 2010, plus an
additional 1/12th of 0.50% for each month
thereafter
April 2011 and thereafter 6.75%
Class A-1 Trigger Event: The situation that exists with respect to any
Distribution Date on or after April 2005, if (a) the quotient of (1) the
aggregate Stated Principal Balance of all Group One
- 6 -
Mortgage Loans 60 or more days delinquent, measured on a rolling three-month
basis (including Mortgage Loans in foreclosure, REO Properties and Mortgage
Loans with respect to which the applicable mortgagor is in bankruptcy) and (2)
the Stated Principal Balance of all the Group One Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 37.00%
and (ii) the Required Percentage or (b) the quotient (expressed as a percentage)
of (1) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (2) the sum
of (x) the aggregate principal balance of the Group One Mortgage Loans as of the
Cut-off Date and (y) the Group One Original Pre-Funded Amount exceeds the Class
A-1 Required Loss Percentage
Class A-1 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class A-1 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.290% per annum.
Class A-1A Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1A Certificates.
Class A-1A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1A Certificates.
Class A-1A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1A Pass-Through Rate for the related Accrual Period.
Class A-1A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.215% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.430% per annum.
Class A-1A Pass-Through Rate: For the first Distribution Date, 3.10625%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-1A Margin and (2) the Class A-1 Available Funds Cap for
such Distribution Date.
Class A-1B Certificate: Any Certificate designated as a "Class A-1B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1B Certificates.
Class A-1B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1B Pass-Through Rate on
the Class A-1B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1B Interest Carry Forward Amount that is recovered as a
voidable
- 7 -
preference by a trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on such Distribution Date to the Class A-1B Certificates.
Class A-1B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1B Pass-Through Rate for the related Accrual Period.
Class A-1B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.265% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.530% per annum.
Class A-1B Pass-Through Rate: For the first Distribution Date, 3.15625%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-1B Margin and (2) the Class A-1 Available Funds Cap for
such Distribution Date.
Class A-2 Available Funds Cap: With respect to a Distribution Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Included Mortgage Loans in Group Two based on
the Net Mortgage Rates in effect on the related Due Date divided by (y) the
aggregate Stated Principal Balance of the Included Mortgage Loans in Group Two
as of the first day of the related Accrual Period (or, in the case of the first
Distribution Date, as of the Cut-off Date) and (iii) a fraction, the numerator
of which is 30, and the denominator of which is the actual number of days in the
related Accrual Period.
Class A-2 Cap Contract: The amended confirmation and agreement and any
related confirmation thereto, between the Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of Exhibit N-2 hereto).
Class A-2 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-2 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-2 One-Month LIBOR Cap Table attached hereto as
Exhibit O-2.
Class A-2 Cap Contract Termination Date: The day after the Distribution
Date in February 2008.
Class A-2 Certificates: Any of the Class A-2A, Class A-2B and Class A-2C
Certificates.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate, adjusted to reflect the length of the related Accrual Period, equal
to the weighted average of the maximum lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group Two and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group Two (in each case, disregarding Mortgage
Loans that are not Included Mortgage Loans). The Class A-2 Maximum Rate Cap
shall relate to the Class A-2 Certificates.
Class A-2 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class A-2 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.300% per annum.
Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
- 8 -
Class A-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2A Certificates.
Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.110% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.220% per annum.
Class A-2A Pass-Through Rate: For the first Distribution Date, 3.00125%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-2A Margin and (2) the Class A-2 Available Funds Cap for
such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.
Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class X-0X Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.200% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.400% per annum.
- 9 -
Class A-2B Pass-Through Rate: For the first Distribution Date, 3.09125%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-2B Margin and (2) the Class A-2 Available Funds Cap for
such Distribution Date.
Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2C Certificates.
Class A-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class A-2C
Current Interest or a Class A-2C Interest Carry Forward Amount that is recovered
as a voidable preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class A-2C
Certificates.
Class A-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2C Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2C Pass-Through Rate for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.300% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.600% per annum.
Class A-2C Pass-Through Rate: For the first Distribution Date, 3.19125%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-2C Margin and (2) the Class A-2 Available Funds Cap for
such Distribution Date.
Class B Certificates: Any of the Class B-1, Class B-2, Class B-3, Class
B-4 or Class B-5 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1 Certificates.
- 10 -
Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.200% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.800% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 4.09125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M Certificate Principal Balance, have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Certificate Principal Distribution Amount on such Distribution Date),
(F) the Class M-5 Certificate Principal Balance (after taking into account
distributions of the Class M-5 Certificate Principal Distribution Amount on such
Distribution Date), (G) the Class M-6 Certificate Principal Balance (after
taking into account distributions of the Class M-6 Certificate Principal
Distribution Amount on such Distribution Date) and (H) the Class B-1 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 87.50% of the Stated Principal Balance of the Mortgage Loans as of
the end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates and Class M Certificates has been reduced to zero, the Class B-1
Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class B-1 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A
and Class M Certificates and (II) in no event will the Class B-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class B-1
Certificate Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
- 11 -
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.350% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.025% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 4.24125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Certificate
Principal Distribution Amount on such Distribution Date), (F) the Class M-5
Certificate Principal Balance (after taking into account distributions of the
Class M-5 Certificate Principal Distribution Amount on such Distribution Date),
(G) the Class M-6 Certificate Principal Balance (after taking into account
distributions of the Class M-6 Certificate Principal Distribution Amount on such
Distribution Date), (H) the Class B-1 Certificate Principal Balance (after
taking into account distributions of the Class B-1 Principal Distribution Amount
on such Distribution Date) and (I) the Class B-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 90.10% of
the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the
- 12 -
foregoing, (I) on any Distribution Date prior to the Stepdown Date on which the
Certificate Principal Balance of each Class of Class A, Class M and Class B-1
Certificates has been reduced to zero, the Class B-2 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-2 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M and Class B-1
Certificates and (II) in no event will the Class B-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-2 Certificate
Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.
Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.000% per annum and, as of any
Distribution Date after the Optional Termination Date, 3.000% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 4.89125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance and the Class B-2 Certificate Principal Balance have been reduced to
zero and a
- 13 -
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distributions of the Class M-4 Certificate Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distributions of the Class M-5 Certificate Principal
Distribution Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal Balance (after taking into account distributions of the Class M-6
Certificate Principal Distribution Amount on such Distribution Date), (H) the
Class B-1 Certificate Principal Balance (after taking into account distributions
of the Class B-1 Principal Distribution Amount on such Distribution Date), (I)
the Class B-2 Certificate Principal Balance (after taking into account
distributions of the Class B-2 Principal Distribution Amount on such
Distribution Date) and (J) the Class B-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 92.30% of
the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A, Class M, Class B-1
and Class B-2 Certificates has been reduced to zero, the Class B-3 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class M,
Class B-1 and Class B-2 Certificates and (II) in no event will the Class B-3
Principal Distribution Amount with respect to any Distribution Date exceed the
Class B-3 Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance"
Class B-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-4 Certificates.
Class B-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-4 Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-4 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
- 14 -
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.
Class B-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.750% per annum, and, as of any
Distribution Date after the Optional Termination Date, 4.125% per annum.
Class B-4 Pass-Through Rate: For the first Distribution Date, 5.64125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-4 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class B-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance, the Class B-2 Certificate Principal Balance and the Class B-3
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Class M-4 Certificate
Principal Balance (after taking into account distributions of the Class M-4
Certificate Principal Distribution Amount on such Distribution Date), (F) the
Class M-5 Certificate Principal Balance (after taking into account distributions
of the Class M-5 Certificate Principal Distribution Amount on such Distribution
Date), (G) the Class M-6 Certificate Principal Balance (after taking into
account distributions of the Class M-6 Certificate Principal Distribution Amount
on such Distribution Date), (H) the Class B-1 Certificate Principal Balance
(after taking into account distributions of the Class B-1 Principal Distribution
Amount on such Distribution Date), (I) the Class B-2 Certificate Principal
Balance (after taking into account distributions of the Class B-2 Principal
Distribution Amount on such Distribution Date), (J) the Class B-3 Certificate
Principal Balance (after taking into account distributions of the Class B-3
Principal Distribution Amount on such Distribution Date) and (K) the Class B-4
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 93.70% of the Stated Principal Balance of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class M, Class B-1, Class B-2 and Class B-3 Certificates has been reduced to
zero, the Class B-4 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class B-4 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M, Class B-1, Class B-2 and Class B-3 Certificates and
(II) in no event will the Class B-4 Principal Distribution Amount with respect
to any Distribution Date exceed the Class B-4 Certificate Principal Balance.
- 15 -
Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-5 Certificates.
Class B-5 Certificate: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-5 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-5
Certificates.
Class B-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-5 Pass-Through Rate on
the Class B-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-5 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-5 Pass-Through Rate for the related Accrual Period.
Class B-5 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.750% per annum, and, as of any
Distribution Date after the Optional Termination Date, 4.125% per annum.
Class B-5 Pass-Through Rate: For the first Distribution Date 5.64125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-5 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class B-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance, the Class B-2 Certificate Principal Balance, the Class B-3 Certificate
Principal Balance and the Class B-4 Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution
- 16 -
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distributions of the Class M-4 Certificate Principal Distribution Amount
on such Distribution Date), (F) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Certificate Principal
Distribution Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal Balance (after taking into account distributions of the Class M-6
Certificate Principal Distribution Amount on such Distribution Date), (H) the
Class B-1 Certificate Principal Balance (after taking into account distributions
of the Class B-1 Principal Distribution Amount on such Distribution Date), (I)
the Class B-2 Certificate Principal Balance (after taking into account
distributions of the Class B-2 Principal Distribution Amount on such
Distribution Date), (J) the Class B-3 Certificate Principal Balance (after
taking into account distributions of the Class B-3 Principal Distribution Amount
on such Distribution Date), (K) the Class B-4 Certificate Principal Balance
(after taking into account distributions of the Class B-4 Principal Distribution
Amount on such Distribution Date) and (L) the Class B-5 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
95.70% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A, Class M, Class B-1,
Class B-2, Class B-3 and Class B-4 Certificates has been reduced to zero, the
Class B-5 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class B-5 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates and (II) in no event will the Class B-5 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-5 Certificate
Principal Balance.
Class B-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to 99.95% of the aggregate principal balance of
the Lower Tier REMIC Regular Interests immediately prior to such Distribution
Date (such amount of interest representing a "specified portion" (within the
meaning of Treasury Regulations Section 1.860G-1(a)(2)(i)(C)) of interest
payments on the Lower Tier REMIC Regular Interests (other than the Class LTII1B
Interest and the Class LTII2B Interest)), plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class C Certificates.
- 17 -
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC I Marker Interests and the Class LTIX Interest (treating for purposes of
this clause (b) the interest rate on each of the Lower Tier REMIC I Marker
Interests as being subject to a cap and a floor equal to the interest rate of
the Corresponding Certificates and treating the Class LTIX Interest as being
capped at zero). The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the Lower Tier
REMIC Regular Interests immediately prior to any date of determination.
Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class LTA-1A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificates and an interest rate equal
to the Net Rate.
Class LTA-1B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTA-2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTA-2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTA-2C Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
- 18 -
Class LTB-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTB-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
sum of (A) the aggregate Cut-off Date Principal Balance of the Mortgage Loans
and (B) the Original Pre-Funded Amount over (ii) the initial principal balance
of the Lower Tier REMIC I Marker Interests, and with an interest rate equal to
the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
sum of (A) the aggregate Cut-off Date Principal Balance of the Mortgage Loans
and (B) the Original Pre-Funded Amount over (ii) the initial principal balance
of the Lower Tier REMIC II Marker Interests, and with an interest rate equal to
the Net Rate.
Class LTII1A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the excess of (i)
the sum of (A) the aggregate Cut-off Date Principal Balance of the Group One
Mortgage Loans and (B) the Group One Original Pre-Funded Amount over (ii) the
aggregate of the initial Certificate Principal Balances of Certificate Group
One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the sum of (A)
the aggregate Cut-off Date Principal Balance of the Group One Mortgage Loans and
(B) the Group One Original Pre-Funded Amount, and with an interest rate equal to
the Class A-1 Available Funds Cap.
Class LTII2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the excess of (i)
the sum of (A) the aggregate Cut-off Date Principal Balance of the Group Two
Mortgage Loans and (B) the Group Two Original Pre-Funded Amount over (ii) the
aggregate of the initial Certificate Principal Balances of Certificate Group
Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the sum of (A)
the aggregate Cut-off Date Principal Balance of the Group Two Mortgage Loans and
(B) the Group Two Original Pre-Funded Amount, and with an interest rate equal to
the Class A-2 Available Funds Cap.
Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
- 19 -
Class LTM-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower
Tier REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Certificate Principal Balance: For any date of determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2 Certificate
Principal Balance, Class M-3 Certificate Principal Balance, Class M-4
Certificate Principal Balance, Class M-5 Certificate Principal Balance and the
Class M-6 Certificate Principal Balance.
Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.420% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.630% per annum.
- 20 -
Class M-1 Pass-Through Rate: For the first Distribution Date, 3.31125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 64.10% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A Certificates and (II) in no event will the Class M-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-1
Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
- 21 -
Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.450% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.675% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 3.34125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M-1 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class M-2 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
70.50% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates and the
Class M-1 Certificates has been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-2 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A and Class
M-1 Certificates and (II) in no event will the Class M-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-2 Certificate
Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-3
Certificates.
Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates.
- 00 -
Xxxxx X-0 Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.470% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.705% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 3.36125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 74.40% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates and the Class M-2 Certificates has been reduced to zero,
the Class M-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-3 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M-1 and Class M-2 Certificates and (II) in no event will the
Class M-3 Principal Distribution Amount with respect to any Distribution Date
exceed the Class M-3 Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-4
Certificates.
- 23 -
Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-4 Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.620% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.930% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 3.51125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance and
Class M-3 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date) and (E) the Class M-4
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 78.10% of the Stated Principal Balances of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class M-3 Certificates has been reduced to zero, the Class M-4 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-4 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class
M-1, Class M-2 and Class M-3 Certificates and (II) in no event will the Class
M-4 Principal Distribution Amount with respect to any Distribution Date exceed
the Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
- 24 -
Class M-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5 Certificates.
Class M-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5 Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.640% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.960% per annum.
Class M-5 Pass-Through Rate: For the first Distribution Date, 3.53125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-5 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (F) the Class M-5 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 81.40% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the
Class M-3 Certificates
- 25 -
and the Class M-4 Certificates has been reduced to zero, the Class M-5 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-5 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class
M-1, Class M-2, Class M-3 and Class M-4 Certificates and (II) in no event will
the Class M-5 Principal Distribution Amount with respect to any Distribution
Date exceed the Class M-5 Certificate Principal Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6 Certificates.
Class M-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-6 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6 Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-6 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.680% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.020% per annum.
Class M-6 Pass-Through Rate: For the first Distribution Date, 3.57125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-6 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate Principal Balance
and Class M-5 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on
- 26 -
such Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Certificate
Principal Distribution Amount on such Distribution Date), (E) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Certificate Principal Distribution Amount on such Distribution Date),
(F) the Class M-5 Certificate Principal Balance (after taking into account
distributions of the Class M-5 Certificate Principal Distribution Amount on such
Distribution Date) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 84.70% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates and the Class M-5 Certificates has been reduced to
zero, the Class M-6 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class M-6 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates and (II) in no event will the Class M-6 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-6 Certificate
Principal Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P Certificate
on the face thereof, executed by the Securities Administrator and authenticated
by the Securities Administrator in substantially the form set forth in Exhibit
A, representing the right to distributions as set forth herein.
Class R Certificate: The Class R Certificate executed by the Securities
Administrator and authenticated by the Securities Administrator in substantially
the form set forth in Exhibit A.
Class R Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class R Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class R Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R Certificate. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and
- 27 -
(2) interest on such excess (to the extent permitted by applicable law) at the
Class R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.215% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.430% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 3.10625% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin and (2) the Class A-1 Available Funds Cap for such
Distribution Date.
Closing Date: April 8, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Xxxxxx Loan
Servicing LP, as servicer for HSBC Bank USA, National Association, as trustee,
in trust for registered holders of Ownit Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-2." Funds in the Collection Account shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan) and (B) the sales price
of the related Mortgaged Property (or applicable dwelling unit, in the case of a
Co-op Loan) at time of origination.
Compensating Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the portion of any Prepayment Interest
Shortfalls required to be deposited in the Collection Account by the Servicer
pursuant to Section 4.02 hereof.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan),
whether permanent or temporary, partial or entire, by exercise of the power of
eminent domain or condemnation, to the extent not required to be released either
to a Mortgagor in accordance with the terms of the related mortgage loan
documents or to the holder of a senior lien on the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan).
Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and a collateral
assignment of the related Co-op Lease.
Corresponding Certificates: With respect to the Class LTA-1A Interest, the
Class A-1A and Class R Certificates. With respect to the Class LTA-1B Interest,
the Class A-1B Certificates. With respect to the Class LTA-2A Interest, the
Class A-2A Certificates. With respect to the Class LTA-2B
- 28 -
Interest, the Class A-2B Certificates. With respect to the Class LTA-2C
Interest, the Class A-2C Certificates. With respect to the Class LTM-1 Interest,
the Class M-1 Certificates. With respect to the Class LTM-2 Interest, the Class
M-2 Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTM-6 Interest, the Class M-6
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates. With respect to the Class LTB-4 Interest, the Class B-4
Certificates. With respect to the Class LTB-5 Interest, the Class B-5
Certificates.
Current Interest: Any of the Class A-1A Current Interest, the Class A-1B
Current Interest, the Class A-2A Current Interest, the Class A-2B Current
Interest, the Class A-2C Current Interest, the Class R Current Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5 Current
Interest, the Class M-6 Current Interest, the Class B-1 Current Interest, the
Class B-2 Current Interest, the Class B-3 Current Interest, the Class B-4
Current Interest, the Class B-5 Current Interest and the Class C Current
Interest.
Custodian: Xxxxx Fargo Bank, N.A., on behalf of HSBC as Trustee.
Cut-off Date: March 1, 2005 for the Initial Mortgage Loans only.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
- 29 -
Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Securities Administrator and the initial Depository.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such 25th
day is not a Business Day, the next succeeding Business Day, commencing in April
2005.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Securities
Administrator, the Trustee and each Rating Agency, the Certificateholders have a
claim with respect to the funds in such account and a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (v) maintained at an eligible institution whose commercial paper,
short-term debt or other short-term deposits are rated at least A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state chartered depository
institution the deposits in which are insured by the FDIC to the applicable
limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1 by
S&P or Prime-1 by
- 30 -
Moody's at the time any deposits are held on deposit therein, or (vii) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency to the Securities Administrator and the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
ERISA Restricted Certificates: The Class C, Class P and Class R
Certificates and any other Certificate, unless the acquisition and holding of
such other Certificate is covered by and exempt under the Underwriter's
exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for each Class of the Class A,
Class M and Class B Certificates, the excess, if any, of (1) the amount of
interest such Class of Certificates is entitled to receive on such Distribution
Date at its Pass-Through Rate over (2) the amount of interest such Class of
Certificates would have been entitled to receive on such Distribution Date had
the Pass-Through Rate for such Class been the REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) $25,284,821 over (B) the sum of (x) the aggregate Stated Principal Balance
of the Mortgage Loans as of such Distribution Date and (y) the amount on deposit
in the Pre-Funding Account on such Distribution Date (disregarding income or
loss on investments of amounts on deposits in the Pre-Funding Account) and (2)
on and after the Stepdown Date, (A) the sum of (x) the Aggregate Certificate
Principal Balance immediately preceding such Distribution Date, reduced by the
Principal Funds with respect to such Distribution Date and (y) the greater of
(a) 4.30% of the aggregate Stated Principal Balance of the Mortgage Loans and
(b) the Minimum Required Overcollateralization Amount less (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of such Distribution Date;
provided, however, that if on any Distribution Date a Stepdown Trigger Event is
in effect, the Extra Principal Distribution Amount will not be reduced to the
applicable percentage of the then-current aggregate Stated Principal Balance of
the Mortgage Loans (and will remain fixed at the applicable percentage of the
aggregate Stated Principal
- 31 -
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.
Xxxxxx Mae: A federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a class of Class A, Class M or Class
B Certificates is based upon the related Available Funds Cap, the excess of (1)
the amount of interest that such Class would have been entitled to receive on
such Distribution Date had the Pass-Through Rate for that Class not been
calculated based on the related Available Funds Cap, up to but not exceeding
greater of (x) the related Maximum Rate Cap or (y) the sum of (i) the related
Available Funds Cap and (ii) the product of (A) a fraction, the numerator of
which is 360 and the denominator of which is the actual number of days in the
related Accrual Period and (B) the quotient obtained by dividing (I) an amount
equal to the proceeds, if any, payable under the related Cap Contract with
respect to such Distribution Date by (II) the aggregate Certificate Principal
Balance of each of the Classes of Certificates to which such Cap Contract
relates for such Distribution Date over (2) the amount of interest such class
was entitled to receive on such Distribution Date based on the related Available
Funds Cap, together with (i) the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate, without giving effect to the applicable Available Funds Cap)
and (ii) any amount previously distributed with respect to Floating Rate
Certificate Carryover for such class that is recovered as a voidable preference
by a trustee in bankruptcy.
Xxxxxxx Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.
Funding Period: The period beginning on the Closing Date and ending on the
earlier of (a) the date on which the amount on deposit in the Pre-Funding
Account is reduced to zero or (b) 2:00 p.m., New York City time, on June 24,
2005.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group One" in
the Prospectus Supplement including Initial Mortgage Loans included in such
Group as of the Cut-off Date and Subsequent Mortgage Loans added thereto.
Group One Mortgage Loan: Any Mortgage Loan at any time identified in the
Group One Mortgage Loan Schedule attached hereto as Exhibit B-2.
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Group One Original Pre-Funded Amount: $207,303,544.
Group One Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x) the Group One
Principal Distribution Percentage and (y) the Class A Principal Distribution
Amount; provided, however, that with respect to any Distribution Date on which
the Class A-1 and Class R Certificates are outstanding and the Certificate
Principal Balance of the Class A-2 Certificates has been reduced to zero, the
Group One Principal Distribution Amount will equal the Class A Principal
Distribution Amount.
Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group One and with respect to the Distribution Date immediately following the
end of the Funding Period, the portion, if any, of the Group One Original
Pre-Funded Amount remaining in the Pre-Funding Account after giving effect to
the purchase of Subsequent Mortgage Loans included in Group One (disregarding
income or loss on investments of amounts on deposit in the Pre-Funding Account),
and the denominator of which is the amount of Principal Funds received from all
of the Mortgage Loans in the mortgage pool and with respect to the Distribution
Date immediately following the end of the Funding period, the portion, if any,
of the Original Pre-Funded Amount remaining in the Pre-Funding Account after
giving effect to the purchase of Subsequent Mortgage Loans included in either
Mortgage Group (disregarding income or loss on investments of amounts on deposit
in the Pre-Funding Account).
Group Two: The portion of the Mortgage Pool identified as "Group Two" in
the Prospectus Supplement including Initial Mortgage Loans included in such
Group as of the Cut-off Date and Subsequent Mortgage Loans added thereto.
Group Two Mortgage Loan: Any Mortgage Loan at any time identified in the
Group Two Mortgage Loan Schedule attached hereto as Exhibit B-3.
Group Two Original Pre-Funded Amount: $86,706,001.
Group Two Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A Principal Distribution Amount;
provided, however, that with respect to any Distribution Date on which the Class
A-2 Certificates are outstanding and the Certificate Principal Balances of the
Class A-1 and Class R Certificates have been reduced to zero, the Group Two
Principal Distribution Amount will equal the Class A Principal Distribution
Amount.
Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group Two and with respect to the Distribution Date immediately following the
end of the Funding Period, the portion, if any, of the Group Two Original
Pre-Funded Amount remaining in the Pre-Funding Account after giving effect to
the purchase of Subsequent Mortgage Loans included in Group Two (disregarding
income or loss on investments of amounts on deposit in the Pre-Funding Account),
and the denominator of which is the amount of Principal Funds received from all
of the Mortgage Loans in the mortgage pool and with respect to the Distribution
Date immediately following the end of the Funding Period, the portion, if any,
of the Original Pre-Funded Amount remaining in the Pre-Funding Account after
giving effect to the purchase of Subsequent Mortgage Loans included in either
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Mortgage Group (disregarding income or loss on investments of amounts on deposit
in the Pre-Funding Account).
Included Mortgage Loan: With respect to any Distribution Date, any
Mortgage Loan with a Stated Principal Balance greater than zero as of the
preceding Distribution Date (or, in the case of the first Distribution Date, the
Initial Mortgage Loans); provided, however, that no Subsequent Mortgage Loan as
to which the Subsequent Cut-Off Date is on or after the Due Date in the related
Due Period shall be treated as an Included Mortgage Loan for such Distribution
Date.
Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Loans: The Mortgage Loans included in the Trust Fund as
of the Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect with respect to such Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the case of a
Co-op Loan), including any replacement policy or policies for any insurance
policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or the
related Mortgaged Property (or the related Underlying Mortgaged Property, in the
case of a Co-op Loan) pursuant to any Insurance Policy or any other insurance
policy covering such Mortgage Loan or Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan), to the extent such proceeds
are payable to the mortgagee under the Mortgage, the Servicer or the trustee
under the deed of trust and are not applied to the restoration of the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) or released either to the Mortgagor or to the holder of a senior
lien on the related Mortgaged Property (or the related Underlying Mortgaged
Property in the case of a Co-op Loan) in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds in respect
of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property (or the related Underlying Mortgaged Property, in the case of a Co-op
Loan).
Interest Carry Forward Amount: Any of the Class A-1A Interest Carry
Forward Amount, the Class A-1B Interest Carry Forward Amount, the Class A-2A
Interest Carry Forward Amount, the Class A-2B Interest Carry Forward Amount, the
Class A-2C Interest Carry Forward Amount, the Class R Interest Carry Forward
Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward Amount, the
Class M-6 Interest Carry Forward
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Amount, the Class B-1 Interest Carry Forward Amount, the Class B-2 Interest
Carry Forward Amount, the Class B-3 Interest Carry Forward Amount, the Class B-4
Interest Carry Forward Amount, the Class B-5 Interest Carry Forward Amount or
the Class C Interest Carry Forward Amount, as the case may be.
Interest Determination Date: With respect to the Certificates, (i) for any
Accrual Period other than the first Accrual Period, the second LIBOR Business
Day preceding the commencement of such Accrual Period and (ii) for the first
Accrual Period, April 6, 2005.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee and the Securities
Administrator Fee, (2) all Advances relating to interest with respect to the
Mortgage Loans and such Distribution Date, (3) all Compensating Interest with
respect to the Mortgage Loans and such Distribution Date, (4) Liquidation
Proceeds with respect to the Mortgage Loans (to the extent such Liquidation
Proceeds relate to interest) collected during the related Prepayment Period, (5)
all proceeds of any purchase pursuant to Section 2.02 or 2.03 during the related
Prepayment Period or pursuant to Section 9.01 not later than the related
Determination Date (to the extent that such proceeds relate to interest) less
the Servicing Fee and the Securities Administrator Fee, (6) all Prepayment
Charges received with respect to the Mortgage Loans during the related
Prepayment Period and (7) any Required Withdrawal from the Capitalized Interest
Account for such Distribution Date, less (A) all Non-Recoverable Advances
relating to interest and (B) other amounts reimbursable to the Servicer, the
Master Servicer, the Securities Administrator and the Trustee pursuant to this
Agreement.
Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and conducting transactions in foreign
currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee's sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which the
Servicer has certified (in accordance with Section 3.12) in the related
Prepayment Period that it has received all amounts it expects to receive in
connection with such liquidation or (b) as to which is not a first lien Mortgage
Loan and is delinquent 180 days or longer, the Servicer has certified in a
certificate of an officer of the Servicer delivered to the Depositor and the
Trustee that it does not believe that there is a reasonable likelihood that any
further net proceeds will be received or recovered with respect to such Mortgage
Loan.
Liquidation Proceeds: Amounts, including Condemnation Proceeds, Insurance
Proceeds, received in connection with the partial or complete liquidation of a
Mortgage Loan, whether through trustee's sale, foreclosure sale, sale by the
Servicer pursuant to this Agreement or otherwise or amounts received in
connection with any condemnation or partial release of a Mortgaged Property and
any other proceeds received in connection with the final sale of a related REO
Property, less the sum of related unreimbursed Advances, Servicing Fees,
Servicing Advances and any other expenses related to such Mortgage Loan.
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 lesser
of (X) the Appraised Value of the related Mortgaged Property (or
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applicable dwelling unit, in the case of a Co-op Loan) and (Y) the sales price
of the related Mortgaged Property (or applicable dwelling unit, in the case of a
Co-op Loan) at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the Class
LTA-1B Interest, the Class LTA-2A Interest, the Class LTA-2B Interest, the Class
LTA-2C Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest, the Class
LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest, the Class
LTB-3 Interest, the Class LTB-4 Interest, the Class LTB-5 Interest, the Class
LTIX Interest, the Class LTIIX Interest, the Class LTII1A Interest, the Class
LTII1B Interest, the Class LTII2A Interest, the Class LTII2B Interest and the
Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower Tier
REMIC Regular Interests other than the Class LTIX Interest, the Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class LTII2B Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class LTII2B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the
principal balance of the Class LTII1A Interest to (ii) the principal balance of
the Class LTII2A Interest that is equal to the ratio of (i) the excess of (A)
the sum of (1) the aggregate Stated Principal Balance of Group One and (2) the
portion of the Group One Original Pre-Funded Amount remaining in the Pre-Funding
Account (disregarding income or loss on investments of amounts on deposit in the
Pre-Funding Account) over (B) the current Certificate Principal Balance of the
Class A-1 and Class R Certificates to (ii) the excess of (A) the sum of (1) the
aggregate Stated Principal Balance of Group Two and (2) the portion of the Group
Two Original Pre-Funded Amount remaining in the Pre-Funding Account
(disregarding income or loss on investments of amounts on deposit in the
Pre-Funding Account) over (B) the current Certificate Principal Balance of the
Class A-2 Certificates.
Master Servicer: Xxxxx Fargo Bank, N.A., a national banking association,
or any successor in interest.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class A-2
Maximum Rate Cap or the Subordinated Certificate Maximum Rate Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
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MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.
MIN: The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the sum of (i) the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date and (y) the Original Pre-Funded Amount.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Excess Interest Amount: With respect to each Distribution Date,
the amount, if any, by which the Interest Funds for such Distribution Date
exceeds the aggregate amount distributed on such Distribution Date pursuant to
Section 4.04(b) (other than the last clause thereof).
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument with all riders attached thereto
creating a first or second lien or a first or second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note. With
respect to a Co-op Loan, the security agreement with all riders attached thereto
creating a security interest in the stock allocated to a dwelling unit in a
residential cooperative housing corporation and pledged to secure such Co-op
Loan and the related Co-op Lease.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Properties and, following the related
Subsequent Mortgage Loan Transfer Date, any Subsequent Mortgage Loan delivered
pursuant to a Subsequent Transfer Instrument), the mortgage loans so held being
identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other
acquisition of title of the related Mortgaged Property. Any mortgage loan that
was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement and as supplemented by each schedule of Subsequent Mortgage Loans
attached to a Subsequent Transfer Instrument) transferred to the Trustee as part
of the
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Trust Fund and from time to time subject to this Agreement, attached hereto as
Exhibits X-0, X-0 and B-3, setting forth the following information with respect
to each Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance or Subsequent Cut-off Date
Principal Balance (with respect to Subsequent Mortgage Loans);
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a first
lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
respect to a second lien Mortgage Loan;
(x) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of each Adjustment Date;
(B) the next Adjustment Date;
(C) the Maximum Mortgage Rate;
(D) the Minimum Mortgage Rate;
(E) the Mortgage Rate as of the Cut-off Date;
(F) the related Periodic Rate Cap;
(G) the Gross Margin;
(H) the lifetime rate cap;
(xiii) location of the related Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan);
(xiv) a code indicating whether a Prepayment Charge is applicable
and, if so the term of such Prepayment Charge;
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(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto with all riders
attached thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate
and the Securities Administrator Fee Rate.
Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Included Mortgage Loans calculated
based on the respective Net Mortgage Rates and the Stated Principal Balances of
such Included Mortgage Loans as of the preceding Distribution Date (or, in the
case of the first Distribution Date, as of the Cut-off Date) and (y) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Accrual Period.
Net WAC: With respect to any Distribution Date and any Mortgage Group, a
per annum rate equal to 12 times the quotient obtained by dividing (x) the total
scheduled interest on the Included Mortgage Loans in such Mortgage Group based
on the Net Mortgage Rates in effect on the related Due Date by (y) the aggregate
Stated Principal Balance of the Included Mortgage Loans in such Mortgage Group
as of the preceding Distribution Date (or, in the case of the first Distribution
Date, as of the Cut-off Date).
NIM Notes: The notes to be issued pursuant to the Indenture.
NIMs Insurer: Any of the one or more insurers, if any, that is
guaranteeing certain payments under any NIM Notes; provided, that upon the
payment in full of the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.
NIMs Insurer Default: As defined in Section 10.12.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise with respect to the related Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
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Offered Certificates: The Class A-1, Class A-2, Class M, Class B-1 and
Class R Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Master Servicer, the Servicer or the Securities Administrator (or any other
officer customarily performing functions similar to those performed by any of
the above designated officers and also to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with a particular subject) or (2), if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor, the Master Servicer, the Servicer, the Securities Administrator
or the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Securities Administrator on the related Interest Determination Date on
the basis of (a) the offered rates for one-month United States dollar deposits,
as such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on
such Interest Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as of 11:00 a.m. (London time), the offered rates of the Reference
Banks for one-month United States dollar deposits, as such rates appear on the
Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each Interest Determination Date, One-Month LIBOR for the related
Accrual Period will be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the higher of
(i) One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, the Master Servicer, the Servicer or the Securities
Administrator, reasonably acceptable to each addressee of such opinion;
provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor, the Master Servicer, the Servicer or the
Securities Administrator, (2) not have any direct financial interest in the
Depositor, the Master Servicer, the Servicer or the Securities Administrator or
in any affiliate of any such party and (3) not be connected with the Depositor,
the Master Servicer, the Servicer or the Securities Administrator as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Optional Termination: The termination of the Trust Fund hereunder pursuant
to clause (b) of Section 9.01 hereof.
Optional Termination Amount: The amount received by the Securities
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 9.01(b).
Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties is
equal to or less than 10% of the sum of (i) the
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aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
and (ii) the Original Pre-Funded Amount.
Optional Termination Price: On any date after the Optional Termination
Date, an amount equal to the sum of (A) the aggregate Stated Principal Balance
of each Mortgage Loan (other than any Mortgage Loan that has become an REO
Property) as of the Distribution Date on which the proceeds of the Optional
Termination are distributed to the Certificateholders, plus accrued interest
thereon at the applicable Mortgage Rate as of the Due Date preceding the
Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee, the Master
Servicer, the Securities Administrator or the Servicer and any unpaid or
unreimbursed Servicing Fees, Securities Administrator Fees, Advances and
Servicing Advances and (C) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to any of
the Mortgage Loans of any predatory or abusive lending law.
