Exhibit 4.1
EXECUTION COPY
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
TERWIN ADVISORS LLC,
Seller
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Servicing Administrator, Securities Administrator And Backup Servicer
SPECIALIZED LOAN SERVICING, LLC,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2005
-------------------------------
TERWIN MORTGAGE TRUST
ASSET-BACKED CERTIFICATES, SERIES TMTS 2005- 16HE
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS
AND WARRANTIES...................................................54
SECTION 2.01. Conveyance of Mortgage Loans..........................76
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.......80
SECTION 2.03. Representations, Warranties and
Covenants of the Depositor.........................82
SECTION 2.04. Representations and Warranties of the
Servicing Administrator; Representations
and Warranties of the Servicer; Representations
and Warranties of the Securities Administrator;
Representations and Warranties of the
Backup Servicer....................................86
SECTION 2.05. Substitutions and Repurchases of Mortgage
Loans which are not "Qualified Mortgages.".........89
SECTION 2.06. Authentication and Delivery of Certificates...........89
SECTION 2.07. REMIC Elections.......................................89
SECTION 2.08. Covenants of the Servicing Administrator..............95
SECTION 2.09. Covenants of the Servicer.............................96
SECTION 2.10. Related Agreements....................................96
SECTION 2.11. Conveyance of Subsequent Mortgage Loans...............96
SECTION 2.12. Permitted Activities of the Trust.....................99
SECTION 2.13. Qualifying Special Purpose Entity.....................99
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...................99
SECTION 3.01. Servicer to Service Mortgage Loans....................99
SECTION 3.02. Servicing and Subservicing; Enforcement
of the Obligations of the Servicer................100
SECTION 3.03. Rights of the Depositor, the Securities
Administrator, the Backup Servicer and the
Trustee in Respect of the Servicer................101
SECTION 3.04. The Servicing Administrator or Backup
Servicer to Act as Servicer.......................101
SECTION 3.05. Collection of Mortgage Loan Payments;
Collection Account; Servicing Administrator
Collection Account; Certificate Account...........102
SECTION 3.06. Collection of Taxes, Assessments and
Similar Items; Escrow Accounts....................106
SECTION 3.07. Access to Certain Documentation and
Information Regarding the Mortgage Loans..........107
SECTION 3.08. Withdrawals from a Collection Account,
Servicing Administrator Collection Account
and Certificate Account...........................107
SECTION 3.09. [RESERVED]...........................................110
SECTION 3.10. [RESERVED]...........................................110
SECTION 3.11. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.............................110
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds..................111
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files......114
SECTION 3.14. Documents, Records and Funds in Possession
of the Servicer to be Held for
the Trustee.......................................115
SECTION 3.15. Servicing Compensation...............................115
SECTION 3.16. Access to Certain Documentation......................116
SECTION 3.17. Annual Statement as to Compliance....................116
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TABLE OF CONTENTS
(continued)
Page
SECTION 3.18. Annual Independent Public Accountants'
Servicing Statement; Financial Statements.........116
SECTION 3.19. Duties and Removal of the Credit Risk Manager........117
SECTION 3.20. Periodic Filings.....................................117
SECTION 3.21. Annual Certificate by Securities Administrator.......118
SECTION 3.22. [RESERVED]...........................................118
SECTION 3.23. Prepayment Penalty Reporting Requirements............118
SECTION 3.24. Servicer Reports.....................................119
SECTION 3.25. Indemnification......................................119
SECTION 3.26. Nonsolicitation......................................120
SECTION 3.27. SLS as Servicer......................................120
SECTION 3.28. Quarterly Audit......................................121
SECTION 3.29. Maintenance of LPMI Policy:..........................121
SECTION 3.30. SLS Servicing Tape; Storage and Access
to Servicing Tape.................................121
ARTICLE IV ADMINISTRATION AND BACKUP SERVICING OF THE MORTGAGE LOANS.......122
SECTION 4.01. Servicing Administrator..............................122
SECTION 4.02. REMIC Related Covenants..............................122
SECTION 4.03. Fidelity Bond........................................123
SECTION 4.04. Powers to Act; Procedures............................123
SECTION 4.05. Due-on-Sale Clauses; Assumption Agreements...........124
SECTION 4.06. Documents, Records and Funds in Possession
of Servicing Administrator to be Held
for Trustee.......................................124
SECTION 4.07. Monitoring of the Servicer...........................124
SECTION 4.08. [RESERVED]...........................................125
SECTION 4.09. [RESERVED]...........................................125
SECTION 4.10. Presentment of Claims and Collection of Proceeds.....125
SECTION 4.11. Trustee or Custodian to Retain Possession
of Certain Insurance Policies
and Documents.....................................125
SECTION 4.12. Realization Upon Defaulted Loans.....................126
SECTION 4.13. REO Property.........................................126
SECTION 4.14. Annual Statement as to Compliance....................126
SECTION 4.15. Annual Independent Public Accountants'
Servicing Statement; Financial Statements.........127
SECTION 4.16. Annual Certificate by Servicing Administrator........127
SECTION 4.17. Obligation of the Servicing Administrator
in Respect of Prepayment Interest Shortfalls......127
SECTION 4.18. Obligation of the Servicing Administrator
in Respect of Collection Account..................128
SECTION 4.19. Backup Servicer......................................128
ARTICLE V DISTRIBUTIONS...................................................128
SECTION 5.01. Advances by the Servicing Administrator
and the Servicer..................................128
SECTION 5.02. Advance Facility.....................................129
SECTION 5.03. Reduction of Servicing Compensation
in Connection with Prepayment
Interest Shortfalls...............................132
SECTION 5.04. Distributions on the REMIC Interests.................132
SECTION 5.05. Distributions........................................132
-ii-
TABLE OF CONTENTS
(continued)
Page
SECTION 5.06. Monthly Statements to Certificateholders.............140
SECTION 5.07. Certificate Insurance Policy Matters.................143
SECTION 5.08. Effect of Payments by the Certificate Insurer........147
SECTION 5.09. Pre-Funding Account..................................148
SECTION 5.10. Capitalized Interest Account.........................148
ARTICLE VI THE CERTIFICATES................................................149
SECTION 6.01. The Certificates.....................................149
SECTION 6.02. Appointment of Certificate Registrar;
Certificate Register; Registration
of Transfer and Exchange of Certificates..........150
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen
Certificates......................................154
SECTION 6.04. Persons Deemed Owners................................155
SECTION 6.05. Access to List of Certificateholders'
Names and Addresses...............................155
SECTION 6.06. Book-Entry Certificates..............................155
SECTION 6.07. Notices to Depository................................156
SECTION 6.08. Definitive Certificates..............................156
SECTION 6.09. Maintenance of Office or Agency......................157
SECTION 6.10. Authenticating Agents................................157
SECTION 6.11. Trustee To Act with Consent of the
Certificate Insurer...............................158
SECTION 6.12. Mortgage Loans, Trust Fund Held for Benefit
of Certificate Insurer and
Holders of Certificates...........................158
ARTICLE VII THE DEPOSITOR, THE SERVICING ADMINISTRATOR, THE SERVICER
AND THE SECURITIES ADMINISTRATOR................................158
SECTION 7.01. Respective Liabilities of the Depositor,
the Servicing Administrator, the
Servicer and the Securities Administrator............158
SECTION 7.02. Merger or Consolidation of the Depositor,
the Servicing Administrator,
the Servicer or the Securities Administrator......158
SECTION 7.03. Limitation on Liability of the Depositor,
Servicing Administrator, the Servicer,
the Backup Servicer, the Trustee,
the Securities Administrator
and Others........................................159
SECTION 7.04. Limitation on Resignation of the Servicer............160
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds.......161
SECTION 7.06. Limitation on Resignation of the Servicing
Administrator and the Backup Servicer.............161
SECTION 7.07. Assignment by Backup Servicer and
Servicing Administrator...........................161
SECTION 7.08. Limitation Upon Liability of the
Credit Risk Manager...............................162
ARTICLE VIII DEFAULT; TERMINATION OF SERVICER................................163
SECTION 8.01. Events of Default....................................163
SECTION 8.02. Securities Administrator to Act;
Servicing Administrator and Backup
Servicer to Act; Appointment of Successor.........165
SECTION 8.03. Notification to Certificateholders...................167
SECTION 8.04. Waiver of Servicer Events of Default.................167
SECTION 8.05. SLS Events of Termination............................167
-iii-
TABLE OF CONTENTS
(continued)
Page
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.........167
SECTION 9.01. Duties of the Trustee................................167
SECTION 9.02. Certain Matters Affecting the Trustee................169
SECTION 9.03. The Trustee Not Liable for Certificates
or Mortgage Loans.................................170
SECTION 9.04. The Trustee May Own Certificates.....................171
SECTION 9.05. Trustee's Fees and Expenses..........................171
SECTION 9.06. [RESERVED]...........................................171
SECTION 9.07. Eligibility Requirements for the Trustee.............171
SECTION 9.08. Resignation and Removal of the Trustee...............172
SECTION 9.09. [RESERVED]...........................................172
SECTION 9.10. Successor Trustee....................................172
SECTION 9.11. Merger or Consolidation of the Trustee...............173
SECTION 9.12. Appointment of Co-Trustee or Separate Trustee........173
SECTION 9.13. Tax Matters..........................................174
SECTION 9.14. Duties of Securities Administrator...................176
SECTION 9.15. Certain Matters Affecting the Securities
Administrator.....................................178
SECTION 9.16. Securities Administrator Not Liable for
Certificates or Mortgage Loans....................179
SECTION 9.17. Securities Administrator May Own Certificates........179
SECTION 9.18. Fees and Expenses of the Securities
Administrator.....................................180
SECTION 9.19. Eligibility Requirements for the
Securities Administrator..........................180
SECTION 9.20. Resignation and Removal of the
Securities Administrator..........................180
SECTION 9.21. Successor Securities Administrator...................181
SECTION 9.22. Merger or Consolidation of Securities
Administrator.....................................182
ARTICLE X TERMINATION.....................................................182
SECTION 10.01. Termination upon Liquidation or
Repurchase of all Mortgage Loans..................182
SECTION 10.02. Final Distribution on the Certificates...............182
SECTION 10.03. Additional Termination Requirements..................184
ARTICLE XI MISCELLANEOUS PROVISIONS........................................184
SECTION 11.01. Amendment............................................184
SECTION 11.02. Counterparts.........................................186
SECTION 11.03. Governing Law........................................186
SECTION 11.04. Intention of Parties.................................186
SECTION 11.05. Notices..............................................187
SECTION 11.06. Severability of Provisions...........................188
SECTION 11.07. Assignment...........................................188
SECTION 11.08. Limitation on Rights of Certificateholders...........188
SECTION 11.09. Inspection and Audit Rights..........................189
SECTION 11.10. Certificates Nonassessable and Fully Paid............189
-iv-
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 I
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE--GROUP II
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF CUSTODIAN 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
EXHIBIT H FORM OF RULE 144A LETTER
EXHIBIT I REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M FORM OF SUBSEQUENT TRANSFER INSTRUMENT
EXHIBIT N FORM OF ADDITION NOTICE
EXHIBIT O FORM OF SWAP AGREEMENT
EXHIBIT P FORM OF CERTIFICATE OF SERVICING ADMINISTRATOR
EXHIBIT Q FORM OF CUSTODIAL AGREEMENT
EXHIBIT R FORM OF SERVICER REPORT
-v-
POOLING AND SERVICING AGREEMENT, dated as of October 1, 2005, among
XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor
(the "Depositor"), TERWIN ADVISORS LLC, a Delaware limited liability company, as
seller (the "Seller"), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking
association organized under the laws of the United States of America, as
servicing administrator (in such capacity, the "Servicing Administrator") as
securities administrator (in such capacity, the "Securities Administrator") and
backup servicer (in such capacity, the "Backup Servicer"), SPECIALIZED LOAN
SERVICING, LLC, a Delaware limited liability company, as servicer (the
"Servicer") and U.S. BANK 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. It is intended that for federal income
tax purposes the Trust Fund will include (i) four real estate mortgage
investment conduits in a tiered REMIC structure, (ii) the Initial ES Strip,
(iii) amounts distributable to the Class X Certificates pursuant to Section
5.05(i), (iv) the grantor trusts described in Section 2.07, (v) the Supplemental
Interest Trust, which in turn will hold the Swap agreement, and (vi) the
Pre-Funding Account and Capitalized Interest Account. The Pre-Funding REMIC will
consist of all of the assets constituting the Trust Fund (other than assets
described in clauses (ii), (iii), (iv) (v) and (vi) above, the Pre-Funding REMIC
Regular Interests, the SWAP REMIC Regular Interests and the REMIC 1 Regular
Interests) and will be evidenced by the Pre-Funding REMIC Regular Interests
(which will be uncertificated and will represent the "regular interests" in the
Pre-Funding REMIC) and the Class PF-R Interest as the single "residual interest"
in the Pre-Funding REMIC. The Trustee will hold the Pre-Funding REMIC Regular
Interests. The SWAP REMIC will hold as its assets the Pre-Funding REMIC Regular
Interests and will be evidenced by the SWAP REMIC Regular Interests (which will
represent the "regular interests" in the SWAP REMIC") and the Class SW-R
Interest as the single "residual interest in the SWAP REMIC. The Trustee will
hold the SWAP REMIC Regular Interests. REMIC 1 will hold as its assets the SWAP
REMIC Regular Interests and will be evidenced by the REMIC 1 Regular Interests
(which will represent the "regular interests" in REMIC 1) and the Class LT1-R
Interest as the single "residual interest" in REMIC 1. The Trustee will hold the
REMIC 1 Regular Interests. REMIC 2 will consist of the REMIC 1 Regular Interests
and will be evidenced by the REMIC 2 Regular Interests (which will represent the
"regular interests" in REMIC 2) and the Class LT2-R Interest as the single
"residual interest" in REMIC 2. The Class R Certificate will represent
beneficial ownership of the Class PF-R Interest, the Class SW-R Interest, the
Class LT1-R Interest and the Class LT2-R Interest. The "latest possible maturity
date" for federal income tax purposes of all the interests created hereby will
be the Latest Possible Maturity Date.
All covenants and agreements made 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.
The Pre-Funding REMIC
The following table sets forth the designations, initial principal balances and
interest rates for each interest in the Pre-Funding REMIC:
Class Initial Principal Balance Interest Rate
PF-I $272,700,081.22 (1)
PF-II $277,303,676.06 (2)
PF-R (3) (3)
(1) The interest rate on the Class PF-I Interest shall be the Group I Net WAC.
(2) The interest rate on the Class PF-II Interest shall be the Group II Net
WAC.
(3) The Class PF-R Interest shall have no principal amount and shall bear no
interest.
The SWAP REMIC
The following table sets forth the designations, initial principal balances and
interest rates for each interest in the SWAP REMIC:
Class Initial Principal Balance Interest Rate
--------------------------------------------------------------------------------
1-SW1 $131,170,697.55 (1)
--------------------------------------------------------------------------------
1-SW1A $991,429.58 (2)
--------------------------------------------------------------------------------
1-SW1B $991,429.58 (3)
--------------------------------------------------------------------------------
1-SW2A $1,233,858.29 (2)
--------------------------------------------------------------------------------
1-SW2B $1,233,858.29 (3)
--------------------------------------------------------------------------------
1-SW3A $1,486,104.39 (2)
--------------------------------------------------------------------------------
1-SW3B $1,486,104.39 (3)
--------------------------------------------------------------------------------
1-SW4A $1,734,594.69 (2)
--------------------------------------------------------------------------------
1-SW4B $1,734,594.69 (3)
--------------------------------------------------------------------------------
1-SW5A $1,981,763.90 (2)
--------------------------------------------------------------------------------
1-SW5B $1,981,763.90 (3)
--------------------------------------------------------------------------------
1-SW6A $2,214,648.92 (2)
--------------------------------------------------------------------------------
1-SW6B $2,214,648.92 (3)
--------------------------------------------------------------------------------
1-SW7A $2,488,100.77 (2)
--------------------------------------------------------------------------------
1-SW7B $2,488,100.77 (3)
--------------------------------------------------------------------------------
1-SW8A $2,695,928.30 (2)
--------------------------------------------------------------------------------
1-SW8B $2,695,928.30 (3)
--------------------------------------------------------------------------------
1-SW9A $2,870,185.19 (2)
--------------------------------------------------------------------------------
1-SW9B $2,870,185.19 (3)
--------------------------------------------------------------------------------
1-SW10A $2,664,590.07 (2)
--------------------------------------------------------------------------------
1-SW10B $2,664,590.07 (3)
--------------------------------------------------------------------------------
1-SW11A $2,535,085.19 (2)
--------------------------------------------------------------------------------
1-SW11B $2,535,085.19 (3)
--------------------------------------------------------------------------------
1-SW12A $2,411,874.68 (2)
--------------------------------------------------------------------------------
1-SW12B $2,411,874.68 (3)
--------------------------------------------------------------------------------
1-SW13A $2,294,652.38 (2)
--------------------------------------------------------------------------------
1-SW13B $2,294,652.38 (3)
--------------------------------------------------------------------------------
1-SW14A $2,183,126.99 (2)
--------------------------------------------------------------------------------
1-SW14B $2,183,126.99 (3)
--------------------------------------------------------------------------------
1-SW15A $2,077,022.59 (2)
--------------------------------------------------------------------------------
1-SW15B $2,077,022.59 (3)
--------------------------------------------------------------------------------
1-SW16A $1,976,074.42 (2)
--------------------------------------------------------------------------------
1-SW16B $1,976,074.42 (3)
--------------------------------------------------------------------------------
1-SW17A $1,880,032.83 (2)
--------------------------------------------------------------------------------
1-SW17B $1,880,032.83 (3)
--------------------------------------------------------------------------------
1-SW18A $1,788,658.85 (2)
--------------------------------------------------------------------------------
1-SW18B $1,788,658.85 (3)
--------------------------------------------------------------------------------
1-SW19A $1,701,726.13 (2)
--------------------------------------------------------------------------------
-2-
--------------------------------------------------------------------------------
1-SW19B $1,701,726.13 (3)
--------------------------------------------------------------------------------
1-SW20A $3,907,298.66 (2)
--------------------------------------------------------------------------------
1-SW20B $3,907,298.66 (3)
--------------------------------------------------------------------------------
1-SW21A $3,439,653.44 (2)
--------------------------------------------------------------------------------
1-SW21B $3,439,653.44 (3)
--------------------------------------------------------------------------------
1-SW22A $3,000,629.64 (2)
--------------------------------------------------------------------------------
1-SW22B $3,000,629.64 (3)
--------------------------------------------------------------------------------
1-SW23A $2,619,730.72 (2)
--------------------------------------------------------------------------------
1-SW23B $2,619,730.72 (3)
--------------------------------------------------------------------------------
1-SW24A $2,289,123.05 (2)
--------------------------------------------------------------------------------
1-SW24B $2,289,123.05 (3)
--------------------------------------------------------------------------------
1-SW25A $1,042,942.52 (2)
--------------------------------------------------------------------------------
1-SW25B $1,042,942.52 (3)
--------------------------------------------------------------------------------
1-SW26A $971,449.97 (2)
--------------------------------------------------------------------------------
1-SW26B $971,449.97 (3)
--------------------------------------------------------------------------------
1-SW27A $915,520.80 (2)
--------------------------------------------------------------------------------
1-SW27B $915,520.80 (3)
--------------------------------------------------------------------------------
1-SW28A $862,818.90 (2)
--------------------------------------------------------------------------------
1-SW28B $862,818.90 (3)
--------------------------------------------------------------------------------
1-SW29A $813,178.15 (2)
--------------------------------------------------------------------------------
1-SW29B $813,178.15 (3)
--------------------------------------------------------------------------------
1-SW30A $766,425.04 (2)
--------------------------------------------------------------------------------
1-SW30B $766,425.04 (3)
--------------------------------------------------------------------------------
1-SW31A $734,117.98 (2)
--------------------------------------------------------------------------------
1-SW31B $734,117.98 (3)
--------------------------------------------------------------------------------
1-SW32A $987,827.23 (2)
--------------------------------------------------------------------------------
1-SW32B $987,827.23 (3)
--------------------------------------------------------------------------------
1-SW33A $893,281.27 (2)
--------------------------------------------------------------------------------
1-SW33B $893,281.27 (3)
--------------------------------------------------------------------------------
1-SW34A $434,720.13 (2)
--------------------------------------------------------------------------------
1-SW34B $434,720.13 (3)
--------------------------------------------------------------------------------
1-SW35A $478,578.43 (2)
--------------------------------------------------------------------------------
1-SW35B $478,578.43 (3)
--------------------------------------------------------------------------------
1-SW36A $487,437.16 (2)
--------------------------------------------------------------------------------
1-SW36B $487,437.16 (3)
--------------------------------------------------------------------------------
1-SW37A $463,717.62 (2)
--------------------------------------------------------------------------------
1-SW37B $463,717.62 (3)
--------------------------------------------------------------------------------
1-SW38A $441,210.35 (2)
--------------------------------------------------------------------------------
1-SW38B $441,210.35 (3)
--------------------------------------------------------------------------------
1-SW39A $419,883.86 (2)
--------------------------------------------------------------------------------
1-SW39B $419,883.86 (3)
--------------------------------------------------------------------------------
1-SW40A $399,675.68 (2)
--------------------------------------------------------------------------------
1-SW40B $399,675.68 (3)
--------------------------------------------------------------------------------
1-SW41A $380,371.13 (2)
--------------------------------------------------------------------------------
1-SW41B $380,371.13 (3)
--------------------------------------------------------------------------------
1-SW42A $362,071.34 (2)
--------------------------------------------------------------------------------
1-SW42B $362,071.34 (3)
--------------------------------------------------------------------------------
1-SW43A $344,704.93 (2)
--------------------------------------------------------------------------------
-3-
--------------------------------------------------------------------------------
1-SW43B $344,704.93 (3)
--------------------------------------------------------------------------------
1-SW44A $333,541.90 (2)
--------------------------------------------------------------------------------
1-SW44B $333,541.90 (3)
--------------------------------------------------------------------------------
1-SW45A $328,817.78 (2)
--------------------------------------------------------------------------------
1-SW45B $328,817.78 (3)
--------------------------------------------------------------------------------
1-SW46A $314,705.40 (2)
--------------------------------------------------------------------------------
1-SW46B $314,705.40 (3)
--------------------------------------------------------------------------------
1-SW47A $299,714.93 (2)
--------------------------------------------------------------------------------
1-SW47B $299,714.93 (3)
--------------------------------------------------------------------------------
1-SW48A $285,463.47 (2)
--------------------------------------------------------------------------------
1-SW48B $285,463.47 (3)
--------------------------------------------------------------------------------
1-SW49A $271,927.97 (2)
--------------------------------------------------------------------------------
1-SW49B $271,927.97 (3)
--------------------------------------------------------------------------------
1-SW50A $259,075.95 (2)
--------------------------------------------------------------------------------
1-SW50B $259,075.95 (3)
--------------------------------------------------------------------------------
1-SW51A $247,062.60 (2)
--------------------------------------------------------------------------------
1-SW51B $247,062.60 (3)
--------------------------------------------------------------------------------
1-SW52A $306,562.13 (2)
--------------------------------------------------------------------------------
1-SW52B $306,562.13 (3)
--------------------------------------------------------------------------------
1-SW53A $282,828.96 (2)
--------------------------------------------------------------------------------
1-SW53B $282,828.96 (3)
--------------------------------------------------------------------------------
1-SW54A $261,068.14 (2)
--------------------------------------------------------------------------------
1-SW54B $261,068.14 (3)
--------------------------------------------------------------------------------
1-SW55A $160,290.77 (2)
--------------------------------------------------------------------------------