Original Pre-Funded Amount: The amount deposited by the Depositor in the
Pre-Funding Account on the Closing Date from the proceeds of the issuance of the
Certificates, which amount is $294,099,545.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(2) Certificates in exchange for which or in lieu of which other Certificates
have been executed by the Securities Administrator and delivered by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the excess
of (1) the sum of (x) the Stated Principal Balance of the Mortgage Loans and (y)
the amount on deposit in the Pre-Funding Account (disregarding income or loss on
investments of amounts on deposit in the Pre-Funding Account) over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Ownit: Ownit Mortgage Solutions Inc., a California corporation, or its
successor in interest.
Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be
equal to the Certificate Principal Balance
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of such Class divided by the aggregate Certificate Principal
Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of
the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the aggregate
of the Denominations of all Certificates of such Class; except
that in the case of any Class P Certificates, the Percentage
Interest with respect to such Certificate shown on the face of
such Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the Trust Fund created
pursuant to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor and
other assets of the Trust Fund, including the Cap Contracts
and any credit enhancement and passive derivative financial
instruments that pertain to beneficial interests issued or
sold to parties other than the Depositor, its Affiliates, or
its agents;
(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) receiving collections on the Mortgage Loans and the Cap
Contracts and making payments on such Certificates and
interests in accordance with the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental
to accomplish these limited purposes, which activities cannot
be contrary to the status of the Trust Fund as a qualified
special purpose entity under existing accounting literature.
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 rating the
Certificates;
(iii) commercial or finance company paper, other than commercial or
finance company paper issued by the Depositor, the Securities
Administrator or any of its Affiliates, which is then
receiving the highest commercial or finance company paper
rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances (other than banker's acceptances issued by the
Securities Administrator or any of its Affiliates) 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, provided that the commercial paper and/or
long term unsecured debt obligations of such
- 42 -
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;
(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 rated in the two
highest long-term or the highest short-term ratings of each
Rating Agency 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 as evidenced by a
letter from each 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 (v) 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, other than the Securities
Administrator or any of its Affiliates, 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;
(ix) interests in any money market fund (including those managed or
advised by the Securities Administrator, the Trustee or their
respective affiliates) 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 rating such fund; and
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of
the United States or any state thereof, other than the
Securities Administrator or any of its Affiliates, which on
the date of acquisition has been rated by each such Rating
Agency in their respective highest applicable rating category;
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 above par 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 (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of the any
- 43 -
REMIC provided for herein as a REMIC under the Code or result in imposition of a
tax on the Trust Fund or any REMIC provided for herein and (II) each such
investment must be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code. 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 (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Securities Administrator with a duly
completed Internal Revenue Service Form W-8ECI or applicable successor form. The
terms "United States," "State" and "International Organization" shall have the
meanings set forth in Section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the sum of (i)
the aggregate of the Stated Principal Balances, as of such Distribution Date, of
the Mortgage Loans that were Outstanding Mortgage Loans as of such date and (ii)
the Pre-Funded Amount as of such Distribution Date.
Preference Claim: The meaning set forth in Section 4.04(j) hereof.
Pre-Funded Amount: As of any date of determination, the amount on deposit
in the Pre-Funding Account (not including any income, gain or loss on such
amount).
Pre-Funding Account: The account established and maintained pursuant to
Section 4.06.
Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Offered Certificates.
Prepayment Charges: Any prepayment fees, premiums or charges to be paid by
the Mortgagor on a Mortgage Loan pursuant to the terms of the related Mortgage
Note or Mortgage, as applicable, as identified on the Mortgage Loan Schedule.
Prepayment Interest Excesses: With respect to any Servicer Remittance
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment
- 44 -
Period occurring between the first day of the calendar month in which such
Servicer Remittance Date occurs and the last day of the related Prepayment
Period, an amount equal to interest (to the extent received) at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month in which such Servicer
Remittance Date occurs and ending on the date on which such Principal Prepayment
is so applied.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof), the amount, if any, by
which (i) one month's interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date or
in the case of a partial Principal Prepayment, on the amount of such prepayment,
exceeds (ii) the amount of interest paid or collected in connection with such
Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period beginning with
the opening of business on the 15th day of the calendar month preceding the
month in which such Distribution Date occurs (or in the case of the first
Distribution Date, beginning with the opening of business on the Cut-off Date)
and ending on the close of business on the 14th day of the month in which such
Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) all scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) Principal
Prepayments collected in the related Prepayment Period, (3) the Stated Principal
Balance of each Mortgage Loan that was purchased by the Depositor or the
Servicer during the related Prepayment Period or, in the case of a purchase
pursuant to Section 9.01, on any Business Day prior to such Distribution Date,
(4) the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loan is less than the aggregate unpaid principal of the
related Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan pursuant to Section 2.03(c), (5) all Liquidation
Proceeds collected during the related Prepayment Period (to the extent such
Liquidation Proceeds related to principal), (6) all Subsequent Recoveries
received during the related Due Period, (7) with respect to the Distribution
Date immediately following the end of the Funding Period, any amounts in the
Pre-Funding Account (as determined without regard to income or losses arising
from the investment of amounts on deposit in the Pre-Funding Account) after
giving effect to the purchase of any Subsequent Mortgage Loans and (8) all other
collections and recoveries in respect of principal during the related Prepayment
Period less (A) all Non-Recoverable Advances relating to principal with respect
to the Mortgage Loans and (B) other amounts reimbursable to the Servicer, the
Master Servicer, the Securities Administrator and the Trustee pursuant to this
Agreement and allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and 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.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.
- 45 -
Prospectus Supplement: The Prospectus Supplement dated April 6, 2005
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the Transferor pursuant to Section 2.02 or 2.03
hereof or purchased by the Servicer pursuant to Section 3.12(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan as of the date of such purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest on such unpaid principal balance at
the applicable Mortgage Rate from (a) the date through which interest was last
paid by the Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be distributed to Certificateholders and (iii) any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection with any violation relating to such
Mortgage Loan of any predatory or abusive lending law. With respect to any REO
Property purchased by the Servicer pursuant to Section 3.12(c) hereof, an amount
equal to the fair market value of such REO Property, as determined in good faith
by the Servicer
Rating Agency: Any of Fitch, S&P or Xxxxx'x. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) a Mortgage Loan which is not
a Liquidated Loan, any amount of principal that the Mortgagor is no longer
legally required to pay (except for the extinguishment of debt that results from
the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Xxxxx Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Securities Administrator which are engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, England, (ii) whose quotations appear
on the Reuters Screen LIBO Page on the relevant Interest Determination Date and
(iii) which have been designated as such by the Securities Administrator.
Regular Certificate: Any one of the Class A, Class M, and Class B
Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
- 46 -
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires, all of) the Lower Tier REMIC and the
Upper Tier REMIC.
REMIC Pass-Through Rate: The Class A-1 Available Funds Cap (in the case of
a Class included in Certificate Group One), the Class A-2 Available Funds Cap
(in the case of a Class included in Certificate Group Two) or the Subordinated
Certificate Available Funds Cap (in the case of the Subordinated Certificates).
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 2.07 and (ii) the Uncertificated Class C Interest.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer, on behalf of
the Trustee for the benefit of the Certificateholders, through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; and (9) comply
with each representation and warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee (or its custodian), substantially in the form of Exhibit
I hereto.
- 47 -
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Required Percentage: As of any Distribution Date following the Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date, over (B) the Certificate Principal
Balance of the most senior Class of Certificates outstanding as of such
Distribution Date, prior to giving effect to distributions to be made on such
Distribution Date and (2) the Stated Principal Balance of the Mortgage Loans as
of such Distribution Date.
Required Withdrawal: With respect to any Distribution Date on or prior to
the Distribution Date in June 2005, an amount equal to the sum of (A) the
product of (i) the amount relating to Group One on deposit in the Pre-Funding
Account (as determined without regard to income from investments of amounts on
deposit in the Pre-Funding Account and without regard to losses from such
investments) as of the close of the preceding calendar month (or, if such date
would be prior to the Closing Date, the Group One Original Pre-Funded Amount)
and (ii) the Net WAC for Group One and (B) the product of (i) the amount
relating to Group Two on deposit in the Pre-Funding Account (as determined
without regard to income from investments on amounts on deposit in the
Pre-Funding Account and without regard to losses from such investments) as of
the close of the preceding calendar month (or, if such date would be prior to
the Closing Date, the Group Two Original Pre-Funded Amount) and (ii) the Net WAC
for Group Two.
Reserve Interest Rate: [Revise]With respect to any Interest Determination
Date, the rate per annum that the Securities Administrator determines to be (1)
the arithmetic mean (rounded upwards if necessary to the nearest whole multiple
of 0.03125%) of the one-month United States dollar lending rates which New York
City banks selected by the Securities Administrator are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (2) in the event that the Securities
Administrator can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Securities
Administrator are quoting on such Interest Determination Date to leading
European banks.
Residual Excess Interest Amount: With respect to any Distribution Date,
the excess of (x) 0.05% of the Monthly Excess Interest Amount for such
Distribution Date and all prior Distribution Dates over (y) all payments
previously made to the Class R Certificate in respect of the Residual Excess
Interest Amount.
Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions on the
Class R Certificate in respect of Excess Interest.
Responsible Officer: When used with respect to the Securities
Administrator or the Servicer, any officer of the Securities Administrator or
the Servicer with direct responsibility for the administration of this Agreement
and any other officer to whom, with respect to a particular matter, such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Trustee, any officer of the
Trustee with direct responsibility for the administration of this Agreement and
also means any other officer to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
- 48 -
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of March 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated pursuant to
the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., a national banking
association, or any successor in interest.
Securities Administrator Fee: The monthly fee payable to the Securities
Administrator from interest collected with respect to each Mortgage loan equal
to the product of (x) one-twelfth of the Securities Administrator Fee Rate and
(y) the Stated Principal Balance of such Mortgage Loan. The Securities
Administrator is also entitled to investment income earned on the amounts on
deposit in the Certificate Account from the Business Day preceding the
Distribution Date to and including the Distribution Date.
Securities Administrator Fee Rate: 0.008% per annum.
Seller: Xxxxxxx Xxxxx Mortgage Capital, Inc., a Delaware corporation, or
its successors in interest.
Servicer: Xxxxxx Loan Servicing LP, a Delaware limited partnership, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date, the 10th
day (or if such day is not a Business Day, the next succeeding Business Day ) of
the month in which the related Distribution Date occurs.
Servicer Trigger Event: As defined in Section 7.02 hereof.
Servicer's Assignee: As defined in Section 10.14(a).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance of the Servicer's
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, inspection, restoration and protection of a Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan), including
without limitation advances in respect of real estate taxes and assessments, (2)
any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (3) the conservation,
management, sale and liquidation of any REO Property, (4) executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage to the extent not otherwise recovered from the related Mortgages or
payable under this Agreement, (5) correcting errors of prior servicers; costs
and expenses charged to the Servicer by the Trustee or Securities Administrator;
tax tracking; title research; flood
- 49 -
certifications; lender paid mortgage insurance, (6) obtaining or correcting any
legal documentation required to be included in the Mortgage Files and reasonably
necessary for the Servicer to perform its obligations under this Agreement and
(7) compliance with the obligations under Sections 3.01 and 3.10; provided that
such amounts are required to be advanced only to the extent such advances
constitute "unanticipated expenses" within the meaning of Treasury Regulation
Section 1.860G-1(b)(3)(ii).
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) one-twelfth of the Servicing Fee Rate and (y)
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date or, in the event of any payment of interest that accompanies a
Principal Prepayment in full made by the Mortgagor, interest at the Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
preceding Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished to the Master Servicer, the Securities
Administrator and the Trustee by the Servicer on the Closing Date pursuant to
this Agreement, as such lists may from time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by the Servicer,
to which the Servicer may pledge and assign all of its right, title and interest
in, to and under this Agreement, including Wachovia Bank, N.A., as the
representative of certain lenders.
Servicing Transfer Costs: In the event that the Servicer does not
reimburse the Master Servicer under this Agreement, all costs associated with
the transfer of servicing from the predecessor Servicer, including, without
limitation, any costs or expenses associated with the termination of the
predecessor servicer, the appointment of a successor servicer, the complete
transfer of all servicing data and the manipulation, completion or correction of
such servicing data as may be required by the Master Servicer or any successor
servicer to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Master Servicer or successor servicer to service the
Mortgage Loans properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date (or Subsequent Cut-off Date with respect to
Subsequent Mortgage Loans), the Cut-off Date Principal Balance (or Subsequent
Cut-off Date Principal Balance with respect to Subsequent Mortgage Loans)
thereof, and (2) as of any Distribution Date, such Cut-off Date Principal
Balance (or Subsequent Cut-off Date Principal Balance with respect to Subsequent
Mortgage Loans), minus the sum of (A) the principal portion of the Scheduled
Payments (x) due with respect to such Mortgage Loan during each Due Period
ending prior to such Distribution Date and (y) that were received by the
Servicer as of the close of business on the Determination Date related to such
Distribution Date or with respect to which Advances were made on the Servicer
Advance Date prior to such Distribution Date and (B) all Principal Prepayments
with respect to such Mortgage Loan received on or prior to the last day of the
related Prepayment Period, and all Liquidation Proceeds to the extent applied by
the Servicer as recoveries of principal in accordance with Section 3.12 with
respect to such Mortgage Loan, that were received by the Servicer as of the
close of business on the last day of the related Due Period.
- 50 -
Notwithstanding the foregoing, the Stated Principal Balance of a Liquidated Loan
shall be deemed to be zero.
Stepdown Date: The later to occur of (1) the Distribution Date in April
2008 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance (reduced by the Principal Funds with respect to such
Distribution Date) is less than or equal to (B) 56.80% of the Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------ ---------------------------------
April 2008 - March 2009 3.00% with respect to
April 2008, plus an
additional 1/12th of 1.75%
for each month thereafter
April 2009 - March 2010 4.75% with respect to
April 2009, plus an
additional 1/12th of 1.50%
for each month thereafter
April 2010 - March 2011 6.25% with respect to
April 2010, plus an
additional 1/12th of 0.50%
for each month thereafter
April 2011 and thereafter 6.75%
Stepdown Trigger Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties
and Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 37.00%
and (ii) the Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (B) the sum
of (x) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date and (y) the Original Pre-Funded Amount exceeds the Stepdown Required Loss
Percentage.
Subordinated Certificate Available Funds Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted average (weighted in
proportion to the results of subtracting the current Certificate Principal
Balance of the related Class A Certificates from the sum of (x) the aggregate
Stated Principal Balance of the Included Mortgage Loans in each Mortgage Group
as of the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, as of the Cut-off Date) plus (y) the portion of amount on
deposit in the Pre-Funding Account related to such Mortgage Group as of the
close of the month immediately preceding such Distribution Date (disregarding
income or loss on investments of amounts on deposit in the Pre-Funding Account))
of the Class A-1 Available Funds Cap and the Class A-2 Available Funds Cap.
Subordinated Certificate Cap Contract: The amended confirmation and
agreement and any related confirmation thereto, between the Trust Fund or
Trustee and the Cap Contract Counterparty (in the form of Exhibit N-3 hereto).
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Subordinated Certificate Cap Contract Notional Balance: With respect to
any Distribution Date, the Subordinated Certificate Cap Contract Notional
Balance set forth for such Distribution Date in the Subordinated Certificate
One-Month LIBOR Cap Table attached hereto as Exhibit O-3.
Subordinated Certificate Cap Contract Termination Date: The day after the
Distribution Date in February, 2008.
Subordinated Certificate Maximum Rate Cap: With respect to a Distribution
Date, the per annum rate equal to the weighted average (weighted in proportion
to the results of subtracting from the aggregate Stated Principal Balance of the
Included Mortgage Loans in each Mortgage Group as of the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Cut-off Date) the current Certificate Principal Balance of the related Class A
Certificates of the Class A-1 Maximum Rate Cap and the Class A-2 Maximum Rate
Cap.
Subordinated Certificate Upper Collar: With respect to each Distribution
Date with respect to which payments are received on the Subordinated Certificate
Cap Contract, a rate equal to the lesser of One-Month LIBOR and 8.59% per annum.
Subordinated Certificates: Each Class of the Class M and Class B
Certificates.
Subsequent Cut-off Date Principal Balance: As to any Subsequent Mortgage
Loan, the unpaid principal balance thereof as of the close of business on the
calendar day immediately preceding the Subsequent Cut-off Date after application
of all payments of principal due on or prior to the Subsequent Cut-off Date,
whether or not received, and all Principal Prepayments received prior to the
Subsequent Cut-off Date, but without giving effect to any installments of
principal received in respect of Due Dates after the Subsequent Cut-off Date.
Subsequent Cut-off Date: With respect to those Subsequent Mortgage Loans
sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the first
day of the month in which the related Subsequent Transfer Date occurs.
Subsequent Mortgage Loan: A Mortgage Loan sold by the Depositor to the
Trust Fund pursuant to Section 2.10, such Mortgage Loan being identified on the
Mortgage Loan Schedule attached to a Subsequent Transfer Instrument, all of
which shall be "qualified mortgages" within the meaning of Section 860G(a)(3)(A)
of the Code (as determined without regard to Treasury Regulations Section
1.860G-2(a)(3)(iii) or any similar rule that treats a defective obligation as a
"qualified mortgage" for a temporary period).
Subsequent Mortgage Loan Purchase Agreement: The agreement between the
Depositor and the Mortgage Loan Seller regarding the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts reimbursed to the Servicer related to such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subsequent Transfer Date: With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Mortgage Loans are sold to
the Trust Fund.
Subsequent Transfer Instrument: Each Subsequent Transfer Instrument, dated
as of a Subsequent Transfer Date, executed by the Depositor and acknowledged by
the Trustee substantially in the form of
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Exhibit Q, by which Subsequent Mortgage Loans are sold to the Trust Fund and
which will specify, on Attachment B thereto, among other things, the Mortgage
Group to which each Subsequent Mortgage Loan is to be added.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Agreement: The Master Mortgage Loan Purchase and Interim
Servicing Agreement dated as of March 1, 2004, as amended, between Xxxxxxx Xxxxx
Mortgage Capital Inc., as purchaser and Ownit, as seller and interim servicer,
as supplemented by the Bring Down Letter.
Transferor: Ownit.
Transferor Affirmation Notice: A notice from Fitch to the Depositor or the
Seller that the ratings of the Certificates will not be negatively impacted by
the removal of the Seller's obligation to honor the Transferor's representations
and warranties, a copy of which notice shall be provided by either the Seller or
the Depositor to the Securities Administrator and the Trustee.
Trust Fund: The corpus of the trust (the "Ownit Mortgage Loan Trust,
Series 2005-2") created hereunder consisting of (i) the Mortgage Loans and all
interest and principal received on or with respect thereto on and after the
Cut-off Date to the extent not applied in computing the Cut-off Date Principal
Balance thereof, exclusive of interest not required to be deposited in the
Collection Account; (ii) the Collection Account, the Certificate Account, the
Pre-Funding Account and the Capitalized Interest Account and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee's rights under the
Insurance Policies with respect to the Mortgage Loans; (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property; and (vi) the Cap Contract and Cap Contract Account.
Trustee: HSBC Bank USA, National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Uncertificated Class C Interest: An uncertificated interest having (i) the
same rights to payments as the Class C Certificates, other than the rights to
payments of amounts with respect to the Cap Contracts, and (ii) the rights to
the payments treated as distributed to the Class C Certificates under Section
2.07(d), provided, however, that such interest shall have no obligation to make
any payments treated as paid by the Class C Certificates pursuant to interest
rate cap agreements under Section 2.07(d).
Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
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Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized Loss Amount,
Class B-4 Unpaid Realized Loss Amount, Class B-5 Unpaid Realized Loss Amount,
and Class C Unpaid Realized Loss Amount, collectively.
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2 Upper
Collar or the Subordinated Certificate Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and Class B
Certificates, with the allocation among such Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes and (2) each Class of the Class C and
Class P will be allocated 1% of the Voting Rights. Voting Rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans, other than the Subsequent Mortgage
Loans, on or after the Cut-off Date (other than Scheduled Payments due on the
Mortgage Loans on or before the Cut-off Date).
It is agreed and understood by the Depositor, the Master Servicer, the
Servicer, the Securities Administrator and the Trustee that it is not intended
that any Mortgage Loan be included in the Trust that is, without limitation, a
"High-Cost Home Loan" as defined by the Home Ownership and Equity Protection Act
of 1994 or any other applicable anti-predatory lending laws, including but not
limited to (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004; or
(iii) a "High-Cost Home Loan" as defined in the Massachusetts Predatory Home
Loan Practices Act effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined by the Indiana High Cost Home Loan Law effective January 1, 2005.
(i) In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee or its Custodian, the following documents or
instruments with respect to each Mortgage Loan so assigned that is not a Co-op
Loan and the Depositor shall, in accordance with Section 2.10, deliver to, and
deposit with, the Trustee the following documents or instruments with respect to
each Subsequent Mortgage Loan:
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(A) The original Mortgage Note endorsed in blank or, "Pay to the
order of HSBC Bank USA, National Association, as trustee, without
recourse" together with all riders thereto. The Mortgage Note shall
include all intervening endorsements showing a complete chain of the title
from the originator to [____________________];
(B) Except as provided below and for each Mortgage Loan that is not
a MERS Loan, the original recorded Mortgage with all riders thereto, with
evidence of recording thereon, or, if the original Mortgage has not yet
been returned from the recording office, a copy of the original Mortgage
certified by the Transferor to be true copy of the original of the
Mortgage that has been delivered for recording in the appropriate
recording office of the jurisdiction in which the Mortgaged Property is
located and in the case of each MERS Loan, the original Mortgage, noting
the presence of the MIN of the Loan and either language indicating that
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan
at origination, the original Mortgage and the assignment thereof to MERS,
with evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage endorsed either in blank or, to "HSBC
Bank USA, National Association, as trustee;"
(D) The original policy of title insurance (or a preliminary title
report, commitment or binder if the original title insurance policy has
not been received from the title insurance company);
(E) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located; and
(F) Originals of all assumption and modification agreements, if any.
(ii) In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned that is a Co-op Loan:
(A) (i) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension and
modification agreement)), in either case endorsed either in blank or, "Pay
to the order of HSBC Bank, USA, National Association as trustee, without
recourse;"
(B) The original Mortgage entered into by the Mortgagor with respect
to such Co-Op Loan;
(C) The original Assignment of Mortgage endorsed either in blank or
to "HSBC Bank USA, National Association, as trustee;"
(D) Original assignments of Mortgage showing a complete chain of
assignment from the originator of the related Co-Op Loan to the last
endorsee on the Mortgage Note;
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(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect to
such Co-Op Loan (or a recorded copy thereof);
(F) Form UCC-3 (or copy thereof) by the Transferor or its agent
assigning the security interest covered by such Form UCC-1 to "HSBC Bank,
USA, National Association., as trustee," together with all Forms UCC-3 (or
copies thereof) showing a complete chain of assignment from the originator
of the related Co-op Loan to the Transferor, with evidence of recording
thereon;
(G) Original stock certificate representing the stock allocated to
the related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of such
Co-op Loan with a stock power in blank attached;
(H) Original proprietary lease;
(I) Original assignment of proprietary lease or a copy thereof, to
the Trustee or in blank, and all intervening assignments thereof;
(J) Original recognition agreement or a copy thereof of the
interests of the mortgagee with respect to the Co-op Loan by the
residential cooperative housing corporation, the stock of which was
pledged by the related Mortgagor to the originator of such Co-op Loan; and
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F) above
with respect to such Co-op Loan.
If in connection with any Mortgage Loan that is not a Co-op Loan, the
Depositor cannot deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, with evidence of recording
thereon, if applicable, concurrently with the execution and delivery of this
Agreement solely because of a delay caused by the public recording office where
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Trustee written notice
stating that such Mortgage or assumption, consolidation or modification, as the
case may be, has been delivered to the appropriate public recording office for
recordation. Thereafter, the Depositor shall deliver or cause to be delivered to
the Trustee such Mortgage, Assignments of Mortgage or assumption, consolidation
or modification, as the case may be, with evidence of recording indicated
thereon, if applicable, upon receipt thereof from the public recording office.
To the extent any required endorsement is not contained on a Mortgage Note or an
Assignment of Mortgage, the Depositor shall make or cause such endorsement to be
made.
With respect to any Mortgage Loan that is not a Co-op Loan, none of the
Depositor, the Master Servicer, the Servicer, the Securities Administrator or
the Trustee shall be obligated to cause to be recorded the Assignment of
Mortgage referred to in this Section 2.01. With respect to any Co-op Loan, none
of the Depositor, the Servicer or the Trustee shall be obligated to cause to be
filed the Form UCC-3 referred to in this Section 2.01. In the event that any
Assignment of Mortgage referred to in this Section 2.01 is not recorded or is
improperly recorded, the Servicer and the Trustee shall have no liability for
any failure to receive or act on notices related to such Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor, the Master Servicer, the Servicer nor
the Securities Administrator shall take any action inconsistent with such
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ownership and shall not claim any ownership interest therein. The Depositor, the
Master Servicer, the Servicer and Securities Administrator shall respond to any
third party inquiries with respect to ownership of the Mortgage Loans by stating
that such ownership is held by the Trustee on behalf of the Certificateholders.
Mortgage documents relating to the Mortgage Loans not delivered to the Trustee
are and shall be held in trust by the Servicer, for the benefit of the Trustee
as the owner thereof, and the Servicer's possession of the contents of each
Mortgage File so retained is for the sole purpose of servicing the related
Mortgage Loan, and such retention and possession by the Servicer is in a
custodial capacity only. The Depositor agrees to take no action inconsistent
with the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreement described therein and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Seller, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto except as specifically set forth herein.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it in trust for the use and benefit of all present
and future Certificateholders. The Depositor will cause the
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Seller to repurchase any Mortgage Loan to which a material exception was taken
in the Exception Report unless such exception is cured to the satisfaction of
the Trustee within 45 Business Days of the Closing Date (or the Subsequent
Transfer Date with respect to Subsequent Mortgage Loans).
The Trustee acknowledges receipt of the three Cap Contracts (forms of
which are attached hereto as Exhibits N-1, N-2 and N-3), the Transfer Agreement,
the Bring Down Letter and the Sale Agreement.
The Trustee agrees, for the benefit of Certificateholders and the NIMs
Insurer, to review or cause its Custodian to review each Mortgage File delivered
to it within 60 days after the Closing Date (or the Subsequent Transfer Date
with respect to Subsequent Mortgage Loans) to ascertain and to certify, within
70 days of the Closing Date (or the Subsequent Transfer Date with respect to
Subsequent Mortgage Loans), to the NIMs Insurer, the Depositor, the Master
Servicer and the Servicer that all documents required by Section 2.01 have been
executed and received, and that such documents relate to the Mortgage Loans
identified in Exhibit B that have been conveyed to it. If the Trustee finds any
document or documents constituting a part of a Mortgage File to be missing or
defective (that is, mutilated, damaged, defaced or unexecuted) in any material
respect, the Trustee shall promptly (and in any event within no more than five
Business Days) after such finding so notify the NIMs Insurer, the Servicer, the
Master Servicer, the Seller and the Depositor. In addition, the Trustee shall
also notify the NIMs Insurer, the Master Servicer, the Servicer, the Seller and
the Depositor if the original Mortgage with evidence of recording thereon with
respect to a Mortgage Loan is not received within 70 days of the Closing Date
(or the Subsequent Transfer Date with respect to Subsequent Mortgage Loans); if
it has not been received because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage has been delivered to the appropriate public recording office
for recordation and thereafter the Depositor shall deliver or cause to be
delivered such Mortgage with evidence of recording thereon upon receipt thereof
from the public recording office. The Trustee shall request that the Seller
correct or cure such omission, defect or other irregularity, or substitute a
Mortgage Loan pursuant to the provisions of Section 2.03, within 90 days from
the date the Seller was notified of such omission or defect and, if the Seller
does not correct or cure such omission or defect within such period, that the
Seller purchase such Mortgage Loan from the Trust Fund within 90 days from the
date the Trustee notified the Seller of such omission, defect or other
irregularity at the Purchase Price of such Mortgage Loan. The Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall be paid to the
Servicer and deposited by the Servicer in the Certificate Account or Collection
Account, as appropriate, promptly upon receipt, and, upon receipt by the Trustee
of written notification of such deposit signed by a Servicing Officer, the
Trustee, upon receipt of a Request for Release, shall promptly release to the
Seller the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, without recourse, as shall be requested
by the Seller and necessary to vest in the Seller or its designee, as the case
may be, any Mortgage Loan released pursuant hereto, and the Trustee shall have
no further responsibility with regard to such Mortgage Loan. It is understood
and agreed that the obligation of the Seller to purchase, cure or substitute any
Mortgage Loan as to which a material defect in or omission of a constituent
document exists shall constitute the sole remedy respecting such defect or
omission available to the Trustee on behalf of Certificateholders and the NIMs
Insurer. The preceding sentence shall not, however, limit any remedies available
to the Certificateholders, the NIMs Insurer, the Depositor or the Trustee
pursuant to the Sale Agreement, the Transfer Agreement and the Bring-Down
Letter. The Trustee shall be under no duty or obligation to inspect, review and
examine such documents, instruments, certificates or other papers to determine
that they are genuine, enforceable, recordable or appropriate to the represented
purpose, or that they have actually been recorded, or that they are other than
what they purport to be on their face. The Servicer, the Master Servicer, the
Securities Administrator and the Trustee shall keep confidential the name of
each Mortgagor except as required by this Agreement and the Servicer, the Master
Servicer, the Securities Administrator and the Trustee shall not solicit any
such Mortgagor for the purpose of refinancing the related Mortgage Loan;
notwithstanding anything herein to
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the contrary, the foregoing shall not be construed to prohibit (i) disclosure of
any and all information that is or becomes publicly known, or information
obtained by the Trustee, the Servicer, the Master Servicer or the Securities
Administrator from sources other than the other parties hereto, (ii) disclosure
of any and all information (A) if required by any applicable law, rule or
regulation, (B) to any government agency or regulatory body having or claiming
authority to regulate or oversee any aspects of the Trustee's business or that
of its affiliates, (C) pursuant to any subpoena, civil investigation demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which Trustee or any affiliate or an officer, director, employer
or shareholder thereof is a party or (D) to any affiliate, independent or
internal auditor, agent, employee or attorney of the Trustee, the Servicer, the
Master Servicer or the Securities Administrator having a need to know the same,
provided that the Trustee, the Servicer, the Master Servicer or the Securities
Administrator, as applicable, advises such recipient of the confidential nature
of the information being disclosed, or (iii) any other disclosure authorized by
the Depositor. It is understood and agreed that all rights and benefits relating
to the solicitation of any Mortgagors and the attendant rights, title and
interest in and to the list of Mortgagors and data relating to their Mortgages
shall be retained by the Servicer.
Within 70 days of the Closing Date (or the Subsequent Transfer Date with
respect to Subsequent Mortgage Loans), the Trustee (or its custodian) shall
deliver to the NIMs Insurer, the Depositor, the Master Servicer and the Servicer
the Trustee's Certification, substantially in the form of Exhibit D attached
hereto, evidencing the completeness of the Mortgage Files, with any exceptions
noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.
(a) The Depositor hereby represents and warrants to the Servicer,
the Master Servicer, the Securities Administrator, the NIMs Insurer and the
Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or
hold its properties and to conduct its business as now conducted by it and
to enter into and perform its obligations under this Agreement and the
Sale Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and the Sale Agreement and
has duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the Sale
Agreement; and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject,
as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general principles of equity, regardless of whether enforcement
is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and the Sale Agreement, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Depositor and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it
may be bound or (C) constitute a material violation of any statute, order
or regulation applicable to the Depositor of any court,
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regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Depositor's ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and the Sale Agreement or the ability of the Depositor to
perform its obligations under this Agreement and the Sale Agreement in
accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement and the Sale Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage Loan as of the Closing Date (or the related Subsequent Transfer
Date with respect to each Subsequent Mortgage Loan), and following the
transfer of the Mortgage Loans to it by the Seller, the Depositor had good
title to the Mortgage Loans and the Mortgage Notes were subject to no
offsets, claims, liens, mortgage, pledge, charge, security interest,
defenses or counterclaims.
(b) The representations and warranties of the Transferor with
respect to the Mortgage Loans contained in the Transfer Agreement were made as
of the date of the Transfer Agreement and brought forward to the Closing Date
(or the Subsequent Transfer Date with respect to Subsequent Mortgage Loans)
pursuant to the Bring Down Letter. The representations and warranties of the
Transferor with respect to the Mortgage Loans contained in the Bring Down Letter
were made as of the Closing Date (or will be made as of the Subsequent Transfer
Date with respect to each Subsequent Mortgage Loan). The representations and
warranties of the Seller with respect to the Mortgage Loans contained in the
Sale Agreement were made as of the Closing Date.
To the extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of a representation or warranty of the Transferor under the
Transfer Agreement (whether or not such fact, condition or event would also
constitute a breach of a representation or warranty of the Seller under the Sale
Agreement), the only rights or remedies of the Trustee, the NIMs Insurer or of
any Certificateholder shall be first, the Trustee's right to enforce the
obligations of the Transferor under such applicable representation or warranty
made by it and, second, only if the Transferor is unable or unwilling to fulfill
its obligations to cure or repurchase such Mortgage Loan, the Trustee shall
exercise its right to enforce any rights it may have against the Seller under
the Sale Agreement with respect to such representation or warranty; provided,
that in the event the Trustee shall have received a copy of any Transferor
Affirmation Notice, the Trustee shall only be entitled to enforce any rights it
has against the Transferor under the Transfer Agreement and shall not have any
rights against the Seller under the Sale Agreement with respect to such
representation or warranty. To the extent that any fact, condition or event with
respect to a Mortgage Loan constitutes a breach of a representation or warranty
made by the Seller in the Sale Agreement that does not also constitute a breach
of a representation or warranty of the Transferor under the Transfer Agreement,
the Trustee shall enforce any rights it may have against the Seller under the
Sale Agreement. In furtherance of the above, the Seller expressly acknowledges
that prior to the issuance of a Transferor Affirmation Notice, it shall be
obligated and liable to the Trustee, the NIMs Insurer and the Certificateholders
for any breach of a representation or warranty made under
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the Transfer Agreement, but only after the Transferor evidences that it is
unwilling or unable to fulfill its contractual obligations under the Transfer
Agreement. The Trustee acknowledges that the Depositor shall have no obligation
or liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any circumstances.
In addition to the representations and warranties of the Transferor in the
Transfer Agreement that were brought forward to the Closing Date (or Subsequent
Transfer Date) pursuant to the Bring Down Letter, with respect to each Mortgage
Loan, the Transferor made certain additional covenants regarding such Mortgage
Loan, as set forth in the Transfer Agreement. With respect to any breach of such
additional covenants that materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the Seller shall (1) use reasonable
efforts to enforce such covenant against the Transferor and (2) if the Seller
successfully enforces any obligation of the Transferor to repurchase such
Mortgage Loan, the Seller shall repurchase such Mortgage Loan in accordance with
this Section 2.03. If the Seller does not successfully enforce the obligation,
if any, of the Transferor to repurchase a Mortgage Loan with respect to any
breach of any such additional covenants, the Seller shall have no obligation or
right to repurchase or cure such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer, the NIMs Insurer or the Trustee of a
breach of any of such representations and warranties that adversely and
materially affects the value of the related Mortgage Loan, Prepayment Charges or
the interests of the Certificateholders, the party discovering such breach shall
give prompt written notice to the other parties. Within 90 days of the discovery
of such breach of any representation or warranty, the Transferor or the Seller,
as applicable, shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Trustee at the Purchase Price or (c) within the two year period following
the Closing Date, substitute a Replacement Mortgage Loan for the affected
Mortgage Loan. In the event of discovery of a breach of any representation and
warranty of the Transferor or the Seller, the Trustee shall enforce its rights
under the Transfer Agreement or the Sale Agreement for the benefit of
Certificateholders and the NIMs Insurer. If a breach of the representations and
warranties set forth in the Transfer Agreement exists solely due to the
unenforceability of a Prepayment Charge, the Trustee shall notify the NIMs
Insurer thereof and not seek to enforce the repurchase remedy provided for
herein unless directed in writing to do so by the NIMs Insurer. In the event of
a breach of the representations and warranties with respect to the Mortgage
Loans set forth in the Transfer Agreement, the Trustee shall, at the request of
the NIMs Insurer, enforce the right of the Trust Fund and the NIMs Insurer to be
indemnified for such breach of representation and warranty. In the event that
such breach relates solely to the unenforceability of a Prepayment Charge,
amounts received in respect of such indemnity up to the amount of such
Prepayment Charge shall be distributed pursuant to Section 4.04(b)(i). As
provided in the Sale Agreement, if the Transferor substitutes for a Mortgage
Loan for which there is a breach of any representations and warranties in the
Transfer Agreement which adversely and materially affects the value of such
Mortgage Loan and such substitute mortgage loan is not a Replacement Mortgage
Loan, under the terms of the Sale Agreement, the Seller will, in exchange for
such substitute Mortgage Loan, (i) provide the applicable Purchase Price for the
affected Mortgage Loan or (ii) within two years of the Closing Date, substitute
such affected Mortgage Loan with a Replacement Mortgage Loan. Any such
substitution shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit I and
shall not be effected unless it is within two years of the Startup Day. As
provided in the Sale Agreement, the Seller indemnifies and holds the Trust Fund,
the Trustee, the Depositor, the NIMs Insurer, the Master Servicer, the
Securities Administrator, the Servicer and each Certificateholder harmless
against any and all taxes, claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trust Fund, the Trustee, the Depositor, the NIMs Insurer,
the Master Servicer, the Securities Administrator, the Servicer and any
Certificateholder may sustain in connection with any actions of the Seller
relating
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to a repurchase of a Mortgage Loan other than in compliance with the terms of
this Section 2.03 and the Sale Agreement, to the extent that any such action
causes (i) any federal or state tax to be imposed on the Trust Fund or any REMIC
provided for herein, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup day" under Section 860G(d)(1) of the Code, or
(ii) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding. In furtherance of the foregoing, if the Seller
is not a member of MERS and repurchases a Mortgage Loan which is registered on
the MERS System, the Seller, at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed from registration on the MERS System in
accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Agreement, by the Seller pursuant to the Sale Agreement or by the
Transferor pursuant to the Transfer Agreement, the principal portion of the
funds received by the Servicer in respect of such repurchase of a Mortgage Loan
will be considered a Principal Prepayment and shall be deposited by the Servicer
in the Collection Account pursuant to Section 3.05 and the Servicer shall notify
the Securities Administrator of its receipt of the same. The Trustee, upon
receipt of notice from the Servicer of its receipt of the full amount of the
Purchase Price for a Deleted Mortgage Loan, or upon receipt of the Mortgage File
for a Replacement Mortgage Loan substituted for a Deleted Mortgage Loan, shall
release or cause to be released and reassign to the Depositor, the Seller or the
Transferor, as applicable, the related Mortgage File for the Deleted Mortgage
Loan and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, representation or warranty, as shall be necessary
to vest in such party or its designee or assignee title to any Deleted Mortgage
Loan released pursuant hereto, free and clear of all security interests, liens
and other encumbrances created by this Agreement, which instruments shall be
prepared by the Trustee (or its custodian), and neither the Trustee nor the
Securities Administrator shall not have any further responsibility with respect
to the Mortgage File relating to such Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Trustee (or its custodian) pursuant to the terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the Depositor, the Transferor or the Seller, as
applicable, must deliver to the Trustee (or its custodian) the Mortgage File for
the Replacement Mortgage Loan containing the documents set forth in Section 2.01
along with a written certification certifying as to the delivery of such
Mortgage File and containing the granting language set forth in Section 2.01;
and (ii) the Depositor will be deemed to have made, with respect to such
Replacement Mortgage Loan, each of the representations and warranties made by it
with respect to the related Deleted Mortgage Loan. The Trustee (or its
custodian) shall review the Mortgage File with respect to each Replacement
Mortgage Loan and certify to the NIMs Insurer and the Depositor that all
documents required by Section 2.01 have been executed and received.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Seller to the Servicer for deposit into the
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Collection Account on the Determination Date for the Distribution Date relating
to the Prepayment Period during which the related Mortgage Loan became required
to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee, the NIMs Insurer and the
Securities Administrator shall each have received an Opinion of Counsel (at the
expense of the party seeking to make the substitution) that, under current law,
such substitution will not (A) affect adversely the status of any REMIC
established hereunder as a REMIC, or of the related "regular interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC to engage in
a "prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions.
The Trustee shall cause the Mortgage Loan Schedule to be amended in
accordance with the terms of this Agreement.
The Seller shall give or cause to be given written notice to the
Certificateholders and the NIMs Insurer that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Replacement Mortgage Loan or Replacement Mortgage Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to the NIMs Insurer, the Servicer, the
Master Servicer and the Trustee. Upon such substitution by the Seller, such
Replacement Mortgage Loan or Replacement Mortgage Loans shall constitute part of
the Mortgage Pool and shall be subject in all respects to the terms of this
Agreement and the Sale Agreement, including all applicable representations and
warranties thereof included in the Sale Agreement as of the date of
substitution.
(d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the Seller and
the Depositor set forth in the Sale Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of the Transferor, assigned by the Seller to the
Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the Servicer on the Closing Date (or the Subsequent Transfer Date with
respect to the Subsequent Mortgage Loans).
SECTION 2.04. Representations and Warranties of the Master Servicer;
Representations and Warranties of the Servicer; Representations and Warranties
of the Securities Administrator.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Servicer and the Trustee as follows, as of the date hereof:
(i) The Master Servicer is duly organized and is validly
existing as a national banking association and is duly authorized and qualified
to transact any and all business contemplated by this Agreement to be conducted
by the Master Servicer.
(ii) The Master Servicer has the power and authority to master
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate, the transactions contemplated by this Agreement and has
duly authorized by all necessary action on the part of the Master Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and
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binding obligation of the Master Servicer, enforceable against the Master
Servicer in accordance with its terms, except that (A) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (B) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Master Servicer, the master servicing of the Mortgage Loans under this
Agreement, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Master Servicer and will not (A)
result in a material breach of any term or provision of the charter or by-laws
of the Master Servicer or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Master Servicer
is a party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not in breach
or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Master Servicer's
ability to perform or meet any of its obligations under this Agreement.
(iv) The Master Servicer, or an affiliate thereof, is an
approved servicer of mortgage loans for Xxxxxx Xxx and for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or its performance of any of its other obligations under this
Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is required,
the Master Servicer has obtained the same.
(b) The Servicer hereby represents and warrants to the Depositor,
the Master Servicer, the Securities Administrator and the Trustee as follows, as
of the date hereof:
(i) The Servicer is duly organized and is validly existing as
a limited partnership in good standing under the laws of the State of Delaware
and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan) is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its ability
to enforce each Mortgage Loan, to service the Mortgage Loans in accordance with
the terms of this Agreement and to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(ii) The Servicer has the corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of
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the Servicer the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Servicer and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Servicer or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Servicer's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans
for Xxxxxx Xxx and is an approved servicer of mortgage loans for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Servicer to service the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for the period it serviced the Mortgage Loans), in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
(viii) Notwithstanding any state or federal law to the
contrary, the Servicer shall not impose or collect a Prepayment Charge in any
instance when the mortgage debt is accelerated as the result of the Mortgagor's
default in making the Mortgage Loan payments.
(c) The Securities Administrator hereby represents and warrants to
the Depositor, the Master Servicer, the Servicer and the Trustee as of the date
hereof:
(i) The Securities Administrator is duly organized and is
validly existing as a national banking association and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to be
conducted by the Securities Administrator.
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(ii) The Securities Administrator has the full corporate power
and authority to execute, deliver and perform, and to enter into and consummate,
the transactions contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Securities Administrator the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Securities Administrator, enforceable against the Securities Administrator in
accordance with its terms, except that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Securities Administrator, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Securities
Administrator and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Securities Administrator or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Securities Administrator is a party or by
which it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Securities Administrator of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over the Securities Administrator; and the Securities Administrator is not in
breach or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Securities
Administrator's ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending or, to the best of the
Securities Administrator's knowledge, threatened, against the Securities
Administrator that would materially and adversely affect the execution, delivery
or enforceability of this Agreement or the ability of the Securities
Administrator to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Securities Administrator of, or compliance by the Securities
Administrator with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or order is
required, the Securities Administrator has obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages."
Upon discovery by the Depositor, the Master Servicer, the Servicer, the
Securities Administrator or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of section 860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in any event
within 5 Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Depositor shall, at the Depositor's
option, either (i) substitute, if the conditions in Section 2.03(c) with respect
to substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 2.03. The Trustee, upon the
written request of the Depositor, shall reconvey to the Depositor the Mortgage
Loan to
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be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Securities
Administrator has caused to be authenticated and delivered to or upon the order
of the Depositor, in exchange for the Mortgage Loans, Certificates duly
authenticated by the Securities Administrator in authorized denominations
evidencing ownership of the entire Trust Fund. The Trustee agrees to hold the
Trust Fund and exercise the rights referred to above for the benefit of all
present and future Holders of the Certificates and to perform its duties set
forth in this Agreement in accordance with the provisions hereof to the best of
its abilities, to the end that the interests of the Holders may be adequately
and effectively protected.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to
make an appropriate election to treat each of the Upper Tier REMIC and the Lower
Tier REMIC as a REMIC. The Trustee, upon written direction of the Securities
Administrator, shall sign the returns providing for such elections and such
other tax or information returns which are required to be signed by the Trustee
under applicable law. This Agreement shall be construed so as to carry out the
intention of the parties that each of the Upper Tier REMIC and the Lower Tier
REMIC be treated as a REMIC at all times prior to the date on which the Trust
Fund is terminated.
(b) The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. Each REMIC's fiscal year shall be the calendar year.
The Lower Tier REMIC shall consist of all of the assets of the Trust Fund,
other than (i) amounts distributable to the Class P Certificates pursuant to
Section 4.04(b)(i) hereof, (ii) the interests issued by the Lower Tier REMIC,
(iii) the grantor trusts described in Section 2.07 hereof, (iv) each Cap
Contract and the Cap Contract Account, (v) the Pre-Funding Account and (vi) the
Capitalized Interest Account. The Lower Tier REMIC shall issue the Lower Tier
REMIC Regular Interests which shall be designated as regular interests of such
REMIC and shall issue the Class LTR Interest that shall be designated as the
sole class of residual interest in the Lower Tier REMIC. Each of the Lower Tier
REMIC Regular Interests shall have the characteristics set forth in its
definition.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC Regular
Interests. The REMIC Regular Interests shall be designated as the regular
interests in the Upper Tier REMIC and the Residual Interest shall be designated
as the sole class of residual interest in the Upper Tier REMIC. For federal
income tax purposes, the pass-through rate on each REMIC Regular Interest (other
than the Uncertificated Class C Interest) and on the sole class of residual
interest in the Upper Tier REMIC shall be subject to a cap equal to the Net
Rate.
The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class LTR Interest
shall not have a principal balance or bear interest.
(c) The "tax matters person" with respect to each REMIC for purposes
of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of the Class R Certificate, by
its acceptance thereof, irrevocably appoints the Securities
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Administrator as its agent and attorney-in-fact to act as "tax matters person"
with respect to each REMIC for purposes of the REMIC Provisions. If there is
more than one beneficial owner of the Class R Certificate, the "tax matters
person" shall be the Person with the greatest percentage interest in the Class R
Certificate and, if there is more than one such Person, shall be determined
under Treasury regulation Section 1.860F-4(d) and Treasury regulation Section
301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the Class A,
Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A (other than the Class R Certificate),
Class M and Class B Certificates and the residual interest in the Upper Tier
REMIC held by the holder of the Class R Certificate. For information reporting
requirements, the rights of the Class A, Class M and Class B Certificates to
receive payments in respect of Excess Interest shall be assumed to have zero or
a de minimis value. This provision is intended to satisfy the requirements of
Treasury Regulations Section 1.860G-2(i) for the treatment of property rights
coupled with REMIC interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that
any of the Class A, Class M and Class B Certificates receive payments in respect
of Excess Interest, such amounts, to the extent not derived from payments on the
Cap Contracts, will be treated as distributed by the Upper Tier REMIC to the
Class C Certificates pro rata in payment of the amounts specified in Section
4.04(g) and then paid to the relevant Class of Certificates pursuant to the
related interest rate cap agreement.
(e) The parties intend that the portion of the Trust Fund consisting
of the Uncertificated Class C Interest, the Cap Contracts, the Cap Contract
Account, and the obligation of the holders of the Class C Certificates to pay
amounts in respect of Excess Interest to the holders of the Class A, Class M and
Class B Certificates shall be treated as a "grantor trust" under the Code, for
the benefit of the holders of the Class C Certificates, and the provisions
hereof shall be interpreted consistently with this intention. In furtherance of
such intention, the Securities Administrator shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A, Class M, Class B and
Class C Certificates as may be applicable under the Code.
(f) The parties intend that the portion of the Trust Fund consisting
of the right to receive amounts distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the Code, for the benefit of the holders of the Class P Certificates, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Securities Administrator shall (i) furnish or
cause to be furnished to the holders of the Class P Certificates information
regarding their allocable share of the income with respect to such grantor trust
and (ii) file or cause to be filed with the Internal Revenue Service Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.
(g) [RESERVED]
(h) All payments of principal and interest at the Net Mortgage Rate
on each of the Mortgage Loans (other than amounts distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received from the Mortgage
Loans shall be paid to the Lower Tier REMIC Regular Interests until the
principal balance of all such interests have been reduced to zero and any
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losses allocated to such interests have been reimbursed. Any excess amounts
shall be distributed to the Class LTR Interest. On each Distribution Date,
payments and losses shall be allocated among the Lower Tier REMIC Regular
Interests so that (i) each of the Lower Tier REMIC I Marker Interests shall have
a principal balance equal to 25% of the principal balance of the Corresponding
Certificates, (ii) the Class LTIX Interest has a principal balance equal to the
excess of (x) 50% of the sum of (1) the remaining principal balance of the
Mortgage Loans and (2) the amount remaining on deposit in the Pre-Funding
Account (disregarding income or losses on investments of amounts on deposit in
the Pre-Funding Account) over (y) the aggregate principal balance of the Lower
Tier REMIC I Marker Interests (if necessary to reflect an increase in
overcollateralization, accrued and unpaid interest on the Class LTIX interest
may be added to its principal amount to achieve this result) and (iii) the
aggregate principal amount of the Class LTII1A Interest, Class LTII1B Interest,
Class LTII2A Interest, Class LTII2B Interest and the Class LTIIX Interest shall
equal 50% of the sum of (1) the remaining principal balance of the Mortgage
Loans and (2) the amount remaining on deposit in the Pre-Funding Account
(disregarding income or losses on investments of amounts on deposit in the
Pre-Funding Account). Distributions and losses allocated to the Lower Tier REMIC
Regular Interests described in clause (iii) of the preceding sentence will be
allocated among such Lower Tier REMIC Regular Interests in the following manner:
(x) such distributions shall be deemed made to such Lower Tier REMIC Regular
Interests first, so as to keep the principal balance of the each such Lower Tier
REMIC Regular Interest with "B" at the end of its designation equal to 0.05% of
the sum of (1) the aggregate scheduled principal balance of the Mortgage Loans
in the related Mortgage Group and (2) the portion of the Original Pre-Funded
Amount related to such Mortgage Group that is remaining in the Pre-Funding
Account (disregarding income or loss on investments of amounts on deposit in the
Pre-Funding Account); second, to such Lower Tier REMIC Regular Interests with
"A" at the end of its designation so that the uncertificated principal balance
of each such Lower Tier REMIC Regular Interest is equal to 0.05% of the excess
of (I) the sum of (1) the aggregate scheduled principal balance of the Mortgage
Loans in the related Mortgage Group and (2) the portion of the Original
Pre-Funded Amount related to such Mortgage Group that is remaining in the
Pre-Funding Account (disregarding income or loss on investments of amounts on
deposit in the Pre-Funding Account) over (II) the aggregate principal balance of
Certificate Group One, in the case of Group One, or Certificate Group Two, in
the case of Group Two (except that if 0.05% of any such excess is greater than
the principal amount of the related Lower Tier REMIC II Marker Interest with "A"
at the end of its designation, the least amount of principal shall be
distributed to each Lower Tier REMIC II Marker Interest with "A" at the end of
its designation such that the Lower Tier REMIC Subordinated Balance Ratio is
maintained) and finally, any remaining distributions of principal to the Class
LTIIX Interest and (y) such losses shall be allocated among the Lower Tier REMIC
Regular Interests described in clause (iii) of the preceding sentence first, so
as to keep the principal balance of the each such Lower Tier REMIC Regular
Interest with "B" at the end of its designation equal to 0.05% of the sum of (1)
the aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group and (2) the portion of the Original Pre-Funded Amount related to
such Mortgage Group that is remaining in the Pre-Funding Account (disregarding
income or loss on investments of amounts on deposit in the Pre-Funding Account);
second, to such Lower Tier REMIC Regular Interests with "A" at the end of its
designation so that the uncertificated principal balance of each such Lower Tier
REMIC Regular Interest is equal to 0.05% of the excess of (I) the sum of (1) the
aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group and (2) the portion of the Original Pre-Funded Amount related to
such Mortgage Group that is remaining in the Pre-Funding Account (disregarding
income or loss on investments of amounts on deposit in the Pre-Funding Account)
over (II) the aggregate principal balance of Certificate Group One, in the case
of the Class LTII1A Interest, or Certificate Group Two, in the case of the Class
LTII2A Interest (except that if 0.05% of any such excess is greater than the
principal amount of the related Lower Tier REMIC II Marker Interest with "A" at
the end of its designation, the least amount of losses shall be allocated to
each Lower REMIC II Marker Interest with "A" at the end of its designation such
that the Lower Tier REMIC Subordinated Balance Ratio is maintained) and finally,
any remaining
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losses to the Class LTIIX Interest. Notwithstanding the preceding two sentences,
however, losses not allocated to any Class of Certificates will not be allocated
to any Lower Tier REMIC Regular Interests. All computations with respect to the
Lower Tier REMIC Regular Interests shall be taken out to ten decimal places.
Any available funds remaining in the Lower Tier REMIC on a Distribution
Date after distributions to the Lower Tier REMIC Regular Interests shall be
distributed to the Class R Certificates in respect of the Class LTR Interest.
If on any Distribution Date the Certificate Principal Balance of any Class
of Certificates is increased pursuant to the last sentence of the definition of
"Certificate Principal Balance", then there shall be an equivalent increase in
the principal amounts of the Lower Tier REMIC Regular Interests, with such
increase allocated (before the making of distributions and the allocation of
losses on the Lower Tier REMIC Regular Interests on such Distribution Date)
among the Lower Tier REMIC Regular Interests so that, to the greatest extent
possible, (i) each of the Lower Tier REMIC I Marker Interests has a principal
balance equal to 25% of the principal balance of the Corresponding Certificates,
(ii) the Class LTIX Interest has a principal balance equal to the excess of (x)
50% of the sum of (1) the remaining principal balance of the Mortgage Loans and
(2) the amount remaining on deposit in the Pre-Funding Account (disregarding
income or losses on investments of amounts on deposit in the Pre-Funding
Account) over (y) the aggregate principal balance of the Lower Tier REMIC I
Marker Interests and (iii) the aggregate principal amount of the Lower Tier
REMIC II Marker Interests and the Class LTIIX Interest shall equal 50% of the
sum of (1) the remaining principal balance of the Mortgage Loans and (2) the
amount remaining on deposit in the Pre-Funding Account (disregarding income or
losses on investments of amounts on deposit in the Pre-Funding Account).
Allocations in connection with clause (iii) shall be made so that, to the
greatest extent possible, (a) the principal balance of each Lower Tier REMIC II
Marker Interest with "B" at the end of its designation equals 0.05% of the sum
of (1) the aggregate scheduled principal balance of the Mortgage Loans in
related Mortgage Group and (2) the portion of the Original Pre-Funded Amount
related to such Mortgage Group that is remaining in the Pre-Funding Account
(disregarding income or loss on investments of amounts on deposit in the
Pre-Funding Account), (b) the principal balance of each Lower Tier REMIC II
Marker Interest with "A" at the end of its designation equals 0.05% of the
excess of (x) the sum of (1) the aggregate scheduled principal balance of the
Mortgage Loans in related Mortgage Group and (2) the portion of the Original
Pre-Funded Amount related to such Mortgage Group that is remaining in the
Pre-Funding Account (disregarding income or loss on investments of amounts on
deposit in the Pre-Funding Account) over (y) the aggregate principal balance of
Certificate Group One in the case of the Class LTII1A Interest, or Certificate
Group Two in the case of the Class LTII2A Interest and (c) any remaining
allocations are made to the Class LTIIX Interest.
For purposes of this Section 2.07, (i) the Class LTII1A Interest and Class
LTII1B Interest shall be related to Group One, and (ii) the Class LTII2A
Interest and Class LTII2B Interest shall be related to Group Two.
(i) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify the NIMs Insurer,
the Trustee, the Securities Administrator, the Master Servicer and the Trust
Fund against any and all Losses resulting from such negligence; provided,
however, that the Servicer shall not be liable for any such Losses attributable
to the action or inaction of the Trustee, the Securities Administrator, the
Master Servicer, the Depositor or the Holder of the residual interest in such
REMIC, as applicable, nor for any such Losses resulting from misinformation
provided by the Holder of the residual interest in such REMIC on which
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the Servicer has relied. The foregoing shall not be deemed to limit or restrict
the rights and remedies of the Holder of the residual interest in such REMIC now
or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Servicer have any liability (1) for any action or
omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement, (2)
for any Losses other than those arising out of a negligent performance by the
Servicer of its duties and obligations set forth herein, and (3) for any special
or consequential damages to Certificateholders (in addition to payment of
principal and interest on the Certificates).
(j) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Securities
Administrator of its duties and obligations set forth herein, the Securities
Administrator shall indemnify the NIMs Insurer and the Trust Fund against any
and all Losses resulting from such negligence; provided, however, that the
Securities Administrator shall not be liable for any such Losses attributable to
the action or inaction of the Servicer, the Master Servicer, the Depositor, the
Trustee or the Holder of the residual interest in such REMIC, as applicable, nor
for any such Losses resulting from misinformation provided by the Holder of the
residual interest in such REMIC on which the Securities Administrator has
relied. The foregoing shall not be deemed to limit or restrict the rights and
remedies of the Holder of the residual interest in such REMIC now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Securities Administrator have any liability (1) for any action
or omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement, (2)
for any Losses other than those arising out of a negligent performance by the
Securities Administrator of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).
SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy;
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, the Master
Servicer, the Securities Administrator, the NIMs Insurer or the Trustee, any
affiliate of the Depositor, the Master Servicer, the Securities Administrator,
the NIMs Insurer or the Trustee and prepared by the Servicer pursuant to this
Agreement is inaccurate in any material respect, provided, however, that the
Servicer shall not be responsible for inaccurate information provided to it by
third parties.
SECTION 2.10. Conveyance of Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the remittance on each Subsequent Transfer Date to or upon the
order of the Depositor of all or a portion of the balance of funds in the
Pre-Funding Account, which constitute the purchase price for the related
Subsequent Mortgage Loans, as described in the next paragraph, the Depositor
shall on such Subsequent Transfer Date sell, transfer, assign, set over and
convey without recourse all of the right, title and
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interest of the Depositor in and to (i) the Subsequent Mortgage Loans identified
on the Mortgage Loan Schedule attached to the related Subsequent Transfer
Instrument delivered by the Depositor on such Subsequent Transfer Date,
including all interest and principal received on or with respect to the
Subsequent Mortgage Loans so assigned and the Depositor shall deliver to, and
deposit with, the Trustee (or the Custodian on its behalf) all items with
respect to such Subsequent Mortgage Loans to be delivered pursuant to Section
2.01; provided, however, that the Depositor reserves and retains all right,
title and interest in and to principal received and interest accruing on the
Subsequent Mortgage Loans on or prior to the related Subsequent Cut-off Date.
The transfer to the Trustee for deposit in the Mortgage Pool by the Depositor of
the Subsequent Mortgage Loans identified on the Mortgage Loan Schedule shall be
absolute and is intended by the Depositor, the Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale of the Subsequent
Mortgage Loans by the Depositor to the Trust Fund. The related Mortgage File for
each Subsequent Mortgage Loan shall be delivered to the Trustee or to the
Custodian (as the duly appointed agent of the Trustee) on or before the related
Subsequent Transfer Date. The Servicer shall amend the Mortgage Loan Schedule to
reflect any additions of such Subsequent Mortgage Loans. After the Subsequent
Transfer Date, the Subsequent Mortgage Loans shall constitute part of the
Mortgage Group designated in the Subsequent Transfer Instrument and shall be
subject in all respects to the terms of this Agreement and the Sale Agreement,
including all applicable representations and warranties thereof included in the
Sale Agreement as of the date of substitution.
Upon delivery by the Depositor of timely Addition Notices, and subject to
satisfaction of the conditions set forth in paragraphs (c) and (d) below, the
Trust Fund shall be obligated to purchase, in accordance with the provisions of
this Agreement, Subsequent Mortgage Loans offered for sale by the Depositor
during the Funding Period (subject to the limitation that the aggregate purchase
price for such Subsequent Mortgage Loans may not exceed the Original Pre-Funded
Amount (and further that the aggregate purchase price for Subsequent Mortgage
Loans added to Group One and Group Two may not exceed the Group One Original
Pre-Funded Amount or the Group Two Original Pre-Funded Amount, respectively)).
The purchase price paid by the Trust Fund for the Subsequent Mortgage Loans on
each Subsequent Transfer Date shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor) as of the related Subsequent Cut-off Date. On each Subsequent
Transfer Date, the aggregate purchase price for all Subsequent Mortgage Loans
purchased on such date shall be withdrawn by the Securities Administrator from
the Pre-Funding Account and paid to the Depositor. Thereafter, the Pre-Funded
Amount will equal the Original Pre-Funded Amount reduced by the purchase price
paid for Subsequent Mortgage Loans. This Agreement shall constitute a
fixed-price purchase contract in accordance with Section 860G(a)(3)(A)(ii) of
the Code.
(b) The Depositor shall transfer to the Trustee for deposit in the
Mortgage Pool the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Securities
Administrator shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Depositor shall have provided the Trustee, the Securities
Administrator and the Servicer with a timely Addition Notice;
(ii) the Depositor shall have delivered to the Trustee (with a copy
to the Securities Administrator) a duly executed Subsequent Transfer
Instrument, which shall include a Mortgage Loan Schedule listing the
Subsequent Mortgage Loans, and the Depositor shall have delivered a
computer file containing such Mortgage Loan Schedule to the Securities
Administrator, the Trustee and the Servicer at least three Business Days
prior to the related Subsequent Transfer Date;
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(iii) as of each Subsequent Transfer Date, as evidenced by delivery
of the Subsequent Transfer Instrument, the Depositor shall not be
insolvent nor shall it have been rendered insolvent by such transfer nor
shall it be aware of any pending insolvency;
(iv) the Funding Period shall not have terminated;
(v) the Depositor shall have delivered to the Trustee (with a copy
to the Securities Administrator) a Subsequent Transfer Instrument
confirming the satisfaction of the conditions precedent specified in this
Section 2.10 and, pursuant to the Subsequent Transfer Instrument, assigned
to the Trustee without recourse for the benefit of the Certificateholders
all the right, title and interest of the Depositor, in, to and under the
Subsequent Mortgage Loan Purchase Agreement, to the extent of the
Subsequent Mortgage Loans;
(vi) the Depositor shall have delivered to the Trustee and the
Securities Administrator a letter (with copies provided to the Rating
Agencies and the Securities Administrator), upon which the Trustee may
rely, including for purposes of paragraph (c) and (d) stating that the
characteristics of the Subsequent Mortgage Loans substantially conform to
the characteristics set forth in paragraphs (c) and (d) below and that
such Subsequent Mortgage Loans were not selected in a manner that the
Depositor believes to be adverse to Certificateholders;
(vii) the Depositor shall have delivered to the Trustee an Opinion
of Counsel addressed to the Trustee and the Rating Agencies with a copy to
the Securities Administrator with respect to the transfer of the
Subsequent Mortgage Loans substantially in the form of the Opinion of
Counsel delivered to the Trustee on the Closing Date regarding the true
sale of the Subsequent Mortgage Loans; and
(viii)the Trustee shall have delivered to the Depositor an Opinion
of Counsel addressed to the Depositor and the Rating Agencies with respect
to the Subsequent Transfer Instrument substantially in the form of the
Opinion of Counsel delivered to the Depositor on the Closing Date
regarding certain corporate matters relating to the Trustee.
(c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the Subsequent Cut-off Date (or such other date
as is specified herein): (i) the Subsequent Mortgage Loan may not be 31 or more
days delinquent as of the related Subsequent Cut-off Date (except with respect
to not more than 1.50% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, which may be 31 or more days
delinquent but less than 60 days delinquent as of the related Subsequent Cut-off
Date); (ii) the stated term to maturity of the Subsequent Mortgage Loan will not
be less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) the Subsequent
Mortgage Loan will not have a Combined Loan-to-Value Ratio greater than 100.00%;
(v) the Subsequent Mortgage Loans will have as of the Subsequent Cut-off Date, a
term since origination not in excess of 6 months; (vi) the Subsequent Mortgage
Loan must have a first Monthly Payment due on or before July 1, 2005; (vii) the
Subsequent Mortgage Loans assigned to Group One must meet the Xxxxxxx Mac
principal balance criteria described in the Prospectus Supplement; (viii) the
Subsequent Mortgage Loan will be underwritten in accordance with the criteria
set forth under the section "Underwriting Guidelines--Ownit Underwriting
Guidelines" in the Prospectus Supplement, (ix) the Subsequent Mortgage Loan must
provide for monthly interest payments due on the first day of each calendar
month, (x) as of the Subsequent Transfer Date for such Subsequent Mortgage Loan,
the Subsequent Mortgage Loan must be a "qualified mortgage" within the meaning
of Section 860G of the
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Code and Treasury Regulations Section 1.860G-2 (as determined without regard to
Treasury Regulations Section 1.860G-2(a)(3) or any similar provision that treats
a defective obligation as a qualified mortgage for a temporary period), (xi) as
of the Subsequent Transfer Date for such Subsequent Mortgage Loan, the
Subsequent Mortgage Loan does not provide for interest other than at either (a)
a single fixed rate in effect throughout the term of the Subsequent Mortgage
Loan or (b) a "variable rate" (within the meaning of Treasury Regulations
Section 1.860G-1(a)(3)) in effect throughout the term of the Subsequent Mortgage
Loan, (xii) as of the Subsequent Transfer Date for such Subsequent Mortgage
Loan, the Depositor would not, based on the delinquency status of such
Subsequent Mortgage Loan, institute foreclosure proceedings prior to the next
scheduled payment date for such Subsequent Mortgage Loan, (xiii) as of the
Subsequent Transfer Date for such Subsequent Mortgage Loan, the Subsequent
Mortgage Loan was not the subject of pending or final foreclosure proceedings
and (xiv) as of the Subsequent Transfer Date for such Subsequent Mortgage Loan,
each of the representations and warranties of the Seller in the Sale Agreement
shall be true, complete and correct with respect to such Subsequent Mortgage
Loan.
(d) Following the purchase of the Subsequent Mortgage Loans by the
Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will
have characteristics that, as of the Subsequent Cut-off Date, are not materially
inconsistent with the Initial Mortgage Loans.
Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by a Rating Agency if the inclusion of any such Subsequent Mortgage
Loan would adversely affect the ratings of any Class of Certificates.
SECTION 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and to perform the duties and obligations of the
Trustee under, the Cap Contracts, an insurance and indemnity agreement with a
NIMs Insurer and any other agreement or instrument related thereto, in each case
in such form as the Depositor shall direct or shall approve, the execution and
delivery of any such agreement by the Depositor to be conclusive evidence of its
approval thereof.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of SFAS 140,
the parties hereto intend that the Trust Fund shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans, including without limitation, any powers of
attorney, in accordance with Accepted Servicing Practices. In connection with
such servicing and administration, the Servicer shall have full power and
authority, acting alone and/or through subservicers as provided in Section 3.02
hereof, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration, including but
not limited to, the power and authority, subject to the terms hereof (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property
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(or the stock allocated to a dwelling unit related to a Co-op Loan) and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds and (iv) subject to Section 3.12(a), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property (or
the stock allocated to a dwelling unit related to a Co-op Loan) securing any
Mortgage Loan; provided that, subject to Section 6.03, the Servicer shall not
take any action that is inconsistent with or prejudices the interests of the
Trust Fund or the Certificateholders in any Mortgage Loan serviced by it under
this Agreement or the rights and interests of the other parties to this
Agreement except as otherwise required by this Agreement or by law. The Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would cause any of the REMICs provided for herein to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, subordinations and all other comparable instruments, with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor, the Securities Administrator and/or the Trustee such documents
requiring execution and delivery by any or all of them as are necessary or
appropriate to enable the Servicer to service and administer the Mortgage Loans,
including without limitation, any powers of attorney. Upon receipt of such
documents, the Depositor, the Securities Administrator and/or the Trustee shall
execute such documents and deliver them to the Servicer. For purposes of this
Section 3.01, the Trustee hereby grants to the Servicer a limited power of
attorney in the form of Exhibit P to execute and file any and all documents
necessary to fulfill the obligations of the Servicer under this Section 3.01.