1-SW55B $160,290.77 (3)
--------------------------------------------------------------------------------
1-SW56A $747,805.70 (2)
--------------------------------------------------------------------------------
1-SW56B $747,805.70 (3)
--------------------------------------------------------------------------------
2-SW2 $133,385,059.73 (4)
--------------------------------------------------------------------------------
2-SW1A $1,008,166.42 (5)
--------------------------------------------------------------------------------
2-SW1B $1,008,166.42 (6)
--------------------------------------------------------------------------------
2-SW2A $1,254,687.71 (5)
--------------------------------------------------------------------------------
2-SW2B $1,254,687.71 (6)
--------------------------------------------------------------------------------
2-SW3A $1,511,192.11 (5)
--------------------------------------------------------------------------------
2-SW3B $1,511,192.11 (6)
--------------------------------------------------------------------------------
2-SW4A $1,763,877.31 (5)
--------------------------------------------------------------------------------
2-SW4B $1,763,877.31 (6)
--------------------------------------------------------------------------------
2-SW5A $2,015,219.10 (5)
--------------------------------------------------------------------------------
2-SW5B $2,015,219.10 (6)
--------------------------------------------------------------------------------
2-SW6A $2,252,035.58 (5)
--------------------------------------------------------------------------------
2-SW6B $2,252,035.58 (6)
--------------------------------------------------------------------------------
2-SW7A $2,530,103.73 (5)
--------------------------------------------------------------------------------
2-SW7B $2,530,103.73 (6)
--------------------------------------------------------------------------------
2-SW8A $2,741,439.70 (5)
--------------------------------------------------------------------------------
2-SW8B $2,741,439.70 (6)
--------------------------------------------------------------------------------
2-SW9A $2,918,638.31 (5)
--------------------------------------------------------------------------------
2-SW9B $2,918,638.31 (6)
--------------------------------------------------------------------------------
2-SW10A $2,709,572.43 (5)
--------------------------------------------------------------------------------
2-SW10B $2,709,572.43 (6)
--------------------------------------------------------------------------------
-4-
--------------------------------------------------------------------------------
2-SW11A $2,577,881.31 (5)
--------------------------------------------------------------------------------
2-SW11B $2,577,881.31 (6)
--------------------------------------------------------------------------------
2-SW12A $2,452,590.82 (5)
--------------------------------------------------------------------------------
2-SW12B $2,452,590.82 (6)
--------------------------------------------------------------------------------
2-SW13A $2,333,389.62 (5)
--------------------------------------------------------------------------------
2-SW13B $2,333,389.62 (6)
--------------------------------------------------------------------------------
2-SW14A $2,219,981.51 (5)
--------------------------------------------------------------------------------
2-SW14B $2,219,981.51 (6)
--------------------------------------------------------------------------------
2-SW15A $2,112,085.91 (5)
--------------------------------------------------------------------------------
2-SW15B $2,112,085.91 (6)
--------------------------------------------------------------------------------
2-SW16A $2,009,433.58 (5)
--------------------------------------------------------------------------------
2-SW16B $2,009,433.58 (6)
--------------------------------------------------------------------------------
2-SW17A $1,911,770.67 (5)
--------------------------------------------------------------------------------
2-SW17B $1,911,770.67 (6)
--------------------------------------------------------------------------------
2-SW18A $1,818,854.15 (5)
--------------------------------------------------------------------------------
2-SW18B $1,818,854.15 (6)
--------------------------------------------------------------------------------
2-SW19A $1,730,453.87 (5)
--------------------------------------------------------------------------------
2-SW19B $1,730,453.87 (6)
--------------------------------------------------------------------------------
2-SW20A $3,973,259.84 (5)
--------------------------------------------------------------------------------
2-SW20B $3,973,259.84 (6)
--------------------------------------------------------------------------------
2-SW21A $3,497,720.06 (5)
--------------------------------------------------------------------------------
2-SW21B $3,497,720.06 (6)
--------------------------------------------------------------------------------
2-SW22A $3,051,284.86 (5)
--------------------------------------------------------------------------------
2-SW22B $3,051,284.86 (6)
--------------------------------------------------------------------------------
2-SW23A $2,663,955.78 (5)
--------------------------------------------------------------------------------
2-SW23B $2,663,955.78 (6)
--------------------------------------------------------------------------------
2-SW24A $2,327,766.95 (5)
--------------------------------------------------------------------------------
2-SW24B $2,327,766.95 (6)
--------------------------------------------------------------------------------
2-SW25A $1,060,548.98 (5)
--------------------------------------------------------------------------------
2-SW25B $1,060,548.98 (6)
--------------------------------------------------------------------------------
2-SW26A $987,849.53 (5)
--------------------------------------------------------------------------------
2-SW26B $987,849.53 (6)
--------------------------------------------------------------------------------
2-SW27A $930,976.20 (5)
--------------------------------------------------------------------------------
2-SW27B $930,976.20 (6)
--------------------------------------------------------------------------------
2-SW28A $877,384.60 (5)
--------------------------------------------------------------------------------
2-SW28B $877,384.60 (6)
--------------------------------------------------------------------------------
2-SW29A $826,905.85 (5)
--------------------------------------------------------------------------------
2-SW29B $826,905.85 (6)
--------------------------------------------------------------------------------
2-SW30A $779,363.46 (5)
--------------------------------------------------------------------------------
2-SW30B $779,363.46 (6)
--------------------------------------------------------------------------------
2-SW31A $746,511.02 (5)
--------------------------------------------------------------------------------
2-SW31B $746,511.02 (6)
--------------------------------------------------------------------------------
2-SW32A $1,004,503.27 (5)
--------------------------------------------------------------------------------
2-SW32B $1,004,503.27 (6)
--------------------------------------------------------------------------------
2-SW33A $908,361.23 (5)
--------------------------------------------------------------------------------
2-SW33B $908,361.23 (6)
--------------------------------------------------------------------------------
2-SW34A $442,058.87 (5)
--------------------------------------------------------------------------------
2-SW34B $442,058.87 (6)
--------------------------------------------------------------------------------
-5-
--------------------------------------------------------------------------------
2-SW35A $486,657.57 (5)
--------------------------------------------------------------------------------
2-SW35B $486,657.57 (6)
--------------------------------------------------------------------------------
2-SW36A $495,665.84 (5)
--------------------------------------------------------------------------------
2-SW36B $495,665.84 (6)
--------------------------------------------------------------------------------
2-SW37A $471,545.88 (5)
--------------------------------------------------------------------------------
2-SW37B $471,545.88 (6)
--------------------------------------------------------------------------------
2-SW38A $448,658.65 (5)
--------------------------------------------------------------------------------
2-SW38B $448,658.65 (6)
--------------------------------------------------------------------------------
2-SW39A $426,972.14 (5)
--------------------------------------------------------------------------------
2-SW39B $426,972.14 (6)
--------------------------------------------------------------------------------
2-SW40A $406,422.82 (5)
--------------------------------------------------------------------------------
2-SW40B $406,422.82 (6)
--------------------------------------------------------------------------------
2-SW41A $386,792.37 (5)
--------------------------------------------------------------------------------
2-SW41B $386,792.37 (6)
--------------------------------------------------------------------------------
2-SW42A $368,183.66 (5)
--------------------------------------------------------------------------------
2-SW42B $368,183.66 (6)
--------------------------------------------------------------------------------
2-SW43A $350,524.07 (5)
--------------------------------------------------------------------------------
2-SW43B $350,524.07 (6)
--------------------------------------------------------------------------------
2-SW44A $339,172.60 (5)
--------------------------------------------------------------------------------
2-SW44B $339,172.60 (6)
--------------------------------------------------------------------------------
2-SW45A $334,368.72 (5)
--------------------------------------------------------------------------------
2-SW45B $334,368.72 (6)
--------------------------------------------------------------------------------
2-SW46A $320,018.10 (5)
--------------------------------------------------------------------------------
2-SW46B $320,018.10 (6)
--------------------------------------------------------------------------------
2-SW47A $304,774.57 (5)
--------------------------------------------------------------------------------
2-SW47B $304,774.57 (6)
--------------------------------------------------------------------------------
2-SW48A $290,282.53 (5)
--------------------------------------------------------------------------------
2-SW48B $290,282.53 (6)
--------------------------------------------------------------------------------
2-SW49A $276,518.53 (5)
--------------------------------------------------------------------------------
2-SW49B $276,518.53 (6)
--------------------------------------------------------------------------------
2-SW50A $263,449.55 (5)
--------------------------------------------------------------------------------
2-SW50B $263,449.55 (6)
--------------------------------------------------------------------------------
2-SW51A $251,233.40 (5)
--------------------------------------------------------------------------------
2-SW51B $251,233.40 (6)
--------------------------------------------------------------------------------
2-SW52A $311,737.37 (5)
--------------------------------------------------------------------------------
2-SW52B $311,737.37 (6)
--------------------------------------------------------------------------------
2-SW53A $287,603.54 (5)
--------------------------------------------------------------------------------
2-SW53B $287,603.54 (6)
--------------------------------------------------------------------------------
2-SW54A $265,475.36 (5)
--------------------------------------------------------------------------------
2-SW54B $265,475.36 (6)
--------------------------------------------------------------------------------
2-SW55A $162,996.73 (5)
--------------------------------------------------------------------------------
2-SW55B $162,996.73 (6)
--------------------------------------------------------------------------------
2-SW56A $760,429.80 (5)
--------------------------------------------------------------------------------
2-SW56B $760,429.80 (6)
--------------------------------------------------------------------------------
SW-R (7) (7)
--------------------------------------------------------------------------------
(1) The interest rate on the Class 1-SW1 Interest shall be a per annum rate
equal to the Group I Net WAC.
-6-
(2) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the designation "A"
shall be a per annum rate equal to 2 times the Group I Net WAC, subject to a
maximum rate of 2 times the REMIC Swap Rate for such Distribution Date.
(3) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the designation "B"
shall be a per annum rate equal to the greater of (x) the excess, if any, of (i)
2 times the Group I Net WAC over (ii) 2 times the REMIC Swap Rate for such
Distribution Date and (y) 0.00%.
(4) The interest rate on the Class 2-SW2 Interest shall be a per annum rate
equal to the Group II Net WAC.
(5) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the designation "A"
shall be a per annum rate equal to 2 times the Group II Net WAC, subject to a
maximum rate of 2 times the REMIC Swap Rate for such Distribution Date.
(6) For any Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the designation "B"
shall be a per annum rate equal to the greater of (x) the excess, if any, of (i)
2 times the Group II Net WAC over (ii) 2 times the REMIC Swap Rate for such
Distribution Date and (y) 0.00%.
(7) The Class SW-R Interest shall have no principal amount and shall bear no
interest.
REMIC 1
The following table sets forth the designations, initial principal balances and
interest rates for each interest in REMIC 1:
Class Initial Principal Balance Interest Rate
--------------------------------------------------------------------------------
LT1-AF1 27,375,000.00 (1)
--------------------------------------------------------------------------------
LT1-R$100 25.00 (1)
--------------------------------------------------------------------------------
LT1-AF2 17,599,500.00 (1)
--------------------------------------------------------------------------------
LT1-AF3 1,221,750.00 (1)
--------------------------------------------------------------------------------
LT1-AF4 7,430,250.00 (1)
--------------------------------------------------------------------------------
LT1-AF5 5,958,500.00 (1)
--------------------------------------------------------------------------------
LT1-AV1 30,016,500.00 (1)
--------------------------------------------------------------------------------
LT1-AV2 25,574,250.00 (1)
--------------------------------------------------------------------------------
LT1-AV3 5,000,000.00 (1)
--------------------------------------------------------------------------------
LT1-M1A 2,823,250.00 (1)
--------------------------------------------------------------------------------
LT1-M1B 2,814,250.00 (1)
--------------------------------------------------------------------------------
LT1-M2A 1,377,000.00 (1)
--------------------------------------------------------------------------------
LT1-M2B 1,373,000.00 (1)
--------------------------------------------------------------------------------
LT1-M3A 723,000.00 (1)
--------------------------------------------------------------------------------
LT1-M3B 720,750.00 (1)
--------------------------------------------------------------------------------
LT1-M4A 1,859,250.00 (1)
--------------------------------------------------------------------------------
-7-
--------------------------------------------------------------------------------
LT1-M4B 1,853,250.00 (1)
--------------------------------------------------------------------------------
LT1-M5A 413,000.00 (1)
--------------------------------------------------------------------------------
LT1-M5B 412,000.00 (1)
--------------------------------------------------------------------------------
LT1-M6A 344,250.00 (1)
--------------------------------------------------------------------------------
LT1-M6B 343,250.00 (1)
--------------------------------------------------------------------------------
LT1-B1 687,500.00 (1)
--------------------------------------------------------------------------------
LT1-B2 687,500.00 (1)
--------------------------------------------------------------------------------
LT1-B3 893,750.00 (1)
--------------------------------------------------------------------------------
LT1-IX 137,501,103.64 (1)
--------------------------------------------------------------------------------
LT1-II1A 17,179.9906 (1)
--------------------------------------------------------------------------------
LT1-II1B 136,350.0406 (2)
--------------------------------------------------------------------------------
LT1-II2A 17,470.3380 (1)
--------------------------------------------------------------------------------
LT1-II2B 138,651.8380 (3)
--------------------------------------------------------------------------------
LT1-IIX 274,692,226.4327 (1)
--------------------------------------------------------------------------------
LT1-IO (4) (4)
--------------------------------------------------------------------------------
LT1-R (5) (5)
--------------------------------------------------------------------------------
(1) For each Distribution Date, the interest rate for each of the REMIC 1
Interests (other than the Class LT1-II1B, the Class LT1-II2B, the Class LT1-IO
and the Class LT1-R Interests) shall be a per annum rate (but not less than
zero) equal to the product of (i) the weighted average of the interest rates on
the SWAP REMIC Regular Interests for such Distribution Date and (ii) a fraction
the numerator of which is 30 and the denominator of which is the actual number
of days in the Accrual Period for the LIBOR Certificates, provided however, that
for any Distribution Date on which the Class LT1-IO Interest is entitled to a
portion of interest accruals on a SWAP REMIC Regular Interest ending with a
designation "A" as described in footnote 4 below, such weighted average shall be
computed by first subjecting the rate on such SWAP REMIC Regular Interest to a
cap equal to Swap LIBOR for such Distribution Date.
(2) For each Distribution Date, the interest rate for the Class LT1-II1B
Interest shall be a per annum rate equal to the product of (i) the weighted
average of the interest rates on the SWAP REMIC Regular Interests beginning with
the designation "1" for such Distribution Date and (ii) a fraction the numerator
of which is 30 and the denominator of which is the actual number of days in the
Accrual Period for the LIBOR Certificates, provided, however, that for any
Distribution Date on which the Class LT1-IO Interest is entitled to a portion of
interest accruals on a SWAP REMIC Regular Interest ending with a designation "A"
as described in footnote 4 below, such weighted average shall be computed by
first subjecting the rate on such SWAP REMIC Regular Interest to a cap equal to
Swap LIBOR for such Distribution Date.
(3) For each Distribution Date, the interest rate for the Class LT1-II2B
Interest shall be a per annum rate equal to the product of (i) the weighted
average of the interest rates on the SWAP REMIC Regular Interests beginning with
the designation "2" for such Distribution Date and (ii) a fraction the numerator
of which is 30 and the denominator of which is the actual number of days in the
Accrual Period for the LIBOR Certificates, provided, however, that for any
Distribution Date on which the Class LT1-IO Interest is entitled to a portion of
interest accruals on a SWAP REMIC Regular Interest ending with a designation "A"
as described in footnote 4 below, such weighted average shall be computed by
first subjecting the rate on such SWAP REMIC Regular Interest to a cap equal to
Swap LIBOR for such Distribution Date.
(4) The Class LT1-IO Interest is an interest-only class that does not have a
principal balance. For only those Distribution Dates listed in the first column
of the table below, the Class LT1-IO shall be entitled to interest accrued on
the SWAP REMIC Regular Interest listed in the second column below at a per annum
-8-
rate equal to the excess, if any, of (i) the interest rate for such SWAP REMIC
Regular Interest for such Distribution Date over (ii) Swap LIBOR for such
Distribution Date.
Distribution Date SWAP REMIC Regular Interest
1 Class 1-SW1A
Class 2-SW1A
1-2 Class 1-SW2A
Class 2-SW2A
1-3 Class 1-SW3A
Class 2-SW3A
1-4 Class 1-SW4A
Class 2-SW4A
1-5 Class 1-SW5A
Class 2-SW5A
1-6 Class 1-SW6A
Class 2-SW6A
1-7 Class 1-SW7A
Class 2-SW7A
1-8 Class 1-SW8A
Class 2-SW8A
1-9 Class 1-SW9A
Class 2-SW9A
1-10 Class 1-SW10A
Class 2-SW10A
1-11 Class 1-SW11A
Class 2-SW11A
1-12 Class 1-SW12A
Class 2-SW12A
1-13 Class 1-SW13A
Class 2-SW13A
1-14 Class 1-SW14A
Class 2-SW14A
1-15 Class 1-SW15A
Class 2-SW15A
1-16 Class 1-SW16A
Class 2-SW16A
1-17 Class 1-SW17A
Class 2-SW17A
1-18 Class 1-SW18A
Class 2-SW18A
1-19 Class 1-SW19A
Class 2-SW19A
1-20 Class 1-SW20A
Class 2-SW20A
1-21 Class 1-SW21A
Class 2-SW21A
1-22 Class 1-SW22A
Class 2-SW22A
1-23 Class 1-SW23A
Class 2-SW23A
-9-
1-24 Class 1-SW24A
Class 2-SW24A
1-25 Class 1-SW25A
Class 2-SW25A
1-26 Class 1-SW26A
Class 2-SW26A
1-27 Class 1-SW27A
Class 2-SW27A
1-28 Class 1-SW28A
Class 2-SW28A
1-29 Class 1-SW29A
Class 2-SW29A
1-30 Class 1-SW30A
Class 2-SW30A
1-31 Class 1-SW31A
Class 2-SW31A
1-32 Class 1-SW32A
Class 2-SW32A
1-33 Class 1-SW33A
Class 2-SW33A
1-34 Class 1-SW34A
Class 2-SW34A
1-39 Class 1-SW35A
Class 2-SW35A
1-40 Class 1-SW36A
Class 2-SW36A
1-41 Class 1-SW37A
Class 2-SW37A
1-42 Class 1-SW38A
Class 2-SW38A
1-43 Class 1-SW39A
Class 2-SW39A
1-44 Class 1-SW40A
Class 2-SW40A
1-45 Class 1-SW41A
Class 2-SW41A
1-46 Class 1-SW42A
Class 2-SW42A
1-47 Class 1-SW43A
Class 2-SW43A
1-48 Class 1-SW44A
Class 2-SW44A
1-49 Class 1-SW45A
Class 2-SW45A
1-50 Class 1-SW46A
Class 2-SW46A
1-51 Class 1-SW47A
Class 2-SW47A
1-52 Class 1-SW48A
Class 2-SW48A
-10-
1-53 Class 1-SW49A
Class 2-SW49A
1-54 Class 1-SW50A
Class 2-SW50A
1-55 Class 1-SW51A
Class 2-SW51A
1-56 Class 1-SW52A
Class 2-SW52A
1-57 Class 1-SW53A
Class 2-SW53A
1-58 Class 1-SW54A
Class 2-SW54A
1-59 Class 1-SW55A
Class 2-SW55A
1-60 Class 1-SW56A
Class 2-SW56A
(5) The Class LT1-R Interest shall have no principal amount and shall bear no
interest.
REMIC 2
The following table sets forth the designation, the initial principal balances
and the interest rates in each of the interests in REMIC 2.
Class Initial Principal Balance Interest Rate
LT2-AF1 109,500,000.00 (1)
LT2-AF2 70,398,000.00 (1)
LT2-AF3 4,887,000.00 (1)
LT2-AF4 29,721,000.00 (1)
LT2-AF5 23,834,000.00 (1)
LT2-AV1 120,066,000.00 (1)
LT2-AV2 102,297,000.00 (1)
LT2-AV3 20,000,000.00 (1)
LT2-M1A 11,293,000.00 (1)
LT2-M1B 11,257,000.00 (1)
LT2-M2A 5,508,000.00 (1)
LT2-M2B 5,492,000.00 (1)
LT2-M3A 2,892,000.00 (1)
LT2-M3B 2,883,000.00 (1)
LT2-M4A 7,437,000.00 (1)
LT2-M4B 7,413,000.00 (1)
LT2-M5A 1,652,000.00 (1)
LT2-M5B 1,648,000.00 (1)
LT2-M6A 1,377,000.00 (1)
LT2-M6B 1,373,000.00 (1)
LT2-B1 2,750,000.00 (1)
LT2-B2 2,750,000.00 (1)
LT2-B3 3,575,000.00 (1)
REMIC 2 X Interest (2) (2)
LT2-IO (3) (3)
LT2-R 100.00 (4)
-11-
(1) The interest rates on each of these REMIC 2 Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the corresponding Class of
Certificates, provided that in lieu of the applicable Available Funds Caps set
forth in the definition of an applicable Pass-Through Rate, the applicable REMIC
2 Net WAC Cap shall be used.
(2) The REMIC 2 X Interest shall have an initial principal balance equal to
$657.28. The REMIC 2 X Interest shall accrue interest on a notional balance set
forth in the definition of REMIC 2 X Interest at a rate equal to the REMIC 2 X
Interest Rate.
(3) The Class LT2-IO Interest shall have no principal amount and will not have
an interest rate, but will be entitled to 100% of the interest accrued with
respect to the Class LT1-IO Interest.
(4) The Class LT2-R Interest shall bear no interest.
The Certificates
The following table sets forth the Class designation, Certificate Interest Rate,
and initial Class Principal Amount for each Class of Certificates comprising
interests in the Trust Fund.
Class Initial Principal Balance Interest Rate
AF-1 109,500,000.00 (1)
AF-2 70,398,000.00 (1)
AF-3 4,887,000.00 (1)
AF-4 29,721,000.00 (1)
AF-5 23,834,000.00 (1)
AV-1 120,066,000.00 (1)
AV-2 102,297,000.00 (1)
AV-3 20,000,000.00 (1)
M-1A 11,293,000.00 (1)
M-1B 11,257,000.00 (1)
M-2A 5,508,000.00 (1)
M-2B 5,492,000.00 (1)
M-3A 2,892,000.00 (1)
M-3B 2,883,000.00 (1)
M-4A 7,437,000.00 (1)
M-4B 7,413,000.00 (1)
M-5A 1,652,000.00 (1)
M-5B 1,648,000.00 (1)
M-6A 1,377,000.00 (1)
M-6B 1,373,000.00 (1)
B-1 2,750,000.00 (1)
B-2 2,750,000.00 (1)
B-3 3,575,000.00 (1)
X (2) (2)
ES (3) (3)
R (4) (4)
-12-
(1) Each of these Classes of Certificates shall bear interest at a per annum
rate equal to the Pass-Through Rate for such Certificates set forth in the
definitions herein.
(2) For federal income tax purposes, the Class X Certificate shall represent (i)
the right to receive all distributions with respect to the REMIC 2 Regular
Interests represented by the REMIC 2 X Interest and the Class LT2-IO Interest,
(ii) the right to amounts distributable pursuant to Section 5.05(i) and (iii)
certain rights and obligations with respect to notional principal contracts as
described in Section 2.07.
(3) The Class ES Certificates shall be entitled to the amounts set forth herein
and shall not represent a REMIC regular interest.
(4) The Class R Interest represents ownership of the Class PF-R Interest, the
Class SW-R Interest, the Class LT1-R Interest and the Class LT2-R Interest.
In consideration of the mutual agreements herein contained, the Depositor,
the Servicing Administrator, the Servicer, the Securities Administrator, the
Backup 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 Servicing Administration Practices: With respect to any Mortgage
Loan, as applicable, either (x) those customary mortgage master servicing
practices of prudent mortgage servicing institutions that master service
mortgage loans of the same type and quality as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property (or Underlying Mortgaged
Property in the case of a Co-op Loan) is located, to the extent applicable to
the Servicing Administrator (except in its capacity as successor to the
Servicer), or (y) as provided in Section 5.01 hereof, but in no event below the
standard set forth in clause (x).
Accepted Servicing Practices: With respect to any Mortgage Loan, the
customary mortgage servicing practices of prudent mortgage lending institutions
which service for their own account mortgage loans of the same type as such
Mortgage Loan in the jurisdiction in which the related Mortgaged Property is
located.
Accrual Period: With respect to the LIBOR Certificates, the REMIC 1
Regular Interests and the REMIC 2 Regular Interests (other than the REMIC 2
Regular Interests related to the Fixed Rate Certificates) 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 and with respect to the Fixed
Rate Certificates and the REMIC 2 Regular Interests related to the Fixed Rate
Certificates, the SWAP REMIC Regular Interests and the Pre-Funding REMIC Regular
Interests, the calendar month immediately preceding the month in which such
Distribution Date occurs. All calculations of interest on the LIBOR
Certificates, the REMIC 1 Regular Interests and the REMIC 2 Regular Interests
(other than the REMIC 2 Regular Interests related to the Fixed Rate
Certificates) will be made on the basis of the actual number of days elapsed in
the related Accrual Period and a 360 day year and all calculations of interest
on the Fixed Rate Certificates and the REMIC 2 Regular Interests related to the
Fixed Rate Certificates, the SWAP REMIC Regular
-13-
Interests and the Pre-Funding REMIC Regular Interests will be made on the basis
of a 360 day year consisting of twelve 30 day months.
Addition Notice: With respect to the transfer of Subsequent Mortgage Loans
to the Trust Fund pursuant to Section 2.11, a notice of the Seller'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,
the Custodian, the Certificate Insurer 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 N.
Administration Fee: The sum of the Aggregate Servicing Fee, the Securities
Administrator Fee and the Credit Risk Manager Fee.
Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 5.01.
Advance Facility: A financing or other facility as described in Section
5.02(a).
Advance Facility Notice: As defined in Section 5.02(b) hereof.
Advance Financing Person: As defined in Section 5.02(a) hereof.
Advance Reimbursement Amounts: As defined in Section 5.02(b) hereof.
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 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 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 and the Class B-3
Certificate Principal Balance, in each case as of such date of determination.