The Trustee shall deliver Powers of Attorney in the form attached hereto
as Exhibit P to the Servicer promptly after the Closing Date and additional
Powers of Attorney promptly after request therefor by the Servicer.
In accordance with the standards of the preceding paragraph, the Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. To the extent that a Mortgage does not provide for
escrow payments, (i) the Servicer shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or to foreclosure as a result
of a tax lien and (ii) the Servicer shall ensure that all insurance required to
be maintained on the Mortgaged Property pursuant to this Agreement is
maintained. If any such payment has not been made and the Servicer receives
notice of a tax lien being imposed with respect to the Mortgage Loan, the
Servicer will, to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property.
All costs incurred by the Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
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In the event that the Mortgage Loan Documents relating to any Mortgage
Loan contain provisions requiring the related Mortgagor to submit to binding
arbitration any disputes arising in connection with such Mortgage Loan, the
Servicer shall be entitled to waive any such provisions on behalf of the Trust
and to send written notice of such waiver to the related Mortgagor, although the
Mortgagor may still require arbitration of such disputes at its option.
The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall have at least 30 days' notice of the appointment of a
NIMs Insurer prior to being required to deliver any notices pursuant to this
Agreement to such NIMs Insurer.
The Servicer shall deliver a list of Servicing Officers to the Master
Servicer and the Trustee by the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 97-02 and that for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment,
release and other comparable instruments with respect to such assignment,
release or re-recording of a Mortgage in the name of MERS, solely as nominee for
the Trustee and its successors and assigns. Any reasonable expenses incurred in
connection with the actions described in the preceding sentence or as a result
of MERS discontinuing or becoming unable to continue operations in connection
with the MERS System, shall be subject to withdrawal by the Servicer from the
Collection Account (provided that such expenses constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
With respect to any Mortgage Loan, the Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
and
(b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and
(c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations
of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer, which may be an affiliate (each, a "subservicer")
pursuant to a Subservicing Agreement (each, a "Subservicing Agreement");
provided, however, that (i) such subservicing arrangement and the
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terms of the related Subservicing Agreement must provide for the servicing of
such Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder, (ii) that such agreement would not result in a
withdrawal or downgrading by any Rating Agency of the ratings of any
Certificates or any of the NIM Notes evidenced by a letter to that effect
delivered by each Rating Agency to the Depositor and the NIMs Insurer and (iii)
the NIMs Insurer shall have consented to such Subservicing Agreement, which
consent shall not be unreasonably withheld. Notwithstanding the provisions of
any Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or reference
to actions taken through a subservicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Master Servicer, the Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every Subservicing
Agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement, with the consent of
the NIMs Insurer (which consent shall not be unreasonably withheld), in the
event a successor servicer is appointed. All actions of the each subservicer
performed pursuant to the related Subservicing Agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the NIMs Insurer and the Master
Servicer copies of all Subservicing Agreements. The Trustee, the Master Servicer
and the Securities Administrator shall have no obligations, duties or
liabilities with respect to a subservicer, including, without limitation, any
obligation, duty or liability to monitor such subservicer or to pay a
subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor, the Securities Administrator and
the Trustee in Respect of the Servicer.
None of the Securities Administrator, the Trustee nor the Depositor shall
have any responsibility or liability for any action or failure to act by the
Servicer, and none of them is obligated to supervise the performance of the
Servicer hereunder or otherwise.
SECTION 3.04. Master Servicer to Act as Servicer.
Subject to Sections 6.04, 7.03 and 11.02, in the event that the Servicer
shall, for any reason, no longer be the servicer hereunder (including by reason
of an Event of Default), the Master Servicer or its designee shall, within a
period of time not to exceed ninety (90) days from the date of notice of
termination or resignation, thereupon assume all of the rights and obligations
of the Servicer hereunder arising thereafter (except that the Master Servicer
shall not be (i) liable for losses of the Servicer pursuant to Section 3.10
hereof or any acts or omissions of any predecessor servicer hereunder, (ii)
obligated to make Advances if it is prohibited from doing so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including pursuant to Section 2.02 or 2.03 hereof, (iv) responsible
for any expenses of the Servicer pursuant to Section 2.03 or (v) deemed to have
made any representations and warranties hereunder, including pursuant to Section
2.04 or the first paragraph of Section 6.02 hereof; provided, however that the
Master Servicer (subject to clause (ii) above) or its designee, in its capacity
as the successor servicer, shall immediately assume the Servicer's obligation to
make Advances and Servicing Advances). No such termination or resignation shall
affect any obligation of the Servicer to pay amounts owed under this Agreement
and to perform its duties under
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this Agreement until its successor assumes all of its rights and obligations
hereunder. If the Servicer shall for any reason no longer be the servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; provided, however, that the Master Servicer (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation Servicing Transfer Costs incurred by the Master Servicer in
connection with this Section 3.04 or Section 11.02, are not paid by the Servicer
pursuant to this Agreement within 30 days of the date of the Master Servicer's
invoice thereof, such amounts shall be payable out of the Certificate Account;
provided that the terminated servicer shall reimburse the Trust Fund for any
such expense incurred by the Trust Fund upon receipt of a reasonably detailed
invoice evidencing such expenses. If the Master Servicer is unwilling or unable
to act as servicer, the Master Servicer shall seek to appoint a successor
servicer that is eligible in accordance with the criteria specified in this
Agreement and reasonably acceptable to the NIM Insurer.
The Servicer shall, upon request of the Master Servicer, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement and the Mortgage Loans then being
serviced and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of any Event of Default),
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that within 10 Business Days or delivery to the Trustee by the
Servicing Rights Pledgee of a letter signed by the Servicer whereby the Servicer
shall resign as Servicer under this Agreement, the Servicing Rights Pledgee or
its designee shall be appointed as successor servicer (provided that at the time
of such appointment the Servicing Rights Pledgee or such designee meets the
requirements of a successor servicer set forth above) and the Servicing Rights
Pledgee agrees to be subject to the terms of this Agreement.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing and subject to Section
3.01, the Servicer may in its discretion (i) waive any late payment charge or,
if applicable, any default interest charge, or (ii) extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provided, further, that the
NIMs Insurer's prior written consent shall be required for any modification,
waiver or amendment after the Cut-off Date if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans as of the Cut-Off Date. In the event of any
such arrangement pursuant to clause (ii) above, subject to Section 4.01, the
Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably
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foreseeable, the Servicer, consistent with the standards set forth in Section
3.01, may also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Mortgage Loan),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), provided, however, that in no event shall
the Servicer grant any such forbearance (other than as permitted by the second
sentence of this Section) with respect to any one Mortgage Loan more than once
in any 12 month period or more than three times over the life of such Mortgage
Loan, and provided, further, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01. In connection with any modification pursuant to this
Section 3.05(a) and to the extent there are any unreimbursed Advances, the
Servicer shall reimburse itself for such amounts from the Collection Account.
(b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) in the Servicer's
reasonable judgment as described in Section 3.01 hereof, (x) such waiver relates
to a default or a reasonably foreseeable default, (y) such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and related Mortgage Loan and (z) doing so is standard and customary in
servicing similar Mortgage Loans (including any waiver of a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is related to a default or
a reasonably foreseeable default), or (iv) sufficient information is not made
available to enable it to collect the Prepayment Charge. Except as provided in
the preceding sentence, in no event will the Servicer waive a Prepayment Charge
in connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If the Servicer waives or does not
collect all or a portion of a Prepayment Charge relating to a Principal
Prepayment in full or in part due to any action or omission of the Servicer,
other than as provided above, the Servicer shall deposit the amount of such
Prepayment Charge (or such portion thereof as had been waived for deposit) into
the Collection Account for distribution in accordance with the terms of this
Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(d) The Servicer shall establish and maintain so long as it is
acting as servicer hereunder, on behalf of the Trustee for the benefit of the
Certificateholders, the Collection Account. The Servicer shall deposit into the
Collection Account, within two Business Days of receipt thereof, in immediately
available funds, the following payments and collections received or made by it
on and after the Cut-Off Date with respect to the Mortgage Loans (or the
Subsequent Cut-off Date with respect to Subsequent Mortgage Loans):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the Mortgage
Loans on or prior to the Cut-off Date or Subsequent Cut-off Date, as applicable;
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(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other than (x)
interest due on the Mortgage Loans on or prior to the Cut-off Date or Subsequent
Cut-off Date, as applicable and (y) Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) or released to either the
Mortgagor or the holder of a senior lien on the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) in accordance with
the Servicer's normal servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Purchase Prices and Substitution Adjustment
Amounts;
(ix) all Advances made by the Servicer pursuant to Section
4.01;
(x) all Prepayment Charges;
(xi) all net monthly rental income from REO Properties
required to be deposited by the Servicer pursuant to Section 3.12; and
(xii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing-related fees,
including all late payment charges, insufficient funds charges, customary real
estate referral fees and payments in the nature of assumption fees (i.e. fees
related to the assumption of a Mortgage Loan upon the purchase of the related
Mortgaged Property or stock allocated to a dwelling unit in the case of a Co-op
Loan), modification fees, extension fees and other similar ancillary fees and
charges (other than Prepayment Charges) if collected, and any Prepayment
Interest Excess need not be remitted by the Servicer. Rather, such fees and
charges and similar amounts may be retained by the Servicer as additional
servicing compensation. In the event that the Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the Trustee, or such
other institution maintaining the Collection Account, to withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding. The Servicer shall maintain adequate records with respect to
all withdrawals made pursuant to this Section. All funds deposited in the
Collection Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Collection Account at the direction of the
Servicer.
The Servicer shall give notice to the NIMs Insurer, the Securities
Administrator and the Trustee of the location of the Collection Account
maintained by it when established and prior to any change thereof. Not later
than twenty days after each Distribution Date, the Servicer shall forward to the
NIMs
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Insurer, and upon request, to the Securities Administrator, the Trustee and the
Depositor the most current available bank statement for the Collection Account.
Copies of such statement shall be provided by the Securities Administrator to
any Certificateholder and to any Person identified to the Securities
Administrator as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Securities Administrator.
(e) The Securities Administrator shall establish and maintain, on
behalf of the Certificateholders, the Certificate Account. The Securities
Administrator shall, promptly upon receipt, deposit or cause to be deposited in
the Certificate Account and retain therein the following:
(i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate Account;
(ii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iii) the Optional Termination Amount paid by Servicer
pursuant to Section 9.01.
Any amounts received by the Securities Administrator prior to 1:00 p.m.
New York City time (or such earlier deadline for investment in the Permitted
Investments designated by the Securities Administrator) which are required to be
deposited in the Certificate Account by the Servicer or Master Servicer shall be
invested in Permitted Investments on the Business Day on which they were
received. The foregoing requirements for remittance by the Servicer and Master
Servicer and deposit by the Servicer and Master Servicer into the Certificate
Account shall be exclusive. In the event that the Servicer or the Master
Servicer shall remit any amount not required to be remitted and not otherwise
subject to withdrawal pursuant to Section 3.08 hereof, it may at any time
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. All funds deposited in the Certificate Account shall
be held by the Securities Administrator in trust for the Certificateholders
until disbursed in accordance with this Agreement or withdrawn in accordance
with Section 3.08. In no event shall the Securities Administrator incur
liability for withdrawals from the Certificate Account at the direction of the
Servicer or the Master Servicer. The Securities Administrator shall give notice
to the NIMs Insurer, the Master Servicer and the Servicer of the location of the
Certificate Account maintained by it when established and prior to any change
thereof.
(f) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account as directed by
the Servicer or the Securities Administrator, as applicable, in writing, in
Permitted Investments, which shall mature not later than (i) in the case of the
Collection Account the Business Day preceding the related Servicer Remittance
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Servicer Remittance Date) and (ii) in the case of the Certificate Account, the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains such Certificate Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Servicer, or the Securities Administrator, as applicable, for
the benefit of the Certificateholders. All income and gain net of any losses
realized from amounts on deposit in the Collection Account shall be for the
benefit of the Servicer as servicing compensation and shall be remitted to it or
withdrawn by it monthly as provided herein. The amount of
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any losses incurred in the Collection Account in respect of any such investments
shall be deposited by the Servicer in the Collection Account out of the
Servicer's own funds immediately as realized.
(g) All income and gain net of any losses realized from amounts on
deposit in the Certificate Account shall be for the benefit of (i) the Servicer
to the extent such income and gain (net of any losses) relates to the period
from the Servicer Remittance Date to but not including the Business Day
immediately preceding the related Distribution Date and (ii) the Securities
Administrator to the extent such income and gain (net of any losses) relates to
any other period. Any amounts in such Certificate Account earned for the benefit
of the Servicer shall be remitted by the Securities Administrator to the
Servicer not later than the third Business Day of the month immediately
succeeding the month in which such amounts were earned. The amount of any losses
incurred in the Certificate Account in respect of any such investments shall be
deposited by the Servicer and/or the Securities Administrator, as applicable, in
the Certificate Account out of the Securities Administrator's own funds
immediately as realized; provided that the Securities Administrator shall be
reimbursed by the Servicer for any such losses which relate to the period from
the Servicer Remittance Date to but not including the Business Day immediately
preceding the related Distribution Date.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes, assessments, dues or comparable items and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account to withdraw funds
deposited in error or amounts previously deposited but returned as unpaid due to
a "not sufficient funds" or other denial by the related Mortgagor's banking
institution or to clear and terminate the Escrow Account at the termination of
this Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall
not be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.
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(a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes (the order below not constituting
an order of priority):
(i) to pay to the Servicer (to the extent not previously paid
to or withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment or recovery of interest on a Mortgage
Loan that equals the Servicing Fee for the period with respect to which such
interest payment or recovery was made or allocated, and, as additional servicing
compensation, those other amounts set forth in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it) with respect to
the Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds)
that represent late recoveries of payments of principal and/or interest on such
particular Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable
Advance previously made and any Non-Recoverable Servicing Advances previously
made to the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income
with respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(vi) to pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing Advances would constitute an "unanticipated expense"
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)), the
Servicer's right to reimbursement of Servicing Advances pursuant to this
subclause (vi) with respect to any Mortgage Loan being limited to amounts
received on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late recoveries of
the payments for which such advances were made pursuant to Section 3.01 or
Section 3.06;
(vii) to pay to the Depositor or the Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(viii) to reimburse the Servicer, the Master Servicer, the
Securities Administrator or the Depositor for expenses incurred by any of them
in connection with the Mortgage Loans or the Certificates and reimbursable
pursuant to Section 3.25 or Section 6.03 hereof;
(ix) to reimburse the Trustee for enforcement expenses
reasonably incurred in respect of a breach or defect giving rise to the purchase
obligation in Section 2.03 that were incurred in the Purchase Price of the
Mortgage Loans including any expenses arising out of the enforcement of the
purchase obligation; provided that any such expenses will be reimbursable under
this subclause (ix) only to the extent that such expenses would constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for herein;
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(x) to withdraw any amount deposited in the Collection Account
and not required to be deposited therein;
(xi) to withdraw funds deposited in error or amounts
previously deposited but returned as unpaid due to a "not sufficient funds" or
other denial by the related Mortgagor's banking institution;
(xii) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof;
(xiii) to reimburse itself for Advances or Servicing Advances
from amounts in the Collection Account held for future distributions that were
not included in Available Funds for the preceding Distribution Date. An amount
equal to the amount withdrawn from the Collection Account pursuant to this
subclause (xiii) shall be deposited in the Collection Account by the Servicer on
the next succeeding Distribution Date on which funds are to be distributed to
Certificateholders; and
(xiv) to reimburse itself from any amounts in the Collection
Account for any prior Advances which have not otherwise been reimbursed at the
time a Mortgage Loan is modified.
In addition, no later than 12:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds to the extent on deposit, and
such amount shall be deposited in the Certificate Account; provided, however, if
the Securities Administrator does not receive such Interest Funds and Principal
Funds by 2:00 p.m. Eastern Time, such Interest Funds and Principal Funds shall
be deposited in the Certificate Account on the next Business Day.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.
The Servicer shall provide written notification to the Securities
Administrator on or prior to the next succeeding Servicer Remittance Date upon
making any withdrawals from the Collection Account pursuant to subclauses (iii)
and (viii) above.
In the event of any failure by the Servicer to remit to the Securities
Administrator for deposit into the Certificate Account any amounts (including
any Advance) required to be so remitted by the Servicer on the Servicer
Remittance Date, the Servicer shall pay to the Securities Administrator, for its
own account, interest on such amounts at the "prime rate" (as specified in the
New York edition of The Wall Street Journal) until such failure is remedied.
Unless otherwise specified, any amounts reimbursable to the Servicer or
the Securities Administrator from amounts on deposit in the Collection Account
or the Certificate Accounts shall be deemed to come from first, Interest Funds,
and thereafter, Principal Funds for the related Distribution Date.
(b) The Securities Administrator shall withdraw funds from the
Certificate Account for distribution to the Certificateholders in the manner
specified in this Agreement (and shall withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to retain pursuant to this
Agreement). In addition, the Securities Administrator may from time to time make
withdrawals from the Certificate Account for the following purposes (the order
below not constituting an order of priority):
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(i) to withdraw any amount deposited in the Certificate
Account and not required to be deposited therein;
(ii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof (after paying all
amounts necessary to the Trustee, the Securities Administrator, the Master
Servicer or the Servicer in connection with any such termination);
(iii) to reimburse the Securities Administrator, the Master
Servicer or the Trustee for any fees, expenses and indemnification reimbursable
pursuant to this Agreement, including without limitation Sections 3.04, 6.03,
8.06 and 11.02 hereof; and
(iv) to pay to the Servicer or the Securities Administrator,
as applicable, earnings on or investment income with respect to funds in or
credited to the Certificate Account as provided in Section 3.05(g).
SECTION 3.09. [RESERVED]
SECTION 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each first lien Mortgage
Loan (other than a Co-op Loan), fire and hazard insurance with extended coverage
in an amount that is at least equal to the lesser of (i) the replacement value
of the improvements that are part of such Mortgaged Property, or (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds of such policy shall be sufficient to prevent the
related Mortgagor and/or mortgagee from becoming a co-insurer or (iii) the
amount required under applicable HUD/FHA regulations. Each policy of standard
hazard insurance shall contain, or have an accompanying endorsement that
contains, a standard mortgagee clause. The Servicer shall also cause flood
insurance to be maintained on property acquired upon foreclosure or deed in lieu
of foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of late payments by the related Mortgagor or
out of Liquidation Proceeds to the extent and as otherwise permitted by Section
3.08 hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Servicer shall cause flood insurance to be maintained with respect to such first
lien Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may
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contain a deductible clause on terms substantially equivalent to those
commercially available and maintained by comparable servicers. If such policy
contains a deductible clause, the Servicer shall, in the event that there shall
not have been maintained on the related Mortgaged Property a policy complying
with the first sentence of this Section 3.10, and there shall have been a loss
that would have been covered by such policy, deposit in the Collection Account
the amount not otherwise payable under the blanket policy because of such
deductible clause. In connection with its activities as servicer of the Mortgage
Loans, the Servicer agrees to present, on behalf of itself, the Depositor and
the Securities Administrator for the benefit of the Certificateholders, claims
under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, but only to the extent that such enforcement will not adversely affect
or jeopardize coverage under any Required Insurance Policy; provided, however,
that the Servicer shall not exercise any such right if the due-on-sale clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law. An opinion of counsel, which shall be reimbursable as a Servicing Advance
(to the extent it is an "unanticipated expense" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii)), delivered to the Securities
Administrator, Master Servicer, Trustee and the Depositor shall conclusively
establish the reasonableness of such belief to the extent permitted under
applicable law. Notwithstanding the foregoing, the Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom the
related Mortgaged Property (or stock allocated to a dwelling unit, in the case
of a Co-op Loan) has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Servicer is authorized, subject to Section 3.11(b), to
take or enter into an assumption and modification agreement from or with the
Person to whom such property has been or is about to be conveyed, pursuant to
which such Person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Servicer, subject to Section 3.11(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
3.11(a) by reason of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property (or stock allocated to a dwelling unit, in the case of Co-op
Loan) has been conveyed to a Person by a Mortgagor, and such Person is to enter
into an assumption agreement or modification agreement or supplement to the
Mortgage Note or Mortgage that requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Servicer shall prepare and deliver or
cause to be prepared and delivered to the Trustee for signature and shall
direct, in writing, the Trustee to execute the assumption agreement with the
Person to whom the Mortgaged Property (or the stock allocated to a dwelling
unit, in the case of a Co-op Loan) is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other
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instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) to such Person. In
connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Rate, the Minimum Rate, the Gross Margin, the Periodic Rate
Cap, the Adjustment Date, any prepayment penalty and any other term affecting
the amount or timing of payment on the Mortgage Loan) may be changed. The
Servicer shall notify the Trustee and the NIMs Insurer that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee (with a copy to the NIMs Insurer) the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. The Servicer shall be responsible for recording any
such assumption or substitution agreements. Any fee collected by the Servicer
for entering into an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds.
(a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) and if applicable, as a Non-Recoverable Servicing Advance,
as contemplated in Section 3.08 hereof. If the Servicer has knowledge that a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) that the Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan), consider such risks and only take action in
accordance with Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer or its affiliate may
receive usual and customary real estate referral fees for real estate brokers in
connection with the listing and disposition of REO Property. The Servicer shall
prepare a statement with respect to each REO Property that has been
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rented showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Servicer to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on the Determination Date immediately following the
month concerned. The Servicer shall perform the tax reporting and withholding
related to foreclosures, abandonments and cancellation of indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing
such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, obtain, in accordance with applicable procedures for
obtaining an automatic extension of the grace period, more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period, in which case such property must be disposed of
prior to the end of such extension, unless the Trustee and the NIMs Insurer
shall have been supplied with an Opinion of Counsel (such Opinion of Counsel not
to be an expense of the Master Servicer, Securities Administrator, Trustee or
the NIMs Insurer), to the effect that the holding by the Trust Fund of such
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) subsequent to such three-year period or extension will not result in
the imposition of taxes on "prohibited transactions" of the Trust Fund or any of
the REMICs provided for herein as defined in section 860F of the Code or cause
any of the REMICs provided for herein to fail to qualify as a REMIC at any time
that any Certificates are outstanding, in which case the Trust Fund may continue
to hold such Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
acquired by the Trust Fund shall be held, rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject the Trust Fund or any REMIC
provided for herein to the imposition of any federal, state or local income
taxes on the income earned from such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes. The
Servicer shall have no liability for any losses resulting from a foreclosure on
a second lien Mortgage Loan in connection with the foreclosure of the related
first lien mortgage loan that is not a Mortgage Loan if the Servicer does not
receive notice of such foreclosure action.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of Co-op Loan), shall be applied for the purpose of
the Trust Fund to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such net income shall be deemed, for all purposes
and as between the parties to this Agreement, to be payments on account of
principal and interest on the related Mortgage
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Notes and shall be deposited into the Collection Account. To the extent that any
such net income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds and any net income from an REO
Property, will be applied as between the parties in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and unpaid Servicing Fees, pursuant to Section 3.08(a)(vi) or
this Section 3.12; second, to reimburse the Servicer for any unreimbursed
Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to any
Prepayment Charges and then to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the applicable Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) The Servicer, in its sole discretion, shall have the right to
elect (by written notice sent to the Trustee, the Master Servicer and the
Securities Administrator) to purchase for its own account from the Trust Fund
any Mortgage Loan that is 90 days or more Delinquent or REO Property for which
the Servicer has accepted a deed-in-lieu of foreclosure at a price equal to the
Purchase Price. The Purchase Price for any Mortgage Loan or REO Property
purchased hereunder shall be delivered to the Securities Administrator for
deposit to the Certificate Account and the Trustee (or its custodian), upon
receipt of such confirmation of deposit and a Request for Release from the
Servicer in the form of Exhibit I hereto, shall release or cause to be released
to the Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the Servicer, in each case
without recourse, representation or warranty, as shall be necessary to vest in
the Servicer any Mortgage Loan or REO Property released pursuant hereto and the
Servicer shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The Servicer
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto. The Servicer shall not use any procedure in selecting Mortgage Loans to
be repurchased which is materially adverse to the interests of the
Certificateholders.
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (unless the Servicer, after making a
reasonable estimate of the expected recovery, determines that foreclosure
proceedings or other liquidation of the related Mortgaged Property would yield a
net recovery), (iii) take a deed in lieu of foreclosure, (iv) accept a short
sale or short refinance; (v) arrange for a repayment plan, or (vi) agree to a
modification of such Mortgage Loan.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above,
may continue to be serviced by the Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of
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expenses in connection with such Mortgage Loans after the date of charge off,
only to the extent of funds available from any recoveries on all such Mortgage
Loans.
In the event that the Servicer (or an affiliate of the Servicer) is the
owner of more than 50% of the Class of Certificates which is then currently in a
first loss position and such party is deemed to be the "Primary Beneficiary" as
defined in FIN 40, the provisions of the preceding paragraph shall not apply and
the Servicer (or an affiliate of the Servicer), in its sole discretion, shall
have the right to elect to purchase for its own account from the Trust Fund any
Mortgage Loan that is 120 days or more Delinquent or REO Property for which the
Servicer has accepted a deed-in-lieu of foreclosure, during the period
commencing on the first day of the calendar quarter succeeding the calendar
quarter in which the Initial Delinquency Date (as defined below) occurred with
respect to such Mortgage Loan and ending on the last Business Day of such
calendar quarter. If the Servicer (or an affiliate of the Servicer) does not
exercise its purchase right with respect to a Mortgage Loan during the period
specified in the preceding sentence, such Mortgage Loan shall thereafter again
become eligible for purchase pursuant to the preceding sentence only after the
Mortgage Loan ceases to be 120 days or more Delinquent and thereafter becomes
120 days Delinquent again. The "Initial Delinquency Date" of a Mortgage Loan
shall mean the date on which the Mortgage Loan first became 120 days Delinquent.
Prior to repurchase pursuant to this Section 3.12, the Servicer shall be
required to continue to make monthly advances pursuant to Section 4.01. The
Servicer shall not use any procedure in selecting Mortgage Loans to be
repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer shall purchase any Mortgage Loan or REO
Property pursuant to this paragraph at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan or REO Property purchased hereunder shall
be delivered to the Securities Administrator for deposit in the Certificate
Account. The Securities Administrator shall notify the Trustee of such deposit.
The Trustee, upon receipt of notice of such deposit and a Request for Release
from the Servicer in the form of Exhibit I hereto, shall release or cause to be
released to the Servicer the related Mortgage File and shall execute and deliver
such instruments of transfer or assignment prepared by the Servicer, in each
case without recourse, representation or warranty, as shall be necessary to vest
in the Servicer any Mortgage Loan or REO Property released pursuant hereto and
the Servicer shall succeed to all the Trustee's right, title and interest in and
to such Mortgage Loan and all security and documents related thereto. The
provisions in this paragraph shall only apply if Xxxxxx Loan Servicing LP is the
servicer.
(f) The Servicer may write-off any second lien Mortgage Loan that
has been Delinquent for a period of 180 days or more, provided that the Servicer
has certified in a certificate of an officer of the Servicer delivered to the
Depositor, the Trustee, the Securities Administrator and the Master Servicer
that it does not believe that there is a reasonable likelihood that any further
net proceeds will be received or recovered with respect to such Mortgage Loan.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of two copies of such request, the Trustee or its
designee shall promptly release the related Mortgage File to the Servicer, and
the Servicer is authorized to cause the removal from the registration on the
MERS System of any such Mortgage if applicable, and the Servicer, on behalf of
the Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Mortgagor to the
extent permitted by law, and otherwise to the Trust Fund to the extent such
expenses constitute "unanticipated expenses"
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within the meaning of Treasury Regulations Section 1.860G-(1)(b)(3)(ii). From
time to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee or its
designee shall, upon delivery to the Trustee or its designee of a Request for
Release in the form of Exhibit I signed by a Servicing Officer, release the
Mortgage File to the Servicer. Subject to the further limitations set forth
below, the Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee or its designee when the need therefor by the Servicer
no longer exists, unless the Mortgage Loan is liquidated and the proceeds
thereof are deposited in the Collection Account.
Each Request for Release may be delivered to the Trustee or its designee
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or its designee shall mutually agree. The Trustee or
its designee shall promptly release the related Mortgage File(s) within five (5)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above. Receipt of a properly completed Request for
Release shall be authorization to the Trustee or its designee to release such
Mortgage Files, provided the Trustee or its designee has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages respectively caused by
it.
On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total number
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii).
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) as authorized by this Agreement, the Servicer may deliver
or cause to be delivered to the Trustee or its designee, for signature, as
appropriate or on behalf of the Trustee, execute any court pleadings, requests
for trustee's sale or other documents necessary to effectuate such foreclosure
or any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Servicer shall cause possession of any Mortgage File or of the documents therein
that shall have been released by the Trustee or its designee to be returned to
the Trustee promptly after possession thereof shall have been released by the
Trustee or its designee unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account, and the Servicer shall have delivered to the Trustee or its
designee a Request for Release in the form of Exhibit I or (ii) the Mortgage
File or document shall have been delivered to an attorney or to a public trustee
or other public official as required by law for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
and the Servicer shall have delivered to the Trustee or its designee an
Officer's Certificate of a Servicing Officer certifying as to the name and
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address of the Person to which the Mortgage File or the documents therein were
delivered and the purpose or purposes of such delivery.
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Certificate Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee or the Securities
Administrator for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to the
Servicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
or recovery of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan as of the immediately preceding
Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property (or stock allocated to
a dwelling unit, in the case of Co-op Loan)), modification fees, customary real
estate referral fees, extension fees and similar fees payable by the Mortgagor,
Prepayment Interest Excess, and all income and gain net of any losses realized
from Permitted Investments in the Collection Account shall be retained by the
Servicer to the extent not required to be deposited in the Collection Account
pursuant to Sections 3.05 or 3.12(a) hereof. In addition, the Servicer shall be
entitled to income and gain from amounts on deposit in the Certificate Account
during the period from the Servicer Remittance date to but not including the
Business Day immediately preceding the related Distribution Date as described in
Section 3.05(g). The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
any premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement. In no event shall the Trustee or the
Securities Administrator be liable for any Servicing Fee or for any differential
between the Servicing Fee and the amount necessary to induce a successor
servicer to act as successor servicer under this Agreement.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer
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designated by it provided, that the Servicer shall be entitled to be reimbursed
by each such Certificateholder for actual expenses incurred by the Servicer in
providing such reports and access. Nothing in this Section shall limit the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of the Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
SECTION 3.17. Annual Statement as to Compliance.
Pursuant to this Agreement, the Servicer shall deliver to the Depositor,
the Securities Administrator, the Master Servicer and the Trustee on or before
March 15 of each year beginning in 2006, or such other date in order to remain
in compliance with the Section 302 Requirements, an Officer's Certificate
stating, as to each signatory thereof, that (i) a review of the activities of
the Servicer during the preceding calendar year and of performance under this
Agreement or a similar agreement has been made under such officer's supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. The Master Servicer shall forward a copy of each such
statement received by it to each Rating Agency. Copies of such statement shall
be provided by the Securities Administrator to any Certificateholder upon
written request at the Certificateholder's expense, provided such statement has
been delivered by the Servicer to the Securities Administrator.
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before March 15 of each year, beginning in 2006 or such other date
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Securities Administrator, the
Trustee, the Master Servicer and the Depositor. Copies of the USAP Report shall
be provided by the Securities Administrator to any Certificateholder upon
request at the Certificateholder's expense, provided such report has been
delivered by the Servicer to the Securities Administrator. The Trustee shall
deliver to the NIMs Insurer upon written request: (i) a copy of such USAP
Report, and (ii) the Servicer's annual officer's certificate as to compliance
with this Agreement provided by the Servicer to the Trustee pursuant to Section
3.17. In addition, at the NIMs Insurer's written request, the Servicer shall
deliver copies of evidence of the Servicer's fidelity bond or errors and
omissions insurance coverage to the NIMs Insurer.
SECTION 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this agreement shall
exist so long as the NIM Notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such NIM notes.
SECTION 3.20. [RESERVED]
SECTION 3.21. Annual Certificate by Securities Administrator.
For so long as the Master Servicer and the Securities Administrator are
the same Person, the Securities Administrator shall not be required to satisfy
or perform the terms of Section 3.21(a) and (b).
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(a) On or before March 15 of each year (commencing in 2006), an
officer of the Securities Administrator shall execute and deliver an Officer's
Certificate, signed by a Responsible Officer of the Securities Administrator or
any officer to whom that officer reports, to the Depositor and the Master
Servicer for the benefit of the Depositor and the Master Servicer and their
respective officers, directors and affiliates, certifying as to the matters
described in the Officer's Certificate attached hereto as Exhibit K.
(b) The Securities Administrator shall indemnify and hold harmless
the Depositor, the Master Servicer, the Servicer, the Trustee and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Securities Administrator or any of its officers, directors,
agents or affiliates of its obligations under this Section 3.21, any material
misstatement or omission in the Officer's Certificate required under this
Section or the negligence, bad faith or willful misconduct of the Securities
Administrator in connection therewith. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Depositor and the
Master Servicer, then the Securities Administrator agrees that it shall
contribute to the amount paid or payable by the Depositor or the Master Servicer
as a result of the losses, claims, damages or liabilities of the Depositor or
the Master Servicer in such proportion as is appropriate to reflect the relative
fault of the Securities Administrator on the one hand and of the Depositor and
the Master Servicer on the other in connection with a breach of the Securities
Administrator's obligations under this Section 3.21, any material misstatement
or omission in the Officer's Certificate required under this Section or the
Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith.
SECTION 3.22. Annual Certificate by Servicer.
(a) Within 15 days prior to the date on which a Form 10-K is
required to be filed with a Certification by the Master Servicer, the Servicer
shall execute and deliver an Officer's Certificate in the form of Exhibit L
attached hereto, signed by the senior officer in charge of servicing of the
Servicer or any officer to whom that officer reports, to the Master Servicer and
Depositor for the benefit of the Master Servicer and Depositor and their
respective officers, directors and affiliates.
(b) The Servicer shall indemnify and hold harmless the Securities
Administrator, the Trustee, the Master Servicer and the Depositor and their
respective officers, directors, agents and affiliates from and against (i) any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under Section 3.17, Section 3.18 and this Section
3.22, (ii) any allegation that the Officer's Certificate required under this
Section contains a misstatement of a material fact or omits or omitted to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading or (iii) the
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Securities Administrator, the Master Servicer
and the Depositor, then the Servicer agrees that it shall contribute to the
amount paid or payable by the Securities Administrator, the Master Servicer and
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor and the Master Servicer in such proportion as is appropriate to
reflect the relative fault of the Depositor and the Master Servicer on the one
hand and the Servicer on the other in connection with a breach of the Servicer's
obligations under this Section 3.22, any material misstatement or omission in
the Officer's Certificate required under this Section or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.
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SECTION 3.23. Prepayment Charge Reporting Requirements.
Promptly after each Distribution Date, the Servicer shall provide to the
Depositor and the Master Servicer the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) Prepayment Charge amount due;
(v) Prepayment Charge amount collected; and
(vi) reason why full Prepayment Charge amount was not collected, if
applicable.
SECTION 3.24. Statements to Securities Administrator.
Not later than the tenth calendar day of each month, the Servicer shall
furnish to the Securities Administrator a delinquency report substantially in
the form set forth in Exhibit M-1, a monthly remittance advice substantially in
the form set forth in Exhibit M-2 and a realized loss report in the form set
forth in Exhibit M-3 (or such other form or forms as the Master Servicer and the
Servicer may from time to time agree) for the period ending on the last Business
Day of the preceding month and for the applicable Prepayment Period with respect
to prepayments in the format mutually agreed upon between the Servicer and the
Securities Administrator, including but not limited to information sufficient to
allow the Securities Administrator to prepare the Monthly Statement described in
Section 4.05(a).
SECTION 3.25. Indemnification.
(a) The Servicer shall indemnify the Seller, the Trust Fund, the
Trustee, the Depositor, the Securities Administrator, the Master Servicer, the
NIMs Insurer and their officers, directors, employees and agents and hold each
of them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Servicer
immediately shall notify the Seller, the Trustee, the Securities Administrator,
the Master Servicer, the NIMs Insurer and the Depositor or any other relevant
party if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the indemnified party,
which consent shall not be unreasonably withheld or delayed) the defense of any
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or any of such parties in respect of such claim. The Servicer
shall follow any reasonable written instructions received from the NIMs Insurer
and the Master Servicer in connection with such claim, it being understood that
the Master Servicer shall have no duty to monitor or give instructions with
respect to such claims. The Servicer shall provide the Depositor, the Securities
Administrator, the Trustee, the NIMs Insurer and the Master Servicer with a
written report of all expenses and advances incurred by the Servicer pursuant to
this Section 3.25(a), and the Servicer shall promptly reimburse itself from the
assets of the Trust Fund in the Collection Account for all amounts advanced by
it pursuant to the preceding sentence except when and to the extent a
determination has been made that the claim in any way relates
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to the failure of the Servicer to service and administer the Mortgage Loans in
material compliance with the terms of this Agreement or the gross negligence,
bad faith or willful misconduct of the Servicer. The provisions of this
paragraph shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
(b) The Master Servicer shall indemnify the Seller, the Trust Fund,
the Trustee, the Securities Administrator, the Servicer and the Depositor and
their officers, directors, employees and agents and hold each of them harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of such parties may sustain in any way related
to the failure of the Master Servicer to perform its duties and master service
the Mortgage Loans in compliance with the terms of this Agreement. The Master
Servicer immediately shall notify the Seller, the Trustee, the Servicer, the
Securities Administrator and the Depositor or any other relevant party if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld or delayed) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or any of such parties in respect of such claim. The Master Servicer
shall follow any written instructions received from the Trustee in connection
with such claim it being understood that the Trustee shall have no duty to
monitor or give instructions with respect to such claims. The Master Servicer
shall provide the Servicer, the Securities Administrator, the Trustee and the
Depositor with a written report of all expenses and advances incurred by the
Master Servicer pursuant to this Section 3.25(b), and the Master Servicer shall
promptly reimburse itself from the assets of the Trust Fund in the Collection
Account for all amounts advanced by it pursuant to the preceding sentence except
when the claim in any way relates to the failure of the Master Servicer to
service and administer the Mortgage Loans in material compliance with the terms
of this Agreement or the negligence, bad faith or willful misconduct of the
Master Servicer. The provisions of this paragraph shall survive the termination
of this Agreement and the payment of the outstanding Certificates.
(c) The Securities Administrator shall indemnify the Seller, the
Trust Fund, the Trustee, the Servicer, the Master Servicer and the Depositor and
their officers, directors, employees and agents and hold each of them harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of such parties may sustain in any way related
to the failure of the Securities Administrator to perform its duties in
compliance with the terms of this Agreement. The Securities Administrator
immediately shall notify the Seller, the Trustee, the Servicer, the Master
Servicer and the Depositor or any other relevant party if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans, assume (with
the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any of such parties in respect of such claim. The Securities Administrator shall
follow any written instructions received from the Trustee in connection with
such claim it being understood that the Trustee shall have no duty to monitor or
give instructions with respect to such claims. The Securities Administrator
shall provide the Trustee, the Servicer, the Master Servicer and the Depositor
with a written report of all expenses and advances incurred by the Securities
Administrator pursuant to this Section 3.25(c), and the Securities Administrator
shall promptly reimburse itself from the assets of the Trust Fund in the
Certificate Account for all amounts advanced by it pursuant to the preceding
sentence except when the claim in any way relates to the failure of the
Securities Administrator to perform its duties in material compliance with the
terms of this Agreement or the negligence, bad faith or willful misconduct of
the Securities Administrator. The provisions of this
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paragraph shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
SECTION 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Advances.
(a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 1:00 p.m. Eastern time on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Securities
Administrator for the benefit of the Certificateholders, funds constituting the
remaining portion of such Advance, if applicable, and (ii) to the Depositor, the
NIMs Insurer and the Master Servicer an Officer's Certificate setting forth the
basis for such determination. The Servicer may, in its sole discretion, make an
Advance with respect to the principal portion of the final Scheduled Payment on
a Balloon Loan, but the Servicer is under no obligation to do so; provided,
however, that nothing in this sentence shall affect the Servicer's obligation
under this Section 4.01 to advance the interest portion of the final Scheduled
Payment with respect to a Balloon Loan as if such Balloon Loan were a fully
amortizing Mortgage Loan. If a Mortgagor does not pay its final Scheduled
Payment on a Balloon Loan when due, the Servicer shall Advance (unless it
determines in its good faith judgment that such amounts would constitute a
Non-Recoverable Advance) a full month of interest (net of the Servicing Fee) on
the Stated Principal Balance thereof each month until its Stated Principal
Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
In addition, the Servicer shall have the right to reimburse itself for any such
Advance from amounts held from time to time in the Collection Account to the
extent such amounts are not then required to be distributed. Any funds so
applied and transferred pursuant to the previous two sentences shall be replaced
by the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled to be
reimbursed from the Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until the earlier of
(i) the date such Mortgage Loan is paid in full, (ii) the date the related
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor)
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from the Trust Fund pursuant to any applicable provision of this Agreement,
except as otherwise provided in this Section 4.01, or (iii) the date on which
such Mortgage Loan becomes 150 days delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor and the Master Servicer. In addition, the
Servicer shall not be required to advance any Relief Act Shortfalls. The
Servicer will not make any Advances of principal on REO Properties and is
required to advance only the interest portion on second lien mortgage loans.
(c) Notwithstanding the foregoing, the Servicer shall not be
required to make any Advances for any Mortgage Loan after such Mortgage Loan
becomes 150 days delinquent.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall resulting from a Principal Prepayment in full, the Servicer
shall, from amounts in respect of the Servicing Fee for such Distribution Date,
deposit into the Collection Account, as a reduction of the Servicing Fee for
such Distribution Date, no later than the Servicer Advance Date immediately
preceding such Distribution Date, an amount up to the Prepayment Interest
Shortfall; provided that the amount so deposited with respect to any
Distribution Date shall be limited to one half of the product of (x) one-twelfth
of 0.50% and (y) the aggregate Stated Principal Balance of the Mortgage Loans.
In case of such deposit, the Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Master Servicer, the Securities
Administrator, the Trustee, the Trust Fund or the Certificateholders. With
respect to any Distribution Date, to the extent that the Prepayment Interest
Shortfall exceeds Compensating Interest (such excess, a "Non-Supported Interest
Shortfall"), such Non-Supported Interest Shortfall shall reduce the Current
Interest with respect to each Class of Certificates, pro rata, based upon the
amount of interest each such Class would otherwise be entitled to receive on
such Distribution Date. Notwithstanding the foregoing, there shall be no
reduction of the Servicing Fee in connection with Prepayment Interest Shortfalls
relating to the Relief Act and the Servicer shall not be obligated to pay
Compensating Interest with respect to Prepayment Interest Shortfalls related to
the Relief Act.
SECTION 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in the Lower Tier REMIC in an amount sufficient to make the
distributions on the respective Certificates on such Distribution Date in
accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) Reserved.
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(b) On each Distribution Date, the Securities Administrator shall
make the following distributions from funds then available in the Certificate
Account, of an amount equal to the Interest Funds in the following order of
priority:
(i) to the Class P Certificates, an amount equal to any
Prepayment Charges received with respect to the Mortgage Loans and all amounts
paid by the Servicer, the Seller or the Transferor in respect of Prepayment
Charges pursuant to this Agreement or the Transfer Agreement, as applicable, and
all amounts received in respect of any indemnification paid as a result of a
Prepayment Charge being unenforceable in breach of the representations and
warranties set forth in the Sale Agreement or the Transfer Agreement for the
related Prepayment Period;
(ii) to each class of the Class A Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such Class;
provided, however, if such amount is not sufficient to make a full distribution
of the Current Interest and any Interest Carry Forward Amount with respect to
the Class A Certificates, such amount will be distributed pro rata among each
Class of the Class A Certificates based on the ratio of (x) the Current Interest
and Interest Carry Forward Amount for each class of the Class A Certificates to
(y) the total amount of Current Interest and any Interest Carry Forward Amount
for the Class A Certificates;
(iii) to the Class M-1 Certificates, the Class M-1 Current
Interest and any Class M-1 Interest Carry Forward Amount;
(iv) to the Class M-2 Certificates, the Class M-2 Current
Interest and any Class M-2 Interest Carry Forward Amount;
(v) to the Class M-3 Certificates, the Class M-3 Current
Interest and any Class M-3 Interest Carry Forward Amount;
(vi) to the Class M-4 Certificates, the Class M-4 Current
Interest and any Class M-4 Interest Carry Forward Amount;
(vii) to the Class M-5 Certificates, the Class M-5 Current
Interest and any Class M-5 Interest Carry Forward Amount;
(viii) to the Class M-6 Certificates, the Class M-6 Current
Interest and any Class M-6 Interest Carry Forward Amount;
(ix) to the Class B-1 Certificates, the Class B-1 Current
Interest and any Class B-1 Interest Carry Forward Amount;
(x) to the Class B-2 Certificates, the Class B-2 Current
Interest and any Class B-2 Interest Carry Forward Amount;
(xi) to the Class B-3 Certificates, the Class B-3 Current
Interest and any Class B-3 Interest Carry Forward Amount;
(xii) to the Class B-4 Certificates, the Class B-4 Current
Interest and any Class B-4 Interest Carry Forward Amount;
(xiii) to the Class B-5 Certificates, the Class B-5 Current
Interest and any Class B-5 Interest Carry Forward Amount, and
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(xiv) any remainder pursuant to Section 4.04(f) hereof.
On each Distribution Date, subject to the proviso in (ii) above, Interest
Funds received on the Group One Mortgage Loans will be deemed to be distributed
to the Class R and Class A-1 Certificates and Interest Funds received on the
Group Two Mortgage Loans will be deemed to be distributed to the Class A-2
Certificates, in each case, until the related Current Interest and Interest
Carry Forward Amount of each such class of Certificates for such Distribution
Date has been paid in full. Thereafter, Interest Funds not required for such
distributions are available to be applied to if necessary, to the class or
classes of Certificates that are not related to such group of Mortgage Loans.
(c) [Reserved]
(d) On each Distribution Date, the Securities Administrator shall
make the following distributions from the Certificate Account of an amount equal
to the Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(b) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Class A Certificates, the Class A Principal
Distribution Amount shall be distributed as follows:
(a) the Group One Principal Distribution Amount shall be
distributed as follows: (I) if no Class A-1 Trigger Event has occurred,
the Group One Principal Distribution Amount will be distributed as
follows: first, to the Class R Certificate until its Certificate Principal
Balance has been reduced to zero, and second, pro rata to the Class A-1A
and Class A-1B Certificates, based on their relative Certificate Principal
Balances, until the Certificate Principal Balance of each such Class has
been reduced to zero and (II) if a Class A-1 Trigger Event has occurred,
the Group One Principal Distribution Amount shall be distributed
sequentially to the Class R, Class A-1A and Class A-1B Certificates, until
the Certificate Principal Balance of each such Class has been reduced to
zero;
(b) the Group Two Principal Distribution Amount will be
distributed sequentially to the Class A-2A, Class A-2B and Class A-2C
Certificates until the Certificate Principal Balance of each such Class
has been reduced to zero; provided, however, that on and after the
Distribution Date on which the aggregate Certificate Principal Balance of
the Class M, Class B and Class C Certificates have been reduced to zero,
any principal distributions allocated to the Class A-2A, Class A-2B and
Class A-2C Certificates are required to be allocated pro rata among such
Classes of Certificates, based on their respective Certificate Principal
Balances, until their Certificate Principal Balances have been reduced to
zero;
(ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
(iv) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount;
(v) to the Class M-4 Certificates, the Class X-0 Xxxxxxxxx
Xxxxxxxxxxxx Xxxxxx;
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(xx) to the Class M-5 Certificates, the Class M-5 Principal
Distribution Amount;
(vii) to the Class M-6 Certificates, the Class M-6 Principal
Distribution Amount;
(viii) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;
(ix) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;
(x) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount;
(xi) to the Class B-4 Certificates, the Class B-4 Principal
Distribution Amount;
(xii) to the Class B-5 Certificates, the Class B-5 Principal
Distribution Amount; and
(xiii) any remainder pursuant to Section 4.04(f) hereof.
(e) [Reserved].
(f) On each Distribution Date, the Securities Administrator shall
make the following distributions up to the following amounts from the
Certificate Account of the remainders pursuant to Section 4.04(b)(xiv) and
(d)(xiii) hereof and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(b) and (d) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date:
(i) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the Class M-1 Unpaid
Realized Loss Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Unpaid
Realized Loss Amount;
(iv) to the Class M-3 Certificates, the Class M-3 Unpaid
Realized Loss Amount;
(v) to the Class M-4 Certificates, the Class M-4 Unpaid
Realized Loss Amount;
(vi) to the Class M-5 Certificates, the Class M-5 Unpaid
Realized Loss Amount;
(vii) to the Class M-6 Certificates, the Class M-6 Unpaid
Realized Loss Amount;
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(viii) to the Class B-1 Certificates, the Class B-1 Unpaid
Realized Loss Amount;
(ix) to the Class B-2 Certificates, the Class B-2 Unpaid
Realized Loss Amount;
(x) to the Class B-3 Certificates, the Class B-3 Unpaid
Realized Loss Amount;
(xi) to the Class B-4 Certificates, the Class B-4 Unpaid
Realized Loss Amount;
(xii) to the Class B-5 Certificates, the Class B-5 Unpaid
Realized Loss Amount;
(xiii) to the Class R Certificate, the Residual Excess
Interest Amount;
(xiv) to the Class A, Class M and Class B Certificates, on a
pro rata basis, based upon outstanding Floating Rate Certificate Carryover for
each such Class, the Floating Rate Certificate Carryover for each Class; and
(xv) the remainder pursuant to Section 4.04(g) hereof.
(g) on each Distribution Date, the Securities Administrator shall
allocate the remainders pursuant to Section 4.04(f)(xv) as follows:
(i) to the Class C Certificates in the following order of
priority, (I) the Class C Current Interest, (II) the Class C Interest Carry
Forward Amount, (III) as principal on the Class C Certificate until the
Certificate Principal Balance of the Class C Certificates has been reduced to
zero and (IV) the Class C Unpaid Realized Loss Amount; and
(ii) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Securities Administrator shall
allocate the remainder pursuant to Section 4.04(g)(ii) hereof (i) to the
Securities Administrator to reimburse amounts or pay indemnification amounts
owing to the Master Servicer and the Securities Administrator pursuant to
Section 6.03 and (ii) to the Class R Certificate and such distributions shall be
made only after all preceding distributions shall have been made until such
remainder shall have been fully distributed.
(i) On each Distribution Date, after giving effect to distributions
on such Distribution Date, the Securities Administrator shall allocate the
Applied Realized Loss Amount for the Certificates to reduce the Certificate
Principal Balances of the Class C Certificates and the Subordinated Certificates
in the following order of priority:
(i) to the Class C Certificates, until the Class C Certificate
Principal Balance is reduced to zero;
(ii) to the Class B-5 Certificates until the Class B-5
Certificate Principal Balance is reduced to zero;
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(iii) to the Class B-4 Certificates until the Class B-4
Certificate Principal Balance is reduced to zero;
(iv) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;
(v) to the Class B-2 Certificates until the Class B-2
Certificate Principal Balance is reduced to zero;
(vi) to the Class B-1 Certificates until the Class B-1
Certificate Principal Balance is reduced to zero;
(vii) to the Class M-6 Certificates until the Class M-6
Certificate Principal Balance is reduced to zero
(viii) to the Class M-5 Certificates until the Class M-5
Certificate Principal Balance is reduced to zero
(ix) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero
(x) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(xi) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
(xii) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either by wire transfer in immediately available funds to the account of such
holder at a bank or other entity having appropriate facilities therefor, if such
Holder has so notified the Securities Administrator at least five (5) Business
Days prior to the related Record Date or, if not, by check mailed by first class
mail to such Certificateholder at the address of such holder appearing in the
Certificate Register. Notwithstanding the foregoing, but subject to Section 9.02
hereof respecting the final distribution, distributions with respect to
Certificates registered in the name of a Depository shall be made to such
Depository in immediately available funds.
In accordance with this Agreement, the Servicer shall prepare and deliver
a report (the "Remittance Report") to the Securities Administrator in the form
of a computer readable magnetic tape (or by such other means as the Servicer and
the Securities Administrator may agree from time to time) containing such data
and information as to permit the Securities Administrator to prepare the Monthly
Statement to Certificateholders and make the required distributions for the
related Distribution Date. The Securities Administrator will prepare the Monthly
Report based solely upon the information received from the Servicer.
The Trustee shall promptly notify the NIMs Insurer of any proceeding or
the institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
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Claim") of any distribution made with respect to the Class C Certificates or the
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates and the Trustee hereby agree
that the NIMs Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to such Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMs Insurer shall be subrogated to the rights
of the Trustee and each Holder of the Class C Certificates and the Class P
Certificates in the conduct of any such Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim;
provided, however, that the NIMs Insurer will not have any rights with respect
to any Preference Claim set forth in this paragraph unless the indenture trustee
with respect to the NIM Notes or the holder of any NIMs Notes has been required
to relinquish a distribution made on the Class C Certificates, the Class P
Certificates or the NIM Notes, as applicable, and the NIMs Insurer made a
payment in respect of such relinquished amount.
(k) The Securities Administrator is hereby directed by the Depositor
to execute the Cap Contracts on behalf of the Trust Fund in the form presented
to it by the Depositor and shall have no responsibility for the contents of such
Cap Contract, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Securities Administrator under the
Cap Contracts at closing shall be paid by the Depositor. Notwithstanding
anything to the contrary contained herein or in any Cap Contract, the Securities
Administrator shall not be required to make any payments to the counterparty
under any Cap Contract. Any payments received under the terms of the related Cap
Contract will be available to pay the holders of the related Offered
Certificates up to the amount of any Floating Rate Certificate Carryovers
remaining after all other distributions required under this Section 4.04 are
made on such Distribution Date, other than Floating Rate Certificate Carryovers
attributable to the fact that Applied Realized Loss Amounts are not allocated to
the Class A Certificates. Any amounts received under the terms of any Cap
Contract on a Distribution Date that are not used to pay such Floating Rate
Certificate Carryovers will be distributed to the holders of the Class C
Certificates. Payments in respect of such Floating Rate Certificate Carryovers
from proceeds of a Cap Contract shall be paid to the related Classes of Offered
Certificates, pro rata based upon such Floating Rate Certificate Carryovers for
each such class of Offered Certificates.
(i) The Securities Administrator shall establish and maintain,
for the benefit of the Trust Fund and the Certificateholders, the Cap Contract
Account. On or prior to the related Cap Contract Termination Date, amounts, if
any, received by the Securities Administrator for the benefit of the Trust Fund
in respect of the related Cap Contract shall be deposited by the Securities
Administrator into the Cap Contract Account and will be used to pay Floating
Rate Certificate Carryovers on the related Offered Certificates to the extent
provided in the immediately preceding paragraph. With respect to any
Distribution Date on or prior to the related Cap Contract Termination Date, the
amount, if any, payable by the Cap Contract Counterparty under the related Cap
Contract will equal the product of (i) the excess of (x) One-Month LIBOR (as
determined by the Cap Contract Counterparty and subject to a cap equal to the
rate with respect to such Distribution Date as shown under the heading "1ML
Upper Collar" in the schedule to the related Cap Contract), over (y) the rate
with respect to such Distribution Date as shown under the heading "1ML Strike
Lower Collar" in the schedule to the related Cap Contract, (ii) an amount equal
to the related Cap Contract Notional Balance and (iii) the number of days in
such Accrual Period, divided by 360. If a payment is made to the Trust Fund
under a Cap Contract and the Securities Administrator is required to distribute
excess amounts to the holders of the Class C Certificates as described above,
information regarding such distribution will be included in the monthly
statement made available on the Securities Administrator's website pursuant to
Section 4.05 hereof.
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(ii) Amounts on deposit in the Cap Contract Account will
remain uninvested pending distribution to Certificateholders.
(iii) Each Cap Contract is scheduled to remain in effect until
the related Cap Contract Termination Date and will be subject to early
termination only in limited circumstances. Such circumstances include certain
insolvency or bankruptcy events in relation to the Cap Contract Counterparty
(after a grace period of three Local Business Days, as defined in the related
Cap Contract, after notice of such failure is received by the Cap Contract
Counterparty) to make a payment due under the related Cap Contract, the failure
by the Cap Contract Counterparty (after a cure period of 20 days after notice of
such failure is received) to perform any other agreement made by it under the
related Cap Contract, the termination of the Trust Fund and the related Cap
Contract becoming illegal or subject to certain kinds of taxation.
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on
information provided by the Servicer (which information is not required to
include any prediction of future performance as to which such report relates),
the Securities Administrator shall prepare and make available on its website
located at xxx.xxxxxxx.xxx to each Holder of a Class of Certificates of the
Trust Fund, the Servicer, the Master Servicer, the Trustee, the NIMs Insurer,
the Rating Agencies and the Depositor a statement setting forth for the
Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein, (C) the Extra Principal Distribution
Amount, if any, and (D) the aggregate amount of Prepayment Charges, if any;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;
(iii) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;
(iv) the Pool Stated Principal Balance for such Distribution
Date;
(v) the amount of the Servicing Fee paid to or retained by the
Servicer, the amount of the Securities Administrator Fee paid to or retained by
the Securities Administrator and any amounts constituting reimbursement or
indemnification of the Servicer, Master Servicer, Securities Administrator or
Trustee;
(vi) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(vii) the amount of Advances included in the distribution on
such Distribution Date;
(viii) the cumulative amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts to date, in the aggregate and with respect to the
Group One Mortgage Loans and Group Two Mortgage Loans;
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(ix) the amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts with respect to such Distribution Date, in the aggregate
and with respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(x) the number and aggregate principal amounts of Mortgage
Loans (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60
days, (2) 61 to 90 days and (3) 91 or more days, and (B) in foreclosure and
Delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each
case as of the close of business on the last day of the calendar month preceding
such Distribution Date, in the aggregate and with respect to the Group One
Mortgage Loans and Group Two Mortgage Loans;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on the last
day of the calendar month preceding such Distribution Date and the date of
acquisition thereof, in the aggregate and with respect to the Group One Mortgage
Loans and Group Two Mortgage Loans;
(xii) the total number and principal balance of any REO
Properties as of the close of business on the last day of the calendar month
preceding such Distribution Date, in the aggregate and with respect to the Group
One Mortgage Loans and Group Two Mortgage Loans;
(xiii) the aggregate Stated Principal Balance of all
Liquidated Loans as of the preceding Distribution Date, in the aggregate and
with respect to the Group One Mortgage Loans and Group Two Mortgage Loans;
(xiv) whether a Stepdown Trigger Event or a Class A-1 Trigger
Event has occurred and is in effect;
(xv) with respect to each Class of Certificates, any Interest
Carry Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;
(xvi) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;
(xvii) the number of Mortgage Loans for which Prepayment
Charges were received during the related Prepayment Period and, for each such
Mortgage Loan, the amount of Prepayment Charges received during the related
Prepayment Period and in the aggregate of such amounts for all such Mortgage
Loans since the Cut-off Date;
(xviii) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(viii);
(xix) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC "regular interest"
or REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
"regular interest" or REMIC "residual interest";
(xx) as of each Distribution Date, the amount, if any, to be
deposited in the Cap Contract Account pursuant to the related Cap Contract as
described in Section 4.04(k) and the
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amount thereof to be paid to the Class A, Class M, Class B and Class C
Certificates described in Section 4.04(k) hereof;
(xxi) any Floating Rate Certificate Carryover paid and all
Floating Rate Certificate Carryover remaining on each class of the Offered
Certificates and Class B-2, Class B-3, Class B-4 and Class B-5 Certificates on
such Distribution Date;
(xxii) for each Distribution Date during the Pre-Funding
Period, the amount on deposit in the Pre-Funding Account and the Capitalized
Interest Account and the amount, if any, that has not been used to purchase
Subsequent Mortgage Loans and that is being distributed to certificate holders
as a mandatory prepayment of principal on such Distribution Date, such amounts
being stated in the aggregate and with respect to Group One and Group Two; and
(xxiii) the number of Mortgage Loans with respect to which (i)
a reduction in the Mortgage Rate has occurred or (ii) the related borrower's
obligation to repay interest on a monthly basis has been suspended or reduced
pursuant to the Servicemembers Civil Relief Act or the California Military and
Veterans Code, as amended; and the amount of interest not required to be paid
with respect to any such Mortgage Loans during the related Due Period as a
result of such reductions in the aggregate and with respect to the Group One
Mortgage Loans and the Group Two Mortgage Loans.
(b) The Securities Administrator will make the Monthly Statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders, other parties to
this Agreement and any other interested parties via the Securities
Administrator's Internet website. The Securities Administrator's Internet
website shall initially be located at "xxx.xxxxxxx.xxx." Assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at (000) 000-0000. Parties that are unable to use the website are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator shall
have the right to change the way the monthly statements to Certificateholders
are distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Securities Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.
The Securities Administrator shall also be entitled to rely on but shall
not be responsible for the content or accuracy of any information provided by
third parties for purposes of preparing the monthly statement and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
As a condition to access the Securities Administrator's internet website,
the Securities Administrator may require registration and the acceptance of a
disclaimer. The Securities Administrator will not be liable for the
dissemination of information in accordance with this Agreement.
(c) The Servicer shall deliver to the NIMs Insurer a copy of any
report delivered by the Servicer to the Securities Administrator.
(d) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Securities Administrator shall make
available on its website or cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder of record, a statement
containing the information set forth in clauses (a)(i) without regard to
subclauses (A)-(D) thereof and (a)(ii) of this Section 4.05 aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Securities Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be
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provided by the Securities Administrator pursuant to any requirements of the
Code as are from time to time in effect.
(e) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Class R Certificate and the
NIMs Insurer each Form 1066 and each Form 1066Q and shall respond promptly to
written requests made not more frequently than quarterly by any Holder of a
Class R Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows
on the Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash flows
described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through the end
of such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the REMICs with respect
to such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
REMICs; and
(vii) Any taxes (including penalties and interest) imposed on
the REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.
SECTION 4.06 Pre-Funding Account.
(a) No later than the Closing Date, the Securities Administrator
shall establish and maintain on behalf of the Trustee for the benefit of the
Certificateholders a segregated trust account that is an Eligible Account, which
shall be titled "Pre-Funding Account, HSBC Bank USA, N.A., as trustee for the
registered holders of Ownit Mortgage Trust, 2005-2, Mortgage Loan, Asset-Backed
Certificates, Series 2005-2" (the "Pre-Funding Account"). The Securities
Administrator, as agent for the Trustee, shall, promptly upon receipt, deposit
in the Pre-Funding Account and retain therein the Original Pre-Funded Amount
remitted on the Closing Date to the Trustee by the Depositor. Funds deposited in
the Pre-Funding Account shall be held in trust by the Trustee on behalf of the
Certificateholders for the uses and purposes set forth herein. The Trustee
hereby appoints the Securities Administrator as its agent in connection with
establishing and maintaining the Pre-Funding Account pursuant to this Section
4.06.
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(b) The Securities Administrator shall invest funds deposited in the
Pre-Funding Account in Permitted Investments as directed in writing by the
Depositor (provided that if the Securities Administrator does not receive
written direction from the Depositor, then amounts in the Pre-Funding Account
shall not be invested) with a maturity date no later than the Business Day
preceding each Distribution Date or Subsequent Transfer Date, as the case may
be. For federal income tax purposes, the Depositor shall be the owner of the
Pre-Funding Account and shall report all items of income, deduction, gain or
loss arising therefrom. All income and gain realized from investment of funds
deposited in the Pre-Funding Account shall be transferred to the Capitalized
Interest Account on the Business Day immediately preceding each Distribution
Date or Subsequent Transfer Date, as the case may be. The Depositor shall
deposit in the Pre-Funding Account the amount of any net loss incurred in
respect of any such Permitted Investment immediately upon realization of such
loss without any right of reimbursement therefor. The Pre-Funding Account will
not be an asset of any of the REMICs provided for herein.
(c) Amounts on deposit in the Pre-Funding Account shall be withdrawn
by the Securities Administrator as follows:
(i) On any Subsequent Transfer Date, the Securities
Administrator shall withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate Stated Principal Balances as of the Subsequent Cut-off
Date of the Subsequent Mortgage Loans transferred and assigned to the Trustee
for deposit in the Mortgage Pool on such Subsequent Transfer Date and pay such
amount to or upon the order of the Depositor upon satisfaction of the conditions
set forth in Section 2.10 with respect to such transfer and assignment;
(ii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and
(iii) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the end of
the Funding Period and (B) the termination of this Agreement, with any amounts
remaining on deposit therein being deposited into the Certificate Account for
distribution in accordance with the terms thereof.
SECTION 4.07 Capitalized Interest Account.
(a) No later than the Closing Date, the Securities Administrator, on
behalf of the Trustee, shall establish and maintain a segregated trust account
that is an Eligible Account, which shall be titled "Capitalized Interest
Account, HSBC Bank USA, N.A., as trustee for the registered holders of Ownit
Mortgage Trust 2005-2, Mortgage Loan, Asset-Backed Certificates, Series 2005-2"
(the "Capitalized Interest Account"). The Securities Administrator shall,
promptly upon receipt, deposit in the Capitalized Interest Account and retain
therein the Capitalized Interest Amount remitted on the Closing Date to the
Securities Administrator by the Depositor and any amounts of income and gain
realized from investment of funds deposited in the Pre-Funding Account pursuant
to Section 4.06(a). Funds deposited in the Capitalized Interest Account shall be
held in trust by the Trustee on behalf of the Certificateholders for the uses
and purposes set forth herein. The Trustee hereby appoints the Securities
Administrator as its agent in connection with establishing and maintaining the
Capitalized Interest Account pursuant to this Section 4.07. With respect to each
Distribution Date during the Funding Period, the Securities Administrator will
withdraw from the Capitalized Interest Account and deposit into the Certificate
Account an amount equal to the Required Withdrawal. The Depositor is required to
deposit into the Capitalized Interest Account no later than the Business Day
prior to each Distribution Date during the Funding Period an amount sufficient
to permit the Securities Administrator to make the withdrawals required by this
Section 4.07.
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(b) The Securities Administrator will invest funds deposited in the
Capitalized Interest Account in Permitted Investments as directed in writing by
the Depositor (provided that if the Securities Administrator does not receive
written direction from the Depositor, then amounts in the Capitalized Interest
Account shall not be invested) with a maturity date no later than the Business
Day preceding each Distribution Date. For federal income tax purposes, the
Depositor shall be the owner of the Capitalized Interest Account and shall
report all items of income, deduction, gain or loss arising therefrom. At no
time will the Capitalized Interest Account be an asset of any of the REMICs
provided for herein. All income and gain realized from investment of funds
deposited in the Capitalized Interest Account shall be for the sole and
exclusive benefit of the Depositor and shall be remitted by the Securities
Administrator to the Depositor on each Distribution Date, if such amounts are
not used as part of the Required Withdrawal. The Depositor shall deposit in the
Capitalized Interest Account the amount of any net loss incurred in respect of
any such Permitted Investment immediately upon realization of such loss.
(c) Upon the earliest of (i) the Distribution Date immediately
following the end of the Funding Period and (ii) the termination of this
Agreement in accordance with Section 9.01, any amount remaining on deposit in
the Capitalized Interest Account after withdrawals pursuant to paragraph (a)
above shall be withdrawn by the Trustee and paid to the Depositor or its
designee.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Integral Original
Minimum Multiples in Certificate
Class Denomination Excess of Minimum Principal Balance
A-1A $25,000.00 $1.00 $520,082,000.00
A-1B $25,000.00 $1.00 130,021,000.00
A-2A $25,000.00 $1.00 133,768,000.00
A-2B $25,000.00 $1.00 113,651,000.00
A-2C $25,000.00 $1.00 24,491,000.00
M-1 $25,000.00 $1.00 42,925,000.00
M-2 $25,000.00 $1.00 37,633,000.00
M-3 $25,000.00 $1.00 22,932,000.00
M-4 $25,000.00 $1.00 21,756,000.00
M-5 $25,000.00 $1.00 19,404,000.00
M-6 $25,000.00 $1.00 19,404,000.00
B-1 $25,000.00 $1.00 16,464,000.00
B-2 $25,000.00 $1.00 15,288,000.00
B-3 $25,000.00 $1.00 12,936,000.00
B-4 $25,000.00 $1.00 8,232,000.00
B-5 $25,000.00 $1.00 11,760,000.00
C (1) (1) 100%
R $100.00 N/A $100.00
P (2) (2) (2)
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(1) The Class C Certificates shall not have minimum dollar denominations or
certificate notional amounts and shall be issued in a minimum percentage
interest of 10%. The initial Overcollateralization Amount is
$25,291,080.80.
(2) The Class P Certificates shall not have minimum dollar denominations or
Certificate Principal Balances and shall be issued in a minimum percentage
interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the
Securities Administrator shall bind the Trust Fund, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such authentication and delivery. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form set forth as attached hereto executed by the Securities Administrator by
manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. On the Closing Date, the Securities
Administrator shall authenticate the Certificates to be issued at the written
direction of the Depositor, or any Affiliate thereof.
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of Transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of Transfer of any Certificate, the Securities
Administrator shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and of
like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Securities Administrator in accordance
with such Securities Administrator's customary procedures.