Aggregate Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the immediately 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
immediately preceding Distribution Date for the period covered by such payment
of interest (in each case payable from interest collections on such Mortgage
Loan).
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
-14-
Amounts For Future Distribution: As to any Distribution Date, the
aggregate amount held in the related Collection Account (with respect to the
Servicer) or the Servicing Administrator Collection Account (with respect to the
Servicing Administrator) at the close of business on the immediately preceding
Determination Date on account of (i) all Scheduled Payments or portions thereof
received in respect of the Mortgage Loans due after the related Due Period and
(ii) Principal Prepayments and Liquidation Proceeds received in respect of the
Mortgage Loans after the last day of the related Prepayment Period.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the Aggregate Certificate Principal Balance after
distributions of principal on such Distribution Date exceeds the sum of the (x)
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 amount on
deposit in the Pre-Funding Account).
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), 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.
Authenticating Agent: As defined in Section 6.10 hereof.
Available Funds Cap: Any of the Group I Available Funds Cap, the Group I
Net WAC Cap, the Group II Available Funds Cap or the Subordinated Available
Funds Cap, as applicable.
Backup Servicer: JPMorgan, or its permitted successor in interest or
assignee or any successor Backup Servicer appointed pursuant to the provisions
hereof.
Balloon Loan: A Mortgage Loan having an original term to stated maturity
of generally up 15 years which provides for level monthly payments of principal
and interest generally 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 6.06). As of the Closing Date, each of
the Class A, Class M and Class B Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in the City of New York, New York, or the city in
which the Corporate Trust Office of the Trustee, the Securities Administrator or
the Certificate Insurer is located, or financial and savings and loan
institutions in the States of California, Texas, Minnesota, Illinois or Colorado
are authorized or obligated by law or executive order to be closed.
Capitalized Interest Account: The account defined in Section 5.10 herein.
-00-
Xxxxxxxxxxx Xxxxxxxx Xxxxxx: The amount paid by the Seller to the
Securities Administrator for deposit into the Capitalized Interest Account on
the Closing Date pursuant to Section 5.10, which amount is $293,247.
Certificate: Any one of the certificates of any Class executed by the
Securities Administrator and authenticated by the Authenticating Agent 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(f) in the name of the
Trustee for the benefit of the Certificateholders and designated "JPMorgan Chase
Bank, N.A., as securities administrator for U.S. Bank National Association, as
trustee, in trust for registered holders of Terwin Mortgage Trust, Asset-Backed
Certificates, Series XXXX 0000-00XX." 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 I or Certificate Group II.
Certificate Group I: The Group I Senior Certificates and Class R
Certificates. For purposes of Section 2.07 hereof, Certificate Group I shall be
related to Group I.
Certificate Group II: The Group II Senior Certificates. For purposes of
Section 2.07 hereof, Certificate Group II shall be related to Group II.
Certificate Insurance Policy: The irrevocable Certificate Guaranty
Insurance Policy, No. 51683-N, including any endorsements thereto, issued by the
Certificate Insurer with respect to the Class AF-2, Class AF-4 and Class AF-5
Certificates.
Certificate Insurer: Financial Security Assurance Inc., a New York
financial guaranty insurance company, or any successor thereto.
Certificate Insurer Account: The account established pursuant to Section
5.07(g) hereof.
Certificate Insurer Contact Persons: Collectively, the officers designated
by each Servicer to provide information to the Certificate Insurer pursuant to
Section 5.07(m).
Certificate Insurer Default: A default by the Certificate Insurer in its
obligations under the Certificate Insurance Policy.
Certificate Insurer Premium: With respect to any Distribution Date, an
amount equal to 1/12th of the product of (a) the aggregate Certificate Principal
Balance of the Class AF-2, Class AF-4 and Class AF-5 Certificates as of such
Distribution Date (prior to giving effect to any distributions thereon on such
Distribution Date) and (b) the Certificate Insurer Premium Rate.
Certificate Insurer Premium Rate: The per annum rate at which the
Certificate Insurer Premium is determined, as described in the commitment letter
dated as of October 17, 2005, between the Depositor, the Seller and the
Certificate Insurer.
Certificate Insurer Reimbursement Amount: The sum of (i) all amounts paid
by the Certificate Insurer under the Certificate Insurance Policy which have not
been previously reimbursed, (ii) all unpaid Certificate Insurer Premiums, (iii)
all costs and expenses incurred by the Certificate Insurer on behalf of itself
or the Class AF-2, Class AF-4 and Class AF-5 Certificates in connection with any
actions, suits or proceedings with respect to the exercise or enforcement of any
rights under the Certificate Insurance
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Policy or this Agreement and (iv) interest on the foregoing at the respective
Pass-Through Rate on each of the Class AF-2, Class AF-4 and Class AF-5
Certificates.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than a Class X
or Class ES 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 5.05, and (2) any Applied Realized Loss Amounts allocated to such
Certificate on previous Distribution Dates pursuant to Section 5.05(j).
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 in respect of principal 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). Solely for the purposes of determining the
Certificate Insurer's rights as subrogee for payments pursuant to Section 5.05,
"Certificate Principal Balance" of the Class AF-2, Class AF-4 and Class AF-5
Certificates shall not be reduced by the amount of any payments made by the
Certificate Insurer in respect of principal on such Certificates under the
Certificate Insurance Policy, except to the extent such payment shall have been
reimbursed to the Certificate Insurer pursuant to the provisions of this
Agreement. Instead, the Certificate Insurer shall be subrogated to such amounts
paid under the Certificate Insurance Policy.
Certificate Register: The register maintained pursuant to Section 6.02
hereof.
Certificate Registrar: The Certificate Registrar appointed pursuant to
Section 6.02 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 the Book-Entry Certificates) in the case of any
Class of Certificates, and, with respect to the Class AF-2, Class AF-4 and Class
AF-5 Certificates, the Certificate Insurer (except with respect to distributions
pursuant to Section 5.05, the Certificate Insurer shall only be a
Certificateholder with respect to the Class AF-2, Class AF-4 and Class AF-5
Certificates to the extent of any amount paid under the Certificate Insurance
Policy), 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, the Trustee and the Certificate
Registrar 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 6.01 hereof.
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Class A Certificate Principal Balance: For any date of determination, the
sum of the Class AF-1 Certificate Principal Balance, the Class AF-2 Certificate
Principal Balance, the Class AF-3 Certificate Principal Balance, the Class AF-4
Certificate Principal Balance, the Class AF-5 Certificate Principal Balance, the
Class AV-1 Certificate Principal Balance, the Class AV-2 Certificate Principal
Balance and the Class AV-3 Certificate Principal Balance.
Class A Certificates: Any of the Class AF-1 Certificates, the Class AF-2
Certificates, the Class AF-3 Certificates, the Class AF-4 Certificates, the
Class AF-5 Certificates, the Class AV-1 Certificates, the Class AV-2
Certificates and the Class AV-3 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 Trigger
Event exists, 100% of the Principal Distribution Amount for such Distribution
Date and (2) on or after the Stepdown Date where a Trigger Event does not exist,
the excess of (A) the Class A Certificate Principal Balance and the Class R
Certificate Principal Balance immediately prior to such Distribution Date over
(B) the lesser of (i) 73.20% of the Stated Principal Balance of the Mortgage
Loans as of the end of the immediately preceding Due Period and (ii) 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; 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 and Class R Certificates.
Class AF-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AF-1 Certificates.
Class AF-1 Certificates: Any Certificate designated as a "Class AF-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AF-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AF-1 Pass-Through Rate on
the Class AF-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AF-1 Certificates.
Class AF-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AF-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AF-1 Certificates with respect to Class AF-1 Current Interest and Class AF-1
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AF-1
Pass-Through Rate for the related Accrual Period.
Class AF-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.150% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.300% per annum.
Class AF-1 Pass-Through Rate: For the first Distribution Date, 4.14688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class AF-1 Margin, (2) the Group I Available Funds Cap for such
Distribution Date and (3) the Group I Maximum Rate Cap for such Distribution
Date.
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Class AF-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AF-2 Certificates.
Class AF-2 Certificates: Any Certificate designated as a "Class AF-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AF-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AF-2 Pass-Through Rate on
the Class AF-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AF-2 Certificates.
Class AF-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AF-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AF-2 Certificates with respect to Class AF-2 Current Interest and Class AF-2
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AF-2
Pass-Through Rate for the related Accrual Period.
Class AF-2 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class AF-2 Certificates, the
least of (1) 4.761% per annum, (2) the Group I Net WAC Cap for such Distribution
Date and (3) the Group I Maximum Rate Cap for such Distribution Date and, as of
any Distribution Date after the Optional Termination Date, the least of (1)
5.261% per annum, (2) the Group I Net WAC Cap for such Distribution Date and (3)
the Group I Maximum Rate Cap for such Distribution Date.
Class AF-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AF-3 Certificates.
Class AF-3 Certificates: Any Certificate designated as a "Class AF-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AF-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AF-3 Pass-Through Rate on
the Class AF-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AF-3 Certificates.
Class AF-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AF-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AF-3 Certificates with respect to Class AF-3 Current Interest and Class AF-3
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AF-3
Pass-Through Rate for the related Accrual Period.
Class AF-3 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class AF-3 Certificates, the
least of (1) 5.300% per annum, (2) the Group I Net
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WAC Cap for such Distribution Date and (3) the Group I Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 5.800% per annum, (2) the Group I Net WAC Cap
for such Distribution Date and (3) the Group I Maximum Rate Cap for such
Distribution Date.
Class AF-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AF-4 Certificates.
Class AF-4 Certificates: Any Certificate designated as a "Class AF-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AF-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AF-4 Pass-Through Rate on
the Class AF-4 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AF-4 Certificates.
Class AF-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AF-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AF-4 Certificates with respect to Class AF-4 Current Interest and Class AF-4
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AF-4
Pass-Through Rate for the related Accrual Period.
Class AF-4 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class AF-4 Certificates, the
least of (1) 5.470% per annum, (2) the Group I Net WAC Cap for such Distribution
Date and (3) the Group I Maximum Rate Cap for such Distribution Date and, as of
any Distribution Date after the Optional Termination Date, the least of (1)
5.970% per annum, (2) the Group I Net WAC Cap for such Distribution Date and (3)
the Group I Maximum Rate Cap for such Distribution Date.
Class AF-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AF-5 Certificates.
Class AF-5 Certificates: Any Certificate designated as a "Class AF-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AF-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AF-5 Pass-Through Rate on
the Class AF-5 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AF-5 Certificates.
Class AF-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AF-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AF-5 Certificates with respect to Class AF-5 Current Interest and Class AF-5
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such
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excess (to the extent permitted by applicable law) at the Class AF-5
Pass-Through Rate for the related Accrual Period.
Class AF-5 Lockout Distribution Amount: For any Distribution Date, an
amount equal to the product of (x) the Class AF-5 Lockout Distribution
Percentage for such Distribution Date and (y) the Class AF-5 Pro Rata
Distribution Amount for such Distribution Date. In no event shall the Class AF-5
Lockout Distribution Amount for a Distribution Date exceed the Principal
Distribution Amount for such Distribution Date or the Certificate Principal
Balance of the Class AF-5 Certificates immediately prior to such Distribution
Date.
Class AF-5 Lockout Distribution Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
Distribution Date Occurring In Lockout Percentage
------------------------------ ------------------
November 2005 - October 2008 0%
November 2008 - October 2010 45%
November 2010 - October 2011 80%
November 2011 - October 2012 100%
November 2012 and thereafter 300%
Class AF-5 Pro Rata Distribution Amount: For any Distribution Date, an
amount equal to the product of (x) a fraction expressed as a percentage, the
numerator of which is the Certificate Principal Balance of the Class AF-5
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Certificate Principal Balance of the Group I Senior
Certificates immediately prior to such Distribution Date and (y) the Principal
Distribution Amount for such Distribution Date.
Class AF-5 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class AF-5 Certificates, the
least of (1) 5.033% per annum, (2) the Group I Net WAC Cap for such Distribution
Date and (3) the Group I Maximum Rate Cap for such Distribution Date and, as of
any Distribution Date after the Optional Termination Date, the least of (1)
5.533% per annum, (2) the Group I Net WAC Cap for such Distribution Date and (3)
the Group I Maximum Rate Cap for such Distribution Date.
Class AV-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AV-1 Certificates.
Class AV-1 Certificates: Any Certificate designated as a "Class AV-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AV-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-1 Pass-Through Rate on
the Class AV-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AV-1 Certificates.
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Xxxxx XX-0 Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-1 Certificates with respect to Class AV-1 Current Interest and Class AV-1
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AV-1
Pass-Through Rate for the related Accrual Period.
Class AV-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.140% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.280% per annum.
Class AV-1 Pass-Through Rate: For the first Distribution Date, 4.13688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class AV-1 Margin, (2) the Group II Available Funds Cap for such
Distribution Date and (3) the Group II Maximum Rate Cap for such Distribution
Date.
Class AV-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AV-2 Certificates.
Class AV-2 Certificates: Any Certificate designated as a "Class AV-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class AV-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-2 Pass-Through Rate on
the Class AV-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AV-2 Certificates.
Class AV-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-2 Certificates with respect to Class AV-2 Current Interest and Class AV-2
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AV-2
Pass-Through Rate for the related Accrual Period.
Class AV-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.290% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.580% per annum.
Class AV-2 Pass-Through Rate: For the first Distribution Date, 4.28688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class AV-2 Margin, (2) the Group II Available Funds Cap for such
Distribution Date and (3) the Group II Maximum Rate Cap for such Distribution
Date.
Class AV-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class AV-3 Certificates.
Class AV-3 Certificates: Any Certificate designated as a "Class AV-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
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Class AV-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-3 Pass-Through Rate on
the Class AV-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class AV-3 Certificates.
Class AV-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-3 Certificates with respect to Class AV-3 Current Interest and Class AV-3
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class AV-3
Pass-Through Rate for the related Accrual Period.
Class AV-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.400% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.800% per annum.
Class AV-3 Pass-Through Rate: For the first Distribution Date, 4.39688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class AV-3 Margin, (2) the Group II Available Funds Cap for such
Distribution Date and (3) the Group II Maximum Rate Cap for such Distribution
Date.
Class B Certificates: The Class B-1 Certificates, Class B-2 Certificates
and Class B-3 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 the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the Current Interest and Interest
Carry Forward Amount portions of any previous distributions on such Class that
are 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.
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 Class B-1 Current Interest and Class B-1
Interest Carry Forward Amounts 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.
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Class B-1 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class B-1 Certificates, the
least of (1) 6.500% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 7.000% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate 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, the
Class R Certificate Principal Balance and the Class M Certificate Principal
Balance have been reduced to zero and a Trigger Event exists, or as long as a
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance and Class R Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M Certificate Principal Balance (after
taking into account distributions of the Class M Principal Distribution Amount
on such Distribution Date) and (C) the Class B-1 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 96.10% 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 foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A, Class R and Class M
Certificates has been reduced to zero, the Class B-1 Principal Distribution
Amount will equal the lesser of (x) the outstanding Class B-1 Certificate
Principal Balance and (y) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A, Class R 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 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.
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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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.
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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 Class B-2 Current Interest and Class B-2
Interest Carry Forward Amounts 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 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class B-2 Certificates, the
least of (1) 6.500% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 7.000% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate 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 R Certificate Principal Balance, the Class M Certificate Principal Balance
and the Class B-1 Certificate Principal Balance have been reduced to zero and a
Trigger Event exists, or as long as a Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance and Class R
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M Certificate Principal Balance (after taking into account distributions of the
Class M Principal Distribution Amount on such Distribution Date), (C) 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 (D)
the Class B-2 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 97.10% 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 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 R, 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 Class B-2 Certificate Principal Balance and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class R, 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 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.
-25-
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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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.
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 Class B-3 Current Interest and Class B-3
Interest Carry Forward Amounts 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 Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class B-3 Certificates, the
least of (1) 6.500% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 7.000% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate 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 R 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 Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance and Class R Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M
Certificate Principal Balance (after taking into account distributions of the
Class M Principal Distribution Amount on such Distribution Date), (C) the Class
B-1 Certificate Principal Balance (after taking into account distributions of
the Class B-1 Principal Distribution Amount on such Distribution Date), (D) the
Class B-2 Certificate Principal Balance immediately prior to such Distribution
Date (after taking into account distribution of the Class B-2 Principal
Distribution Amount on such Distribution Date) and (E) the Class B-3 Certificate
Principal Balance over (2) the lesser of (A) 98.40% 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 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 R, 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 Class B-3 Certificate
Principal Balance and (y) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A, Class R, 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 definition of
"Certificate Principal Balance."
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Class ES Certificate: The Class ES Certificates executed by the Trustee
and authenticated by the Trustee in substantially the form set forth in Exhibit
A.
Class ES Distribution Amount: For any Distribution Date, the lesser of (i)
an amount equal to the product of (x) the Stated Principal Balance of the
Mortgage Loans as of the immediately preceding Distribution Date and (y) the
excess of the Servicing Fee Rate over the SLS Servicing Fee Rate and (ii) the
Initial ES Strip.
Class LT1-AF1 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AF2 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AF3 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AF4 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AF5 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AV1 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AV2 Interest: An uncertificated regular interest in REMIC 1 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 LT1-AV3 Interest: An uncertificated regular interest in REMIC 1 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 LT1-B1 Interest: An uncertificated regular interest in REMIC 1 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 LT1-B2 Interest: An uncertificated regular interest in REMIC 1 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 LT1-B3 Interest: An uncertificated regular interest in REMIC 1 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.
-27-
Class LT1-M1A Interest: An uncertificated regular interest in REMIC 1 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 LT1-M1B Interest: An uncertificated regular interest in REMIC 1 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 LT1-M2A Interest: An uncertificated regular interest in REMIC 1 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 LT1-M2B Interest: An uncertificated regular interest in REMIC 1 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 LT1-M3A Interest: An uncertificated regular interest in REMIC 1 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 LT1-M3B Interest: An uncertificated regular interest in REMIC 1 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 LT1-M4A Interest: An uncertificated regular interest in REMIC 1 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 LT1-M4B Interest: An uncertificated regular interest in REMIC 1 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 LT1-M5A Interest: An uncertificated regular interest in REMIC 1 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 LT1-M5B Interest: An uncertificated regular interest in REMIC 1 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 LT1-M6A Interest: An uncertificated regular interest in REMIC 1 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 LT1-M6B Interest: An uncertificated regular interest in REMIC 1 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 LT1-R Interest: The sole class of "residual interest" in REMIC 1.
-28-
Class LT1-R$100 Interest: An uncertificated regular interest in REMIC 1
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 LT1-IO Interest: An uncertificated regular interest in REMIC 1 with
the characteristics set forth in the description of REMIC 1 in the Preliminary
Statement.
Class LT1-IX Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to the excess of (i) 50% of the sum of (x)
the aggregate Cut-off Date Principal Balance of the Mortgage Loans and (y) the
Original Pre-Funded Amount over (ii) the initial principal balance of the REMIC
1-I Marker Interests, and with an interest rate equal to the Net Rate.
Class LT1-IIX Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to the excess of (i) 50% of the sum of (x)
the aggregate Cut-off Date Principal Balance of the Mortgage Loans and (y) the
Original Pre-Funded Amount over (ii) the initial principal balance of the REMIC
1-II Marker Interests, and with an interest rate equal to the Net Rate.
Class LT1-II1A Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 0.05% of the excess of (i) the sum of
(x) the aggregate Cut-off Date Principal Balance of the Group I Mortgage Loans
and (y) the portion of the Original Pre-Funded Amount related to Group I over
(ii) the aggregate of the initial Certificate Principal Balances of Certificate
Group I, and with an interest rate equal to the Net Rate.
Class LT1-II1B Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 0.05% of the sum of (x) the aggregate
Cut-off Date Principal Balance of the Group I Mortgage Loans and (y) the portion
of the Original Pre-Funded Amount related to Group I, and with an interest rate
equal to the rate set forth in footnote 2 to the description of REMIC 1 in the
Preliminary Statement.
Class LT1-II2A Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 0.05% of the excess of (i) the sum of
(x) the aggregate Cut-off Date Principal Balance of the Group II Mortgage Loans
and (y) the portion of the Original Pre-Funded Amount related to Group II over
(ii) the aggregate of the initial Certificate Principal Balances of Certificate
Group II, and with an interest rate equal to the Net Rate.
Class LT1-II2B Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 0.05% of the sum of (x) the aggregate
Cut-off Date Principal Balance of the Group II Mortgage Loans and (y) the
portion of the Original Pre-Funded Amount related to Group II, and with an
interest rate equal to the rate set forth in footnote 3 to the description of
REMIC 1 set forth in the Preliminary Statement.
Class LT2-R Interest: The residual interest in REMIC 2 as set forth in the
Preliminary Statement.
Class M Certificates: 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 Distribution Date, the sum
of 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
Certificate Principal Balance, the Class M-5 Certificate Principal Balance and
the Class M-6 Certificate Principal Balance.
Class M Principal Distribution Amount: For any Distribution Date, the sum
of the Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, the Class X-0 Xxxxxxxxx
-00-
Xxxxxxxxxxxx Xxxxxx, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, and the Class M-6 Principal Distribution Amount.
Class M-1 Certificate: The Class M-1A and Class M-1B Certificates.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1A and Class M-1B
Certificates.
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 and the
Class R Certificate Principal Balance has been reduced to zero and a Trigger
Event exists, or as long as a Trigger Event does not exist, the excess of (1)
the sum of (A) the Class A Certificate Principal Balance and Class R 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) 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 and Class R Certificates has been reduced to zero, the Class M-1 Principal
Distribution Amount will equal the lesser of (x) the outstanding Class M-1
Certificate Principal Balance and (y) 100% of the Principal Distribution Amount
remaining after any distributions on such Class A and Class R 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-1A 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-1A Certificates.
Class M-1A Certificate: Any Certificate designated as a "Class M-1A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1A Certificates.
Class M-1A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1A Pass-Through Rate on
the Class M-1A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-1A Certificates.
Class M-1A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1A Certificates with respect to Class M-1A Current Interest and Class M-1A
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-1A
Pass-Through Rate for the related Accrual Period.
-30-
Class M-1A Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class M-1A Certificates, the
least of (1) 5.422% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 5.922% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate Cap for such Distribution Date.
Class M-1A Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1A Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-1A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-1A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-1B 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-1B Certificates.
Class M-1B Certificate: Any Certificate designated as a "Class M-1B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1B Certificates.
Class M-1B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1B Pass-Through Rate on
the Class M-1B Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-1B Certificates.
Class M-1B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1B Certificates with respect to Class M-1B Current Interest and Class M-1B
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-1B
Pass-Through Rate for the related Accrual Period.
Class M-1B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.530% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.795% per annum.
Class M-1B Pass-Through Rate: For the first Distribution Date, 4.52688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-1B Margin, (2) the Subordinated Available Funds Cap for
such Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date.
Class M-1B Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1B Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the
-31-
Class M-1B Unpaid Realized Loss Amounts on all previous Distribution Dates and
(y) all increases in the Certificate Principal Balance of such Class M-1B
Certificates pursuant to 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: The Class M-2A and Class M-2B Certificates.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2A and Class M-2B
Certificates.
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, the
Class R Certificate Principal Balance and the Class M-1 Certificate Principal
Balance have been reduced to zero and a Trigger Event exists, or as long as a
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance and Class R 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)
85.40% 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 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 R and Class
M-1 Certificates has been reduced to zero, the Class M-2 Principal Distribution
Amount will equal the lesser of (x) the outstanding Class M-2 Certificate
Principal Balance and (y) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A, Class R 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-2A 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-2A Certificates.
Class M-2A Certificate: Any Certificate designated as a "Class M-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2A Certificates.
Class M-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2A Pass-Through Rate on
the Class M-2A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-2A Certificates.
-00-
Xxxxx X-0X Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2A Certificates with respect to Class M-2A Current Interest and Class M-2A
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-2A
Pass-Through Rate for the related Accrual Period.
Class M-2A Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class M-2A Certificates, the
least of (1) 5.471% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 5.971% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate Cap for such Distribution Date.
Class M-2A Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2A Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-2A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-2A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-2B 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-2B Certificates.
Class M-2B Certificate: Any Certificate designated as a "Class M-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2B Certificates.
Class M-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2B Pass-Through Rate on
the Class M-2B Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-2B Certificates.
Class M-2B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2B Certificates with respect to Class M-2B Current Interest and Class M-2B
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-2B
Pass-Through Rate for the related Accrual Period.
Class M-2B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.590% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.885% per annum.
Class M-2B Pass-Through Rate: For the first Distribution Date, 4.58688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-2B Margin, (2) the
-33-
Subordinated Available Funds Cap for such Distribution Date and (3) the
Subordinated Maximum Rate Cap for such Distribution Date.
Class M-2B Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2B Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-2B Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-2B Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-3 Certificate: The Class M-3A and Class M-3B Certificates.
Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3A and Class M-3B
Certificates.