(b) No Transfer of a Class C or Class P Certificate shall be made
unless such Transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under the Securities Act
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and such state securities laws. In the event that a Transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such Transfer and such Certificateholder's prospective
transferee shall (except with respect to the initial transfer of a Class C or
Class P Certificate by Xxxxxxx Xxxxx & Co. or, in connection with a transfer of
a Class C or Class P Certificate to the indenture trustee under an Indenture
pursuant to which NIM Notes are issued, whether or not such notes are guaranteed
by the NIMs Insurer) each certify to the Securities Administrator in writing the
facts surrounding the Transfer in substantially the form set forth in Exhibit F
(the "Transferor Certificate") and (i) deliver a letter in substantially the
form of either Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A
Letter") or (ii) there shall be delivered to the Securities Administrator an
Opinion of Counsel that such Transfer may be made pursuant to an exemption from
the Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Securities Administrator or the Trustee. The Depositor shall
provide to any Holder of a Class C or Class P Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Securities Administrator shall cooperate with the Depositor in providing the
Rule 144A information referenced in the preceding sentence, including providing
to the Depositor such information in the possession of the Securities
Administrator regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Class C or Class P
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Depositor, the Securities Administrator and the Trustee against
any liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of an ERISA Restricted Certificate that is a Class R
Certificate may be made to any Person unless the Securities Administrator has
received a representation that such transferee is not an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), or to any Person directly or indirectly acquiring such
Certificate for, on behalf of, or with any assets of any such Plan. Each Person
to whom a Class R Certificate is to be transferred shall be required or deemed
to represent that it is not a Plan.
No transfer of an ERISA-Restricted Certificate (other than the Class R
Certificate) shall be made to any Person unless the Securities Administrator has
received (A) a representation that such transferee is not a Plan and is not
directly or indirectly acquiring the Certificate for, on behalf of, or with the
assets of any such Plan, (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that such transferee is an
insurance company that is acquiring the Certificate with assets contained in an
"insurance company general account," as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60, and the acquisition and holding of
the Certificate are covered and exempt under Sections I and III of PTCE 95-60,
or (C) solely in the case of a Definitive Certificate, an Opinion of Counsel
satisfactory to the Securities Administrator, and upon which the Securities
Administrator and the NIMs Insurer shall be entitled to rely, to the effect that
the acquisition and holding of such Certificate will not constitute or result in
a nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Trustee, the
Master Servicer, the Securities Administrator, the Servicer, the NIMs Insurer or
the Depositor to any obligation in addition to those expressly undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the
Securities Administrator, the Trustee, the Master Servicer, the Servicer, the
NIMs Insurer or the Depositor.
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For purposes of the two immediately preceding paragraphs of this
Subsection 5.02(b), other than clause (C) in the immediately preceding
paragraph, the representations as set forth therein shall be deemed to have been
made to the Securities Administrator by the transferee's acceptance of an ERISA
Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any Class of ERISA Restricted Certificates).
Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA Restricted Certificate to or on behalf of a Plan without
the delivery to the Securities Administrator of a representation or an Opinion
of Counsel satisfactory to the Securities Administrator as described above shall
be void and of no effect. The Securities Administrator shall not be under any
liability to any Person for any registration or transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Securities Administrator be under any liability for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Securities Administrator in accordance with the foregoing
requirements. The Securities Administrator shall be entitled, but not obligated,
to recover from any Holder of any ERISA Restricted Certificate that was in fact
a Plan and that held such Certificate in violation of this Section 5.02(b) all
payments made on such ERISA Restricted Certificate at and after the time it
commenced such holding. Any such payments so recovered shall be paid and
delivered to the last preceding Holder of such Certificate that is not a Plan.
(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Securities Administrator of any change or impending change in its status as
a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Securities
Administrator shall not register the Transfer of any Class R Certificate unless,
in addition to the certificates required to be delivered to the Securities
Administrator under subparagraph (b) above, the Securities Administrator shall
have been furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit E-1 and
an affidavit of the proposed transferor in the form attached hereto as Exhibit
E-2. In the absence of a contrary instruction from the transferor of a Class R
Certificate, declaration (11) in Appendix A of the Transfer Affidavit may be
left blank. If the transferor requests by written notice to the Securities
Administrator prior to the date of the proposed transfer that one of the two
other forms of declaration (11) in Appendix A of the Transfer Affidavit be used,
then the requirements of this Section 5.02(c)(ii) shall not have been satisfied
unless the Transfer Affidavit includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership Interest
in a Class R Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee. Further, no transfer, sale or other
disposition of any Ownership Interest in a Class R Certificate may be made to a
person who is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the
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Securities Administrator with a duly completed and effective Internal Revenue
Service Form W-8ECI (or any successor thereto) and the Securities Administrator
consents to such transfer, sale or other disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(c), then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Securities Administrator shall be under no liability to any
Person for any registration of Transfer of a Class R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related Transfer
Affidavit. The Securities Administrator shall be entitled but not obligated to
recover from any Holder of a Class R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such subsequent time
as it became other than a Permitted Transferee, all payments made on such Class
R Certificate at and after either such time. Any such payments so recovered by
the Securities Administrator shall be paid and delivered by the Securities
Administrator to the last preceding Permitted Transferee of such Certificate.
(v) At the option of the Holder of the Class R Certificate,
the Class LTR Interest and the residual interest in the Upper Tier REMIC may be
severed and represented by separate certificates (with the certificate that
represents the Residual Interest also representing all rights of the Class R
Certificate to distributions attributable to a Pass-Through Rate on the Class R
Certificate in excess of the Net Rate); provided, however, that such separate
certification may not occur until the Securities Administrator and the NIMs
Insurer receive an Opinion of Counsel to the effect that separate certification
in the form and manner proposed would not result in the imposition of federal
tax upon the Trust Fund or any of the REMICs provided for herein or cause any of
the REMICs provided for herein to fail to qualify as a REMIC; and provided
further, that the provisions of Sections 5.02(b) and (c) will apply to each such
separate certificate as if the separate certificate were a Class R Certificate.
If, as evidenced by an Opinion of Counsel, it is necessary to preserve the REMIC
status of any of the REMICs provided for herein, the Class LTR Interest and the
residual interest in the Upper Tier REMIC shall be severed and represented by
separate Certificates.
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator and the NIMs Insurer of an
Opinion of Counsel, which Opinion of Counsel shall not be an expense of the
Securities Administrator, the NIMs Insurer or the Depositor, to the effect that
the elimination of such restrictions will not cause any of the REMICs provided
for herein to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the imposition of any tax on the Trust Fund, any REMIC
provided for herein, a Certificateholder or another Person. Each Person holding
or acquiring any Ownership Interest in a Class R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Securities Administrator, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The transferor of the Class R Certificate shall notify the
Securities Administrator in writing upon the transfer of the Class R
Certificate.
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(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor, the Securities Administrator or the Trustee.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Securities
Administrator or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof and (b) there is delivered to the Securities Administrator and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator and
the Trustee and their counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Securities Administrator under the terms of this
Section 5.03 shall be canceled and destroyed by the Securities Administrator in
accordance with its standard procedures without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The NIMs Insurer, the Trustee, the Securities Administrator and any agent
of the NIMs Insurer, the Trustee or the Securities Administrator may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the NIMs Insurer,
the Trustee or the Securities Administrator, nor any agent of the NIMs Insurer,
the Trustee or the Securities Administrator shall be affected by any notice to
the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication that such Certificateholders propose to
transmit or if the NIMs Insurer or the Depositor shall request such information
in writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
NIMs Insurer or the Depositor or such Certificateholders at such recipients'
expense the most recent list of the Certificateholders of the Trust Fund held by
the Securities Administrator, if any. The Depositor and every Certificateholder,
by receiving and holding a Certificate, agree that the Securities Administrator
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate
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Register in the name of the Depository or its nominee, and no Certificate Owner
of a Book-Entry Certificate will receive a definitive certificate representing
such Certificate Owner's interest in such Certificates, except as provided in
Section 5.08. Unless and until definitive, fully registered Certificates
("Definitive Certificates") have been issued to the Certificate Owners of the
Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Securities Administrator, the NIMs Insurer
and the Trustee may deal with the Depository and the Depository Participants for
all purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of the Book-Entry
Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the
Book-Entry Certificates shall be exercised only through the Depository and the
Depository Participants and shall be limited to those established by law and
agreements between the Owners of the Book-Entry Certificates and the Depository
and/or the Depository Participants. Pursuant to the Depository Agreement, unless
and until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants and
receive and transmit distributions of principal and interest on the related
Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Securities Administrator and the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Securities Administrator and the
Trustee shall give all such notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Securities
Administrator and the Trustee that the Depository is no
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longer willing, qualified or able to discharge properly its responsibilities
under the Depository Agreement with respect to such Certificates and the
Securities Administrator or the Depositor is unable to locate a qualified
successor, (b) the Depositor notifies the Securities Administrator of its intent
to terminate the book-entry system through the Depository and, upon receipt of
notice of such intent from the Depository, the Certificate Owners of the
Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Securities Administrator, the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Securities
Administrator shall notify all Certificate Owners of such Book-Entry
Certificates and the NIMs Insurer, through the Depository, of the occurrence of
any such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Securities Administrator with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon surrender
to the Securities Administrator of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Securities Administrator shall authenticate and deliver such Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Securities Administrator, to the extent applicable
with respect to such Definitive Certificates and the Securities Administrator
shall recognize the Holders of such Definitive Certificates as
Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Securities Administrator will maintain or cause to be maintained at
its expense an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange. The Securities
Administrator initially designates its offices at Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Client Services Manager - Ownit
Mortgage Loan Trust, Series 2005-2 as offices for such purposes. The Securities
Administrator will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE SECURITIES
ADMINISTRATOR
SECTION 6.01. Respective Liabilities of the Depositor, the Master
Servicer, the Servicer and the Securities Administrator.
The Depositor, the Master Servicer, the Servicer and the Securities
Administrator shall each be liable in accordance herewith only to the extent of
the obligations specifically and respectively imposed upon and undertaken by
them herein.
SECTION 6.02. Merger or Consolidation of the Depositor, the Master
Servicer, the Servicer or the Securities Administrator.
Except as provided in the next paragraph, the Depositor, the Master
Servicer, the Servicer and the Securities Administrator will each keep in full
effect its existence, rights and franchises as a corporation, a limited
liability company or banking association under the laws of the United States or
under the laws of
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one of the States thereof and will each obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor, the Master Servicer, the Servicer or
the Securities Administrator may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Depositor, the Master
Servicer, the Servicer or the Securities Administrator shall be a party, or any
Person succeeding to the business of the Depositor, the Master Servicer, the
Servicer or the Securities Administrator, shall be the successor of the
Depositor, the Master Servicer, the Securities Administrator or the Servicer, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding (except for the execution of an assumption agreement
where such succession is not effected by operation of law); provided, however,
that the successor or surviving Person to the Servicer shall be qualified to
sell mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Xxx
or Xxxxxxx Mac.
SECTION 6.03. Limitation on Liability of the Depositor, the Securities
Administrator, the Master Servicer, the Servicer and Others.
None of the Depositor, the Master Servicer, the Servicer, the Securities
Administrator nor any of the directors, officers, employees or agents of the
Depositor, the Master Servicer, the Servicer or the Securities Administrator
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer, the
Servicer, the Securities Administrator or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Master Servicer, the Servicer, the Securities Administrator or any such Person
from any liability that would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder. The Depositor, the
Master Servicer, the Servicer or the Securities Administrator and any director,
officer, employee or agent of the Depositor, the Master Servicer, the Servicer
or the Securities Administrator may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor, the Master Servicer, the Servicer, the
Securities Administrator and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Servicer or the Securities Administrator
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense, incurred in connection with the performance of their
duties under this agreement or incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense (i) incurred by reason of willful misfeasance,
bad faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder or (ii) which does not
constitute an "unanticipated expense" within the meaning of Treasury Regulation
Section 1.860G-1(b)(3)(ii). None of the Depositor, the Master Servicer, the
Servicer nor the Securities Administrator shall be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
respective duties hereunder and that in its opinion may involve it in any
expense or liability; provided, however, that any of the Depositor, the Master
Servicer, the Servicer or the Securities Administrator in its discretion may
undertake any such action that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and the interests
of the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor, the Master
Servicer, the Servicer and the Securities Administrator shall be entitled to be
reimbursed therefor out of the Collection Account as provided by Section 3.08
hereof.
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In addition, the Master Servicer and Securities Administrator shall be
entitled to be reimbursed out of the Certificate Account for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the
Master Servicer or Securities Administrator on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of each of the Master Servicer or
Securities Administrator acting in its capacity as Master Servicer or Securities
Administrator hereunder, respectively, and (B) to the extent that the Securities
Administrator must engage persons not regularly in its employ to perform acts or
services on behalf of the Trust Fund, which acts or services are not in the
ordinary course of the duties of a securities administrator, in the absence of a
breach or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons), except any such compensation, expense,
disbursement or advance that either (i) arises from its negligence, bad faith or
willful misconduct or (ii) does not constitute an "unanticipated expense" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee, the NIMs Insurer and the Master Servicer. No
such resignation shall become effective until the Master Servicer or a successor
servicer reasonably acceptable to the NIMs Insurer and the Master Servicer is
appointed and has assumed the Servicer's responsibilities, duties, liabilities
and obligations hereunder. Any such resignation shall not relieve the Servicer
of any of the obligations specified in Section 7.01 and 7.02 as obligations that
survive the resignation or termination of the Servicer.
The Trustee, the Securities Administrator, the Master Servicer, the
Depositor and the NIMs Insurer hereby specifically (i) consent to the pledge and
assignment by the Servicer of all the Servicer's right, title and interest in,
to and under this Agreement to the Servicing Rights Pledgee, if any, for the
benefit of certain lenders, and (ii) agree that upon delivery to the Trustee by
the Servicing Rights Pledgee of a letter signed by the Servicer whereby the
Servicer shall resign as Servicer under this Agreement, notwithstanding anything
to the contrary which may be set forth in Section 3.04 above, the Trustee shall
appoint the Servicing Rights Pledgee or its designee as successor servicer,
provided that the Servicer's resignation will not be effective unless, at the
time of such appointment, the Servicing Rights Pledgee or its designee (i) meets
the requirements of a successor servicer under this Agreement (including being
acceptable to the Rating Agencies), provided, that the consent and approval of
the Trustee, the Securities Administrator, the Master Servicer, the Depositor
and the NIMS Insurer shall be deemed to have been given to the Servicing Rights
Pledgee or its designee, and the Servicing Rights Pledgee and its designee are
hereby agreed to be acceptable to the Trustee, the Securities Administrator, the
Master Servicer, the Depositor and the NIMS Insurer and (ii) agrees to be
subject to the terms of this Agreement. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor servicer, the entire
amount of the Servicing Fee and other compensation payable to the Servicer
pursuant hereto shall thereafter be payable to such successor servicer.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for Persons
performing servicing for mortgage loans purchased by Fannie
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Mae or Xxxxxxx Mac unless the Servicer has obtained a waiver of such
requirements from the Seller. The Servicer shall provide the Trustee, the NIMs
Insurer and the Master Servicer, upon request and reasonable notice, with copies
of such policies and fidelity bond or a certification from the insurance
provider evidencing such policies and fidelity bond. The Servicer may be deemed
to have complied with this provision if an Affiliate of the Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. In the event that any such policy or bond ceases to be in effect,
the Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer meeting the requirements
set forth above as of the date of such replacement. Any such policy or fidelity
bond shall by its terms not be cancelable without thirty days' prior written
notice to the Trustee and the Master Servicer.
SECTION 6.06. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or
another successor Master Servicer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement. If the Master Servicer and the Securities Administrator are the same
Person, then at any time the Master Servicer is terminated hereunder, the
Securities Administrator shall likewise be removed as securities administrator
hereunder.
SECTION 6.07. Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in their entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accept in writing such
assignment and delegation and assume the obligations of the Master Servicer
hereunder and shall (a) be a Person which shall be qualified to service mortgage
loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) be reasonably satisfactory to the Trustee and the Depositor;
and (d) execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee and which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver to the
Trustee an Officer's Certificate and an independent Opinion of Counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.
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ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to make any Advance, to
deposit in the Collection Account or the Certificate Account or remit to the
Securities Administrator any payment (excluding a payment required to be made
under Section 4.01 hereof) required to be made under the terms of this
Agreement, which failure shall continue unremedied for three Business Days and,
with respect to a payment required to be made under Section 4.01 hereof, for one
Business Day, after the date on which written notice of such failure shall have
been given to the Servicer by the Securities Administrator or the Depositor, or
to the Securities Administrator and the Servicer by the NIMs Insurer or the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue, which failure or breach shall continue unremedied for a
period of 60 days after the date on which written notice of such failure shall
have been given to the Servicer by the Master Servicer, the Securities
Administrator, the Trustee or the Depositor, or to the Master Servicer, the
Securities Administrator, the Trustee and the Depositor by the NIMs Insurer or
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) consent by the Servicer to the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or
(v) admission by a Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations or
(vi) any failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
Agreement, which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Master Servicer or any
other party to this Agreement.
If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00p.m. on the Servicer Remittance Date, the Master
Servicer may, or at the direction of the NIMs Insurer or the Holders of
Certificates evidencing not less than 25% of
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the Voting Rights evidenced by the Certificates (with the written consent of the
NIMs Insurer, except after a NIMs Insurer Default), shall, by notice in writing
to the Servicer and the Servicing Rights Pledgee, if any (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On or after the receipt
by the Servicer of such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Master Servicer. To the extent the Event of Default
resulted from the failure of the Servicer to make a required Advance, the Master
Servicer shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Master Servicer is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Master Servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Master Servicer of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans. The Servicer and
the Master Servicer shall promptly notify the Rating Agencies of the occurrence
of an Event of Default or an event that, with notice, passage of time, other
action or any combination of the foregoing would be an Event of Default, such
notice to be provided in any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination.
SECTION 7.02. Servicer Trigger Event.
A "Servicer Trigger Event," shall be deemed to have occurred on any
Distribution Date where the aggregate amount of cumulative Realized Losses
incurred since the Cut-off Date through the last day of the related Accrual
Period divided by the Pool Balance 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 2008 through March 2009 4.25%
April 2009 through March 2010 6.00%
April 2010 through March 2011 7.50%
April 2011 and thereafter 8.00%
Upon discovery by the Securities Administrator that a Servicer Trigger
Event has occurred, the Securities Administrator shall promptly (and in any
event within 5 Business Days of discovery) give
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written notice thereof to the Certificateholders. If a Servicer Trigger Event
shall occur, then the Holders of Certificates evidencing not less than 51% of
the Voting Rights evidenced by the Certificates (with the written consent of the
NIM Insurer, except after a NIM Insurer Default), may, by notice in writing to
the Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, subject to and in accordance with
Section 6.04 hereof, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Master Servicer as successor servicer. The
Master Servicer is hereby authorized and empowered as successor servicer to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Servicer to pay amounts owed pursuant to Article VIII. The
Servicer agrees to cooperate with the Master Servicer as successor servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Master Servicer as
successor servicer of all cash amounts which shall at the time be credited to
the Collection Account, or thereafter be received with respect to the Mortgage
Loans. The Servicer and the Master Servicer shall promptly notify the Rating
Agencies of the occurrence of a Servicer Trigger Event, such notice to be
provided in any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination.
SECTION 7.03. Master Servicer to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Master Servicer shall, to the extent
provided in Section 3.04, be the successor to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, subject to the last paragraph of Section 7.01,
the Master Servicer shall be entitled to all fees, compensation and
reimbursement for costs and expenses relating to the Mortgage Loans that the
Servicer would have been entitled to hereunder if the Servicer had continued to
act hereunder. Notwithstanding the foregoing, if the Master Servicer has become
the successor to the Servicer in accordance with Section 7.01 hereof, the Master
Servicer may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which successor shall be approved by the NIMs Insurer and which
does not adversely affect the then current rating of the Certificates by each
Rating Agency as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor Servicer shall be an institution that is acceptable to
the NIMs Insurer and is a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service
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the Mortgage Loans and executes and delivers to the Depositor, the Trustee and
the Master Servicer an agreement accepting such delegation and assignment, that
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer (other than
liabilities of the Servicer under Section 6.03 hereof incurred prior to
termination of the Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; and provided further that each
Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation. No appointment of a
successor to the Servicer hereunder shall be effective until the Master Servicer
shall have consented thereto, prior written consent of the NIMs Insurer is
obtained and written notice of such proposed appointment shall have been
provided by the Securities Administrator to each Certificateholder. The Master
Servicer shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to Section 3.04 hereof, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the compensation
of such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess of
that permitted the Servicer hereunder. The Master Servicer and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Master Servicer nor any other
successor servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of any Event of Default),
notwithstanding anything to the contrary above or anything to the contrary which
may be set forth in Section 3.04, the Securities Administrator, the Trustee, the
Master Servicer, the Depositor and the NIMS Insurer hereby agree that within 10
Business Days of delivery to the Trustee by the Servicing Rights Pledgee of a
letter signed by the Servicer whereby the Servicer shall resign as Servicer
under this Agreement, or within 10 days of Securities Administrator's
termination of the Servicer pursuant to Section 7.01 or 7.02, the Servicing
Rights Pledgee or its designee shall be appointed as successor servicer;
provided that at the time of such appointment the Servicing Rights Pledgee or
such designee meets the requirements of a successor servicer set forth above;
and provided, further, that the consent and approval of the Securities
Administrator, the Trustee, the Master Servicer, the Depositor and the NIMs
Insurer shall be deemed to have been given to the Servicing Rights Pledgee or
its designee, and the Servicing Rights Pledgee and its designee are hereby
agreed to be acceptable to the Securities Administrator, the Trustee, the Master
Servicer, the Depositor and the NIMs Insurer, and the Servicing Rights Pledgee
or such designee agrees to be subject to the terms of this Agreement.
SECTION 7.04. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Securities Administrator shall give prompt written notice thereof
to Certificateholders, the Depositor and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
the NIMs Insurer notice of each such
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Event of Default hereunder known to the Securities Administrator, unless such
Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 8.01. Duties of the Trustee and the Securities Administrator.
The Trustee and the Securities Administrator, prior to the occurrence of
an Event of Default and after the curing of all Events of Default that may have
occurred, each shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement. In case an Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. In case an Event of
Default or other default by the Servicer or the Depositor hereunder shall occur
and be continuing, the Trustee shall, at the direction of the majority of the
Certificateholders or the NIMs Insurer, or may, proceed to protect and enforce
its rights and the rights of the Certificateholders or the NIMs Insurer under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee, the NIMs
Insurer and the Certificateholders.
Each of the Trustee and the Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee that are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement. If any such instrument is found not to conform to the requirements of
this Agreement in a material manner, the Trustee or the Securities
Administrator, as the case may be, shall take such action as it deems
appropriate to have the instrument corrected and if the instrument is not
corrected to the its satisfaction, the Securities Administrator will provide
notice to the Certificateholders and the NIMs Insurer and take such further
action as directed by the Certificateholders and the NIMs Insurer.
No provision of this Agreement shall be construed to relieve the Trustee
or the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own misconduct, its negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided,
however, that:
(i) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee, and at all times, the duties and obligations of the
Securities Administrator shall be determined solely by the express provisions of
this Agreement, neither the Trustee nor the Securities Administrator shall be
liable, individually or as Trustee or Securities Administrator, as applicable,
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee or the Securities Administrator and, the
Trustee and the Securities Administrator may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee or the Securities
Administrator and conforming to the requirements of this Agreement that it
reasonably believed in good faith to be genuine and to have been duly executed
by the proper authorities respecting any matters arising hereunder;
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(ii) neither the Trustee nor the Securities Administrator
shall, individually or as Trustee or Securities Administrator, as applicable, be
liable for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee unless the Trustee or Securities
Administrator, as applicable, was negligent or acted in bad faith or with
willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the NIMs Insurer or the
Holders in accordance with this Agreement relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee and the Securities
Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator may request
and conclusively rely upon and shall be fully protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of auditors
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;
(ii) the Trustee and the Securities Administrator may consult
with counsel of its choice and any advice or Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator
shall be liable for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) at all times the Securities Administrator, and prior to
the occurrence of an Event of Default hereunder and after the curing of all
Events of Default that may have occurred, the Trustee, in each case, shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by the NIMs Insurer or the Holders of each Class
of Certificates evidencing not less than 25% of the Voting Rights of such Class;
(v) the Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, accountants or attorneys or
independent contractors and the Trustee and the Securities Administrator will
not be responsible for any misconduct or negligence on the part of any agent,
custodian, accountant, attorney or independent contractor appointed with due
care by it hereunder;
(vi) neither the Trustee nor the Securities Administrator
shall be required to expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such liability is not assured to it;
(vii) neither the Trustee nor the Securities Administrator
shall be liable, individually or as Trustee or Securities Administrator, as
applicable, for any loss on any investment of funds pursuant to this Agreement
(other than as issuer of the investment security);
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(viii) neither the Trustee nor the Securities Administrator
shall be deemed to have knowledge of an Event of Default until a Responsible
Officer of the Trustee or the Securities Administrator, as applicable, shall
have received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the NIMs Insurer or the Certificateholders, pursuant to the
provisions of this Agreement, unless the NIMs Insurer or such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or thereby; and
(x) if requested by the Servicer, the Trustee shall appoint
the Servicer as the trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such power of
attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs, expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. The Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any rerecording, refilling or
redepositing, as applicable, thereof, (B) to see to any insurance or (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund.
SECTION 8.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee, the Master
Servicer and the Securities Administrator assume no responsibility for their
correctness. None of the Trustee, the Securities Administrator or the Master
Servicer makes any representation as to the validity or sufficiency of this
Agreement, of any Mortgage Loan, or any related document other than with respect
to the execution and authentication of the Certificates, if it so executed or
authorized the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor, the Securities Administrator, the Master Servicer
or the Servicer of any funds paid to the Depositor, the Securities
Administrator, the Master Servicer or the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor, the Securities Administrator, the Master
Servicer or the Servicer.
SECTION 8.04. Trustee and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator in its individual or
any other capacity may become the owner or pledgee of Certificates with the same
rights as it would have if it was not the Trustee or the Securities
Administrator.
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SECTION 8.05. Trustee's Fees and Expenses.
The Securities Administrator covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing by the Securities Administrator and the Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee.
SECTION 8.06. Indemnification and Expenses of Trustee.
(a) The Trustee and its respective directors, officers, employees
and agents shall be entitled to indemnification from the Trust Fund for any
loss, liability or expense incurred in connection with any legal proceeding or
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with the acceptance or administration of the trusts created
hereunder or in connection with the performance of their duties hereunder,
including any applicable fees and expenses payable hereunder, and the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:
(i) with respect to any such claim, the Trustee shall have
given the Depositor and the Holders written notice thereof promptly after the
Trustee shall have knowledge thereof; provided that failure to so notify shall
not relieve the Trust Fund of the obligation to indemnify the Trustee; however,
any reasonable delay by the Trustee to provide written notice to the Depositor
and the Holders promptly after the Trustee shall have obtained knowledge of a
claim shall not relieve the Trust Fund of the obligation to indemnify the
Trustee under this Section 8.06;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Depositor in preparing such
defense;
(iii) notwithstanding anything to the contrary in this Section
8.06, the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld; and
(iv) any such loss, liability or expense to be indemnified by
the Trust Fund must constitute an "unanticipated expense" of the Trust Fund
within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
(b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advancements incurred or made by the Trustee in accordance
with this Agreement (including fees and expenses of its counsel and all persons
not regularly in its employment), except any such expenses, disbursements and
advancements that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).
(c) The Trustee's right to indemnification and reimbursement shall
be subject to a cap of $300,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home
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loans or any predatory or abusive lending laws, which amounts shall in no case
be subject to any such limitation; provided, however, that such cap shall apply
only if NIM Notes have been issued and shall cease to apply after the date on
which any NIM Notes are paid in full and all amounts which the NIMs Insurer is
entitled to be paid or reimbursed shall have been paid or reimbursed. Any
amounts not in excess of this cap may be withdrawn by the Trustee from the
Certificate Account at any time
SECTION 8.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating that would
not cause any of the Rating Agencies to reduce their respective ratings of any
Class of Certificates below the ratings issued on the Closing Date (or having
provided such security from time to time as is sufficient to avoid such
reduction) and reasonably acceptable to the NIMs Insurer. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Securities Administrator, the NIMs
Insurer and their respective Affiliates; provided, however, that such
corporation cannot be an Affiliate of the Servicer other than the Trustee in its
role as successor to the Servicer.
SECTION 8.08. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Servicer, the NIMs Insurer and the Securities Administrator by mailing notice of
resignation by first class mail, postage prepaid, to the Certificateholders at
their addresses appearing on the Certificate Register and each Rating Agency,
not less than 60 days before the date specified in such notice when, subject to
Section 8.09, such resignation is to take effect, and (2) acceptance of
appointment by a successor trustee acceptable to the NIMs Insurer in accordance
with Section 8.09 and meeting the qualifications set forth in Section 8.07. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice or resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer or (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the NIMs
Insurer may remove the Trustee and the Depositor with the consent of the NIMS
insurer shall promptly appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Securities Administrator and one copy of
which shall be delivered to the successor trustee.
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The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, with the consent of the NIMs Insurer, or the NIMs Insurer upon
failure of the Trustee to perform its obligations hereunder may at any time
remove the Trustee and the Depositor shall appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIMs Insurer), one complete
set of which instruments shall be delivered by the successor Trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
the NIMs Insurer and each Rating Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.09 hereof.
If the Securities Administrator and the Master Servicer are the same
Person, then at any time the Securities Administrator resigns or is removed
hereunder, the Master Servicer shall likewise be terminated as master servicer
hereunder.
SECTION 8.09. Successor Trustee.
Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the NIMs Insurer and the Securities Administrator an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.10. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the
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power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and the NIMs Insurer to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
Any such co-trustee or separate trustee shall be subject to the written approval
of the Servicer and the NIMs Insurer. The Trustee shall not be liable for the
actions of any co-trustee; provided the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Servicer and the NIMs
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.07 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Servicer shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee, with the consent of the NIMs Insurer, may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer, the NIMs Insurer, the Securities Administrator and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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SECTION 8.12. Tax Matters.
(a) It is intended that each of the REMICs provided for herein shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such REMIC to qualify as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. It is also intended
that each of the grantor trusts provided for in Section 2.07 hereof shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such grantor trust to qualify as, a grantor trust under the
provisions of Subpart E, Part I of Subchapter J of the Code. In furtherance of
such intention, the Securities Administrator covenants and agrees that it shall
act as agent (and the Securities Administrator is hereby appointed to act as
agent) on behalf of each of the REMICs provided for herein and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each of the REMICs and grantor
trusts provided for herein, containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for each of the REMICs provided for
herein; (c) make or cause to be made elections, on behalf of each of the REMICs
provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions or other applicable
law, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Person that is not a Permitted Transferee, or a
pass through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of each of the REMICs
and grantor trusts provided for herein at all times that any Certificates are
outstanding so as to maintain the status of each of the REMICs provided for
herein as a REMIC under the REMIC Provisions and the status of each of the
grantor trusts provided for herein as a grantor trust under Subpart E, Part I of
Subchapter J of the Code; (g) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any of the REMICs provided for herein or result in the imposition of tax upon
any such REMIC; (h) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the grantor trust status
under Subpart E, Part I of Subchapter J of the Code of any of the grantor trusts
provided for herein or result in the imposition of tax upon any such grantor
trust; (i) pay, from the sources specified in the last paragraph of this Section
8.12, the amount of any federal, state and local taxes, including prohibited
transaction taxes as described below, imposed on each of the REMICs provided for
herein prior to the termination of the Trust Fund when and as the same shall be
due and payable (but such obligation shall not prevent the Trustee or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings); (j) sign or
cause to be signed federal, state or local income tax or information returns;
(k) maintain records relating to each of the REMICs provided
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for herein, including but not limited to the income, expenses, assets and
liabilities of each of the REMICs and grantor trusts provided for herein, and
the fair market value and adjusted basis of the Trust Fund property determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (l) as and when
necessary and appropriate, represent each of the REMICs provided for herein in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
In order to enable the Securities Administrator to perform its duties as
set forth herein, the Depositor shall provide, or cause to be provided, to the
Securities Administrator within 10 days after the Closing Date all information
or data that the Securities Administrator requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor, any such additional information or data that the
Securities Administrator may, from time to time, request in order to enable the
Securities Administrator to perform its duties as set forth herein. The
Depositor hereby agrees to indemnify the Securities Administrator for any
losses, liabilities, damages, claims or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Securities Administrator on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any
of the REMICs provided for herein as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of any of such REMICs as defined
in Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Securities Administrator, if any such other tax arises out of or results
from a breach by the Securities Administrator of any of its obligations under
this Agreement or as a result of the location of the Securities Administrator,
(ii) any party hereto (other than the Securities Administrator) to the extent
any such other tax arises out of or results from a breach by such other party of
any of its obligations under this Agreement or as a result of the location of
such other party or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts (other than amounts derived
by the Trust Fund from a payment on the Cap Contracts) otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts (other than amounts derived by the Trust Fund from
a payment on the Cap Contracts) otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class C
Certificates (pro rata), second to the Class B-5 Certificates (pro rata), third
to the Class B-4 Certificates (pro rata), fourth to the Class B-3 Certificates
(pro rata), fifth, to the Class B-2 Certificates (pro rata), sixth, to the Class
B-1 Certificates (pro rata), seventh to the Class M-6 Certificates (pro rata),
eighth to the Class M-5 Certificates (pro rata), ninth to the Class M-4
Certificates (pro rata), tenth to the Class M-3 Certificates (pro rata),
eleventh to the Class M-2 Certificates (pro rata), twelfth to the Class M-1
Certificates (pro rata), and thirteenth to the Class A Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class R Certificate, the Securities Administrator is
hereby authorized pursuant to such instruction to retain on any Distribution
Date, from the Holders of the Class R Certificate (and, if necessary, from the
Holders of all other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Securities Administrator agrees to promptly notify in
writing the party liable for any such tax of the amount thereof and the due date
for the payment thereof.
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(b) Each of the Depositor, Securities Administrator and the Trustee
agrees not to take or omit to take knowingly or intentionally, any action or
omit to take any action that would cause the termination of the REMIC status of
any of the REMICs provided for herein or result in the imposition of a tax upon
any of the REMICs provided for herein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Master Servicer, the Servicer, the Securities Administrator
and the Trustee created hereby with respect to the Trust Fund shall terminate
upon the earlier of (a) an Optional Termination and (b) the later of (i) the
maturity or other liquidation of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof and
(ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Optional
Termination Date, the Servicer may, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. In connection with such termination, the Optional
Termination Price shall be delivered to the Securities Administrator no later
than the Business Day immediately preceding the related Distribution Date.