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, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance and the Class M-2 Certificate Principal Balance have been reduced to
zero and a Trigger Event exists, or as long as a Trigger Event does not exist,
the excess of (1) the sum of (A) the Class A Certificate Principal Balance and
Class R 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) and (D) the Class
M-3 Certificate Principal Balance immediately prior to such Distribution Date
over (2) the lesser of (A) 87.50% 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, Class R, Class M-1 and Class M-2 Certificates
has been reduced to zero, the Class M-3 Principal Distribution Amount will equal
the lesser of (x) the outstanding Class M-3 Certificate Principal Balance and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class R, 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-3A 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-3A Certificates.
Class M-3A Certificate: Any Certificate designated as a "Class M-3A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3A Certificates.
Class M-3A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3A Pass-Through Rate on
the Class M-3A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in
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bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class M-3A Certificates.
Class M-3A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3A Certificates with respect to Class M-3A Current Interest and Class M-3A
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-3A
Pass-Through Rate for the related Accrual Period.
Class M-3A Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class M-3A Certificates, the
least of (1) 5.521% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 6.021% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate Cap for such Distribution Date.
Class M-3A Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3A Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-3A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-3A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-3B 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-3B Certificates.
Class M-3B Certificate: Any Certificate designated as a "Class M-3B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3B Certificates.
Class M-3B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3B Pass-Through Rate on
the Class M-3B Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-3B Certificates.
Class M-3B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3B Certificates with respect to Class M-3B Current Interest and Class M-3B
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-3B
Pass-Through Rate for the related Accrual Period.
Class M-3B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.650% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.975% per annum.
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Class M-3B Pass-Through Rate: For the first Distribution Date, 4.64688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-3B Margin, (2) the Subordinated Available Funds Cap for
such Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date.
Class M-3B Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3B Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-3B Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-3B Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-4 Certificate: The Class M-4A and Class M-4B Certificates.
Class M-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4A and Class M-4B
Certificates.
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, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance and the Class M-3
Certificate Principal Balance have been reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance and Class R 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, (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount), and (E) the Class M-4 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
92.90% 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, Class R, Class M-1,
Class M-2 and Class M-3 Certificates has been reduced to zero, the Class M-4
Principal Distribution Amount will equal the lesser of (x) the outstanding Class
M-4 Certificate Principal Balance and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class R, 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-4A 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-4A Certificates.
Class M-4A Certificate: Any Certificate designated as a "Class M-4A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4A Certificates.
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Class M-4A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4A Pass-Through Rate on
the Class M-4A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-4A Certificates.
Class M-4A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4A Certificates with respect to Class M-4A Current Interest and Class M-4A
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-4A
Pass-Through Rate for the related Accrual Period.
Class M-4A Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class M-4A Certificates, the
least of (1) 5.570% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 6.070% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate Cap for such Distribution Date.
Class M-4A Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4A Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-4A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-4A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-4B 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-4B Certificates.
Class M-4B Certificate: Any Certificate designated as a "Class M-4B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4B Certificates.
Class M-4B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4B Pass-Through Rate on
the Class M-4B Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-4B Certificates.
Class M-4B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4B Certificates with respect to Class M-4B Current Interest and Class M-4B
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on
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such excess (to the extent permitted by applicable law) at the Class M-4B
Pass-Through Rate for the related Accrual Period.
Class M-4B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.700% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.050% per annum.
Class M-4B Pass-Through Rate: For the first Distribution Date, 4.69688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-4B Margin, (2) the Subordinated Available Funds Cap for
such Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date.
Class M-4B Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4B Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-4B Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-4B Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-5 Certificate: The Class M-5A and Class M-5B Certificates.
Class M-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5A and Class M-5B
Certificates.
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, 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 and the Class M-4 Certificate Principal Balance have been
reduced to zero and a Trigger Event exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance and Class R 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 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) 94.10% 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 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 R, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates has been
reduced to zero, the Class M-5 Principal Distribution Amount will equal the
lesser of (x) the outstanding Class M-5 Certificate Principal Balance and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class R, 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.
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Class M-5A 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-5A Certificates.
Class M-5A Certificate: Any Certificate designated as a "Class M-5A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5A Certificates.
Class M-5A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5A Pass-Through Rate on
the Class M-5A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-5A Certificates.
Class M-5A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5A Certificates with respect to Class M-5A Current Interest and Class M-5A
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-5A
Pass-Through Rate for the related Accrual Period.
Class M-5A Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class M-5A Certificates, the
least of (1) 5.869% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 6.369% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate Cap for such Distribution Date.
Class M-5A Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5A Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-5A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-5A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-5B 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-5B Certificates.
Class M-5B Certificate: Any Certificate designated as a "Class M-5B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5B Certificates.
Class M-5B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5B Pass-Through Rate on
the Class M-5B Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed
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to be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-5B Certificates.
Class M-5B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5B Certificates with respect to Class M-5B Current Interest and Class M-5B
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-5B
Pass-Through Rate for the related Accrual Period.
Class M-5B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.150% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.725% per annum.
Class M-5B Pass-Through Rate: For the first Distribution Date, 5.14688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-5B Margin, (2) the Subordinated Available Funds Cap for
such Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date.
Class M-5B Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5B Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-5B Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-5B Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-6 Certificate: The Class M-6A and Class M-6B Certificates.
Class M-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6A and Class M-6B
Certificates.
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, 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 Certificate Principal Balance and the Class M-5
Certificate Principal Balance have been reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance and Class R 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 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 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)
95.10% 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 of the
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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 R, Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates has been reduced to zero, the Class
M-6 Principal Distribution Amount will equal the lesser of (x) the outstanding
Class M-6 Certificate Principal Balance and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class R,
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-6A 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-6A Certificates.
Class M-6A Certificate: Any Certificate designated as a "Class M-6A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-6A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6A Certificates.
Class M-6A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6A Pass-Through Rate on
the Class M-6A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-6A Certificates.
Class M-6A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-6A Certificates with respect to Class M-6A Current Interest and Class M-6A
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-6A
Pass-Through Rate for the related Accrual Period.
Class M-6A Pass-Through Rate: As of any Distribution Date up to and
including the Optional Termination Date for the Class M-6A Certificates, the
least of (1) 5.968% per annum, (2) the Subordinated Available Funds Cap for such
Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date and, as of any Distribution Date after the Optional
Termination Date, the least of (1) 6.468% per annum, (2) the Subordinated
Available Funds Cap for such Distribution Date and (3) the Subordinated Maximum
Rate Cap for such Distribution Date.
Class M-6A Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6A Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-6A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-6A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class M-6B 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-6B Certificates.
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Class M-6B Certificate: Any Certificate designated as a "Class M-6B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-6B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6B Certificates.
Class M-6B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6B Pass-Through Rate on
the Class M-6B Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
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-6B Certificates.
Class M-6B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-6B Certificates with respect to Class M-6B Current Interest and Class M-6B
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class M-6B
Pass-Through Rate for the related Accrual Period.
Class M-6B 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 M-6B Pass-Through Rate: For the first Distribution Date, 5.34688%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-6B Margin, (2) the Subordinated Available Funds Cap for
such Distribution Date and (3) the Subordinated Maximum Rate Cap for such
Distribution Date.
Class M-6B Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6B Applied Realized Loss Amount over (2) the sum of
(x) all distributions in reduction of the Class M-6B Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-6B Certificates pursuant to the
definition of "Certificate Principal Balance."
Class PF-I Interest: An uncertificated regular interest in the Pre-Funding
REMIC with an initial principal balance equal to the sum of (x) the aggregate
Cut-off Date Principal Balance of the Group I Mortgage Loans and (y) the portion
of the Original Pre-Funded Amount related to Group I, and with an interest rate
equal to the Group I Net WAC.
Class PF-II Interest: An uncertificated regular interest in the
Pre-Funding REMIC with an initial principal balance equal to the sum of (x) the
aggregate Cut-off Date Principal Balance of the Group II Mortgage Loans and (y)
the portion of the Original Pre-Funded Amount related to Group II, and with an
interest rate equal to the Group II Net WAC.
Class PF-R Interest: The sole class of "residual interest" in the
Pre-Funding REMIC.
Class R Certificate: Any Certificate designated as a "Class R Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
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Class R Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class R Certificate.
Class X Certificates: The Class X Certificates executed by the Trustee and
authenticated by the Trustee in substantially the form set forth in Exhibit A.
Class X Distributable Amount: The excess of (x) the sum of (i) the initial
Overcollateralization Amount, (ii) all interest payments accrued on the REMIC 2
X Interest and (iii) amounts treated as received by the Class X Certificates
pursuant to notional principal contracts described in Section 2.07(d)(ii) over
(y) the sum of (i) all prior distributions to the Class X Certificates pursuant
to Section 5.05(g), (ii) all payments treated as distributed by REMIC 2 to the
REMIC 2 X Interest then paid to the holders of Class A, Class M and Class B
Certificates pursuant to an interest rate cap contract as described in Section
2.07(d), (iii) all payments treated as distributed by REMIC 2 to the REMIC 2 X
Interest then paid to the Swap Provider as described in Section 2.07(e) and (iv)
all payments treated as paid by the Class A, Class M or Class B Certificates to
the Class X Certificates pursuant to notional principal contracts then paid to
the Swap Provider as described in Section 2.07(e).
Closing Date: October 19, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral Value: With respect to a Mortgage Loan, the proceeds of which
were used to purchase the related Mortgaged Property (or applicable dwelling
unit, in the case of a Co-op Loan), the lesser of (x) the appraisal value of
such Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) based on an appraisal made for the originator by an independent fee
appraiser at the time of the origination of the related Mortgage Loan and (y)
the sales price of such Mortgaged Property (or applicable dwelling unit, in the
case of a Co-op Loan) at such time of origination and means, with respect to a
Mortgage Loan the proceeds of which were used to refinance an existing Mortgage
Loan, the appraised value of the Mortgaged Property (or applicable dwelling
unit, in the case of a Co-op Loan) based upon the appraisal obtained at the time
of refinancing.
Collection Account: The separate Eligible Accounts 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 "Specialized
Loan Servicing LLC, as servicer for U.S. Bank National Association, as trustee,
in trust for registered holders of Terwin Mortgage Trust, Asset-Backed
Certificates, Series XXXX 0000-00XX." Funds in the Collection Account shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Compensating Interest: For any Distribution Date and with respect to each
voluntary Principal Prepayment on the related Mortgage Loans serviced by the
Servicer, the lesser of (i) one-half of the Aggregate Servicing Fee payable on
such Distribution Date and (ii) the aggregate Prepayment Interest Shortfall if
any, for the related Prepayment Period; provided, however, that any Compensating
Interest remitted by the Servicing Administrator shall not exceed the Securities
Administrator Fee for such Distribution Date.
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.
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Corporate Trust Office: With respect to (a) the Trustee, the corporate
trust office at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attn: Corporate Trust Structured Finance,
Terwin Mortgage Trust 2005-16HE, or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders, the Depositor,
the Seller, the Servicing Administrator, the Securities Administrator, the
Backup Servicer and the Servicer and (b) the Securities Administrator and the
Backup Servicer, the principal corporate trust office at which at any particular
time its corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at 0 Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Worldwide
Securities Services/Global Debt--Terwin Mortgage Trust 2005-16HE, or at such
other address as the Securities Administrator may designate from time to time by
notice to the Certificateholders, the Trustee, the Depositor, the Seller, the
Servicing Administrator, the Servicer, the Backup Servicer and the Securities
Administrator. With respect to the Securities Administrator, Certificate
Registrar and presentment of Certificates for registration of transfer, exchange
or final payment, 0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000, Attention:
Worldwide Securities Services/Global Debt--Terwin Mortgage Trust 2005-16HE.
Corresponding Certificates: With respect to the Class LT1-R$100 Interest,
the Class R Certificates. With respect to the Class LT1-AF1 Interest, the Class
AF-1 Certificates. With respect to the Class LT1-AF2 Interest, the Class AF-2
Certificates. With respect to the Class LT1-AF3 Interest, the Class AF-3
Certificates. With respect to the Class LT1-AF4 Interest, the Class AF-4
Certificates. With respect to the Class LT1-AF5 Interest, the Class AF-5
Certificates. With respect to the Class LT1-AV1 Interest, the Class AV-1
Certificates. With respect to the Class LT1-AV2 Interest, the Class AV-2
Certificates. With respect to the Class LT1-AV3 Interest, the Class AV-3
Certificates. With respect to the Class LT1-B1 Interest, the Class B-1
Certificates. With respect to the Class LT1-B2 Interest, the Class B-2
Certificates. With respect to the Class LT1-B3 Interest, the Class B-3
Certificates. With respect to the Class LT1-M1A Interest, the Class M-1A
Certificates. With respect to the Class LT1-M1B Interest, the Class M-1B
Certificates. With respect to the Class LT1-M2A Interest, the Class M-2A
Certificates. With respect to the Class LT1-M2B Interest, the Class M-2B
Certificates. With respect to the Class LT1-M3A Interest, the Class M-3A
Certificates. With respect to the Class LT1-M3B Interest, the Class M-3B
Certificates. With respect to the Class LT1-M4A Interest, the Class M-4A
Certificates. With respect to the Class LT1-M4B Interest, the Class M-4B
Certificates. With respect to the Class LT1-M5A Interest, the Class M-5A
Certificates. With respect to the Class LT1-M5B Interest, the Class M-5B
Certificates. With respect to the Class LT1-M6A Interest, the Class M-6A
Certificates. With respect to the Class LT1-M6B Interest, the Class M-6B
Certificates.
Credit Risk Management Agreement: The agreement between the Servicer and
the Credit Risk Manager dated as of October 19, 2005.
Credit Risk Manager: The Murrayhill Company, a Colorado corporation, or
its successor in interest.
Credit Risk Manager Fee: The fee payable on each Distribution Date to the
Credit Risk Manager as compensation for all services rendered by it in exercise
and performance of any of the powers and duties of the Credit Risk Manager under
the Credit Risk Management Agreement, which amount shall equal one-twelfth of
the product of (i) the Credit Risk Manager Fee Rate and (ii) the Stated
Principal Balance of the Mortgage Loans as of the immediately preceding
Distribution Date.
Credit Risk Manager Fee Rate: 0.015% per annum.
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Current Interest: Any of the Class AF-1 Current Interest, the Class AF-2
Current Interest, the Class AF-3 Current Interest, the Class AF-4 Current
Interest, the Class AF-5 Current Interest, the Class AV-1 Current Interest, the
Class AV-2 Current Interest, the Class AV-3 Current Interest, the Class M-1A
Current Interest, the Class M-1B Current Interest, the Class M-2A Current
Interest, the Class M-2B Current Interest, the Class M-3A Current Interest, the
Class M-3B Current Interest, the Class M-4A Current Interest, the Class M-4B
Current Interest, the Class M-5A Current Interest, the Class M-5B Current
Interest, the Class M-6A Current Interest, the Class M-6B Current Interest, the
Class B-1 Current Interest, the Class B-2 Current Interest and the Class B-3
Current Interest.
Custodian: Deutsche Bank National Trust Company, as custodian, or its
successor in interest.
Cut-off Date: October 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.
Defaulted Swap Termination Payment: Any payment required to be made by the
Supplemental Interest Trust to the Swap Counterparty pursuant to the Swap
Agreement as a result of an event of default under the Swap Agreement with
respect to which the Swap Counterparty is the defaulting party or a termination
event (including a Downgrade Termination Event) under that agreement (other than
illegality or a tax event) with respect to which the Swap Counterparty is the
sole Affected Party (as defined in the Swap Agreement.
Definitive Certificates: As defined in Section 6.06 hereof.
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. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
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 its 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
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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.
Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement among the Trustee, 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 18th day of
the month of such Distribution Date or, if such 18th 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 after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in November 2005.
Downgrade Termination Event: An event whereby (x) the Swap Counterparty
(or its guarantor) ceases to rated at least "AA-" by S&P, or any successor
thereto, and at least "Aa3" by Xxxxx'x, or any successor thereto (including in
connection with a merger, consolidation or other similar transaction by the Swap
Counterparty), and (y) at least one of the following events has not occurred
(except to the extent otherwise approved by the rating agencies): (i) within the
time period specified in the Swap Agreement with respect to such downgrade, the
Swap Counterparty shall transfer the Swap Agreement, in whole, but not in part,
to a substitute swap counterparty that satisfies the requirements set forth in
the Swap Agreement, subject to the satisfaction of the Rating Agency Condition
or (ii) within the time period specified in the Swap Agreement with respect to
such downgrade, the Swap Counterparty shall collateralize its exposure to the
Trust pursuant to an ISDA Credit Support Annex, subject to the satisfaction of
the Rating Agency Condition; provided that such ISDA Credit Support Annex shall
be made a credit support document for the Swap Counterparty pursuant to an
amendment to the Swap Agreement.
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.
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Eligible Account: An account that is (1) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by the
Rating Agency in one of its two highest rating categories, or (2) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Xxxxx'x and (B) is 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 (i) an account or accounts the deposits in which are fully insured by
the FDIC, or (ii) an account or accounts, acceptable to the 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 the 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 (iii) maintained at an eligible institution whose commercial paper,
short-term debt or other short-term deposits are rated at least A+ by S&P and
F-1+ by Fitch, or (iv) 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 by
S&P or Prime 1 by Xxxxx'x at the time any deposits are held on deposit therein,
or (v) otherwise acceptable to each Rating Agency, as evidenced by a letter from
the Rating Agency to the Trustee, or (3) a segregated trust account or accounts
maintained with the Trustee, the Securities Administrator or any other federal
or state chartered depository institution or trust company, acting in its
fiduciary capacity. Eligible Accounts may bear interest.
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 any
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 X Certificates, Class ES
Certificates and Class R Certificate and any other Certificate, unless the
acquisition and holding of such other Certificate is in whole or in part covered
by and exempt under any applicable underwriter's exemption granted by the United
States Department of Labor.
Event of Default: As defined in Section 8.01 hereof.
Exception Report: As defined in Section 2.02 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
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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) $4,400,030 over (B) the sum of (x) the aggregate Stated Principal Balance
of the Mortgage Loans and (y) the amount on deposit in the Pre-Funding Amount as
of such Distribution Date (disregarding income and loss on investments of
amounts on deposit in the Pre-Funding Account) and (2) on and after the Stepdown
Date, (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) the greater of (a) 1.60% of the Pool Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the Pool Stated Principal Balance of the
Mortgage Loans as of such Distribution Date; provided, however, that if on any
Distribution Date a Trigger Event is in effect, the Extra Principal Distribution
Amount will not be reduced to the applicable percentage of the then-current Pool
Stated Principal Balance of the Mortgage Loans as of the Due Date immediately
prior to the Trigger Event until the next Distribution Date on which the 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.
Federal Funds Rate: The interest rate at which depository institutions
lend balances at the Federal Reserve to other depository institutions overnight.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Certificates: The Class AF-2, the Class AF-3, the Class AF-4,
the Class AF-5, the Class M-1A, the Class M-2A, the Class M-3A, the Class M-4A,
the Class M-5A, the Class M-6A and the Class B Certificates.
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, 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.
Form 10-K Certification: The certification required pursuant to Rule
13a-14 under the Exchange Act, including any certification that may be required
by any rules or regulations promulgated pursuant to the Xxxxxxxx-Xxxxx Act of
2002 (as such may be amended from time to time).
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.
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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 December 16,
2005.
Guaranteed Distributions: As defined in the Certificate Insurance Policy.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Group I: The portion of the Mortgage Pool identified as "Group I" in the
Prospectus Supplement, including Initial Mortgage Loans included in such
Mortgage Group as of the Cut-off Date and Subsequent Mortgage Loans added
thereto.
Group I Administration Fee: The sum of the Group I Servicing Fee, the
Group I Securities Administrator Fee and the Group I Credit Risk Manager Fee.
Group I Available Funds Cap: As of any Distribution Date, for the Class
AF-1 Certificates, a per annum rate equal to the product of (A) 12 times the
quotient obtained by dividing (x) the excess of (a) the total scheduled interest
on the Group I Included Mortgage Loans for the related Due Period over (b) the
sum of (1) the Group I Administration Fee (2) the Group I Certificate Insurer
Premium and (3) any amounts owed to the Swap Counterparty (other than Defaulted
Swap Termination Payments), multiplied by a fraction, the numerator of which is
the Stated Principal Balance of the Mortgage Loans in Group I as of the
immediately preceding Distribution Date and the denominator of which is the
Stated Principal Balance of the Mortgage Loans in Group I and Group II as of the
immediately preceding Distribution Date by (y) the aggregate Stated Principal
Balance of the Group I Included Mortgage Loans 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 (B) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual Period.
Group I Certificate Insurer Premium: With respect to any Distribution
Date, the Certificate Insurer Premium multiplied by a fraction, the numerator of
which is the Stated Principal Balance of the Mortgage Loans in Group I as of the
immediately preceding Distribution Date and the denominator of which is the
Stated Principal Balance of the Mortgage Loans in Group I and Group II as of the
immediately preceding Distribution Date.
Group I Credit Risk Manager Fee: The product of (i) the Credit Risk
Manager Fee Rate and (ii) the Stated Principal Balance of the Mortgage Loans in
Group I as of the immediately preceding Distribution Date.
Group I Maximum Rate Cap: With respect to the Class AF-1 Certificates and
any Distribution Date, the product of (A) 12 times the quotient obtained by
dividing (x) the aggregate scheduled interest that would have been due on the
adjustable rate Included Mortgage Loans or the fixed rate Included Mortgage
Loans, as applicable, in Group I during the related Due Period had the
adjustable rate mortgage loans in Group I provided for interest at their
respective maximum lifetime Mortgage Rates and the aggregate scheduled interest
that would have been due on the fixed rate mortgage loans in Group I during the
related Due Period had the fixed rate mortgage loans in Group I provided for
interest at their respective Mortgage Rates, less the sum of (1) the Group I
Administration Fee for such Distribution Date (2) the Group I Certificate
Insurer Premium for such Distribution Date and (3) any amounts owed to the Swap
Counterparty (other than Defaulted Swap Termination Payments), multiplied by a
fraction, the numerator of which is the Stated Principal Balance of the Mortgage
Loans in Group I as of the immediately preceding Distribution Date and the
denominator of which is the Stated Principal Balance of the Mortgage Loans in
Group I and Group II as of the immediately preceding Distribution Date, for such
Distribution Date, divided by (y) the Outstanding Principal Balances of the
Included Group I Mortgage
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Loans for such Distribution Date (in each case, disregarding Mortgage Loans that
are not Included Mortgage Loans) and (B) fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the related Accrual
Period; and with respect to the Class AF-2, Class AF-3, Class AF-4 and Class
AF-5 Certificates and any Distribution Date, 12 times the quotient obtained by
dividing (x) the aggregate scheduled interest that would have been due on the
adjustable rate mortgage loans in Group I during the related Due Period had the
adjustable rate mortgage loans in Group I provided for interest at their
respective maximum lifetime Mortgage Rates and the aggregate scheduled interest
that would have been due on the fixed rate Included Mortgage Loans in Group I
during the related Due Period had the fixed rate mortgage loans in Group I
provided for interest at their respective Mortgage Rates, less the sum of (1)
the Group I Administration Fee for such Distribution Date (2) the Group I
Certificate Insurer Premium for such Distribution Date and (3) any amounts owed
to the Swap Counterparty (other than Defaulted Swap Termination Payments),
multiplied by a fraction, the numerator of which is the Stated Principal Balance
of the Mortgage Loans in Group I as of the immediately preceding Distribution
Date and the denominator of which is the Stated Principal Balance of the
Mortgage Loans in Group I and Group II as of the immediately preceding
Distribution Date, divided by (y) the Outstanding Principal Balances of the
Group I Mortgage Loans for such Distribution Date (in each case, disregarding
Mortgage Loans that are not Included Mortgage Loans).
Group I Mortgage Loan: Any Mortgage Loan at any time identified in the
Group I Mortgage Loan Schedule attached hereto as Exhibit B-2.
Group I Net WAC: The Net WAC of Group I.
Group I Net WAC Cap: As of any Distribution Date, for the Class AF-2,
Class AF-3, Class AF-4 and Class AF-5 Certificates, a per annum rate equal to 12
times the quotient obtained by dividing (x) the excess of (a) the total
scheduled interest on the Group I Included Mortgage Loans for the related Due
Period over (b) the sum of (1) the Group I Administration Fee for such
Distribution Date (2) the Group I Certificate Insurer Premium for such
Distribution Date and (3) any amounts owed to the Swap Counterparty (other than
Defaulted Swap Termination Payments), multiplied by a fraction, the numerator of
which is the Stated Principal Balance of the Mortgage Loans in Group I as of the
immediately preceding Distribution Date and the denominator of which is the
Stated Principal Balance of the Mortgage Loans in Group I and Group II as of the
immediately preceding Distribution Date, by (y) the aggregate Stated Principal
Balance of the Group I Included Mortgage Loans 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).
Group I Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Group I Senior Certificates and Class R Certificates and (ii) the product of
(x) the Group I Principal Distribution Percentage and (y) the Class A Principal
Distribution Amount; provided, however, that with respect to any Distribution
Date on which any of the Group I Senior Certificates and Class R Certificates
are outstanding and the Certificate Principal Balance of the Group II Senior
Certificates has been reduced to zero, the Group I Principal Distribution Amount
will equal the Class A Principal Distribution Amount.
Group I 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 I 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
relating to Group I remaining in the Pre-Funding Account (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 relating
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to either Mortgage Group remaining in the Pre-Funding Account (disregarding
income or loss on investments of amounts on deposit in the Pre-Funding Account).
Group I Securities Administrator Fee: As to any Distribution Date and each
Mortgage Loan in Group I, an amount equal to the product of the applicable
Securities Administrator Fee Rate and the outstanding Stated Principal Balance
of such Mortgage Loan as of the preceding Distribution Date.
Group I Senior Certificates: The Class AF-1, Class AF-2, Class AF-3, Class
AF-4 and Class AF-5 Certificates.
Group I Servicing Fee: As to each Mortgage Loan in Group I and any
Distribution Date, an amount equal to one month's interest at the Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan as of the immediately
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 immediately preceding Distribution Date for the period covered by such
payment of interest (in each case payable from interest collections on such
Mortgage Loan).
Group II: The portion of the Mortgage Pool identified as "Group II" in the
Prospectus Supplement, including Initial Mortgage Loans included in such
Mortgage Group as of the Cut-off Date and Subsequent Mortgage Loans added
thereto.
Group II Administration Fee: The sum of the Group II Servicing Fee, the
Group II Securities Administrator Fee and the Group II Credit Risk Manager Fee.
Group II Available Funds Cap: As of any Distribution Date, for the Group
II Senior Certificates, a per annum rate equal to the product of (A) 12 times
the quotient obtained by dividing (x) the excess of (a) the total scheduled
interest on the Group II Included Mortgage Loans for the related Due Period over
(b) the sum of (1) the Group II Administration Fee (2) the Group II Certificate
Insurer Premium and (3) any amounts owed to the Swap Counterparty (other than
Defaulted Swap Termination Payments), multiplied by a fraction, the numerator of
which is the Stated Principal Balance of the Mortgage Loans in Group II as of
the immediately preceding Distribution Date and the denominator of which is the
Stated Principal Balance of the Mortgage Loans in Group I and Group II as of the
immediately preceding Distribution Date by (y) the aggregate Stated Principal
Balance of the Group II Included Mortgage Loans 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 (B) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual Period.
Group II Certificate Insurer Premium: With respect to any Distribution
Date, the Certificate Insurer Premium multiplied by a fraction, the numerator of
which is the Stated Principal Balance of the Mortgage Loans in Group II as of
the immediately preceding Distribution Date and the denominator of which is the
Stated Principal Balance of the Mortgage Loans in Group I and Group II as of the
immediately preceding Distribution Date.
Group II Credit Risk Manager Fee: The product of (i) the Credit Risk
Manager Fee Rate and (ii) the Stated Principal Balance of the Mortgage Loans in
Group II as of the immediately preceding Distribution Date.
Group II Maximum Rate Cap: With respect to the Group II Senior
Certificates and any Distribution Date, the product of (I) 12 times the quotient
obtained by dividing (x) the aggregate scheduled interest that would have been
due on the Group II Included Mortgage Loans during the related Due Period had
the Group II Mortgage Loans provided for interest at their respective maximum
lifetime Mortgage Rates, less the sum of (1) the Group II Administration Fee for
such Distribution Date (2) the
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Group II Certificate Insurer Premium for such Distribution Date and (3) any
amounts owed to the Swap Counterparty (other than Defaulted Swap Termination
Payments), multiplied by a fraction, the numerator of which is the Stated
Principal Balance of the Mortgage Loans in Group II as of the immediately
preceding Distribution Date and the denominator of which is the Stated Principal
Balance of the Mortgage Loans in Group I and Group II as of the immediately
preceding Distribution Date, divided by (y) the Outstanding Principal Balances
of the Included Group II Mortgage Loans for such Distribution Date (in each
case, disregarding Mortgage Loans that are not Included Mortgage Loans) and (II)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the related Accrual Period.
Group II Mortgage Loan: Any Mortgage Loan at any time identified in the
Group II Mortgage Loan Schedule attached hereto as Exhibit B-3. All of the Group
II Mortgage Loans are adjustable rate mortgage loans.
Group II Net WAC: The Net WAC of Group II.
Group II Net WAC Cap: As of any Distribution Date, a per annum rate equal
to 12 times the quotient obtained by dividing (x) the excess of (a) the total
scheduled interest on the Group II Included Mortgage Loans for the related Due
Period over (b) the sum of (1) the Group II Administration Fee for such
Distribution Date (2) the Group II Certificate Insurer Premium for such
Distribution Date and (3) any amounts owed to the Swap Counterparty (other than
Defaulted Swap Termination Payments), multiplied by a fraction, the numerator of
which is the Stated Principal Balance of the Mortgage Loans in Group II as of
the immediately preceding Distribution Date and the denominator of which is the
Stated Principal Balance of the Mortgage Loans in Group I and Group II as of the
immediately preceding Distribution Date, by (y) the aggregate Stated Principal
Balance of the Group II Included Mortgage Loans 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).
Group II Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Certificate Principal Balance of
the Group II Senior Certificates and (ii) the product of (x) the Group II
Principal Distribution Percentage and (y) the Class A Principal Distribution
Amount; provided, however, that with respect to any Distribution Date on which
any of the Group II Senior Certificates are outstanding and the Certificate
Principal Balances of the Group I Senior Certificates and Class R Certificates
have been reduced to zero, the Group II Principal Distribution Amount will equal
the Class A Principal Distribution Amount.
Group II 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 II 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
relating to Group II remaining in the Pre-Funding Account (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 relating to either Mortgage Group remaining in
the Pre-Funding Account (disregarding income or loss on investments of amounts
on deposit in the Pre-Funding Account).
Group II Securities Administrator Fee: As to any Distribution Date and
each Mortgage Loan in Group II, an amount equal to the product of the applicable
Securities Administrator Fee Rate and the outstanding Stated Principal Balance
of such Mortgage Loan as of the preceding Distribution Date.
Group II Senior Certificates: The Class AV-1, Class AV-2 and Class AV-3
Certificates.
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Group II Servicing Fee: As to each Mortgage Loan in Group II and any
Distribution Date, an amount equal to one month's interest at the Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan as of the immediately
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 immediately preceding Distribution Date for the period covered by such
payment of interest (in each case payable from interest collections on such
Mortgage Loan).
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.
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 6.01 hereof.
Initial Certification: As defined in Section 2.02.
Initial ES Strip: For any Distribution Date, an amount equal to the
product of (x) the Stated Principal Balance of the Mortgage Loans as of the
immediately preceding Distribution Date and (y) the excess of the Servicing Fee
Rate over the SLS Servicing Fee Rate as of the Closing Date.
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 included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage 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 released to the
Mortgagor 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 the Mortgage Loans.
Interest Carry Forward Amount: Any of the Class AF-1 Interest Carry
Forward Amount, the Class AF-2 Interest Carry Forward Amount, the Class AF-3
Interest Carry Forward Amount, the Class AF-4 Interest Carry Forward Amount, the
Class AF-5 Interest Carry Forward Amount, the Class AV-1 Interest Carry Forward
Amount, the Class AV-2 Interest Carry Forward Amount, the Class AV-3 Interest
Carry Forward Amount, the Class M-1A Interest Carry Forward Amount, the Class
X-0X Xxxxxxxx Xxxxx
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Xxxxxxx Xxxxxx, the Class M-2A Interest Carry Forward Amount, the Class M-2B
Interest Carry Forward Amount, the Class M-3A Interest Carry Forward Amount, the
Class M-3B Interest Carry Forward Amount, the Class M-4A Interest Carry Forward
Amount, the Class M-4B Interest Carry Forward Amount, the Class M-5A Interest
Carry Forward Amount, the Class M-5B Interest Carry Forward Amount, the Class
M-6A Interest Carry Forward Amount, the Class M-6B Interest Carry Forward
Amount, the Class B-1 Interest Carry Forward Amount, the Class B-2 Interest
Carry Forward Amount or the Class B-3 Interest Carry Forward Amount, as the case
may be.
Interest Determination Date: With respect to the LIBOR 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, October 17, 2005.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due on an Included Mortgage Loan
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 Administration Fee, (2) all Advances relating to interest with respect
to the Mortgage Loans, less unreimbursed Advances due to the Servicer with
respect to such Mortgage Loans, (3) all Compensating Interest with respect to
the Mortgage Loans, (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) proceeds received by the Servicer resulting
from any purchase pursuant to Sections 2.02, 2.03 or 10.01 (to the extent such
proceeds relate to interest) less (A) all Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable to the Servicer, the Backup
Servicer, the Servicing Administrator, the Securities Administrator and the
Trustee pursuant to this Agreement and allocable to interest and (6) the amount
of any Required Withdrawal from the Capitalized Interest Account with respect to
such Distribution Date.
Investment Letter: As defined in Section 6.02(a) hereof.
JPMorgan: JPMorgan Chase Bank, N.A., or its successor in interest.
Last Scheduled Distribution Date: The Distribution Date in September 2036.
Latest Possible Maturity Date: The first Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled maturity date as of the Cut-off Date.
Lender: As defined in Section 5.02(a) hereof.
Letter Agreement: While SLS is the Servicer, means the agreement dated the
Closing Date among SLS, the Depositor and the Trustee (and acknowledged and
agreed to by the Securities Administrator) specifying the SLS Servicing Fee Rate
and after SLS is no longer the Servicer, the agreement among the Depositor, the
Seller, the Trustee, the Securities Administrator and the successor servicer
specifying the SLS Servicing Fee Rate.
LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, New York are open and conducting transactions in foreign
currency and exchange.
LIBOR Certificates: Each of the Class AF-1, Class AV-1, Class AV-2, Class
AV-3, Class M-1B, Class M-2B, Class M-3B, Class M-4B, Class M-5B and Class M-6B
Certificates.
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Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been 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 including the final
disposition of the related REO Property (exclusive of any possibility of a
deficiency judgment).
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of Mortgage Loans, 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 an REO Property, less the sum of related unreimbursed Advances,
the Servicing Fee, Servicing Advances and any other expenses related to such
Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the original
principal balance of such Mortgage Loan divided by the Collateral Value of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan).
Losses: Any losses, claims, damages, liabilities or expenses collectively.
LPMI Insurer: The primary mortgage insurer insuring an LPMI Loan.
LPMI Loan: A Mortgage Loan covered by an LPMI Policy, as set forth in the
Mortgage Loan Schedule or otherwise identified to a Servicer in writing.
LPMI Policy: A policy of primary mortgage insurance issued by a LPMI
Insurer pursuant to which the related premium is to be paid by a Servicer from
payments of interest made by the Mortgagor.
Margin: Any of the Class AF-1 Margin, the Class AV-1 Margin, the Class
AV-2 Margin, the Class AV-3 Margin, the Class M-1B Margin, the Class M-2B
Margin, the Class M-3B Margin, the Class M-4B Margin, the Class M-5B Margin and
the Class M-6B Margin.
Maximum Rate Cap: Any of the Group I Maximum Rate Cap, the Group II
Maximum Rate Cap or the Subordinated 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.
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MIN: The loan number for any MERS Loan.
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 (ii) 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.
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Monthly Excess Interest Amount: With respect to each Distribution Date,
the amount, if any, by which the aggregate amount of interest accrued on the
REMIC 1 Regular Interests for such Distribution Date exceeds the aggregate
amount of interest accrued on the REMIC 2 Regular Interests (other than the
REMIC 2 X Interest) for such Distribution Date.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 5.06.
Moody's: Xxxxx'x Investors Service, Inc. or its 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 creating a first lien or a first
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 or the Custodian to be added to the Mortgage File pursuant to
this Agreement.
Mortgage Group: Either of Group I or Group II.
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 in the
Mortgage Loan Subtrust (including any REO Property and, following the related
Subsequent Mortgage Loan Transfer Dates, 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 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/or address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Mortgage Rate;
(v) the maturity date and the months remaining before maturity
date;
(vi) the original principal balance;
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(vii) the Cut-off Date Principal Balance or Subsequent Cut-off Date
Principal Balance with respect to a Subsequent Mortgage Loan;
(viii) the first payment date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio
(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) location of the related Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan);
(xiii) a code indicating whether a prepayment penalty is applicable
and, if so, the term of such prepayment penalty; and
(xiv) the Credit Score and date obtained.
Mortgage Loan Subtrust: The subtrust established by the Securities
Administrator pursuant to Section 5.05(n) of this Agreement in which all
Mortgage Loans shall be held, notwithstanding any other provision of this
Agreement to the contrary.
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.
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,
the Securities Administrator Fee Rate and the Credit Risk Manager Fee Rate.
Net Rate: The weighted average of the interest rates on the SWAP REMIC
Regular Interests as set forth in the footnote 1 to the description of the REMIC
1 in the Preliminary Statement.
Net Swap Payment: With respect to any Distribution Date, any net payment
(other than a Swap Termination Payment or Defaulted Swap Termination Payment)
made by the Trust to the Swap Provider on the related Fixed Rate Payer Payment
Date or made by the Swap Provider to the Trust on the related Floating Rate
Payer Payment Date (as defined in the Swap Agreement). In each case, the Net
Swap Payment shall not be less than zero.
Net WAC: As of any Distribution Date and for any Mortgage Group, a per
annum rate equal to 12 times the quotient obtained by dividing (x) the excess of
(i) the total scheduled interest on the Included Mortgage Loans in such Mortgage
Group for the related Due Period over (ii) the portion allocable to such
Mortgage Group of the sum of the Administration Fee and the Certificate Insurer
Premium for such Distribution Date by (y) the Outstanding Principal Balances of
the Included Mortgage Loans for such Distribution Date.
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Net WAC Cap: The REMIC Pass-Through Rate applicable to a Class of
Certificates.
Non-Recoverable Advance: With respect to any Mortgage Loan, 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 other proceeds of such
Mortgage Loan.
Non-Recoverable Servicing Advance: With respect to any Mortgage Loan, 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 other
proceeds of such Mortgage Loans.
Non-Supported Interest Shortfall: As defined in Section 5.03 hereof.
Notices: As defined in Section 9.01 hereof.
Offered Certificates: The Class A, Class M, Class B 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
Servicing Administrator, the Servicer, the Backup 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 Servicing Administrator, the Servicer,
the Backup 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 LIBOR 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.
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Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, the Servicing Administrator, the Servicer, the Backup 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 Servicing Administrator, the Servicer,
the Backup Servicer or the Securities Administrator, (2) not have any direct
financial interest in the Depositor, the Servicing Administrator, the Servicer
or the Securities Administrator or in any affiliate of any, and (3) not be
connected with the Depositor, the Servicing Administrator, the Servicer, the
Backup Servicer or Securities Administrator as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
The cost of any Opinion of Counsel shall not be at the expense of the Trustee,
Servicing Administrator or Securities Administrator.
Optional Termination: The termination of the trust hereunder pursuant to
clause (a) of Section 10.01 hereof.
Optional Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage Loans is equal to or less than 10% of
the sum of (i) the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and (ii) the Original Pre-Funded Amount..
Optional Termination Price: As of any Distribution Date on or after the
Optional Termination Date, an amount equal to the sum of (A) the Aggregate
Certificate Principal Balance, plus accrued interest on the Certificates and the
Class X Distributable Amount, (B) any unreimbursed out-of-pocket costs and
expenses owed to the Securities Administrator, the Trustee and the Servicer and
any unreimbursed Advances, Certificate Insurer Reimbursement Amounts, Servicing
Advances and Administration Fees (including any costs and expenses incurred in
connection with the Optional Terminations), (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 Lending Law and
(D) any Swap Termination Payment, other than a Defaulted Swap Termination
Payment, owed to the Swap Counterparty.
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 $19,385,064, of which $4,537,470 will relate to
Group I and $14,847,594 will relate to Group II.
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, each
prior to the end of the related Due Period.
Outstanding Principal Balance: As of any Distribution Date and with
respect to any Included Mortgage Loan, the Stated Principal Balance of such
Included Mortgage Loan as of the immediately preceding Distribution Date (or, if
later, as of the Cut-Off Date, or Subsequent Cut-Off Date, as the case may be).
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Overcollateralization Amount: As of any date of determination, the excess
of (1) the sum of the Stated Principal Balance of the Mortgage Loans and 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.
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.
Pass-Through Rate: With respect to the Class AF-1 Certificates, the Class
AF-1 Pass-Through Rate; with respect to the Class AF-2 Certificates, the Class
AF-2 Pass-Through Rate; with respect to the Class AF-3 Certificates, the Class
AF-3 Pass-Through Rate; with respect to the Class AF-4 Certificates, the Class
AF-4 Pass-Through Rate; with respect to the Class AF-5 Certificates, the Class
AF-5 Pass-Through Rate; with respect to the Class AV-1 Certificates, the Class
AV-1 Pass-Through Rate; with respect to the Class AV-2 Certificates, the Class
AV-2 Pass-Through Rate; with respect to the Class AV-3 Certificates, the Class
AV-3 Pass-Through Rate; with respect to the Class M-1A Certificates, the Class
M-1A Pass-Through Rate; with respect to the Class M-1B Certificates, the Class
M-1B Pass-Through Rate; with respect to the Class M-2A Certificates, the Class
M-2A Pass-Through Rate; with respect to the Class M-2B Certificates, the Class
M-2B Pass-Through Rate; with respect to the Class M-3A Certificates, the Class
M-3A Pass-Through Rate; with respect to the Class M-3B Certificates, the Class
M-3B Pass-Through Rate; with respect to the Class M-4A Certificates, the Class
M-4A Pass-Through Rate; with respect to the Class M-4B Certificates, the Class
M-4B Pass-Through Rate; with respect to the Class M-5A Certificates, the Class
M-5A Pass-Through Rate; with respect to the Class M-5B Certificates, the Class
M-5B Pass-Through Rate; with respect to the Class M-6A Certificates, the Class
M-6A Pass-Through Rate; with respect to the Class M-6B Certificates, the Class
M-6B Pass-Through Rate; with respect to the Class B-1 Certificates, the Class
B-1 Pass-Through Rate; with respect to the Class B-2 Certificates, the Class B-2
Pass-Through Rate; and, with respect to the Class B-3 Certificates, the Class
B-3 Pass-Through Rate.
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 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 X or Class ES Certificates, the
Percentage Interest with respect to such Certificate shown on
the face of such Certificate.
Permitted Activities: The primary activities of the trust created pursuant
to this Agreement which shall be:
(i) holding in the Mortgage Loan Subtrust the Mortgage Loans
transferred from the Depositor and other assets of the Trust
Fund, including the Supplemental Interest Trust subtrust,
which in turn holds the Swap Agreement, 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;
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(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) through the appropriate subtrust, as applicable, receiving
collections on the Mortgage Loans and the Swap Agreement 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 the Rating Agency;
(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 the Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal
funds, 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 depository institution or trust company are then rated
one of the two highest long-term and the highest short-term
ratings of the 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 the
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 the Rating Agency as evidenced by a
letter from the 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;
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(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 the 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 (A) 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 the Rating Agency or (B) would not
adversely affect the then current rating by the Rating Agency
of any of the Certificates. Such investments in this
subsection (ix) may include money market mutual funds or
common trust funds, including, without limitation, the X.X.
Xxxxxx Prime Money Market Fund or any other fund for which
JPMorgan, the Securities Administrator or an affiliate thereof
serves as an investment advisor, administrator, shareholder
servicing agent and/or custodian or subcustodian,
notwithstanding that (i) JPMorgan or an affiliate thereof
charges and collects fees and expenses from such funds for
services rendered, (ii) JPMorgan or an affiliate thereof
charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (iii) services performed for
such funds and pursuant to this Agreement may converge at any
time. JPMorgan or an affiliate thereof is specifically
authorized to charge and collect from the Trust Fund such fees
as are collected from all investors in such funds for services
rendered to such funds (but not to exceed investment earnings
thereon); 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 the 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 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
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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 a
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 includible 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, the Securities Administrator and the
Trustee 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.
Placement Agent: Terwin Capital LLC, a Delaware limited liability company.
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.
Predatory Lending Law: Section 226.32 of Regulation Z or any similar state
or local law (relating to high interest rate credit lending transactions) or any
federal, state or local law dealing with "high cost" or "predatory" mortgage
lending.
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 5.09.
Pre-Funding REMIC: As described in the Preliminary Statement and Section
2.07.
Pre-Funding REMIC Regular Interests: Each of the Class PF-I Interest and
the Class PF-II Interest.
Prepayment Assumption: A rate of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Certificates.
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Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a partial Principal Prepayment or 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
10.01 hereof) during the related Prepayment Period and prior to the Due Date for
such Mortgage Loan occurring during such Prepayment Period, 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 immediately 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 Penalties: Any prepayment premium, penalty or charge payable by
a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note or Mortgage, as applicable.
Prepayment Period: As to any Distribution Date, the period commencing on
the 12th (or, in the case of the first Distribution Date, the 1st) day of the
calendar month preceding the month in which such Distribution Date occurs and
ending on the 11th 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) the 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) prepayments
collected on the Mortgage Loans 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 10.01, on the 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
Servicing Administrator, the Securities Administrator and the Trustee pursuant
to this Agreement.
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 10.01 hereof) that
is received 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.
Prospectus Supplement: The Prospectus Supplement dated October 17, 2005
relating to the public offering of the Offered Certificates.
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PTCE 95-60: As defined in Section 6.02(a) hereof.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the applicable 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
Advances, Servicing Advances and Servicing Fees owed to the Servicer, (ii)
accrued and unpaid interest thereon 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 in connection with any violation or breach relating
to such Mortgage Loan (including without limitation, any violation of any
Predatory Lending Law).
QIB: As defined in Section 6.02(a) hereof.
Rating Agency: Each of Fitch and S&P. If 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.
Rating Agency Condition: As defined in the Swap Agreement.
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) with respect to 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.
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., National Association 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 LIBOR 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.
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 Pre-Funding REMIC, the
SWAP REMIC, REMIC 1 and REMIC 2.
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REMIC Pass-Through Rate: In the case of the Class A, Class M and Class B
Certificates, the REMIC 2 Net WAC Cap for the corresponding REMIC 2 Regular
Interest.
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 Swap Rate: For each Distribution Date (and the related Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap Agreement for
such Distribution Date, as set forth in the Prospectus Supplement.
REMIC 1: As described in the Preliminary Statement and Section 2.07.
REMIC 1 Interests: Each of the Class LT1-R$100 Interest, the Class LT1-AF1
Interest, the Class LT1-AF2 Interest, the Class LT1-AF3 Interest, the Class
LT1-AF4 Interest, the Class LT1-AF5 Interest, the Class LT1-AV1 Interest, the
Class LT1-AV2 Interest, the Class LT1-AV3 Interest, the Class LT1-B1 Interest,
the Class LT1-B2 Interest, the Class LT1-B3 Interest, the Class LT1-M1A
Interest, the Class LT1-M1B Interest, the Class LT1-M2A Interest, the Class
LT1-M2B Interest, the Class LT1-M3A Interest, the Class LT1-M3B Interest, the
Class LT1-M4A Interest, the Class LT1-M4B Interest, the Class LT1-M5A Interest,
the Class LT1-M5B Interest, the Class LT1-M6A Interest, the Class LT1-M6B
Interest, the Class LT1-IX Interest, the Class LT1-IIX Interest, the Class
LT1-II1A Interest, the Class LT1-II1B Interest, the Class LT1-II2A Interest, the
Class LT1-II2B Interest, the Class LT-IO Interest and the Class LT1-R Interest.
REMIC 1-I Marker Interests: Each of the classes of REMIC 1 Regular
Interests other than the Class LT1-IX Interest, the Class LT1-IIX Interest, the
Class LT1-II1A Interest, the Class LT1-II1B Interest, the Class LT1-II2A
Interest, the Class LT1-II2B Interest and the Class LT1-IO Interest.
REMIC 1-II Marker Interests: Each of the Class LT1-II1A Interest, the
Class LT1-II1B Interest, the Class LT1-II2A Interest and the Class LT1-II2B
Interest.
REMIC 1 Regular Interests: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.
REMIC 1 Subordinated Balance Ratio: The ratio of (i) the principal balance
of the Class LT1-II1A Interest to (ii) the principal balance of the Class
LT1-II2A Interest that is equal to the ratio of (i) the excess of (A) the sum of
(1) the aggregate Stated Principal Balance of Group I and (2) the portion of the
Original Pre-Funded Amount related to Group I 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 Balances of the
Group I Senior Certificates and Class R Certificates to (ii) the excess of (A)
the sum of (1) the aggregate Stated Principal Balance of Group II and (2) the
portion of the Original Pre-Funded Amount related to Group II 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 Group II Senior Certificates.
REMIC 2: As described in the Preliminary Statement and Section 2.07.