Notwithstanding anything to the contrary herein, the Optional Termination Amount
paid to the Securities Administrator by the Servicer shall be deposited by the
Securities Administrator directly into the Certificate Account immediately upon
receipt. Upon any termination pursuant to this Section 9.01(b), the Securities
Administrator shall, out of the Optional Termination Amount deposited into the
Certificate Account, pay to the Trustee, the Master Servicer, the Securities
Administrator or the Servicer, as applicable, the aggregate amount of any
unreimbursed out-of-pocket costs and expenses owed to the Trustee, the Master
Servicer, the Securities Administrator or the Servicer and any unpaid or
unreimbursed Servicing Fees, Securities Administrator Fees, Advances and
Servicing Advances.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Collection Account, the Securities
Administrator shall send a final distribution notice promptly to each
Certificateholder and the NIMs Insurer or (ii) the Securities Administrator
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Securities Administrator shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Securities Administrator specified in such notice.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
Securities Administrator by letter to Certificateholders mailed no later than
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the last calendar day of the month immediately preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the location of
the office or agency at which such presentation and surrender must be made, and
(c) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Securities Administrator will
give such notice to the NIMs Insurer and each Rating Agency at the time such
notice is given to Certificateholders.
In the event such notice is given, the Securities Administrator shall
cause all funds in the Collection Account to be deposited in the Certificate
Account on the Business Day prior to the applicable Distribution Date in an
amount equal to the final distribution in respect of the Certificates. Upon such
final deposit with respect to the Trust Fund, certification to the Trustee that
such required amount has been deposited in the Trust Fund and the receipt by the
Trustee of a Request for Release therefor, the Trustee shall promptly release to
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Certificate Account in
the order and priority set forth in Section 4.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto. Upon
payment to the Class R Certificateholders of such funds and assets, neither the
Securities Administrator nor the Trustee shall have any further duties or
obligations with respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Servicer completes an Optional Termination as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements (unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Trustee, the NIMs Insurer or
Servicer, as applicable to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of any of the REMICs provided
for herein as defined in Section 860F of the Code, or (ii) cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding):
(i) The Depositor shall establish a 90-day liquidation period
and notify the Trustee and the Securities Administrator thereof, and the
Securities Administrator shall in turn specify the first day of such period in a
statement attached to the final tax returns of each of the REMICs provided for
herein pursuant to Treasury Regulation Section 1.860F-1. The Depositor shall
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder;
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(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or cause
to be distributed or credited, to the Class R Certificateholders all cash on
hand (other than cash retained to meet outstanding claims), and the Trust Fund
shall terminate at that time, whereupon neither the Securities Administrator nor
the Trustee shall have any further duties or obligations with respect to sums
distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) Upon the written request of the Depositor, the Trustee as agent
for each REMIC hereby agrees to adopt and sign a plan of complete liquidation as
provided to it by the Depositor. In addition, the Trustee shall take such other
action in connection therewith as may be reasonably requested by the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer, the Securities Administrator and the Trustee,
with the consent of the NIMs Insurer and without the consent of any of the
Certificateholders to,
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein
which may be inconsistent with any other provision herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the
terms or provisions contained in this Agreement, provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel addressed to the Trustee to such effect, adversely affect in
any material respect the interests of any Holder; provided, further, however,
that such amendment will be deemed to not adversely affect in any material
respect the interest of any Holder if the Person requesting such amendment
obtains a letter from each Rating Agency stating that such amendment will not
result in a reduction or withdrawal of its rating of any Class of the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Servicer, the
Securities Administrator and the Trustee may at any time and from time
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to time amend this Agreement to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of any of the REMICs provided for herein as REMICs under the Code
or to avoid or minimize the risk of the imposition of any tax on the Trust Fund
or any of the REMICs provided for herein pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee, the NIMs Insurer and the Securities
Administrator shall have been provided an Opinion of Counsel addressed to the
Trustee, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, the NIMs
Insurer or the Securities Administrator, to the effect that such action is
necessary or appropriate to maintain such qualification or to avoid or minimize
the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicer, the Securities Administrator and the Trustee and
the Holders of the Certificates affected thereby evidencing not less than 66
2/3% of the Voting Rights, with the consent of the NIMs Insurer, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee, to the effect that such amendment is permitted
hereunder and will not cause the imposition of any tax on the Trust Fund, any of
the REMICs provided for herein or the Certificateholders or cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding. A copy of such Opinion of Counsel shall be
provided to the NIMs Insurer.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee or upon the written request of
the Trustee to the Securities Administrator, the Securities Administrator shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Securities Administrator may prescribe.
Nothing in this Agreement shall require the Trustee or the Securities
Administrator to enter into an amendment without receiving an Opinion of
Counsel, satisfactory to the Trustee or the Securities Administrator that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
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The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.
SECTION 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices.
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to each Rating Agency and the NIMs Insurer with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
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(iii) The resignation or termination of the Trustee, the
Securities Administrator, the Master Servicer or the Servicer and the
appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03 and 3.12;
(v) The final payment to Certificateholders; and
(vi) Any change in the location of the Certificate Account.
(b) The Securities Administrator shall promptly furnish or make
available to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxxx Xxxxx Mortgage Investors, Inc. 000 Xxxxx Xxxxxx, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies, (i) Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and (ii) Xxxxx'x Investors Service, Inc., 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the case of the Servicer,
Xxxxxx Loan Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx XxXxxxx; (d) in the case of the Master Servicer and Securities
Administrator, Xxxxx Fargo Bank, N.A., 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Client Services Manager - Ownit Mortgage Loan Trust,
Series 2005-2; (e) in the case of the Trustee, HSBC Bank USA, National
Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and in the case of any
of the foregoing persons, such other addresses as may hereafter be furnished by
any such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Securities Administrator and
Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
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The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 10.09. Inspection and Audit Rights.
The Master Servicer and Servicer each agree that, on reasonable prior
notice, it will permit any representative of the Depositor or the Trustee during
the Master Servicer's or Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer or
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the Depositor or the Trustee and to discuss its affairs, finances
and accounts relating to the Mortgage Loans with its officers, employees,
agents, counsel and independent public accountants (and by this provision the
Master Servicer and the Servicer each hereby authorizes such accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 10.09 shall be borne by the party requesting
such inspection; all other such expenses shall be borne by the Servicer or
Master Servicer, as the case may be.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be
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nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Securities Administrator pursuant to this
Agreement, are and shall be deemed fully paid.
SECTION 10.11. Third Party Rights.
The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
SECTION 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and any
successor thereto shall furnish to the NIMs Insurer a copy of any notice,
direction, demand, opinion, schedule, list, certificate, report, statement,
filing, information, data or other communication provided by it or on its behalf
to any other Person pursuant to this Agreement at the same time, in the same
form and in the same manner as such communication is so provided and shall
address or cause such communication to be addressed to the NIMs Insurer in
addition to any other addressee thereof. The Servicer shall cause the NIMs
Insurer to be an addressee of any report furnished pursuant to this Agreement.
With respect to the Securities Administrator, such obligation shall be satisfied
with the provision of access to the NIMs Insurer to the Securities
Administrator's website.
(b) Wherever in this Agreement there shall be a requirement that
there be no downgrade, reduction, withdrawal or qualification of or other effect
on the rating of any Class of Certificates by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIMs Insurer to make a required payment under the policy insuring
the NIM Notes (such event, a "NIMs Insurer Default"), wherever in this Agreement
there shall be a requirement that any Person or any communication, object or
other matter be acceptable or satisfactory to or otherwise receive the consent
or other approval of any other Person (whether as a condition to the eligibility
of such Person to act in any capacity, as a condition to any circumstance or
state of affairs related to such matter, or otherwise), there also shall be
deemed to be a requirement that such Person or matter be approved in writing by
the NIMs Insurer, which approval shall not be unreasonably withheld or delayed.
SECTION 10.13. Assignment; Sales; Advance Facilities.
(a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 10.13(e) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all of the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the NIMs Insurer, Securities Administrator, Trustee, Certificateholders or any
other party shall be required before the Servicer may enter into an Advance
Facility nor shall the NIMs Insurer, Securities Administrator, the Trustee or
the Certificateholders be a third party beneficiary of any obligation of an
Advance Financing Person to the Servicer. Notwithstanding the existence of any
Advance Facility under which an Advance Financing Person agrees to fund Advances
and/or Servicing Advances, (A) the Servicer (i) shall remain
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obligated pursuant to this Agreement to make Advances and/or Servicing Advances
pursuant to and as required by this Agreement and (ii) shall not be relieved of
such obligations by virtue of such Advance Facility and (B) neither the Advance
Financing Person nor any Servicer's Assignee (as hereinafter defined) shall have
any right to proceed against or otherwise contact any Mortgagor for the purpose
of collecting any payment that may be due with respect to any related Mortgage
Loan or enforcing any covenant of such Mortgagor under the related Mortgage Loan
documents.
(b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Securities
Administrator and the Trustee at the address set forth in Section 10.05 hereof a
written notice (an "Advance Facility Notice"), stating (a) the identity of the
Advance Financing Person, (b) the identity of the Person (the "Servicer's
Assignee") that will, subject to Section 10.13(c) hereof, have the right to make
withdrawals from the Collection Account pursuant to Section 3.08 hereof to
reimburse previously unreimbursed Advances and/or Servicing Advances ("Advance
Reimbursement Amounts") and (c) that the Servicer's Assignee shall agree to be
bound by the provisions of this Section 10.13. The Advance Facility Notice shall
be executed by the Servicer, the Advance Financing Person and the Servicer's
Assignee. Advance Reimbursement Amounts (i) shall consist solely of amounts in
respect of Advances and/or Servicing Advances for which the Servicer would be
permitted to reimburse itself in accordance with Section 3.08 hereof, assuming
the Servicer had made the related Advance(s) and/or Servicing Advance(s) and
(ii) shall not consist of amounts payable to a successor Servicer in accordance
with Section 3.08 hereof to the extent permitted under Section 10.13(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person, shall be entitled to
receive reimbursements of Advances and/or Servicing Advances in accordance with
Section 3.08 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice to the Trustee in the manner set
forth in Section 10.05 hereof. Upon receipt of such written notice, the Servicer
shall no longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately have the
right to receive from the Collection Account all Advance Reimbursement Amounts.
Notwithstanding the foregoing, and for the avoidance of doubt, (i) the Servicer
and/or the Servicer's Assignee shall only be entitled to reimbursement of
Advance Reimbursement Amounts hereunder pursuant to Section 3.08 of this
Agreement and shall not otherwise be entitled to make withdrawals of, or
receive, Advance Reimbursement Amounts that shall be deposited in the Collection
Account pursuant to Section 3.05 hereof, and (ii) none of the Trustee or the
Certificateholders shall have any right to, or otherwise be entitled to, receive
any Advance Reimbursement Amounts to which the Servicer or Servicer's Assignee,
as applicable, shall be entitled pursuant to Section 3.08 hereof. An Advance
Facility may be terminated by the joint written direction of the Servicer and
the related Advance Financing Person. Written notice of such termination shall
be delivered to the Trustee in the manner set forth in Section 10.05 hereof.
Upon an Event of Default or if the Trustee otherwise shall reasonably request,
the Servicer shall maintain and provide to any successor servicer or the Trustee
as successor servicer a detailed accounting on a loan-by-loan basis as to
amounts advanced by, pledged or assigned to, and reimbursed to any Advance
Financing Person (and such successor servicer or Trustee may rely on such
information).
(d) [RESERVED]
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an
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Advance Reimbursement Amount related to Advances and/or Servicing Advances that
were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer's Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
be reimbursed by the Advance Financing Person for all Advances and/or Servicing
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.
(f) For purposes of any certification of a Servicing Officer of the
Servicer made pursuant to Section 4.01, any Nonrecoverable Advance or
Nonrecoverable Servicing Advance referred to therein may have been made by such
Servicer or any predecessor Servicer. In making its determination that any
Advance or Servicing Advance theretofore made has become a Nonrecoverable
Advance or Nonrecoverable Servicing Advance, the Servicer shall apply the same
criteria in making such determination regardless of whether such Advance or
Servicing Advance shall have been made by the Servicer or any predecessor
Servicer.
(g) None of the Trustee, the Securities Administrator or the Master
Servicer shall, as a result of the existence of any Advance Facility, have any
additional duty or liability with respect to the payment of any Advance
Reimbursement Amount, have any additional responsibility to track or monitor
Advance Reimbursement Amounts or any Advance Facility, and, is not and shall not
be obligated to make any payment with respect to any Advance Reimbursement
Amount.
(h) None of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor, the Securities
Administrator, the Master Servicer or the Trustee have any additional
responsibility to track or monitor the administration of the Advance Facility or
the payment of Advance Reimbursement Amounts to the Servicer's Assignee. The
Servicer shall indemnify the Depositor, the Securities Administrator, the Master
Servicer, the Trustee, any successor servicer and the Trust Fund for any claim,
loss, liability or damage resulting from any claim by the related Advance
Financing Person, except to the extent that such claim, loss, liability or
damage resulted from or arose out of negligence, recklessness or willful
misconduct on the part of the Depositor, the Trustee or any successor servicer,
as the case may be, or failure by the successor servicer or the Trustee, as the
case may be, to remit funds as required by this Agreement or the commission of
an act or omission to act by the successor servicer or the Trustee, as the case
may be, and the passage of any applicable cure or grace period, such that an
Event of Default under this Agreement occurs or such entity is subject to
termination for cause under this Agreement.
ARTICLE XI
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
SECTION 11.01. Master Servicer.
The Master Servicer shall supervise, monitor and oversee the obligation of
the Servicer to service and administer the Mortgage Loans in accordance with the
terms of this Agreement and shall have full power and authority to do any and
all things which it may deem necessary or desirable in connection with such
master servicing and administration. In performing its obligations hereunder,
the Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and consult
with the Servicer as necessary from time to time to carry out the Master
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Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Servicer and shall cause the Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by the Servicer under
this Agreement. The Master Servicer shall independently and separately monitor
the Servicer's servicing activities with respect to each related Mortgage Loan,
reconcile the results of such monitoring with such information provided in the
previous sentence on a monthly basis and coordinate corrective adjustments to
the Servicer's and Master Servicer's records, and based on such reconciled and
corrected information, prepare any other information and statements required to
be provided by the Master Servicer hereunder. Except during any time where the
Master Servicer is acting as servicer hereunder, neither the Master Servicer nor
the Securities Administrator shall have any responsibility for reviewing or
reconciling the Collection Account or for any expenses or other consequences
resulting from any failure of such Collection Account to be so reconciled.
The Trustee shall furnish the Servicer and/or the Master Servicer with any
limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicer and/or the Master Servicer to
execute in the name of the Trustee, as applicable, all documents reasonably
required to perform the servicing functions described in Article III or this
Article XI. The Trustee shall have no responsibility for any action of the
Master Servicer or the Servicer pursuant to any such limited power of attorney
and shall be indemnified by the Master Servicer or the Servicer, as applicable,
for any cost, liability or expense incurred by the Trustee in connection with
such Person's misuse of any such power of attorney.
The Master Servicer and the Securities Administrator shall provide access
to the records and documentation in possession of the Master Servicer or the
Securities Administrator regarding the related Mortgage Loans and REO Property
and the master servicing and servicing thereof to the Certificateholders, the
FDIC, and the supervisory agents and examiners of the FDIC, such access being
afforded only upon reasonable prior written request and during normal business
hours at the office of the Master Servicer or the Securities Administrator;
provided, however, that, unless otherwise required by law, neither of the Master
Servicer nor the Securities Administrator shall be required to provide access to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Master Servicer and the Securities
Administrator shall allow representatives of the above entities to photocopy any
of the records and documentation and shall provide equipment for that purpose at
a charge that covers the Master Servicer's or the Securities Administrator's
actual costs.
The Trustee shall execute and deliver to the Servicer or the Master
Servicer upon request any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Mortgage Loan
Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or any other
Mortgage Loan Document or otherwise available at law or equity.
SECTION 11.02. Monitoring of Servicer.
(a) The Master Servicer shall be responsible for monitoring the
compliance by the Servicer with its duties under this Agreement. In the review
of the Servicer's activities, the Master Servicer may rely upon an Officer's
Certificate of the Servicer with regard to the Servicer's compliance with the
terms of this Agreement. In the event that the Master Servicer, in its judgment,
determines that the Servicer should be terminated in accordance with the terms
hereof, or that a notice should be sent pursuant to the terms hereof with
respect to the occurrence of an event that, unless cured, would constitute a
Servicer Event of Default, the Master Servicer shall notify the Servicer, the
Seller and the
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Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Securities
Administrator and the Certificateholders, shall enforce the obligations of the
Servicer under this Agreement and shall, in the event that the Servicer fails to
perform its obligations in accordance with this Agreement, subject to the
preceding paragraph, Section 3.04 and Article VII, terminate the rights and
obligations of the Servicer hereunder in accordance with the provisions of
Article VII. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) Upon termination of the rights of the Servicer upon the
Servicer's failure to perform its obligations in accordance with this Agreement,
the Master Servicer shall be entitled to be reimbursed by the Servicer (or from
amounts on deposit in the Collection Account if the Servicer is unable to
fulfill its obligations hereunder) for all reasonable out-of-pocket or third
party costs associated with the transfer of servicing from a predecessor
Servicer (or if the predecessor Servicer is the Master Servicer, from the
Servicer immediately preceding the Master Servicer), including, without
limitation, any reasonable out-of-pocket or third party costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Master Servicer to correct any errors or insufficiencies in the servicing data
or otherwise to enable the Master Servicer to service the Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.
(d) The Master Servicer shall require the Servicer to comply with
the remittance requirements and other obligations set forth in this Agreement.
(e) If the Master Servicer acts as successor to the Servicer, it
will not assume liability for the representations and warranties of the
terminated Servicer.
SECTION 11.03. Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
SECTION 11.04. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Section 8.12, to do any and all things that it may deem necessary or desirable
in connection with the master servicing and administration of the Mortgage
Loans, including but not limited to the power and authority (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary consents
or waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds, and
(iv) to
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effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan, in each case, in accordance with the
provisions of this Agreement; provided, however, that the Master Servicer shall
not (and, consistent with its responsibilities under Section 11.02, shall not
permit the Servicer to) knowingly or intentionally take any action, or fail to
take (or fail to cause to be taken) any action reasonably within its control and
the scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause any REMIC
formed hereby to fail to qualify as a REMIC or result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (at the expense of the Master
Servicer) to the effect that the contemplated action will not cause any REMIC
formed hereby to fail to qualify as a REMIC or result in the imposition of a tax
upon any REMIC. The Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer, with any powers of attorney empowering the
Master Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the Master Servicer and shall be indemnified by the Master
Servicer for any cost, liability or expense incurred by the Trustee in
connection with such Person's use or misuse of any such power of attorney). If
the Master Servicer or the Trustee has been advised that it is likely that the
laws of the state in which action is to be taken prohibit such action if taken
in the name of the Trustee or that the Trustee would be adversely affected under
the "doing business" or tax laws of such state if such action is taken in its
name, the Master Servicer shall join with the Trustee in the appointment of a
co-Trustee pursuant to Section 8.11. In the performance of its duties hereunder,
the Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
SECTION 11.05. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit to the Trustee such documents
and instruments coming into the possession of the Master Servicer from time to
time as are required by the terms hereof to be delivered to the Trustee. Any
funds received by the Master Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be deposited in the
Certificate Account. The Master Servicer shall, and shall cause the Servicer to,
provide access to information and documentation regarding the Mortgage Loans to
the Securities Administrator, its agents and accountants at any time upon
reasonable request and during normal business hours, and to Certificateholders
that are savings and loan associations, banks or insurance companies, the OTS,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest
- 146 -
payments or from Liquidation Proceeds or Insurance Proceeds, shall be deposited
in the Certificate Account.
SECTION 11.06. Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee shall retain possession and custody of the originals (to the
extent available) of any primary mortgage insurance policies, or certificate of
insurance if applicable, and any certificates of renewal as to the foregoing as
may be issued from time to time as contemplated by this Agreement. Until all
amounts distributable in respect of the Certificates have been distributed in
full and the Master Servicer and the Servicer have otherwise fulfilled their
respective obligations under this Agreement, the Trustee shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee, upon the execution or receipt
thereof the originals of any primary mortgage insurance policies, any
certificates of renewal, and such other documents or instruments that constitute
the Mortgage File that come into the possession of the Master Servicer from time
to time.
SECTION 11.07. Compensation for the Master Servicer and the Securities
Administrator.
As compensation for the activities of the Master Servicer and the
Securities Administrator hereunder, the Master Servicer and the Securities
Administrator shall be entitled to a portion of the income from investment of or
earnings on the funds held from time to time in the Certificate Account, as
provided in Section 3.05(g). Each of the Master Servicer and the Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
SECTION 11.08. Annual Statement as to Compliance.
Pursuant to this Agreement, the Master Servicer shall deliver to the
Depositor and the Trustee on or before March 15 of each year beginning in 2006,
(or such other date that the Depositor gives the Master Servicer at least 30
days prior notice of) in order to remain in compliance with the Section 302
Requirements, an Officer's Certificate stating, as to each signatory thereof,
that (i) a review of the activities of the Master Servicer during the preceding
calendar year and of performance under this Agreement or a similar agreement has
been made under such officer's supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Master Servicer has fulfilled all
of its obligations under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The Securities
Administrator shall forward a copy of each such statement received by it to each
Rating Agency. Copies of such statement shall be provided by the Securities
Administrator to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement has been delivered by the
Master Servicer to the Securities Administrator.
SECTION 11.09. Periodic Filings.
(a) As part of the Form 10-K required to be filed pursuant to the
terms of this Agreement, the Master Servicer shall include the accountants
report required pursuant to Section 3.18, the Officer's Certificate delivered by
the Servicer pursuant to Section 3.17 relating to the Servicer's performance of
its obligations under this Agreement and the Officer's Certificate delivered by
the Master Servicer pursuant to Section 11.08 relating to the Master Servicer's
performance of its obligations under this Agreement.
- 147 -
(b) The Master Servicer shall prepare for filing, and execute (other
than the initial filings and the Form 10-Ks), on behalf of the Trust Fund, and
file with the Securities and Exchange Commission, (i) within 15 days after each
Distribution Date in each month, each Monthly Statement on Form 8-K under the
Exchange Act executed by the Master Servicer, (ii) on or before March 30 of each
year beginning in 2006 or such other date in order to remain in compliance with
the Section 302 Requirements, a Form 10-K under the Exchange Act executed by the
Master Servicer, including any certification (the "Certification") required by
the Section 302 Requirements, and (iii) any and all reports, statements and
information (to be provided to the Master Servicer in XXXXX-compatible format)
respecting the Trust Fund and/or the Certificates required to be filed on behalf
of the Trust Fund under the Exchange Act, provided that the Depositor provides
notice to the Master Servicer and the Securities Administrator that such
reports, statements or information is so required to be filed and provides the
Master Servicer with adequate compensation therefor. The Certification and Form
10-K shall be executed by a senior officer of the Master Servicer. Upon such
filing with the Securities and Exchange Commission, the Master Servicer shall
promptly deliver to the Depositor a copy of any such executed report, statement
or information. Prior to making any such filings and certifications, the Master
Servicer shall comply with the provisions set forth in this Section. The Master
Servicer shall file a Form 15 under the Exchange Act unless the Depositor
directs otherwise in writing. The Depositor hereby grants to the Master Servicer
a limited power of attorney to execute and file each such document on behalf of
the Depositor. Such power of attorney shall continue until either the earlier of
(i) receipt by the Master Servicer from the Depositor of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Depositor
agrees to promptly furnish to the Master Servicer, from time to time upon
request, such further information, reports, and financial statements within its
control related to this Agreement and the Mortgage Loans as the Depositor
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Master Servicer shall have no responsibility to file any items
other than those specified in this Section.
(c) [RESERVED]
(d) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which the Master Servicer
is obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this
Section. In the event a Form 15 is properly filed pursuant to paragraph (b) of
this Section, there shall be no further obligations under paragraphs (a) through
(c) of this Section with respect to the fiscal year in which the Form 15 is
filed (other than the obligations in paragraphs (a) and (b) of this Section to
be performed in such fiscal year that relate back to the prior fiscal year).
SECTION 11.10. Obligation of the Master Servicer in Respect of Prepayment
Interest Shortfalls.
In the event a Prepayment Interest Shortfall occurs, the Master Servicer
shall deposit in the Certificate Account not later than the related Distribution
Date an amount equal to the aggregate Prepayment Interest Shortfalls
attributable to Principal Prepayments on the related Mortgage Loans for the
related Distribution Date, to the extent such Prepayment Interest Shortfalls
were required to be, but were not so paid by the Servicer.
- 148 -
IN WITNESS WHEREOF, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer, and the Servicer have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By: ______________________________________
Name: Xxxxxxx Xxxxxx
Title: President
HSBC BANK USA, NATIONAL ASSOCIATION
as Trustee
By:_______________________________________
Name:
Title:
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:_______________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:_______________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXXX LOAN SERVICING LP,
as Servicer
By:_______________________________________
Name:
Title:
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
[INTENTIONALLY OMITTED]
B-1-1
EXHIBIT B-2
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-2-1
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
[INTENTIONALLY OMITTED]
X-0-0
XXXXXXX X
XXXXXXXX
X-0
XXXXXXX X
FORM OF TRUSTEE CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of March 1, 2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, HSBC Bank USA, National Association, as trustee and Xxxxxx Loan
Servicing LP, as servicer (the "Pooling and Servicing Agreement"), the
undersigned, as custodian, hereby certifies that [, except as set forth in
Schedule A hereto,] as to each Mortgage Loan listed in the Mortgage Loan
Schedule attached hereto (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan.
The custodian has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number, the name of the Mortgagor, the street address (excluding zip code), the
mortgage interest rate at origination, the gross margin (if applicable), the
lifetime rate cap (if applicable), the periodic rate cap (if applicable), the
original principal
D-1
balance, the first payment due date and the original maturity date in each
Mortgage File conform to the respective Mortgage Loan number and name listed on
the Mortgage Loan Schedule and (ii) the existence in each Mortgage File of each
of the documents listed in subparagraphs (i)(A) through (F), inclusive, or
(ii)(A) through (K), inclusive, as applicable, of Section 2.01 in the Agreement.
The custodian makes no representations or warranties as to the validity,
legality, recordability, sufficiency, enforceability or genuineness of any of
the documents contained in each Mortgage Loan or the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Pooling and Servicing
Agreement.
XXXXX FARGO BANK, N.A.,
AS CUSTODIAN ON BEHALF OF HSBC AS TRUSTEE
BY:
NAME:
TITLE:
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
Ladies and Gentlemen:
We propose to purchase Ownit Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-2, Class R, described in the Prospectus
Supplement, dated April ___, 2005, and Prospectus, dated January 19, 2005.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Pooling and Servicing Agreement dated March 1, 2005 relating to
this issuance of the Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-2 (the "Pooling and servicing Agreement").
1. We certify that (a) we are not a disqualified organization and (b) we
are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they became
due, (b) we intend, and believe that we will be able, to continue to pay our
debts as they become due in the future, (c) we understand that, as beneficial
owner of the Class R Certificate, we may incur tax liabilities in excess of any
cash flows generated by the Class R Certificate, and (d) we intend to pay any
taxes associated with holding the Class R Certificate as they become due and (e)
we will not cause income from the Class R Certificate to be attributable to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)
_____ The Class R Certificate will be registered in our name.
_____ The Class R Certificate will be held in the name of our nominee,
_________________, which is not a disqualified organization.
----------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-1
4. We certify that we are not an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a
plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code (each, a "Plan"), and are not directly or indirectly
acquiring the Class R Certificate on behalf of or with any assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the Class
R Certificate in connection with the conduct of a trade or business within the
United States and have furnished the transferor and the Securities Administrator
with a duly completed and effective Internal Revenue Service Form W-8ECI or
successor form at the time and in the manner required by the Code; for this
purpose the term "U.S. person" means a citizen or resident of the United States,
a corporation, or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of the source of its income, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such U.S. persons have the authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons. We agree that any breach by us
of this certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to transfer
any interest in the Class R Certificate, we will transfer such interest in the
Class R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person or will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and will furnish us and the Securities Administrator with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Securities Administrator a letter in the form of this letter (including
the affidavit appended hereto) and, we will provide the Securities Administrator
a written statement substantially in the form of Exhibit E-2 to the Pooling and
Servicing Agreement.
E-1-2
7. We hereby designate _______________________ as our fiduciary to
act as the tax matters person for each of the REMICs provided for in the
Pooling and Servicing Agreement.
Very truly yours,
[PURCHASER]
By:_______________________________________
Name:
Title:
Accepted as of __________ __, 200__
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
Name:
Title:
E-1-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4)
of the Internal Revenue Code of 1986, as
amended, and (ii) certain provisions of the
Pooling and Servicing Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________ (the
"Transferee"),
2. the Transferee's Employer Identification number is
__________,
3. the Transferee is not a "disqualified organization" (as
defined below), has no plan or intention of becoming a
disqualified organization, and is not acquiring any of its
interest in the Ownit Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-2, Class R Certificate
on behalf of a disqualified organization or any other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc.("MLMI") has
consented to the transfer to the Transferee by executing
the form of Consent affixed as Appendix B to the
Transferee's Letter to which this Certificate is affixed as
Appendix A, the Transferee is a "U.S. person" (as defined
below),
5. that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
6. the Transferee has historically paid its debts as they
became due,
7. the Transferee intends, and believes that it will be able,
to continue to pay its debts as they become due in the
future,
8. the Transferee understands that, as beneficial owner of the
Class R Certificate, it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificate,
9. the Transferee intends to pay any taxes associated with
holding the Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by MLMI
(upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class R Certificate will not be
owned directly or indirectly by a disqualified organization,
and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE
[the transfer is not a direct or indirect transfer of the
Class R Certificate to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax
treaty) of the Transferee, and as to each of the residual
interests represented by the Class R Certificate, the
present value of
E-1-4
the anticipated tax liabilities associated with holding such
residual interest does not exceed the sum of:
A. the present value of any consideration given to the
Transferee to acquire such residual interest;
B. the present value of the expected future
distributions on such residual interest; and
C. the present value of the anticipated tax savings
associated with holding such residual interest as the
related REMIC generates losses.
For purposes of this declaration, (i) the Transferee is assumed to pay tax
at a rate equal to the highest rate of tax specified in Section 11(b)(1)
of the Code, but the tax rate specified in Section 55(b)(1)(B) of the Code
may be used in lieu of the highest rate specified in Section 11(b)(1) of
the Code if the Transferee has been subject to the alternative minimum tax
under Section 55 of the Code in the preceding two years and will compute
its taxable income in the current taxable year using the alternative
minimum tax rate, and (ii) present values are computed using a discount
rate equal to the Federal short-term rate prescribed by Section 1274(d) of
the Code for the month of the transfer and the compounding period used by
the Transferee;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year
of transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing
that any subsequent transfer of the Class R Certificate will be
to another eligible corporation in a transaction that satisfies
Treasury regulation Sections 1.860E-1(c)(4)(i),
1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and
such transfer will not be a direct or indirect transfer to a
foreign permanent establishment (within the meaning of an
applicable income tax treaty) of a domestic corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
E-1-5
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
--------------------------------------
By:
-----------------------------------
-----------------------------------
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
-----------------------------------------
, Secretary
-----------------------------------------
E-1-6
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this day of ,
200__.
------------------------------------
Notary Public
County of
State of
My commission expires the ________ day of ______________
By:
Name:_________________________
Title: _______________________
Dated:____________
E-1-7
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
_____________________________________
Name:
Title:
E-2-1
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
RE: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of March 1,
2005, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as master servicer and securities administrator, HSBC Bank USA,
National Association, as trustee and Xxxxxx Loan Servicing LP, as servicer.
Very truly yours,
_____________________________________
Name of Transferor
By:__________________________________
Name:
Title
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-2, Class [____] (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement, dated as of March 1, 2005 (the "Pooling
and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as master servicer (the
"Master Servicer") and securities administrator (the "Securities
Administrator"), HSBC Bank USA, National Association, as trustee (the "Trustee")
and Xxxxxx Loan Servicing LP, as servicer (the "Servicer"). [THE PURCHASER
INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR _________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Securities Administrator that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT,
THE 1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
ALSO COMPLIES WITH THE OTHER
G-1
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES
ADMINISTRATOR SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO
THE SECURITIES ADMINISTRATOR (A) AN INVESTMENT LETTER FROM THE PROSPECTIVE
INVESTOR; AND (B) REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE
OFFERING AND SALE OF THE CERTIFICATES.
3. The ERISA Restricted Certificates (other than the Class R Certificates)
will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES
ADMINISTRATOR HAS RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
OR A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF
THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING,
A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS
ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL
ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60,
OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE
SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE
ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER
TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAW
AND WILL NOT SUBJECT THE TRUSTEE, THE NIMS INSURER, THE MASTER SERVICER,
THE SECURITIES ADMINISTRATOR, THE SERVICER OR THE DEPOSITOR TO ANY
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING
AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE NIMS INSURER, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A
DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE
REPRESENTATION IN (A) OR (B) ABOVE.
4. The Class R Certificate will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH A REPRESENTATION
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE,
LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE
G-2
CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN.
5. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
6. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
7. The Purchaser will not nor has it authorized nor will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
8. The Purchaser of an ERISA Restricted Certificate (other than the Class
R Certificate) (A) is not an employee benefit plan subject to Title I of ERISA,
a plan subject to Section 4975 of the Code, a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") and is not directly or indirectly acquiring
such Certificates by, on behalf of, or with any assets of any such plan, or (B)
if the Certificate has been the subject of an ERISA-Qualifying Underwriting, is
an insurance company that is acquiring the Certificate with assets of an
"insurance company general account," as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60, and the acquisition and holding of
the Certificate are covered and exempt under Sections I and III of PTCE 95-60,
or (C) solely in the event the Certificate is a Definitive Certificate, herewith
delivers an Opinion of Counsel satisfactory to the Securities Administrator, and
upon which the Securities Administrator shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the NIMs Insurer, the Master Servicer, the Securities Administrator,
the Servicer or the Depositor to any obligation in addition to those expressly
undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the NIMs Insurer, the Master Servicer,
the Securities Administrator, the Servicer or the Depositor.
----------
* Not required of a broker/dealer purchaser.
G-3
9. The Purchaser of a Class R Certificate is not an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a plan
subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.
10. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
11. The Purchaser agrees to indemnify the Trustee, the Master Servicer,
the Securities Administrator, the Servicer and the Depositor against any
liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:_________________________________
Name:
Title:
G-4
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-2, Class [____] (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement, dated as of March 1, 2005 (the "Pooling
and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as master servicer (the
"Master Servicer") and securities administrator (the "Securities
Administrator"), HSBC Bank USA, National Association, as trustee (the
"Trustee"), Xxxxxx Loan Servicing LP, as servicer (the "Servicer"). [THE
PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR _________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d)(A) solely with respect to
ERISA Restricted Certificates, we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code"), a plan subject to any state, local, federal, non-U.S.
or other law substantively similar to the foregoing provisions of ERISA or the
Code ("Similar Law"), or Persons directly or indirectly acting on behalf of or
using any assets of any such plan, or (B) solely with respect to ERISA
Restricted Certificates (other than the Class R Certificates), if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, we are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
H-1
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(C) solely in the event the Certificate is an ERISA Restricted Certificate
(other than a Class R Certificate) and also a Definitive Certificate, we will
herewith deliver an Opinion of Counsel satisfactory to the Securities
Administrator, and upon which the Securities Administrator shall be entitled to
rely, to the effect that the acquisition and holding of the Certificate will not
constitute or result in a nonexempt prohibited transaction under Title I of
ERISA or Section 4975 of the Code, or a violation of Similar Law, and will not
subject the Trustee, the NIMs Insurer, the Master Servicer, the Securities
Administrator, the Servicer or the Depositor to any obligation in addition to
those expressly undertaken in the Pooling and Servicing Agreement, which Opinion
of Counsel shall not be an expense of the Trustee, the NIMs Insurer, the Master
Servicer, the Securities Administrator, the Servicer or the Depositor, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred Certificates for our own account or for resale pursuant to Rule 144A
and further understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed by us, based upon
certifications of such purchaser or information we have in our possession, to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
We agree to indemnify the Trustee, the Master Servicer, the Securities
Administrator, the Servicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By: ________________________________
Name:
Title:
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by Federal, State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over such institution or is a foreign
savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934, as
amended.
----------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
H-3
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of
the State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of
1974, as amended.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
H-4
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:_______________________________________
Name:
Title:
Date:_____________________________________
H-5
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
H-6
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:_________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
H-7
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the Pooling and Servicing Agreement dated as of March 1,
2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as master servicer and securities administrator, HSBC Bank USA,
National Association, as trustee and Xxxxxx Loan Servicing LP, as servicer (the
"Pooling and Servicing Agreement"), we request the release, and hereby
acknowledge receipt, of the Mortgage File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
____ 1. Mortgage Paid in Full
____ 2. Foreclosure
____ 3. Substitution
____ 4. Other Liquidation
(Repurchases, etc.)
____ 5. Nonliquidation
____
Address to which the Trustee should deliver the Mortgage File:
By:_________________________________
(authorized signer)
Address:____________________________
Date:_______________________________
I-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
XXXXX FARGO BANK, N.A.,
as Custodian
By: ___________________________________ ___________________________________
Signature Date
Documents returned to Custodian:
By: ___________________________________ ___________________________________
Signature Date
I-2
EXHIBIT J
FORM OF ADDITION NOTICE
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxxx Loan Servicing, LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: [______________]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
Re: Pooling and Servicing Agreement dated as of March 1, 2005, among
Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"),
Ownit, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator (the "Securities Administrator") Xxxxxx Loan Servicing, LP,
as servicer (the "Servicer") and HSBC Bank USA, N.A., as trustee (the
"Trustee") relating to Ownit Mortgage Loan Trust, Asset-Backed
Certificates, Series 2005-2
Ladies and Gentlemen::
Pursuant to Section 2.10 of the referenced Pooling and Servicing
Agreement, Xxxxxxx Xxxxx Mortgage Investors, Inc. has designated Subsequent
Mortgage Loans to be sold to the Trust Fund on [DATE], with a proposed
Subsequent Cut-of Date of _______, 2005, with an aggregate Stated Principal
Balance of $___________________ as of the proposed Subsequent Cut-off Date,
which Subsequent Mortgage Loans have not been rejected by any Rating Agency
pursuant to Section 2.10(d) of the Pooling and Servicing Agreement. Such
Subsequent Mortgage Loans with an aggregate Stated Principal Balance as of the
Subsequent Cut-off Date of $________ [and $___________] are proposed to be added
to Group [One/Two][and Group Two, respectively]. Capitalized terms not otherwise
defined herein have the meaning set forth in the Pooling and Servicing
Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
J-1
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
I, [identify the certifying individual], a [title] of Xxxxx Fargo Bank,
N.A., as securities administrator under the Pooling and Servicing Agreement
dated as of March 1, 2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, HSBC Bank USA, National Association, as trustee and Xxxxxx Loan
Servicing LP, as servicer (the "Agreement"), hereby certify to the Depositor,
and its officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
1. I have reviewed the Monthly Statements delivered pursuant to the Agreement
since the last Officer's Certificate executed pursuant to Section 3.21 of
the Agreement [or in the case of the first certification, since the
Cut-off Date] (the "Securities Administrator Information").
2. Based on my knowledge, the information in the Monthly Statement, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading
as of the date hereof;
3. Based on my knowledge, the Monthly Statements required to be prepared
by the Securities Administrator under the Agreement has been prepared
and provided in accordance with the Agreement; and
4. I am responsible for reviewing the activities performed by the Securities
Administrator under the Agreement and the Securities Administrator has, as
of the date hereof fulfilled its obligations under the Agreement and there
are no significant deficiencies relating to the Securities Administrator's
compliance with the Agreement.
Date:
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
By: ____________________________________
Name: __________________________________
Title: _________________________________
K-1
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Ownit Mortgage Loan Trust, Series
2005-2
Re: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-2
I, [identify the certifying individual], an authorized representative of
Xxxxxx Loan Servicing LP, as servicer under the Pooling and Servicing Agreement
dated as of March 1, 2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, HSBC Bank USA, National Association, as trustee and Xxxxxx Loan
Servicing LP, as servicer (the "Agreement"), hereby certify to the Securities
Administrator and the Depositor, and each of their respective officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. Based on my knowledge, the information in the annual statement of
compliance identified in Section 3.17 of the Agreement, the annual independent
public accountants' report identified in Section 3.18 of the Agreement and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Master Servicer, the Securities
Administrator and the Trustee taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the date of this certification;
2. The servicing information required to be provided to the Master
Servicer and the Securities Administrator by the Servicer under the Agreement
has been provided to the Master Servicer and the Securities Administrator;
3. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon the review required hereunder, and except as
disclosed in the annual statement of compliance identified in Section 3.17 of
the Agreement, the annual independent public accountants' report identified in
Section 3.18 of the Agreement and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans submitted
to the Master Servicer and the Securities Administrator, the Servicer has, as of
the date of this certification, fulfilled its obligations under this Agreement;
and
L-1
4. I have disclosed to the Master Servicer all significant deficiencies
relating to the Servicer's compliance with the minimum servicing standards in
accordance with a review conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or similar standard as set forth under
the Agreement.
Date:
Xxxxxx Loan Servicing LP, as Servicer
By: ____________________________________
Name: __________________________________
Title: _________________________________
X-0
XXXXXXX X-0
FORM OF DELINQUENCY REPORT
STANDARD FILE LAYOUT - DELINQUENCY REPORTING
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT
COMMENT
SERVICER_LOAN_NBR A unique number assigned to a loan by the
Servicer. This may be different than the
LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by
the originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by
an external servicer to identify a group
of loans in their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment
MM/DD/YYYY is due to the servicer at the end
of processing cycle, as reported by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim MM/DD/YYYY
was filed.
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was
filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy MM/DD/YYYY
has been approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From MM/DD/YYYY
Bankruptcy. Either by Dismissal,
Discharged and/or a Motion For Relief Was
Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved MM/DD/YYYY
By The Servicer
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For
A Loan Such As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is MM/DD/YYYY
Scheduled To End/Close
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually MM/DD/YYYY
Completed
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the
MM/DD/YYYY servicer with instructions to begin
foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to MM/DD/YYYY
Pursue Foreclosure
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney MM/DD/YYYY
in a Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is MM/DD/YYYY
expected to occur.
M-1-1
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the 2 No commas(,)
foreclosure sale. or dollar
signs ($)
EVICTION_START_DATE The date the servicer initiates eviction MM/DD/YYYY
of the borrower.
EVICTION_COMPLETED_DATE The date the court revokes legal MM/DD/YYYY
possession of the property from the borrower.
LIST_PRICE The price at which an REO property is 2 No commas(,)
marketed. or dollar
signs ($)
LIST_DATE The date an REO property is listed at a MM/DD/YYYY
particular price.
OFFER_AMT The dollar value of an offer for an REO 2 No commas(,)
property. or dollar
signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin MM/DD/YYYY
or by the Servicer.
REO_CLOSING_DATE The date the REO sale of the property is MM/DD/YYYY
scheduled to close.
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is
occupied.
PROP_CONDITION_CODE A code that indicates the condition of the
property.
PROP_INSPECTION_DATE The date a property inspection is MM/DD/YYYY
performed.
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property 2
based on brokers price opinion or
appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if 2
repairs are completed pursuant to a
broker's price opinion or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a borrower
to stop paying on a loan. Code indicates
the reason why the loan is in default for
this cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed MM/DD/YYYY
With Mortgage Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed MM/DD/YYYY
Claim Payment
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On 2 No commas(,)
Claim or dollar
signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance MM/DD/YYYY
Company
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance 2 No commas(,)
Company or dollar
signs ($)
M-1-2
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT
COMMENT
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was MM/DD/YYYY
Issued By The Pool Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance 2 No commas(,)
Company or dollar
signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans MM/DD/YYYY
Admin
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim MM/DD/YYYY
Payment
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
M-1-3
STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
- ASUM - Approved Assumption
- BAP - Borrower Assistance Program
- CO - Charge Off
- DIL - Deed-in-Lieu
- FFA - Formal Forbearance Agreement
- MOD - Loan Modification
- PRE - Pre-Sale
- SS - Short Sale
- MISC - Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code
as follows:
- Mortgagor
- Tenant
- Unknown
- Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
- Damaged
- Excellent
- Fair
- Gone
- Good
- Poor
- Special Hazard
- Unknown
M-1-4
EXHIBIT M-2
FORM OF MONTHLY REMITTANCE ADVICE
STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
----------------------------------------------------------------------------------------------------------
LOAN_NBR Loan Number assigned by investor Text up to 10 digits
SERVICER LOAN_NBR Servicer Loan Number Text up to 10 digits
No commas(,) or dollar
SCHED_PMT_AMT P&I constant 2 signs ($)
NOTE_INT_RATE Gross Interest Rate 4 Max length of 6
Gross Interest Rate less the
NET_RATE Service Fee Rate 4 Max length of 6
SERV_FEE_RATE Service Fee Rate 4 Max length of 6
ARM_INDEX_RATE ARM loan's index Rate used 4 Max length of 6
No commas(,) or dollar
ACTL_BEG_BAL Beginning Actual Balance 2 signs ($)
No commas(,) or dollar
ACTL_END_BAL Ending Actual Balance 2 signs ($)
NEXT_DUE_DATE Borrower's next due date MM/DD/YYYY
No commas(,) or dollar
CURT_AMT_1 Curtailment Amount 2 signs ($)
CURT_DATE_1 Due date Curtailment was applied to MM/DD/YYYY
No commas(,) or dollar
CURT_ADJ_ AMT_1 Curtailment Interest if applicable 2 signs ($)
No commas(,) or dollar
CURT_AMT_2 Curtailment Amount 2 2 signs ($)
CURT_DATE_2 Due date Curtailment was applied to MM/DD/YYYY
No commas(,) or dollar
CURT_ADJ_ AMT2 Curtailment Interest if applicable 2 signs ($)
No commas(,) or dollar
CURT_AMT_3 Curtailment Amount 3 2 signs ($)
CURT_DATE_3 Due date Curtailment was applied to MM/DD/YYYY
No commas(,) or dollar
CURT_ADJ_AMT3 Curtailment Interest, if applicable 2 signs ($)
No commas(,) or dollar
SCHED_BEG_BAL Beginning Scheduled Balance 2 signs ($)
No commas(,) or dollar
SCHED_END_BAL Ending Scheduled Balance 2 signs ($)
No commas(,) or dollar
SCHED_PRIN_AMT Scheduled Principal portion of P&I 2 signs ($)
Scheduled Net Interest (less No commas(,) or dollar
SCHED_NET_INT Service Fee) portion of P&I 2 signs ($)
Liquidation Principal Amt to No commas(,) or dollar
LIQ_AMT bring balance to zero 2 signs ($)
PIF_DATE Liquidation Date MM/DD/YYYY
Either 60 for liquidation or 65
ACTION_CODE for Repurchase Max length of 2
M-2-1
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
----------------------------------------------------------------------------------------------------------
Principal Adjustments made to No commas(,) or dollar
PRIN_ADJ_AMT loan, if applicable 2 signs ($)
Interest Adjustment made to loan, No commas(,) or dollar
INT_ADJ_AMT if applicable 2 signs ($)
PREPAYMENT PENALTY Prepayment penalty amount, if No commas(,) or dollar
AMT applicable 2 signs ($)
SOILDER_SAILOR ADJ Soldier and Sailor Adjustment No commas(,) or dollar
AMT amount, if applicable 2 signs ($)
Non Recoverable Loan Amount, if No commas(,) or dollar
NON ADV LOAN AMT applicable 2 signs ($)
X-0-0
XXXXXXX X-0
FORM OF REALIZED LOSS REPORT
XXXXX FARGO BANK, N.A. - CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
Servicer Loan No. Servicer Name Servicer Address
XXXXX FARGO BANK, N.A. LOAN NO._____________________________
Borrower's Name:____________________________________________
Property Address:___________________________________________
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes," provide deficiency or cramdown amount __________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1)Actual Unpaid Principal Balance of Mortgage Loan $_______________(1)
(2) Interest accrued at Net Rate ________________(2)
(3) Accrued Servicing Fees ________________(3)
(4) Attorney's Fees ________________(4)
(5) Taxes (see page 2) ________________(5)
(6) Property Maintenance ________________(6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________(7)
(8) Utility Expenses ________________(8)
(9) Appraisal/BPO ________________(9)
(10) Property Inspections ________________(10)
(11) FC Costs/Other Legal Expenses ________________(11)
(12) Other (itemize) ________________(12)
Cash for Keys__________________________ ________________(12)
HOA/Condo Fees_______________________ ________________(12)
______________________________________ ________________(12)
TOTAL EXPENSES $_______________(13)
CREDITS:
(14) Escrow Balance $_______________(14)
(15) HIP Refund ________________(15)
(16) Rental Receipts ________________(16)
(17) Hazard Loss Proceeds ________________(17)
M-3-1
(18) Primary Mortgage Insurance / Gov't Insurance ________________(18a)
HUD Part A
________________(18b)
HUD Part B
(19) Pool Insurance Proceeds ________________(19)
(20) Proceeds from Sale of Acquired Property ________________(20)
(21) Other (itemize) ________________(21)
______________________________________ ________________(21)
TOTAL CREDITS $_______________(22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_______________(23)
M-3-2
ESCROW DISBURSEMENT DETAIL
TYPE DATE PAID PERIOD OF TOTAL PAID BASE PENALTIES INTEREST
(TAX /INS.) COVERAGE AMOUNT
M-3-3
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS/GAIN FORM 332 - INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND
ALL CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE
REMITTANCE REPORT DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT
BEING PASSED UNTIL THE FOLLOWING MONTH.
The numbers on the 332 form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default
through liquidation breaking out the net interest and servicing
fees advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For interest advances - an amortization schedule (evidencing
calculation of interest advances)
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to
default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing
all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
M-3-4
CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, copy of
attorney letter of Foreclosure proceeds.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial
proceeds and line (18b) for Part B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
23. The total derived from subtracting line 22 from 13. If the
amount represents a realized gain, show the amount in parenthesis
( ).
M-3-5
EXHIBIT N-1
FORM OF CLASS A-1 CAP CONTRACT
[INTENTIONALLY OMITTED]
N-1-1
EXHIBIT N-2
FORM OF CLASS A-2 CAP CONTRACT
[INTENTIONALLY OMITTED]
N-2-1
EXHIBIT N-3
FORM OF SUBORDINATED CERTIFICATE CAP CONTRACT
[INTENTIONALLY OMITTED]
N-3-1
EXHIBIT O-1
ONE-MONTH LIBOR CAP TABLE - CLASS A-1
1ML STRIKE
LOWER
BEGINNING ENDING NOTIONAL INDEX RATE COLLAR (%) UPPER
PERIOD ACCRUAL ACCRUAL BALANCE($) MULTIPLIER (1) COLLAR (%)
--------------------------------------------------------------------------------
1 4/01/05 4/25/05 65,010,300.0 10 5.921 9.290
2 4/25/05 5/25/05 64,584,561.5 10 6.155 9.290
3 5/25/05 6/25/05 63,978,133.4 10 5.950 9.290
4 6/25/05 7/25/05 63,191,170.8 10 6.156 9.290
5 7/25/05 8/25/05 62,223,165.7 10 5.951 9.290
6 8/25/05 9/25/05 61,076,097.0 10 5.952 9.290
7 9/25/05 10/25/05 59,751,751.9 10 6.158 9.290
8 10/25/05 11/25/05 58,254,511.1 10 5.954 9.290
9 11/25/05 12/25/05 56,588,974.2 10 6.160 9.290
10 12/25/05 1/25/06 54,775,289.2 10 5.957 9.290
11 1/25/06 2/25/06 52,820,259.4 10 5.959 9.290
12 2/25/06 3/25/06 50,873,501.8 10 6.623 9.290
13 3/25/06 4/25/06 48,935,535.5 10 5.965 9.290
14 4/25/06 5/25/06 47,052,877.8 10 6.174 9.290
15 5/25/06 6/25/06 45,223,935.3 10 5.971 9.290
16 6/25/06 7/25/06 43,447,160.7 10 6.180 9.290
17 7/25/06 8/25/06 41,721,051.7 10 5.977 9.290
18 8/25/06 9/25/06 40,044,149.6 10 5.980 9.290
19 9/25/06 10/25/06 38,415,037.9 10 6.189 9.290
20 10/25/06 11/25/06 36,831,502.8 10 5.986 9.290
21 11/25/06 12/25/06 35,289,502.6 10 6.196 9.290
22 12/25/06 1/25/07 32,882,101.4 10 5.999 9.290
23 1/25/07 2/25/07 30,594,641.7 10 7.491 9.290
24 2/25/07 3/25/07 28,120,427.6 10 8.321 9.290
25 3/25/07 4/25/07 25,780,965.7 10 8.045 9.290
26 4/25/07 5/25/07 23,570,994.4 10 8.321 9.290
27 5/25/07 6/25/07 22,009,800.2 10 7.957 9.290
28 6/25/07 7/25/07 20,513,494.4 10 8.322 9.290
29 7/25/07 8/25/07 19,255,049.9 10 8.534 9.290
30 8/25/07 9/25/07 18,039,491.5 10 8.533 9.290
31 9/25/07 10/25/07 16,864,976.7 10 9.002 9.290
32 10/25/07 11/25/07 15,730,208.8 10 8.704 9.290
33 11/25/07 12/25/07 14,633,698.8 10 9.001 9.290
34 12/25/07 1/25/08 13,574,130.4 10 8.703 9.290
35 1/25/08 2/25/08 12,550,237.4 10 9.277 9.290
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined
by the Cap Contract Counterparty and subject to a cap equal to 9.290%)
exceeds the Lower Collar, the Trust Fund will receive payments pursuant to
the Class A-1 Cap Contract.
O-1-1
EXHIBIT O-2
ONE-MONTH LIBOR CAP TABLE - CLASS A-2
LOWER
BEGINNING ENDING NOTIONAL INDEX RATE COLLAR (%) UPPER
PERIOD ACCRUAL ACCRUAL BALANCE($) MULTIPLIER (1) COLLAR (%)
--------------------------------------------------------------------------------
1 4/01/05 4/25/05 27,191,000.0 10 5.985 9.300
2 4/25/05 5/25/05 26,999,774.4 10 6.192 9.300
3 5/25/05 6/25/05 26,733,948.5 10 5.986 9.300
4 6/25/05 7/25/05 26,393,597.8 10 6.193 9.300
5 7/25/05 8/25/05 25,978,719.6 10 5.988 9.300
6 8/25/05 9/25/05 25,490,118.8 10 5.990 9.300
7 9/25/05 10/25/05 24,928,801.7 10 6.198 9.300
8 10/25/05 11/25/05 24,296,702.2 10 5.993 9.300
9 11/25/05 12/25/05 23,599,144.4 10 6.202 9.300
10 12/25/05 1/25/06 22,847,256.3 10 5.999 9.300
11 1/25/06 2/25/06 22,051,879.1 10 6.003 9.300
12 2/25/06 3/25/06 21,259,454.2 10 6.673 9.300
13 3/25/06 4/25/06 20,470,782.9 10 6.013 9.300
14 4/25/06 5/25/06 19,704,184.8 10 6.225 9.300
15 5/25/06 6/25/06 18,959,032.7 10 6.023 9.300
16 6/25/06 7/25/06 18,234,717.1 10 6.235 9.300
17 7/25/06 8/25/06 17,530,646.5 10 6.033 9.300
18 8/25/06 9/25/06 16,846,245.9 10 6.038 9.300
19 9/25/06 10/25/06 16,158,235.2 10 6.252 9.300
20 10/25/06 11/25/06 15,490,742.8 10 6.050 9.300
21 11/25/06 12/25/06 14,786,567.7 10 6.266 9.300
22 12/25/06 1/25/07 13,833,564.5 10 6.219 9.300
23 1/25/07 2/25/07 12,923,187.2 10 7.463 9.300
24 2/25/07 3/25/07 11,950,911.0 10 8.292 9.300
25 3/25/07 4/25/07 11,029,703.6 10 7.992 9.300
26 4/25/07 5/25/07 10,189,754.1 10 8.266 9.300
27 5/25/07 6/25/07 9,551,343.0 10 7.947 9.300
28 6/25/07 7/25/07 8,941,110.2 10 8.321 9.300
29 7/25/07 8/25/07 8,424,925.9 10 8.445 9.300
30 8/25/07 9/25/07 7,925,731.2 10 8.445 9.300
31 9/25/07 10/25/07 7,442,945.8 10 8.899 9.300
32 10/25/07 11/25/07 6,976,034.3 10 8.608 9.300
33 11/25/07 12/25/07 6,524,437.2 10 8.901 9.300
34 12/25/07 1/25/08 6,087,636.3 10 8.755 9.300
35 1/25/08 2/25/08 5,665,220.2 10 9.069 9.300
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined
by the Cap Contract Counterparty and subject to a cap equal to 9.300%)
exceeds the Lower Collar, the Trust Fund will receive payments pursuant to
the Class A-2 Cap Contract.
O-2-1
EXHIBIT O-3
ONE-MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP CONTRACT
LOWER
BEGINNING ENDING NOTIONAL INDEX RATE COLLAR (%) UPPER
PERIOD ACCRUAL ACCRUAL BALANCE($) MULTIPLIER (1) COLLAR (%)
--------------------------------------------------------------------------------
1 4/01/05 4/25/05 22,873,400.0 10 5.237 8.590
2 4/25/05 5/25/05 22,873,400.0 10 5.463 8.590
3 5/25/05 6/25/05 22,873,400.0 10 5.258 8.590
4 6/25/05 7/25/05 22,873,400.0 10 5.464 8.590
5 7/25/05 8/25/05 22,873,400.0 10 5.259 8.590
6 8/25/05 9/25/05 22,873,400.0 10 5.260 8.590
7 9/25/05 10/25/05 22,873,400.0 10 5.467 8.590
8 10/25/05 11/25/05 22,873,400.0 10 5.262 8.590
9 11/25/05 12/25/05 22,873,400.0 10 5.470 8.590
10 12/25/05 1/25/06 22,873,400.0 10 5.266 8.590
11 1/25/06 2/25/06 22,873,400.0 10 5.269 8.590
12 2/25/06 3/25/06 22,873,400.0 10 5.935 8.590
13 3/25/06 4/25/06 22,873,400.0 10 5.276 8.590
14 4/25/06 5/25/06 22,873,400.0 10 5.486 8.590
15 5/25/06 6/25/06 22,873,400.0 10 5.283 8.590
16 6/25/06 7/25/06 22,873,400.0 10 5.493 8.590
17 7/25/06 8/25/06 22,873,400.0 10 5.290 8.590
18 8/25/06 9/25/06 22,873,400.0 10 5.294 8.590
19 9/25/06 10/25/06 22,873,400.0 10 5.505 8.590
20 10/25/06 11/25/06 22,873,400.0 10 5.302 8.590
21 11/25/06 12/25/06 22,873,400.0 10 5.514 8.590
22 12/25/06 1/25/07 22,873,400.0 10 5.361 8.590
23 1/25/07 2/25/07 22,873,400.0 10 6.780 8.590
24 2/25/07 3/25/07 22,873,400.0 10 7.609 8.590
25 3/25/07 4/25/07 22,873,400.0 10 7.326 8.590
26 4/25/07 5/25/07 22,873,400.0 10 7.602 8.590
27 5/25/07 6/25/07 22,873,400.0 10 7.251 8.590
28 6/25/07 7/25/07 22,873,400.0 10 7.619 8.590
29 7/25/07 8/25/07 22,873,400.0 10 7.805 8.590
30 8/25/07 9/25/07 22,873,400.0 10 7.804 8.590
31 9/25/07 10/25/07 22,873,400.0 10 8.269 8.590
32 10/25/07 11/25/07 22,873,400.0 10 7.972 8.590
33 11/25/07 12/25/07 22,873,400.0 10 8.269 8.590
34 12/25/07 1/25/08 22,873,400.0 10 8.016 8.590
35 1/25/08 2/25/08 22,873,400.0 10 8.513 8.590
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined
by the Cap Contract Counterparty and subject to a cap equal to 8.590%)
exceeds the Lower Collar, the Trust Fund will receive payments pursuant to
the Subordinated Certificate Cap Contract.
O-3-1
EXHIBIT P
FORM OF POWER OF ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
XXXXXX LOAN SERVICING LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: _________________________________
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ___________________, having its principal
place of business at , as Trustee (the "Trustee") pursuant to that Pooling and
Servicing Agreement among
(the "Depositor"), Xxxxxx Loan Servicing LP (the "Servicer"), the Master
Servicer, the Securities Administrator and the Trustee, dated as of
1, 200__ (the "Pooling and Servicing Agreement"), hereby constitutes and
appoints the Servicer, by and through the Servicer's officers, the Trustee's
true and lawful Attorney-in-Fact, in the Trustee's name, place and stead and for
the Trustee's benefit, in connection with all mortgage loans serviced by the
Servicer pursuant to the Pooling and Servicing Agreement for the purpose of
performing all acts and executing all documents in the name of the Trustee as
may be customarily and reasonably necessary and appropriate to effectuate the
following enumerated transactions in respect of any of the mortgages or deeds of
trust (the "Mortgages" and the "Deeds of Trust," respectively) and promissory
notes secured thereby (the "Mortgage Notes") for which the undersigned is acting
as Trustee for various certificateholders (whether the undersigned is named
therein as mortgagee or beneficiary or has become mortgagee by virtue of
endorsement of the Mortgage Note secured by any such Mortgage or Deed of Trust)
and for which the Servicer is acting as servicer, all subject to the terms of
the Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of the
parties thereto or to correct title errors discovered after such title
insurance was issued and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed of
Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfactions/releases, partial
reconveyances or the execution or requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the closing
of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
P-1
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related
Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking
of a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any
such foreclosure, including, without limitation, any and all of the
following acts:
a. the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or notices of
sale;
d. the cancellation/rescission of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under the
terms of the Mortgage, Deed of Trust or state law to expeditiously
complete said transactions in paragraphs 8.a. through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
P-2
IN WITNESS WHEREOF, _____________ as Trustee pursuant to that Pooling and
Servicing Agreement among the Depositor, the Servicer, and the Trustee, dated as
of __________ 1, 200__ (______________ Mortgage Loan Asset Backed Certificates,
Series 200__-___), has caused its corporate seal to be hereto affixed and these
presents to be signed and acknowledged in its name and behalf by ______________
its duly elected and authorized Vice President this __ day of ________, 200__.
________________________________________
as Trustee for _____ Mortgage Loan Asset
Backed Certificates, Series 200__-___
By __________________________________
STATE OF ____________
COUNTY OF ___________
On ________________ , 200__, before me, the undersigned, a Notary Public in and
for said state, personally appeared _________________ , Vice President of
________________ as Trustee for ______________ Mortgage Loan Asset Backed
Certificates, Series 200__-___, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed that same in his/her authorized capacity, and that by his/her signature
on the instrument the entity upon behalf of which the person acted and executed
the instrument.
WITNESS my hand and official seal.
(SEAL)
________________________________________
Notary Public
My Commission Expires ________________________
P-3
EXHIBIT Q
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
This Subsequent Transfer Instrument, dated _________, 2005 (the
"Instrument"), is between Xxxxxxx Xxxxx Mortgage Investors, Inc., as seller (the
"Depositor"), and HSBC Bank USA, N.A., in its capacity as trustee of the Ownit
Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-2, as
purchaser (the "Trustee"), and relates to the transfer pursuant to the Pooling
and Servicing Agreement, dated as of March 1, 2005 (the "Pooling and Servicing
Agreement"), among the Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor,
Xxxxx Fargo Bank, N.A., as master servicer and securities administrator, Xxxxxx
Loan Servicing, LLC, as servicer and HSBC Bank USA, N.A., as trustee, on behalf
of the Trust Fund, of the Mortgage Loans listed on the attached Schedule of
Mortgage Loans (the "Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
SECTION 1. Conveyance of Subsequent Mortgage Loans.
(a) The Depositor does hereby sell, transfer, assign, set over and convey
to the Trustee, on behalf of the Trust Fund, without recourse, all of its right,
title and interest in and to the Subsequent Mortgage Loans, and including all
amounts due on the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be
delivered pursuant to Section 2.01 of the Pooling and Servicing Agreement;
provided, however, that the Depositor reserves and retains all right, title and
interest in and to amounts due on the Subsequent Mortgage Loans on or prior to
the related Subsequent Cut-off Date. The Depositor, contemporaneously with the
delivery of this Instrument, has delivered or caused to be delivered to the
Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule attached hereto as
Exhibit B shall be absolute and is intended by the Depositor, the Servicer, the
Trustee and the Certificateholders to constitute and to be treated as a sale by
the Depositor to the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated the date hereof, between the Depositor as purchaser
and the Servicer as seller, to the extent of the Subsequent Mortgage Loans, a
copy of which agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A hereto.
SECTION 2. Representations and Warranties; Conditions Precedent.
(a) The Depositor hereby confirms that each of the conditions precedent
and the representations and warranties set forth in Sections 2.03 and 2.10 of
the Pooling and Servicing Agreement are satisfied as of the date hereof with
respect to the Subsequent Mortgage Loans.
(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Q-1
SECTION 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the [Servicer]
at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
SECTION 4. Governing Law.
This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
SECTION 5. Counterparts.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
SECTION 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
Q-2
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.
By:
Name:
Title:
HSBC BANK USA, N.A.,
not in its individual capacity but solely
as Trustee for Ownit Mortgage Loan
Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-2
By:
Name:
Title:
Q-3
Attachments
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
Q-4
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: ___________ 1, 2005
2. Subsequent Transfer Date: ____________, 2005
3. Aggregate Stated Principal Balance of the Subsequent
Mortgage Loans as of the Subsequent Cut-off Date:
$__________
a. Aggregate Stated Principal Balance as of the
Subsequent Cut-off Date of the Subsequent Mortgage Loans to
be added to Group One: $__________
b. Aggregate Stated Principal Balance as of the
Subsequent Cut-off Date of the Subsequent Mortgage Loans to
be added to Group Two: $__________
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date (or such
other date as is specified herein) shall be true and correct: (i) the Subsequent
Mortgage Loan may not be 30 or more days delinquent as of the related Subsequent
Cut-off Date (except with respect to not more than [1.5]% of the Subsequent
Mortgage Loans, by aggregate principal balance as of the related Subsequent
Cut-off Date, which may be 30 or more days delinquent but less than 60 days
delinquent as of the related Cut-off Date); (ii) the stated term to maturity of
the Subsequent Mortgage Loan will not be less than 120 months and will not
exceed 360 months; (iii) the Subsequent Mortgage Loan may not provide for
negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Combined Loan-to-Value Ratio greater than 100.00%; (v) the Subsequent Mortgage
Loans will have as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 6 months; (vi) the Subsequent Mortgage Loan must
have a first Monthly Payment due on or before ______, ____, 2005; (vii) the
Subsequent Mortgage Loan shall be underwritten in accordance with the criteria
set forth under the section "Underwriting Guidelines -- Ownit Underwriting
Guidelines" in the Prospectus Supplement, (viii) as of both the Subsequent
Cut-off Date and Subsequent Transfer Date for such Subsequent Mortgage Loan, the
Subsequent Mortgage Loan must provide for monthly interest payments which are
due on the first day of each calendar month, (ix) as of the Subsequent Transfer
Date for such Subsequent Mortgage Loan, the Subsequent Mortgage Loan must be a
"qualified mortgage" within the meaning of Section 860G of the Code and Treasury
Regulations Section 1.860G-2 (as determined without regard to Treasury
Regulations Section 1.860G-2(a)(3) or any similar provision that treats a
defective obligation as a qualified mortgage for a temporary period), (x) as of
the Subsequent Transfer Date for such Subsequent Mortgage Loan, the Subsequent
Mortgage Loan does not provide for interest other than at either (a) a single
fixed rate in effect throughout the term of the Subsequent Mortgage Loan or (b)
a "variable rate" (within the meaning of Treasury Regulations Section
1.860G-1(a)(3)) in effect throughout the term of the Subsequent Mortgage Loan,
(xi) as of the Subsequent Transfer Date for such Subsequent Mortgage Loan, the
Depositor would not, based on the delinquency status of such Subsequent Mortgage
Loan, institute foreclosure proceedings prior to the next scheduled payment date
for such Subsequent Mortgage Loan, (xii) as of the Subsequent Transfer Date for
such Subsequent Mortgage Loan, the Subsequent Mortgage Loan was not the subject
of pending or final foreclosure proceedings and (xiii) the Subsequent Mortgage
Loan must bear interest at a fixed rate throughout its term and must have a Net
Mortgage Rate equal to no less than [5.00]% per annum.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the related Subsequent Mortgage Loans) will
as of the Subsequent Cut-off Date not be materially inconsistent with the
Initial Mortgage Loans. Notwithstanding the foregoing, any Subsequent
Q-5
Mortgage Loan may be rejected by either Rating Agency if the inclusion of such
Subsequent Mortgage Loan would adversely affect the ratings on any class of
Offered Certificates.
Q-6
Very truly yours,
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.
By:
Name:
Title:
Acknowledged and Agreed:
HSBC BANK USA, N.A.,
not in its individual capacity but solely as Trustee
By:
Name:
Title:
Q-7