REMIC 2 Net WAC Cap: In the case of the Class LT2-AF1, Class LT2-AF2,
Class LT2-AF3, Class LT2-AF4 and Class LT2-AF5 Interests, a per annum rate equal
to the weighted average of the interest rate (adjusted, in the case of the Class
LT2-AF2, Class LT2-AF3, Class LT2-AF4 and Class LT2-
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AF5 Interests, to reflect accruals on the basis of a 360 day year consisting of
twelve 30 day months) of the Class LT1-II1B Interest for such Distribution Date.
In the case of the Class LT2-AV1, Class LT2-AV2 and Class LT2-AV3 Interests, a
per annum rate equal to the weighted average of the interest rate for the Class
LT1-II2B for such Distribution Date. In the case of the Class LT2-M1A, Class
LT2-M1B, Class LT2-M2A, Class LT2-M2B, Class LT2-M3A, Class LT2-M3B, Class
LT2-M4A, Class LT2-M4B, Class LT2-M5A, Class LT2-M5B, Class LT2-M6A, Class
LT2-M6B, Class LT2-B1, Class LT2-B2, and Class LT2-B3 Interests, a per annum
rate equal to the weighted average (adjusted, in the case of the Class LT2-M1A,
Class LT2-M2A, Class LT2-M3A, Class LT2-M4A, Class LT2-M5A, Class LT2-M6A, Class
LT2-B1, Class LT2-B2 and Class LT2-B3 Interests, to reflect accruals on the
basis of a 360 day year consisting of twelve 30 day months) of the interest
rates of Class LT1-II1B and Class LT1-II2B Interests for such Distribution
weighted, respectively, on the basis of the uncertificated principal balances of
the Class LT1-II1A and the Class LT2-II2A Interests.
REMIC 2 Regular Interests: Each of the REMIC 2 Interests as set forth in
the Preliminary Statement other than the Class LT2-R Interest.
REMIC 2 Residual Interest: The Class LT2-R Interest.
REMIC 2 X Interest: An uncertificated regular interest in REMIC 2 with an
initial principal balance equal to the excess of (i) the sum of (x) the Cut-off
Principal Balance of the Initial Mortgage Loans and (y) the Original Pre-Funded
Amount over (ii) the aggregate Initial Certificate Principal Balance of the
Class A, Class R, Class M and Class B Certificates and bearing interest on a
notional amount equal to 99.95% of the aggregate principal balance of the REMIC
1 Regular Interests outstanding 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 REMIC 1 Regular Interests (other than the Class LT1-II1B Interest and the
Class LT1-II2B Interest and the Class LT1-IO Interest)) at a rate equal to the
REMIC 2 X Interest Rate. The REMIC 2 X Interest will not include any obligation
to make or right to receive any payments in respect of the deemed interest rate
cap contracts or notional principal contracts described in Section 2.07 or any
right to receive amounts distributable to the Class X Certificates pursuant to
Section 5.05(i).
REMIC 2 X Interest Rate: For any Distribution Date, the excess, if any, of
(a) the weighted average of the interest rates on the REMIC 1 Regular Interests
(other than the Class LT1-IO Interest) over (b) two times the weighted average
of the interest rates on the REMIC 1-I Marker Interests and the Class LT1-IX
Interest (treating for purposes of this clause (b) the interest rate on each of
the REMIC 1-I Marker Interests as being subject to a cap and a floor equal to
the interest rate of the REMIC 2 Regular Interest represented by the
Corresponding Certificates (as adjusted to reflect the length of the Accrual
Period for the LIBOR Certificates) and treating the Class LT1-IX Interest as
being subject to a cap and floor of zero). The averages described in the
preceding sentence shall be weighted on the basis of the respective principal
balances of the REMIC 1 Regular Interests immediately prior to any date of
determination.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: One or more Mortgage Loans substituted by the
Seller for one or more Deleted Mortgage Loans which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit I, individually or in the aggregate and on a weighted average basis,
as applicable, (i) 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 more than 10% less than the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) 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
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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; (iii) have a Loan to Value Ratio
no higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity not more than one year greater than or one year less than that of the
Deleted Mortgage Loan; provided that the maturity date of any such Mortgage Loan
shall be prior to the Final Scheduled Distribution Date; provided, further,
however, that if after giving effect to such substitution, Replacement Mortgage
Loans with remaining terms to maturity greater than the remaining term to
maturity of the last maturing Mortgage Loan in the Trust as of the Closing Date
comprise 15% or more of the Aggregate Collateral Balance on such date, then such
Replacement Mortgage Loan shall not have a remaining term to maturity greater
than the remaining term to maturity of the last maturing Mortgage Loan in the
Trust as of the Closing Date; (v) must be of the same or better credit quality
and lien priority as the Mortgage Loan being replaced; (vi) not be a
negatively-amortizing loan; (vii) if the Defective Mortgage Loan is not a
Balloon Loan, not be a Balloon Loan; and (viii) comply with each representation
and warranty set forth in Section 2.03.
Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee, substantially in the form of Exhibit I hereto.
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 Loss Percentage: For any Distribution Date, the applicable
percentage for such Distribution Date set forth in the following table:
Distribution Date Occurring
In Required Loss Percentage Required Loss Percentage
--------------------------- ------------------------
November 2008 - October 2009 2.25% with respect to November
2008, plus an additional 1/12th of
0.75% for each month thereafter
November 2009 - October 2010 3.00% with respect to November
2009, plus an additional 1/12th of
0.50% for each month thereafter
November 2010 - October 2011 3.50% with respect to November
2010, plus an additional 1/12th of
0.25% for each month thereafter
November 2011 and thereafter 3.75%
Required Percentage: As of any Distribution Date on or after 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, prior to
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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 each Distribution Date on or prior to
the Distribution Date in December 2005, an amount equal to the sum of (A) the
product of (i) the amount relating to Group I 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 portion of the Original Pre-Funded
Amount relating to Group I) and (ii) the Net WAC for Group I and (B) the product
of (i) the amount relating to Group II 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 portion of the Original Pre-Funded Amount relating to
Group II) and (ii) the Net WAC for Group II.
Reserve Interest Rate: 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.
Responsible Officer: When used with respect to the Servicer, any officer
of the Servicer 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. When used with respect to the Trustee,
any officer of the Trustee who has direct responsibility for the administration
of this Agreement. When used with respect to the Securities Administrator, any
Vice President, any Managing Director, any Director, any associate, any
Assistant Vice President, any Assistant Secretary, any Trust Officer or any
other officer or employee of the Securities Administrator 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 or employee's knowledge of and familiarity with the
particular subject and in each case who shall have direct responsibility for the
administration of this Agreement.
Reuters Screen LIBOR Page: The display designated as page "LIBOR" on the
Reuters Monitor Money Rates Service (or such other page as may replace such
LIBOR page on that service for the purpose of displaying London interbank
offered rates of major banks.
Rolling Three Month Delinquency: For any Distribution Date will be the
fraction, expressed as a percentage, equal to the average of the related
delinquency rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding months.
Rule 144A Letter: As defined in Section 6.02(a) hereof.
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S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
its successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of October 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: JPMorgan or its successor in interest.
Securities Administrator Fee: As to any Distribution Date and each
Mortgage Loan, an amount equal to the product of the applicable Securities
Administrator Fee Rate and the outstanding Stated Principal Balance of such
Mortgage Loan as of the preceding Distribution Date.
Securities Administrator Fee Rate: 0.005% per annum.
Seller: Terwin Advisors LLC, a Delaware limited liability company, or its
successor in interest.
Servicer: Specialized Loan Servicing, LLC, a Delaware limited liability
company and its successors and assigns.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer's Assignee: As defined in Section 10.14(a) hereof.
Servicer Data Remittance Date: With respect to any Mortgage Loan and any
Distribution Date, the 10th day of the calendar month in which such Distribution
Date occurs, or if such 10th day is not a Business Day, the Business Day
immediately succeeding such 10th day.
Servicer Remittance Date: With respect to any Mortgage Loan and any
Distribution Date, the 18th day of the calendar month in which the related
Distribution Date occurs or, if such 18th day is not a Business Day, the
Business Day immediately preceding such 18th day.
Servicer Withdrawals: As defined in Section 3.08(a) hereof.
Servicing Administrator: JPMorgan.
Servicing Administrator Collection Account: The account established and
maintained by the Servicing Administrator in accordance with Section 3.05.
Servicing Administrator Remittance Date: With respect to any Mortgage Loan
and any Distribution Date, the day that is two (2) Business Days prior to the
related Distribution Date.
Servicing Administrator Withdrawals: As defined in Section 3.08(b) hereof.
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Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, 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 and (4) compliance with the obligations
under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount payable to or retained by the Servicer equal to the product of (x) the
SLS Servicing Fee Rate and (y) the Stated Principal Balance of such Mortgage
Loan as of the immediately preceding Distribution Date.
Servicing Fee Rate: As to any Mortgage Loan, 0.500% per annum.
Servicing Officer: Any officer of the Servicer or the Servicing
Administrator involved in, or responsible for, the administration and servicing
of the Mortgage Loans whose name and facsimile signature appear on a list of
servicing officers furnished to the Securities Administrator, the Backup
Servicer 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 Owner: Terwin Advisors LLC, or its transferee or
assignee, in its capacity as owner of the servicing rights with respect to the
Mortgage Loans.
Servicing Rights Pledgee: The entity designated by the Servicing Rights
Owner pursuant to Section 7.04.
Servicing Transfer Costs: In the event that the Servicer does not
reimburse the Securities Administrator 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 completion,
correction or manipulation of such servicing data as may be required by the
Securities Administrator or any successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Securities
Administrator 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.
Similar Law: As defined in Section 6.02(a) hereof.
SLS: Specialized Loan Servicing, LLC, a Delaware limited liability
company, and its successors and assigns.
SLS Cross Default: An SLS Cross Default shall have occurred if SLS is
terminated as servicer under two or more pooling and servicing agreements to
which SLS is a party and pursuant to which it is servicing Mortgage Loans, other
than this Agreement, (i) in which the principal amount of loans then being
serviced by SLS under each agreement is at least $25,000,000 and (ii) which
termination results from an event of default by SLS thereunder.
SLS Event of Termination: As defined in Section 8.05 hereof.
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SLS Financial Trigger Event: An SLS Financial Trigger Event shall have
occurred if there is a default by SLS of any financial covenants contained in
Article VII (other than those in Section 7.3) of the Receivables Loan Agreement,
dated as of March 1, 2004, as may be amended from time to time, by and between
SLS Funding, LLC, a Delaware limited liability company, as borrower, SLS, as
collection agent, Wachovia Bank National Association, as a lender, GreenPoint
Bank, as a lender and Wachovia Capital Markets, LLC, as deal agent for the
lenders.
SLS Servicing Fee Rate: As to each Mortgage Loan and any Distribution Date
while SLS is the Servicer, means the per annum rate specified in a Letter
Agreement dated the Closing Date among SLS, the Depositor and the Trustee
(provided that such rate does not exceed the Servicing Fee Rate) and as to each
Mortgage Loan and any Distribution Date while SLS is no longer the Servicer, the
per annum rate specified in a successor Letter agreement among the Depositor,
the Seller, the Trustee, the Securities Administrator and the successor servicer
(provided that such rate does not exceed the Servicing Fee Rate).
SLS Servicing Tape: As defined in Section 3.30 hereof.
SPV: As defined in Section 5.02(a) hereof.
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 thereof (or
Subsequent Cut-off Date Principal Balance thereof with respect to Subsequent
Mortgage Loans) and (2) as of any Distribution Date, such Cut-off Date Principal
Balance or Subsequent Cut-off Date Principal Balance (as the case may be), 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. 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 November
2008 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance together with the Class R Certificate Principal Balance
(reduced by the Principal Funds with respect to such Distribution Date) is less
than or equal to (B) 26.80% of the Stated Principal Balances of the Mortgage
Loans as of such Distribution Date.
Subordinated 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 (and subtracting the current Certificate Principal Balance
of the Class R Certificate, in the case of Group I) from the sum of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in each Mortgage Group
and (y) the amount on deposit in the Pre-Funding Account related to such
Mortgage Group (disregarding income or loss on investments of amounts on deposit
in the Pre-Funding Account) as of the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off Date)) of the
Group I Net WAC Cap and the Group II Net WAC Cap (and, in the case of the Class
M-1B, Class M-2B, Class M-3B, Class M-4B,
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Class M-5B and Class M-6B Certificates, multiplied by a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days in the
related Accrual Period).
Subordinated Certificates: The Class M and Class B Certificates.
Subordinated Maximum Rate Cap: With respect to the Subordinated
Certificates and any Distribution Date, the per annum rate equal to the weighted
average (weighted in proportion to the results of subtracting the current
principal balance of the related Class A Certificates and, in the case of Group
I, the Class R Certificate from the sum of (x) the aggregate principal balance
of each Mortgage Group and (y) the amount on deposit in the Pre-Funding Account
related to such Mortgage Group disregarding income or loss on investments of
amounts on deposit in the Pre-Funding Account) of the Group I Maximum Rate Cap
(and, in the case of the Class M-1B, Class M-2B, Class M-3B, Class M-4B, Class
M-5B and Class M-6B Certificates, multiplied by a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Accrual Period) and the Group II Maximum Rate Cap (disregarding, in the
case of the Class M-1A, Class M-2A, Class M-3A, Class M-4A, Class M-5A, Class
M-6A and Class B Certificates, any adjustment for the actual number of days in
the related Accrual Period).
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 2.11, 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 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 Certificate Insurer and the Trustee substantially in the form of Exhibit M,
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.
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Subservicer: As defined in Section 3.02(a) hereof.
Subservicing Agreement: As defined in Section 3.02(a) hereof.
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Supplemental Interest Trust: The segregated non-interest bearing subtrust
of the Trust Fund established by the Securities Administrator pursuant to
Section 5.05(l) of this Agreement in which the Swap Agreement will be held, out
of which any Swap Termination Payments or Net Swap Payments owed to the Swap
Counterparty will be paid, certain distributions to Certificateholders and the
Certificate Insurer will be made, and into which any Swap Termination Payments
or Net Swap Payments received from the Swap Counterparty will be deposited as
set forth in Section 5.05 hereof.
Swap Agreement: The novated confirmations, dated as of October 19, 2005,
among Bear Xxxxxxx Financial Products, Bear Xxxxxxx Bank Plc, Terwin Advisors
LLC and the Trust or any other cap agreement or swap agreement (including any
related schedules) held by the Supplemental Interest Trust pursuant to Section
5.05(l) hereof.
Swap LIBOR: With respect to any Distribution Date (and the related Accrual
Period) the product of (i) the Floating Rate Option (as defined in the Swap
Agreement for the related Swap Payment Date), (ii) two and (iii) the quotient of
(a) the actual number of days in the Accrual Period for the LIBOR Certificates
divided by (b) 30.
Swap Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, the Business Day immediately preceding each
Distribution Date.
Swap Provider: Bear Xxxxxxx Financial Products or any successor
counterparty who meets the requirements set forth in the Swap Agreement.
SWAP REMIC: As described in the Preliminary Statement and Section 2.07.
SWAP REMIC Interests: Each of the interests in the SWAP REMIC as set forth
in the Preliminary Statement.
SWAP REMIC Regular Interests: Each of the SWAP REMIC Interests other than
the Class SW-R Interest.
Swap Termination Payment: Any payment payable by the Supplemental Interest
Trust or the Swap Provider upon termination of the Swap Agreement as a result of
an Event of Default (as defined in the Swap Agreement) or a Termination Event
(as defined in the Swap Agreement).
Targeted Overcollateralization Amount: The product of (i) 0.80% and (ii)
the sum of (x) the Cut-off Date Principal Balance of the Initial Mortgage Loans
and (y) the Original Pre-Funded Amount.
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 Affidavit: As defined in Section 6.02(b)(ii) hereof.
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Transfer Agreement: Any document pursuant to which the Seller acquired any
Mortgage Loan from the originator of such Mortgage Loan.
Transferor: Any originator of a Mortgage Loan.
Transferor Certificate: As defined in Section 6.02(a) hereof.
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 (B) the
Stated Principal Balance of the Mortgage Loans as of the last day of the
preceding calendar month, equals or exceeds the product of (i) 59.00% and (ii)
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 Required Loss Percentage.
Trust Fund: The corpus of the trust (the "Terwin Mortgage Trust, Series
XXXX 0000-00XX") created hereunder consisting of (i) the Mortgage Loan Subtrust,
which in turn holds 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 Servicing Administrator
Collection 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) the Certificate Insurance Policy, (vi) the Supplemental Interest
Trust, which in turn holds the Swap Agreement, and (vii) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.
Trustee: U.S. Bank 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.
Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in gross income for United States tax
purposes regardless of its source or (iv) 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. Notwithstanding the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Persons.
Unpaid Realized Loss Amount: The Class M-1A Unpaid Realized Loss Amount,
Class M-1B Unpaid Realized Loss Amount, Class M-2A Unpaid Realized Loss Amount,
Class M-2B Unpaid
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Realized Loss Amount, Class M-3A Unpaid Realized Loss Amount, Class M-3B Unpaid
Realized Loss Amount, Class M-4A Unpaid Realized Loss Amount, Class M-4B Unpaid
Realized Loss Amount, Class M-5A Unpaid Realized Loss Amount, Class M-5B Unpaid
Realized Loss Amount, Class M-6A Unpaid Realized Loss Amount, Class M-6B Unpaid
Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount, Class B-2 Unpaid
Realized Loss Amount and Class B-3 Unpaid Realized Loss Amount, collectively.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18 or 4.15.
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 98% to the Class A, Class R, Class B and Class M Certificates
and 2.00% to the Class X, Class ES Certificates, with the allocation among the
Class A, Class R, Class B and Class M Certificates to be in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes. Voting Rights will be allocated among
the Certificates of each such Class in accordance with their respective
Percentage Interests. The Class R Certificate will have no Voting Rights.
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 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).
(1) In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee, or to the Custodian as the Trustee's
designated agent, the following documents or instruments with respect to each
Mortgage Loan and the Depositor shall, in accordance with Section 2.11, deliver
to, and deposit with, the Trustee or to the Custodian, as the Trustee's agent,
the following documents or instruments with respect to each Subsequent Mortgage
Loan:
(A) The electronic Mortgage Loan Schedule, a copy of which has also
been delivered to the Servicer, the Backup Servicer, the Servicing
Administrator and the Trustee.
(B) The Original Mortgage Note endorsed in blank or, "Pay to the
order of U.S. Bank National Association, as Trustee for Terwin Mortgage
Trust 2005-16HE, Asset-Backed Certificates, Series 2005-16HE, 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 the Transferor.
(C) Except as provided below and for each Mortgage Loan that is not
a MERS Loan, the original recorded Mortgage together 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 together with all riders thereto certified by the
Transferor to be true copy of
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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 together with all riders thereto, 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.
(D) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage in blank or, to MERS or to "U.S. Bank
National Association, as Trustee for Terwin Mortgage Trust 2005-16HE,
Asset-Backed Certificates, Series 2005-16HE, without recourse."
(E) 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).
(F) 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.
(G) Originals of all assumption and modification agreements, if any.
(2) 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. The original Mortgage Note (or a lost note affidavit (including a
copy of the original Mortgage Note)) or (ii) the 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, "U.S. Bank
National Association, as Trustee for Terwin Mortgage Trust 2005-16HE,
Asset-Backed Certificates, Series 2005-16HE, 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 "U.S. Bank National Association, as Trustee for Terwin Mortgage Trust
2005-16HE, Asset-Backed Certificates, Series 2005-16HE, without recourse";
D. The 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;
E. The 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 "U.S. Bank
National Association, as Trustee for
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Terwin Mortgage Trust 2005-16HE, Asset-Backed Certificates, Series
2005-16HE, without recourse" 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. The 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. The original proprietary lease;
I. The original assignment of proprietary lease or a copy thereof,
to the Trustee or in blank, and all intervening assignments thereof;
J. The 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 MERS Mortgage Loan
or 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
and the Custodian 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 Custodian with notice 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.
In connection with the assignment of any MERS Mortgage Loan, the Seller
agrees that within 360 days of receipt of all information and documentation
required by MERS it will take (or shall cause the Servicing Administrator or the
Servicer to take), at the expense of the Seller (with the cooperation of the
Depositor and the Trustee), such actions as are necessary to cause the MERS
System to indicate that such Mortgage Loans have been assigned to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans that are repurchased in
accordance with this Agreement) in such computer files the information required
by the MERS System to identify the series of the Certificates issued in
connection with the transfer of such Mortgage Loans to the Trust.
With respect to any Mortgage Loan that is not a Co-op Loan, none of the
Depositor, the Servicing Administrator, the Servicer (except as required in
accordance with Accepted Servicing Practices in connection with any delinquent
or defaulted Mortgage Loan), 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 Mortgage Loan that is a Co-op Loan, none
of the Depositor, the Servicing Administrator, the Servicer, the Securities
Administrator or the Trustee shall be obligated to cause to be
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recorded the Form UCC-3 referred to in this Section 2.01. In the event an
Assignment of Mortgage or a Form UCC-3 is not recorded, each of the Servicing
Administrator, the Seller, the Trustee, the Backup Servicer and the Servicer
(except, with respect to the Servicer, as required in accordance with Accepted
Servicing Practices in connection with any delinquent or defaulted Mortgage
Loan) shall have no liability for its failure to record the secured party's
interest for such Mortgage or Form UCC-3, as applicable, in the name of the
Trustee, including without limitation any failure to receive and act on notices
related to such Assignment of Mortgage or such Form UCC-3, as applicable.
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. None of the Depositor, the Servicing Administrator, the
Servicer nor the Securities Administrator shall take any action inconsistent
with such ownership and shall not claim any ownership interest therein. The
Depositor, the Servicing Administrator, 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. 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.
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It is agreed and understood by the Depositor, the Servicer 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 in the Home Ownership and
Equity Protection Act of 1994 or any 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, (iii) the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 or (iv) a "High-Cost Home Loan" as defined in the Indiana
High-Cost Home Loan Law effective January 1, 2005.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
The Trustee accepts its appointment as Trustee hereunder and, except as
set forth as an exception in the exception report (the "Exception Report")
delivered with the Initial Certification (the "Initial Certification") or the
Final Certification, acknowledges the Custodian's receipt, subject to the
provisions of Section 2.01 and subject to the review described below, 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 (or the
Custodian, as its designated agent) 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 and
the Certificate Insurer. The Depositor will cause the 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 Securities
Administrator within 90 Business Days of the Closing Date (or the Subsequent
Transfer Date with respect to Subsequent Mortgage Loans).
The Trustee acknowledges that the Mortgage Loans shall be held in the
Mortgage Loan Subtrust.
The Trustee acknowledges receipt of the Swap Agreement (a form of which is
attached hereto) that will be held in the Supplemental Interest Trust and is
hereby instructed to enter into the Swap Agreement, not in its individual
capacity, but solely as Trustee for the Terwin Mortgage Trust, Series TMTS
2005-16HE and for the Supplemental Interest Trust.
The Trustee agrees to cause the Custodian to deliver prior to the Closing
Date (or the Subsequent Transfer Date with respect to Subsequent Mortgage Loans)
to the Depositor, the Securities Administrator, the Certificate Insurer, the
Servicer and the Trustee an Initial Certification in the form annexed as Exhibit
B-1 to the Custodial Agreement. The Trustee shall not be under any duty or
obligation to inspect, review or examine such documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 90 days after the Closing Date (or the Subsequent Transfer
Date with respect to Subsequent Mortgage Loans), the Custodial Agreement
requires the Custodian to deliver to the Depositor, the Seller, the Securities
Administrator, the Certificate Insurer and the Servicer a Final Certification in
the form annexed as Exhibit B-3 to the Custodial Agreement, with any applicable
exceptions noted thereon.
If, in the course of such review, the Trustee is notified by the Custodian
that any document constituting a part of a Mortgage File does not meet the
requirements of Section 2.01, the Trustee shall cause the Custodian to list such
as an exception in the Final Certification; provided, however, that the Trustee
shall not make any determination as to whether (i) any endorsement is sufficient
to transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or is sufficient to effect the assignment of
and transfer to the assignee thereof under the mortgage to which the assignment
relates.
The Seller shall promptly correct or cure such defect within 90 days from
the date it is so notified of such defect and provided with information
indicating the nature of the breach and, if the Seller does not
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correct or cure such defect within such period, the Seller shall either (i)
substitute for the related Mortgage Loan pursuant to the provisions of Section
2.03(c), or (ii) purchase such Mortgage Loan from the Trustee within 90 days
from the date the Seller was notified of such defect in writing at the Purchase
Price of such Mortgage Loan; provided, however, that if the cure, substitution
or repurchase of a Mortgage Loan pursuant to this provision is required by
reason of a delay in delivery of any documents by the appropriate recording
office, then, provided such defect does not cause such Mortgage Loan not to be a
"qualified mortgage" 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) the Seller shall be given 270 days from the Closing Date
(or the Subsequent Transfer Date with respect to Subsequent Mortgage Loans) to
cure such defect or, subject to the requirements of Section 2.03(c) hereof,
substitute for, or repurchase such Mortgage Loan; and further provided, that the
Seller shall have no liability for recording any Assignment of Mortgage in favor
of the Trustee or for the Seller's failure to record such Assignment of
Mortgage, and the Seller shall not be obligated to repurchase or cure any
Mortgage Loan as to which such Assignment of Mortgage is not recorded. Any such
substitution effected more than 90 days after the Closing Date shall not be
effected prior to the delivery to the Custodian of the Opinion of Counsel
required by Section 2.05 hereof and any substitution shall not be effected prior
to the additional delivery to the Custodian of a Request for Release certifying
that such Mortgage Loan is a Replacement Mortgage Loan substantially in the form
of Exhibit I and the Mortgage File for any such substitute Mortgage Loan. The
Purchase Price for any such Mortgage Loan shall be deposited by the Seller in
the Certificate Account on or prior to the Business Day immediately preceding
the Distribution Date in the month following the month of repurchase and, upon
receipt of such deposit and certification with respect thereto in the form of
Exhibit I hereto, the Custodian shall release the related Mortgage File to the
Seller and shall execute and deliver at such entity's request such instruments
of transfer or assignment prepared by such entity, in each case without
recourse, as shall be necessary to vest in such entity, or a designee, the
Trustee's interest in any Mortgage Loan released pursuant hereto.
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(c), within 90 days from the date the Seller was
notified of such omission or defect and provided with information indicating the
nature of the breach and, if the Seller does not correct or cure such omission
or defect within such period, the Trustee shall require 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 and provided
information indicating the nature of the breach 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, 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. The preceding
sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor, Securities Administrator or the Trustee
pursuant to the Sale Agreement and any Transfer Agreement. 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 Servicing Administrator, the Securities
Administrator, the Credit Risk Manager and the Trustee shall keep
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confidential the name of each Mortgagor except as required by this Agreement and
the Servicing Administrator, 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 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 from sources other
than the other parties hereto, (ii) disclosure of any and all information (A) if
required to do so by any applicable law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee any aspect of Trustee's, the Servicer's, the Servicing Administrator's
or the Securities Administrator's business or that of their affiliates, (C)
pursuant to any subpoena, civil investigation demand or similar demand or
request of any court, regulatory authority, or arbitrator or pursuant to any
arbitration to which Trustee, the Servicer, the Servicing Administrator or the
Securities Administrator or any affiliate or officer, director, employer or
shareholder thereof is a party or (D) to any affiliate, independent or internal
auditor, agent, employee or attorney of Trustee, the Servicer, the Servicing
Administrator or the Securities Administrator having a need to know the same,
provided that such Person advises such recipient of the confidential nature of
the information being disclosed, or (iii) any other disclosure authorized by the
Depositor or Servicing Administrator.
All of the Mortgage Files are being held by the Custodian pursuant to the
Custodial Agreement. Notwithstanding anything to the contrary contained herein,
the parties hereto acknowledge that the functions of the Trustee or the
Custodian, as the Trustee's agents with respect to the custody, acceptance,
inspection and release of the Mortgage Files pursuant to this Agreement shall be
performed by the Custodian pursuant to the Custodial Agreement.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the
Servicer, the Servicing Administrator, the Securities Administrator, the Seller,
the Certificate 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
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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, 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 Subsequent Transfer Date with
respect to Subsequent Mortgage Loans), 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 each Transferor with
respect to the related Mortgage Loans in the applicable Transfer Agreement,
which have been assigned to the Trustee hereunder, were made as of the date
specified in the applicable Transfer Agreement (or underlying agreement, if such
Transfer Agreement is in the form of an assignment of a prior agreement). To the
extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of both (i) a representation or warranty of the applicable
Transferor under the applicable Transfer Agreement and (ii) a representation or
warranty of the Seller under the Sale Agreement, the obligations of the Seller
under the Sale Agreement shall be enforced and to the extent the Seller does not
fulfill its contracted obligations then the obligations of the applicable
Transferor shall be enforced under any applicable representation or warranty
made by it. The Trustee further 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 under any circumstances.
(c) Upon discovery by any of the Depositor, the Servicing
Administrator, the Servicer, the Securities Administrator 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 together with information
indicating the nature of the breach, the applicable 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 any Transferor or the Seller, the Trustee's rights shall be enforced
under the applicable Transfer Agreement and the Sale Agreement for the benefit
of Certificateholders. If a breach of the representations and
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warranties set forth in the Transfer Agreement hereof exists solely due to the
unenforceability of a prepayment charge, the Trustee or the other party having
notice thereof shall notify the Servicer thereof and not seek to enforce the
repurchase remedy provided for herein unless such Mortgage Loan is not current.
In the event of a breach of the representations and warranties with respect to
the Mortgage Loans set forth in a Transfer Agreement, the Trustee shall enforce
the right of the Trust Fund 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 5.05(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 related 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 and the Custodian 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. The Seller indemnifies and
holds the Trust Fund, the Trustee, the Securities Administrator, the Depositor,
the Servicing 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 Securities Administrator, the
Depositor, the Servicing Administrator, the Servicer and any Certificateholder
may sustain in connection with any actions of the Seller relating 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
Transferor or the Seller, as applicable, is not a member of MERS and repurchases
a Mortgage Loan which is registered on the MERS System, the Transferor or the
Seller, as applicable, 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 Transferor
or the Seller, as applicable, 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 Seller pursuant to
the Sale Agreement or by any Transferor pursuant to the applicable Transfer
Agreement, the principal portion of the funds received by the Securities
Administrator, in respect of such repurchase of a Mortgage Loan will be
considered a Principal Prepayment and shall be deposited in the Certificate
Account pursuant to Section 3.05. The Trustee, upon receipt of notice from the
Securities Administrator 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 Seller or the applicable 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 Seller, and neither the Trustee nor the Securities Administrator
shall have any further responsibility with respect to the Mortgage File relating
to such Deleted Mortgage Loan.
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With respect to each Replacement Mortgage Loan to be delivered to the
Trustee (or the Custodian) pursuant to the terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the applicable 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 Mortgage Loan satisfying
all requirements under the definition of Replacement Mortgage Loan and 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 Custodian
shall review the Mortgage File with respect to each Replacement Mortgage Loan
and certify to 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 penalties 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 penalties 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") shall be deposited into the Certificate
Account by the Seller 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 Securities Administrator shall
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 Servicer shall amend the Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
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 each 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 Subsequent Mortgage Loans).
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SECTION 2.04. Representations and Warranties of the Servicing
Administrator; Representations and Warranties of the Servicer; Representations
and Warranties of the Securities Administrator; Representations and Warranties
of the Backup Servicer.
(a) The Servicing Administrator hereby represents and warrants
to the Depositor, the Servicer, the Securities Administrator, the Seller, the
Backup Servicer, the Certificate Insurer and the Trustee as follows, as of the
date hereof:
(i) The Servicing Administrator is duly organized and is
validly existing as a national banking association in good standing under the
laws of the United States of America and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be conducted by
the Servicing Administrator in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business laws
of any such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to master 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 Servicing Administrator 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
Servicing 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 Servicing Administrator, enforceable against the
Servicing 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 therefor may be brought.
(iii) The execution and delivery of this Agreement by
the Servicing Administrator, 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 Servicing Administrator and will
not (A) result in a material breach of any term or provision of the charter or
by-laws of the Servicing 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 Servicing 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 Servicing Administrator of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Servicing
Administrator; and the Servicing 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 Servicing Administrator's ability
to perform or meet any of its obligations under this Agreement.
(iv) The Servicing Administrator, or an affiliate
thereof, is an approved servicer of mortgage loans for Xxxxxx Xxx and for
Xxxxxxx Mac.
(v) Except as previously disclosed to the Depositor, no
litigation is pending or, to the best of the Servicing Administrator's
knowledge, threatened, against the Servicing Administrator that would materially
and adversely affect the execution, delivery or enforceability of this
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Agreement 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 Servicing Administrator of, or compliance by the Servicing
Administrator with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or order is
required, the Servicing Administrator has obtained the same.
(b) The Servicer hereby represents and warrants to the
Depositor, the Servicing Administrator, the Securities Administrator, the
Seller, the Backup Servicer, the Certificate Insurer and the Trustee as follows,
as of the date hereof:
(i) The Servicer is duly organized and is validly
existing as a limited liability company 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
and 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 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 HUD.
(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,
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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 four credit reporting services, including, but not limited to, Equifax,
Experian, and Trans Union Credit Information Company on a monthly basis after
October 1, 2005.
(c) The Securities Administrator and Backup Servicer hereby
represents and warrants to the Depositor, the Servicing Administrator, the
Seller, the Servicer, the Certificate Insurer and the Trustee as of the date
hereof:
(i) The Securities Administrator and Backup Servicer is
duly organized and is validly existing as a national banking association
organized under the laws of the United States and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to be
conducted by the Securities Administrator and Backup Servicer.
(ii) The Securities Administrator and the Backup
Servicer has the full corporate power and authority 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 the Securities Administrator and the Backup Servicer the execution, delivery
and performance of this Agreement.
(iii) The execution and delivery of this Agreement by
the Securities Administrator and the Backup Servicer, 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 the Backup Servicer and will not (A) result in
a material breach of any term or provision of the charter or by-laws of the
Securities Administrator and the Backup 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 Securities Administrator and the Backup Servicer is a party or by
which it may be bound.
(iv) No litigation is pending or, to the best of the
Securities Administrator and the Backup Servicer's knowledge, threatened,
against the Securities Administrator and the Backup Servicer that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Securities Administrator and the Backup
Servicer to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
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(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 and the Backup Servicer of, or
compliance by the Securities Administrator and the Backup Servicer 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 and the Backup Servicer has obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which
are not "Qualified Mortgages."
Upon discovery by the Depositor, the Servicing Administrator, the
Servicer, the Securities Administrator, the Backup Servicer or the Trustee that
any Mortgage Loan does not constitute a "qualified mortgage" within the meaning
of section 860G(a)(3) of the Code, the party discovering such fact shall
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 direction of the Depositor, shall reconvey
to the Depositor the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges receipt by the Custodian on its behalf of the
documents identified in the Initial Certification in the form attached as an
exhibit to Exhibit Q hereto and concurrently with such receipt, 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
Authenticating Agent 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.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the
Securities Administrator on behalf of the Trustee to make an appropriate
election to treat each of the Pre-Funding REMIC, the SWAP REMIC, REMIC 1 and
REMIC 2 as a REMIC for federal income tax purposes. The Trustee, upon the
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
Pre-Funding REMIC, the SWAP REMIC, REMIC 1 and REMIC 2 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.
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The Pre-Funding REMIC shall consist of all of the assets of the Trust Fund
other than (i) the interests issued by the Pre-Funding REMIC, the interests
issued by the SWAP REMIC and the interests issued by REMIC 1, (ii) the Initial
ES Strip, (iii) the rights to receive amounts distributable to the Class X
Certificates pursuant to Section 5.05(i), (iv) the grantor trusts described in
Section 2.07 hereof, (v) the Swap Agreement that is held by the Supplemental
Interest Trust and (vi) the Pre-Funding Account and the Capitalized Interest
Account. The Pre-Funding REMIC shall issue the Pre-Funding REMIC Regular
Interests which shall be designated as regular interests of such REMIC and shall
issue the Class PF-R Interest that shall be designated as the sole class of
residual interest in the Pre-Funding REMIC. Each of the Pre-Funding REMIC
Regular Interests shall have the characteristics set forth in its definition and
this Section 2.07.
The SWAP REMIC shall consist of the Pre-Funding REMIC Regular Interests.
The SWAP REMIC shall issue the SWAP REMIC Regular Interests which shall be
designated as regular interests in such REMIC and shall issue the Class SW-R
Interest that shall be designated as the sole class of residual interest in the
SWAP REMIC. Each of the SWAP REMIC Regular Interests shall have the
characteristics set forth in the Preliminary Statement and this Section 2.07.
REMIC 1 shall consist of the SWAP REMIC Regular Interests. REMIC 1 shall
issue the REMIC 1 Regular Interests which shall be designated as regular
interests of such REMIC and shall issue the Class LT1-R Interest that shall be
designated as the sole class of residual interest in REMIC 1. Each of the REMIC
1 Regular Interests shall have the characteristics set forth in its definition
and this Section 2.07.
The assets of REMIC 2 shall be the REMIC 1 Regular Interests. The REMIC 2
Regular Interests shall be designated as the regular interests in REMIC 2 and
the REMIC 2 Residual Interest shall be designated as the sole class of residual
interest in REMIC 2. Each of the REMIC 2 Regular Interests shall have the
characteristics set forth in the Preliminary Statement and this Section 2.07.
For federal income tax purposes, the interest rate on each REMIC 2 Regular
Interest shall be subject to a cap equal to the applicable REMIC 2 Net WAC Cap.
The beneficial ownership of the Class PF-R Interest, the Class SW-R
Interest, the Class LT1-R Interest and the Class LT2-R Interest shall be
represented by the Class R Certificate. The Class PF-R Interest, the Class SW-R
Interest and the Class LT1-R 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 a Class R Certificate, by its
acceptance thereof, irrevocably appoints the Securities 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) (i) It is intended that the rights 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 in favor of the
holders of the Class A, Class M, and Class B Certificates by the holder of the
Class X Certificates, and such shall be accounted for as property held separate
and apart from the regular interests in REMIC 2 held by the holders of the Class
A, Class M and Class B Certificates. 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 value or a de minimis
value. This provision is intended to satisfy the requirements of Treasury
Regulations Section 1.860G-2(i) for the
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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 Swap Agreement, will be treated as
distributed by REMIC 2 with respect to the REMIC 2 X Interest and then paid to
the relevant Class of Certificates pursuant to the related interest rate cap
contract.
(ii) It is intended that the beneficial owners of the
Certificates (other than the Class X and Class R Certificates) shall be treated
as having entered into a notional principal contract with respect to the
beneficial owners of the Class X Certificates. Pursuant to each such notional
principal contract, all beneficial owners of the Certificates (other than the
Class X and Class R Certificates) shall be treated as having agreed to pay, on
each Distribution Date, to the beneficial owners of the Class X Certificates an
aggregate amount equal to the excess, if any, of (i) the amount payable on such
Distribution Date on the REMIC 2 Regular Interest corresponding to such Class of
Certificates over (ii) the amount payable on such Class of Certificates on such
Distribution Date (such excess, a "Class Payment Shortfall"). A Class Payment
Shortfall shall be allocated to each Class of Certificates to the extent that
interest accrued on such Class for the related Accrual Period at the
Pass-Through Rate for a Class, computed by substituting "Net WAC Cap" for the
applicable Available Funds Cap set forth in the definition thereof, exceeds the
amount of interest accrued on such Certificate at the Pass-Through Rate (without
such substitution) for the related Accrual Period, and a Class Payment Shortfall
payable from principal collections shall be allocated to the most subordinate
Class of Certificates with an outstanding principal balance to the extent of
such balance.
(e) The parties intend that the portion of the Trust Fund
consisting of the uncertificated REMIC 2 X Interest, the uncertificated Class
LT2-IO Interest, the rights to receive amounts distributable to the Class X
Certificates pursuant to Section 5.05(i), the rights to receive payments deemed
made by the Class A, Class M and Class B Certificates in respect of notional
principal contracts described in Section 2.07(d)(ii), the obligation of the
holders of the Class X Certificates to make payments in respect of Excess
Interest to the holders of the Class A, Class M and Class B Certificates, and
the Supplemental Interest Trust, which holds the Swap Agreement, shall be
treated as a "grantor trust" under the Code, and the provisions hereof shall be
interpreted consistently with this intention. In furtherance of such intention,
the Trustee shall (i) furnish or cause to be furnished to the holders of the
Class X 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 X Certificates as may be
applicable under the Code.
The parties intend that amounts paid to the Swap Provider under the Swap
Agreement shall be deemed for federal income tax purposes to be paid by the
Class X Certificates first, out of funds deemed received in respect of the Class
LT2-IO Interest, second, out of funds deemed received in respect of the REMIC 2
X Interest and third, out of funds deemed received in respect of notional
principal contracts described in Section 2.07(d)(ii), and the provisions hereof
shall be interpreted consistently with this intention.
The Supplemental Interest Trust shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the
Supplemental Interest Trust for all federal income tax purposes, and shall be
taxable on all income earned thereon.
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The parties intend that the portion of the Trust Fund consisting of the
Initial ES Strip shall be treated as a "grantor trust" under the Code, 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 ES 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. The parties intend that in the event that any servicer's fee is
computed based on a rate that exceeds the rate upon which the Servicer's fee is
computed as of the Closing Date, the holders of the Class ES Certificates shall
be treated as if they received any amounts that are paid to such servicer and
such holders shall be deemed to pay such amounts to such servicer.
(f) All (i) payments of principal and interest at the Net
Mortgage Rate on each of the Group I Mortgage Loans (other than amounts payable
in respect of the Certificate Insurer Premium and other than amounts
distributable to the Class X Certificates pursuant to Section 5.05(i)) received
from the Group I Mortgage Loans, (ii) payments received in respect of any
Required Withdrawal computed with respect to amounts on deposit in the
Pre-Funding Account related to Group I, (iii) with respect to the Distribution
Date immediately following the Funding Period, amounts remaining in the
Pre-Funding Account related to Group I (as determined without regard to income
or losses arising from the investment of amounts on deposit in the Pre-Funding
Account) and (iv) losses arising with respect to Group I shall be paid or
allocated to the Class PF-I Interest until the principal balance of such
interest has been reduced to zero and any losses allocated to such interest have
been reimbursed. All (i) payments of principal and interest at the Net Mortgage
Rate on each of the Group II Mortgage Loans (other than amounts payable in
respect of the Certificate Insurer Premium and other than amounts distributable
to the Class X Certificates pursuant to Section 5.05(i)) received from the Group
II Mortgage Loans, (ii) payments received in respect of any Required Withdrawal
computed with respect to amounts on deposit in the Pre-Funding Account related
to Group II, (iii) with respect to the Distribution Date immediately following
the Funding Period, amounts remaining in the Pre-Funding Account related to
Group II (as determined without regard to income or losses arising from the
investment of amounts on deposit in the Pre-Funding Account) and (iv) losses
arising with respect to Group II shall be paid or allocated to the Class PF-II
Interest until the principal balance of such interest has been reduced to zero
and any losses allocated to such interest have been reimbursed. Any available
funds remaining in the Pre-Funding REMIC on a Distribution Date after
distributions to the Pre-Funding REMIC Regular Interests shall be distributed to
the Class R Certificates in respect of the Class PF-R Interest.
All payments received by the SWAP REMIC with respect to the Pre-Funding
REMIC Regular Interests shall be paid to the SWAP REMIC Regular Interests until
the principal balance of all such interests have been reduced to zero and any
losses allocated to such interests have been reimbursed. Any available funds
remaining in the SWAP REMIC on a Distribution Date after distributions to the
SWAP REMIC Regular Interests shall be distributed to the Class R Certificates on
account of the Class SW-R Interest. On each Distribution Date, the Trustee shall
distribute the aggregate Interest Funds (net of expenses) with respect to each
of the SWAP REMIC Regular Interests based on the interest rates for each such
SWAP REMIC Regular Interest. On each Distribution Date, the Trustee shall
distribute the aggregate Principal Funds with respect to the Group I Mortgage
Loans first to the Class 1-SW1 Interest until its principal balance is reduced
to zero and then sequentially to each of the other SWAP REMIC Regular Interests
beginning with designation "1" in ascending order of their numerical class
designation, in equal amounts to each such class in such numerical designation,
until the principal balance of each such class is reduced to zero. All losses
with respect to the Group I Mortgage Loans shall be allocated among the SWAP
REMIC Regular Interests beginning with the designation "1" in the same manner
that principal distributions are allocated. On each Distribution Date, the
Trustee shall distribute the aggregate Principal Funds with respect to the Group
II Mortgage Loans first to the Class 2-SW2 Interest until its principal balance
is reduced to zero and then sequentially to each of the other SWAP REMIC Regular
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Interests beginning with designation "2" in ascending order of their numerical
class designation, in equal amounts to each such class in such numerical
designation, until the principal balance of each such class is reduced to zero.
All losses with respect to the Group II Mortgage Loans shall be allocated among
the SWAP REMIC Regular Interest beginning with the designation "2" in the same
manner that principal distributions are allocated. Subsequent Recoveries with
respect to the Group I and Group II Mortgage Loans shall be allocated in the
reverse fashion from the manner in which losses are allocated.
All payments received by REMIC 1 with respect to the SWAP REMIC Regular
Interests shall be paid to the REMIC 1 Regular Interests until the principal
balance of all such interests have been reduced to zero and any losses allocated
to such interests have been reimbursed. Any available funds remaining in REMIC 1
on a Distribution Date after distributions to the REMIC 1 Regular Interests
shall be distributed to the Class R Certificates in respect of the Class LT1-R
Interest. On each Distribution Date, payments and losses shall be allocated
among the REMIC 1 Regular Interests so that (i) each of the REMIC 1-I Marker
Interests shall have a principal balance equal to 25% of the principal balance
of the Corresponding Certificates, (ii) the Class LT1-IX 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 REMIC 1-I Marker Interests (if necessary to reflect an increase
in overcollateralization, accrued and unpaid interest on the Class LT1-IX
interest may be added to its principal amount to achieve this result) and (iii)
the aggregate principal amount of the Class LT1-II1A Interest, Class LT1-II1B
Interest, Class LT1-II2A Interest, Class LT1-II2B Interest and the Class LT1-IIX
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 REMIC 1
Regular Interests described in clause (iii) of the preceding sentence will be
allocated among such REMIC 1 Regular Interests in the following manner: (x) such
distributions shall be deemed made to such REMIC 1 Regular Interests first, so
as to keep the principal balance of the each such REMIC 1 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 remaining in the Pre-Funding Account (disregarding income or losses on
investments of amounts on deposit in the Pre-Funding Account); second, to such
REMIC 1 Regular Interests with "A" at the end of its designation so that the
uncertificated principal balance of each such REMIC 1 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 remaining in
the Pre-Funding Account (disregarding income or losses on investments of amounts
on deposit in the Pre-Funding Account) over (II) the aggregate principal balance
of Certificate Group I, in the case of the Class LT1-II1A Interest, or
Certificate Group II, in the case of the Class LT1-II2A Interest (except that if
0.05% of any such excess is greater than the principal amount of the related
REMIC 1-II Marker Interest with "A" at the end of its designation, the least
amount of principal shall be distributed to each REMIC 1-II Marker Interest with
"A" at the end of its designation such that the REMIC 1 Subordinated Balance
Ratio is maintained) and finally, any remaining distributions of principal to
the Class LT1-IIX Interest and (y) such losses shall be allocated among the
REMIC 1 Regular Interests described in clause (iii) of the preceding sentence
first, so as to keep the principal balance of the each such REMIC 1 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 remaining in the Pre-Funding Account (disregarding income or
losses on investments of amounts on deposit in the Pre-Funding Account); second,
to such REMIC 1 Regular Interests with "A" at the end of its designation so that
the uncertificated principal balance of each such REMIC 1 Regular Interest is
equal to 0.05% of the excess of (I) the sum of (1) the aggregate scheduled
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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
remaining in the Pre-Funding Account (disregarding income or losses on
investments of amounts on deposit in the Pre-Funding Account) over (II) the
aggregate principal balance of Certificate Group I, in the case of the Class
LT1-II1A Interest, or Certificate Group II, in the case of the Class LT1-II2A
Interest (except that if 0.05% of any such excess is greater than the principal
amount of the related REMIC 1-II Marker Interest with "A" at the end of its
designation, the least amount of losses shall be allocated to each REMIC 1-II
Marker Interest with "A" at the end of its designation such that the REMIC 1
Subordinated Balance Ratio is maintained) and finally, any remaining losses to
the Class LT1-IIX Interest. Notwithstanding the preceding two sentences,
however, losses not allocated to any Class of Certificates will not be allocated
to any REMIC 1 Regular Interests. All computations with respect to the REMIC 1
Regular Interests shall be taken out to ten decimal places.
Any available funds remaining in REMIC 1 on a Distribution Date after
distributions to the REMIC 1 Regular Interests shall be distributed to the Class
R Certificates in respect of the Class LT1-R Interest.
If on any Distribution Date the Certificate Principal Balance of any Class of
Certificates is increased pursuant to the third to last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the REMIC 1 Regular Interests, with such
increase allocated (before the making of distributions and the allocation of
losses on the REMIC 1 Regular Interests on such Distribution Date) among the
REMIC 1 Regular Interests so that, to the greatest extent possible, (i) each of
the REMIC 1-I Marker Interests has a principal balance equal to 25% of the
principal balance of the Corresponding Certificates, (ii) the Class LT1-IX
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 REMIC 1-I Marker Interests and (iii) the
aggregate principal amount of the REMIC 1-II Marker Interests and the Class
LT1-IIX Interest shall equal 50% of the sum of (x) 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 REMIC 1-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 REMIC 1-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 I in the case of the Class LT1-II1A Interest, or
Certificate Group II in the case of the Class LT1-II2A Interest and (c) any
remaining allocations are made to the Class LT1-IIX Interest.
For purposes of this Section 2.07, (i) the Class LT1-II1A Interest and
Class LT1-II1B Interest shall be related to Group I, and (ii) the Class LT1-II2A
Interest and Class LT1-II2B Interest shall be related to Group II.
(g) [Reserved]
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(h) 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
Trustee, the Securities Administrator, the Servicing Administrator 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 Securities Administrator, the Depositor, the
Trustee or the Holder of the Class R Certificate, as applicable, nor for any
such Losses resulting from misinformation provided by the Holder of the Class R
Certificate on which the Servicer has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Holder of the Class R
Certificate 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 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).
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 Trust Fund against any and all Losses resulting from such
negligence; provided, however, that the Securities Administrator and the Trustee
shall not be liable for any such Losses attributable to the action or inaction
of the Servicer, the Depositor, the Trustee or the Holder of the Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of the Class R Certificate on which the
Securities Administrator has relied, nor shall the Trustee by liable for any
action or inaction of the Securities Administrator under this section. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of the Class R Certificate 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 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. Covenants of the Servicing Administrator.
The Servicing Administrator hereby covenants to each of the other parties
to this Agreement as follows:
(a) the Servicing Administrator shall comply in the
performance of its obligations under this Agreement and with all reasonable
rules and requirements of the insurer under each Required Insurance Policy to
the extent the Servicing Administrator is acting as servicer hereunder;
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor, the
Servicer or the Trustee, any affiliate of the Depositor, the Servicer, the
Securities Administrator, the Backup Servicer or the Trustee and prepared by the
Servicing Administrator pursuant to this Agreement will be inaccurate in any
material respect, provided, however, that the Servicing Administrator shall not
be responsible for any inaccuracy attributable to or resulting from any
inaccurate or defective information or data from any other Person providing or
responsible for providing such information or data.
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SECTION 2.09. Covenants of the Servicer.
(a) The Servicer hereby covenants to each of the other parties
to this Agreement as follows:
(i) 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, and to the extent such rule or
requirement does not conflict with or violate any covenants, obligations or
duties of the Servicer hereunder; and
(ii) No written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor, the
Servicing Administrator, the Securities Administrator, the Backup Servicer or
the Trustee, any affiliate of the Depositor, the Servicing Administrator, the
Securities Administrator, the Backup Servicer or the Trustee and prepared by the
Servicer pursuant to this Agreement will be 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. Related Agreements.
The Trustee acknowledges receipt of the Certificate Insurance Policy, the
Sale Agreement and the Transfer Agreements.
SECTION 2.11. 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 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 and take all actions required under Section
2.01 regarding the assignment of a MERS Mortgage Loan; 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
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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 I and Group II may not exceed the portion of the Original
Pre-Funded Amount related to Group I or the portion of the Original Pre-Funded
Amount related to Group II, 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
Custodian, the Securities Administrator, the Certificate Insurer 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
Certificate Insurer, the Trustee and the Servicer at least three Business Days
prior to the related Subsequent Transfer Date;
(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 and the Certificate Insurer) a
Subsequent Transfer Instrument confirming the satisfaction of the conditions
precedent specified in this Section 2.11 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 a
certificate (with copies provided to the Rating Agencies, the Certificate
Insurer and the Securities Administrator), which the Trustee may rely on,
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
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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 1.5% 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 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; (vii) the Subsequent Mortgage Loan
must have a first Monthly Payment due on or before December 16, 2005; (viii)
reserved; (ix) the Subsequent Mortgage Loan will be underwritten in accordance
with the criteria set forth under the section "Underwriting Guidelines--The
Winter Group Underwriting Guidelines" in the Prospectus Supplement, (x) the
Subsequent Mortgage Loan must provide for monthly interest payments due on the
first day of each calendar month, (xi) 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), (xii) 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, (xiii) 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, (xiv) 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 (xv) 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.
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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 2.12. Permitted Activities of the Trust. The Trust is
created for the object and purpose of engaging in the Permitted Activities.
SECTION 2.13. 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 or SFAS 140.
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 in accordance with this Agreement and 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 (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, the Certificateholders or the Certificate Insurer 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 each
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, the Securities
Administrator 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 Securities Administrator, the Certificate Insurer, 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 either or both of them as are necessary or appropriate to enable
the Servicer to service and administer the Mortgage Loans,
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to the extent that the Servicer is not permitted to execute and deliver such
documents pursuant to the preceding sentence. 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 will provide to the Servicer, upon reasonable request,
powers of attorney to execute and file any and all documents necessary to
fulfill the obligations of the Servicer under this Section 3.01.
The Servicer shall deliver a list of Servicing Officers to the Securities
Administrator and the Trustee by the Closing Date.
The Servicer for each related Mortgage Loan has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (i.e., favorable and unfavorable) on its
borrower credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
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, the Certificate Insurer and the Trustee, in its own
name or in the name of the Subservicer, when the Servicer or the Subservicer, 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, the Certificate Insurer and the Certificateholders or any of them, any
and all instruments of assignment and other comparable instruments with respect
to such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Trustee and its successors and assigns.
Any reasonable expenses incurred in connection with the actions described
in the preceding sentence or as a result of MERS discontinuing or becoming
unable to continue operations in connection with the MERS System, shall be
Servicing Advances subject to withdrawal by the Servicer from the Collection
Account.
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of the 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
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) the Certificate Insurer shall have consented to the
appointment of such Subservicer and (iii) that such Subservicing Agreement would
not result in a withdrawal or downgrading by any Rating Agency of the ratings of
any Certificates evidenced by a letter to that effect delivered by each Rating
Agency to the Depositor. 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 Securities Administrator, the Certificate
Insurer, 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
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Subservicing Agreement entered into by the Servicer shall contain a provision
giving any successor servicer the option to terminate such agreement in the
event a successor servicer is appointed. All actions of 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 Securities Administrator
copies of all Subservicing Agreements. The Trustee shall have no obligations,
duties or liabilities with respect to a Subservicer including no obligation,
duty or liability to monitor such Subservicer or to pay a Subservicer's fees and
expenses.
Notwithstanding the foregoing, the Servicer shall be entitled to outsource
one or more separate servicing functions to a Person (each, an "Outsourcer")
that does not meet the eligibility requirements for a Subservicer, so long as
such outsourcing does not constitute the delegation of the Servicer's obligation
to perform all or substantially all of the servicing of the related Mortgage
Loans to such Outsourcer. In such event, the use by the Servicer of any such
Outsourcer shall not release the Servicer from any of its obligations hereunder
and the Servicer shall remain responsible hereunder for all acts and omissions
of such Outsourcer as fully as if such acts and omissions were those of the
Servicer, and the Servicer shall pay all fees and expenses of the Outsourcer
from its own funds.
(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,
the Backup Servicer and the Trustee in Respect of the Servicer.
None of the Securities Administrator, the Trustee, the Backup Servicer 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. The Servicing Administrator or Backup Servicer to Act
as Servicer.
Subject to Sections 7.04 and 8.02, 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 successor servicer (which may be the Securities
Administrator, the Servicing Administrator, or the Backup Servicer pursuant to
Section 8.02), shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Servicing Administrator
or Backup Servicer shall not be (i) liable for losses of the Servicer or any
acts or omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances or Servicing Advance 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, or (iv)
deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 7.02 hereof;
provided, however that the Servicing Administrator or the Backup Servicer
(subject to clause (ii) above) or its designee, in its capacity as the successor
servicer, shall immediately assume the terminated or resigning Servicer's
obligation to make Advances and Servicing Advances). No such termination shall
affect any obligation of the Servicer to pay amounts owed under this Agreement
and to perform its duties under 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
Servicing Administrator or the Backup 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 Servicing Administrator or the Backup 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
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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. Notwithstanding anything to the
contrary herein, in no event will a successor servicer be liable for any
expenses or liabilities that were incurred by a predecessor servicer. To the
extent any costs or expenses, including without limitation Servicing Transfer
Costs incurred by the Servicing Administrator or the Backup Servicer in
connection with this Section 3.04, are not paid by the Servicer pursuant to this
Agreement within 30 days of the date of the Servicing Administrator's or the
Backup Servicer's invoice, as applicable, thereof, such amounts shall be payable
out of funds on deposit in the Servicing Administrator Collection Account. 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 Servicing Administrator or the Backup Servicer is unwilling or
unable to act as servicer, the Servicing Administrator or the Backup Servicer,
as applicable, shall seek to appoint a successor servicer that is eligible in
accordance with the criteria specified this Agreement.
The Servicer shall, upon request of the Securities Administrator, the
Servicing Administrator or the Backup 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 able to
be the Servicer hereunder, notwithstanding anything to the contrary herein, the
Trustee and the Depositor hereby agree that within 10 Business Days of delivery
to the Trustee and the Securities Administrator 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.
Notwithstanding anything to the contrary herein, in the event that any of
the Servicing Administrator, the Backup Servicer or the Securities Administrator
becomes the successor servicer hereunder, such party shall be entitled to
receive the Servicing Fee at the full Servicing Fee Rate (i.e., the SLS
Servicing Fee Rate shall be deemed to be 0.500% per annum). In addition, none of
the Servicing Administrator, the Backup Servicer, the Securities Administrator
or the Trustee shall have any obligation to attempt to minimize the SLS
Servicing Fee Rate in the event of the need to solicit a successor servicer.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Account; Servicing Administrator 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, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any penalty
interest, or (ii) subject to Section 3.01, 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. In the event of any such arrangement
pursuant to clause (ii) above, subject to Section 5.01, 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
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judgment of the Servicer, such default is reasonably foreseeable, the Servicer,
subject to the provisions of 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 determining which course of action permitted by this
sentence it shall pursue, the Servicer shall adhere to the standards of Section
3.01. The Servicer's analysis supporting any forbearance and the conclusion that
any forbearance meets the standards of Section 3.01 shall be reflected in
writing in the Mortgage File.
(b) The Servicer will not waive any Prepayment Penalty or
portion thereof unless, (i) the enforceability thereof shall have been limited
by bankruptcy, insolvency, moratorium, receivership or 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) the
Servicer has not been provided with information sufficient to enable it to
collect the Prepayment Penalty, or (iv) 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 Penalty and related
Mortgage Loan and (z) doing so is standard and customary in servicing similar
Mortgage Loans (including any waiver of a Prepayment Penalty in connection with
a refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default). Except as provided in the preceding sentence, in no event
will the Servicer waive a Prepayment Penalty 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 Penalty 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 Penalty (or such portion
thereof as had been waived for deposit) into the Collection Account for
distribution in accordance with the terms of this Agreement. In connection with
any waiver of a Prepayment Penalty by the Servicer, the Servicer shall account
for such waiver in its monthly reports as agreed upon by the Servicer and the
Credit Risk Manager.
(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, Mortgage Note or other instrument pursuant to
which such payment is required is prohibited by or in violation of applicable
law.
(d) The Servicer shall establish and initially maintain, on
behalf of the Certificateholders, one or more Collection Accounts, in the form
of time deposit or demand accounts, titled "[Servicer's Name], as servicer for
U.S. Bank National Association, as trustee, in trust for the Holders of Terwin
Mortgage Trust 2005-16HE, Asset-Backed Certificates, Series XXXX 0000-00XX." The
Servicer shall deposit into the Collection Account daily, 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 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 portion of the Aggregate Servicing Fee permitted to be retained
by the Servicer pursuant to Section 3.15 other than interest due on the Mortgage
Loans on or prior to the Cut-off Date or Subsequent Cut-off Date, as applicable;
(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 the Mortgagor in
accordance with the Servicer's normal servicing procedures;
(iv) all Subsequent Recoveries received by the Servicer;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer
pursuant to Section 3.05(g) in connection with any losses on Permitted
Investments;
(vii) [RESERVED];
(viii) all Advances made by the Servicer pursuant to
Section 5.01;
(ix) all Prepayment Penalties collected by the Servicer;
and
(x) 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, late payment charges,
insufficient funds charges 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) and other similar ancillary fees (other than Prepayment Penalties)
if collected, need not be remitted by the Servicer. 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 Securities Administrator, 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 Securities Administrator or the Trustee incur
liability for withdrawals from the Collection Account at the direction of the
Servicer. The Collection Account may be an interest bearing account.
The Servicer shall give notice to the Securities Administrator, the
Servicing Administrator, the Backup Servicer, the Certificate Insurer 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 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 Servicing Administrator shall establish and maintain
an account, for the benefit of the Certificateholders, as a segregated account
(the "Servicing Administrator Collection Account"), which shall be an Eligible
Account. The Servicing Administrator shall, promptly upon receipt from the
Servicer on the Servicer Remittance Date, deposit into the Servicing
Administrator Collection
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Account and retain on deposit until the related Servicing Administrator
Remittance Date, the following amounts:
(i) the aggregate amount remitted by the Servicer to the
Servicing Administrator pursuant to Section 3.08(a)(viii); and
(ii) any other amounts deposited hereunder which are
required to be deposited in the Servicing Administrator Collection Account
pursuant to this Agreement including, but not limited to, any amounts due to the
Trustee, the Securities Administrator or the Backup Servicer pursuant to Section
3.08 and Article IX herein.
In the event that the Servicer shall remit to the Servicing Administrator
any amount not required to be remitted, the Servicer may at any time in writing
direct the Servicing Administrator to withdraw such amount from the Servicing
Administrator Collection Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering written notice
to the Servicing Administrator (upon which the Servicing Administrator may
conclusively rely) which describes the amounts deposited in error in the
Servicing Administrator Collection Account. All funds deposited in the Servicing
Administrator Collection Account shall be held by the Servicing Administrator in
trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.08(b). In no event shall the
Servicing Administrator incur liability for withdrawals from the Servicing
Administrator Collection Account at the direction of the Servicer. The Servicing
Administrator shall give notice to the Securities Administrator, the Certificate
Insurer, the Trustee, the Backup Servicer and the Servicer of the location of
the Servicing Administrator Collection Account maintained by it when established
and prior to any change thereof. The Servicing Administrator Collection Account
may be an interest bearing account.
(f) The Securities Administrator shall establish and maintain,
on behalf of the Certificateholders, the Certificate Account. The Securities
Administrator shall, promptly upon receipt from the Servicing Administrator on
the Servicing Administrator Remittance Date, deposit or cause to be deposited in
the Certificate Account and retain therein the following:
(i) The aggregate amount remitted by the Servicing
Administrator to the Securities Administrator pursuant to Section 3.08(b);
(ii) the Purchase Price and any Substitution Adjustment
Amount;
(iii) [Reserved]; and
(iv) the Optional Termination Price paid by SLS pursuant
to Section 10.01.
The foregoing requirements for remittance by the Servicer and Servicing
Administrator and deposit by the Servicer and Servicing Administrator into the
Certificate Account shall be exclusive. In the event that the Servicing
Administrator shall remit to the Securities Administrator any amount not
required to be remitted, it may at any time in writing direct the Securities
Administrator to withdraw such amount from the Certificate Account, any
provision herein to the contrary notwithstanding. Such direction may be
accomplished by delivering written notice to the Securities Administrator (upon
which the Securities Administrator may conclusively rely) which describes the
amounts deposited in error in the Certificate Account. 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 Servicing Administrator. The
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Securities Administrator shall give notice to the Trustee, the Servicing
Administrator, the Certificate Insurer, and the Servicer of the location of the
Certificate Account maintained by it when established and prior to any change
thereof. Amounts in the Certificate Account shall remain uninvested, but the
Certificate Account may be an interest bearing account; provided that such
interest must accrue on a Permitted Investment.
(g) Each institution that maintains a Collection Account or
the Servicing Administrator Collection Account shall invest the funds in each
such account, as directed by the Servicer or the Servicing 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 Servicing
Administrator Collection Account, the Business Day preceding the related
Servicing Administrator Remittance Date (except that if such Permitted
Investment is an obligation of the institution that maintains such Servicing
Administrator Collection Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than each Servicing
Administrator Remittance 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 Servicing 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
monthly as provided herein. The amount of 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.
All income and gain net of any losses realized from amounts on deposit in the
Servicing Administrator Collection Account shall be for the benefit of the
Servicing Administrator as master servicing compensation and shall be remitted
to it monthly as provided herein. The amount of any losses incurred in the
Servicing Administrator Collection Account in respect of any such investments
shall be deposited by the Servicing Administrator in the Servicing Administrator
Collection Account out of such Servicing Administrator's own funds immediately
as realized. The Securities Administrator shall retain the funds in the
Certificate Account uninvested.
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 Servicing
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, hazard 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 and assessments and insurance premiums), 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 or to clear and terminate
the Escrow Account at the termination of this Agreement in accordance with
Section 10.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
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SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
(a) The Servicer shall afford the Depositor, the Securities
Administrator and the Trustee reasonable access to all records and documentation
regarding the Mortgage Loans and all accounts, insurance information and other
matters relating to this Agreement, such access being afforded without charge,
but only upon reasonable request and during normal business hours at the office
designated by the Servicer.
(b) Upon reasonable advance notice in writing if required by
federal regulation, the Servicer will provide to the Certificate Insurer and
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.
(c) 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. Nothing in this Section 3.07 shall require the Servicer
to collect, create, collate or otherwise generate any information that it does
not generate in its usual course of business. The Servicer shall not be required
to make copies of or ship documents to any party unless provisions have been
made for the reimbursement of the costs thereof.
SECTION 3.08. Withdrawals from a Collection Account, Servicing
Administrator Collection Account and Certificate Account.
(a) The Servicer shall from time to time, make withdrawals
from the Collection Account for the following purposes:
(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 of interest that equals the
Servicing Fee permitted to be retained by the Servicer for the period with
respect to which such interest payment was made, 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)
in respect of which any such Advance was made (including, for this purpose,
Liquidation Proceeds) that represent late recoveries of payments of principal
and/or interest on such related 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;
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(v) to reimburse the Servicer from Insurance Proceeds
for Insured Expenses covered by the related Insurance Policy;
(vi) [RESERVED];
(vii) to pay the Servicer any unpaid Servicing Fee
permitted to be retained by the Servicer and to reimburse it for any
unreimbursed Servicing Advances, the Servicer's right to reimbursement of
Servicing Advances pursuant to this subclause (vii) with respect to any Mortgage
Loan being limited to amounts received on the related Mortgage Loan(s) in
respect of which any such Advance was made (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;
(viii) 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;
(ix) to reimburse the Servicer, the Servicing
Administrator, the Securities Administrator, the Trustee or the Depositor for
expenses incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 3.25 or Section 7.03 hereof
provided that reimbursement therefor would constitute "unanticipated" expenses
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(x) to reimburse the Securities Administrator and 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 (x) 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;
(xi) to pay the Trustee and/or Securities Administrator
any amounts owed to them pursuant to Article IX;
(xii) to withdraw pursuant to Section 3.05 any amount
deposited in the Collection Account and not required to be deposited therein;
and
(xiii) to clear and terminate the Collection Account
upon termination of this Agreement pursuant to Section 10.01 hereof.
In addition, no later than 2:00 p.m. Eastern Time on each Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds, the Principal Funds and the Administration Fee
(other than the Servicing Fee) (collectively, the "Servicer Withdrawals"), to
the extent on deposit, and such amount shall be deposited in the Servicing
Administrator Collection Account; provided, however, if the Servicing
Administrator does not receive the Servicer Withdrawals by 4:00 p.m. Eastern
Time, the Servicer Withdrawals shall be deposited by the Servicing Administrator
in the Servicing Administrator Collection Account by 2:00 p.m. Eastern Time on
the next Business Day. In the event the Servicer Withdrawals are not deposited
by 2:00 p.m. Eastern Time, the Servicer shall pay, out of its own funds,
interest on such amount at a rate equal to the Servicing Administrator's Prime
Rate for each date or part thereof.
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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 Trustee, the
Servicing Administrator and 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 (vii) above.
Unless otherwise specified, any amounts reimbursable to the Servicer or
the Securities Administrator from amounts on deposit in the Collection Account,
the Servicing Administrator 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 Servicing Administrator shall from time to time make
withdrawals from the Servicing Administrator Collection Account for the
following purposes:
(i) to withdraw any amounts deposited in such Servicing
Administrator Collection Account and not required to be deposited therein;
(ii) to clear and terminate the Servicing Administrator
Collection Account upon termination of this Agreement pursuant to Section 10.01
hereof;
(iii) to pay itself, the Trustee, the Securities
Administrator or the Backup Servicer any amounts permitted to be paid or
reimbursed to any such Person in accordance with Section 3.08, 3.25 or 7.03, or
Articles IV or IX (in each case paid from interest collections on the Mortgage
Loans); and
(iv) to pay itself any investment income with respect to
funds in or credited to the Servicing Administrator Collection Account and any
sub-account thereof.
In addition, no later than 2:00 p.m. Eastern Time on the Servicing
Administrator Remittance Date, the Servicing Administrator shall cause to be
withdrawn from the Servicing Administrator Collection Account the Interest
Funds, the Principal Funds and the Administration Fee (other than the Servicing
Fee) (collectively, the "Servicing Administrator Withdrawals"), 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
Servicing Administrator Withdrawals by 4:00 p.m. Eastern Time, such Servicing
Administrator Withdrawals shall be deposited by the Securities Administrator in
the Certificate Account by 2:00 p.m. Eastern Time on the next Business Day. In
the event such Servicing Administrator Withdrawals are not deposited by 2:00
p.m. Eastern Time, the Servicing Administrator shall pay, out of its own funds,
interest on such amount at a rate equal to the Federal Funds Rate for each date
or part thereof.
The Servicing Administrator shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Servicing Administrator Collection Account.
Unless otherwise specified, any amounts reimbursable to the Servicer, the
Servicing Administrator or the Trustee from amounts on deposit in the Collection
Account, the Servicing Administrator Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.
(c) The Securities Administrator shall withdraw funds from the
Certificate Account for distribution to the Certificateholders and, if
applicable, the Certificate Insurer, in the manner
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specified in this Agreement in Section 5.05 (and to 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 shall from time to
time make withdrawals from the Certificate Account for the following purposes:
(i) [RESERVED]
(ii) to reimburse the Seller, the Servicing
Administrator and/or the Depositor for expenses incurred by any of them and
reimbursable pursuant to Section 10.01 hereof;
(iii) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be deposited therein;
(iv) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 10.01 hereof;
(v) to pay the Credit Risk Manager the Credit Risk
Manager Fee; and
(vi) (a) to pay itself the Securities Administrator Fee
with respect to such Distribution Date and (b) to pay or reimburse itself, the
Servicing Administrator, the Backup Servicer, the Trustee or the Custodian any
amounts permitted to be paid or reimbursed to any such Person in accordance with
the provisions of this Agreement including without limitation, any Advances made
by the Servicing Administrator in its individual capacity as successor servicer
or the Custodial Agreement to the extent such payment or reimbursement in
accordance with the provisions of the Custodial Agreement would constitute an
"unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii).
SECTION 3.09. [RESERVED]
SECTION 3.10. [RESERVED]
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; 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; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which expense shall constitute a Servicing
Advance) delivered to the Securities Administrator, the Trustee and the
Depositor shall conclusively establish the reasonableness of the Servicer's
belief that any "due-on-sale" clause is not enforceable under applicable law. In
such event, the Servicer shall make reasonable efforts to enter into an
assumption and modification agreement 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 law or the
Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Servicer is authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Note. In addition to the foregoing, the
Servicer shall not be required to enforce any "due-on-sale" clause if in the
reasonable
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judgment of the Servicer, entering into an assumption and modification agreement
with a Person to whom such property shall be conveyed and releasing the original
Mortgagor from liability would be in the best interests of the
Certificateholders. The Mortgage Loan, as assumed, shall conform in all respects
to the requirements, representations and warranties of this Agreement. The
Servicer shall notify the Securities Administrator that any such assumption or
substitution agreement has been completed by forwarding to the Securities
Administrator the original copy of such assumption or substitution agreement
(indicating the Mortgage File to which it relates) which copy shall be added by
the Securities Administrator to the related Mortgage File and which 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. In connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
stated maturity or outstanding principal amount of such Mortgage Loan shall not
be changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the Servicer for consenting to any
such conveyance or entering into an assumption or substitution agreement shall
be retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds.
(a) The Servicer shall use reasonable efforts consistent with
the Accepted Servicing Practices to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of Delinquent payments. In connection with such foreclosure
or other conversion, the Servicer shall follow such practices and procedures as
(i) the Servicer shall deem necessary or advisable, (ii) shall be normal and
usual in the Servicer's general mortgage servicing activities, (iii) such
Servicer shall determine consistent with Accepted Servicing Practices to be in
the best interests of the Certificateholders and the Certificate Insurer and
(iv) the Servicer shall determine to be consistent with 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 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),
as contemplated in Section 3.08 hereof. If the Servicer has knowledge that a
Mortgaged Property (or stock allocated to a dwelling unit, 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. The Servicer shall not have any
obligation to purchase any Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) at any foreclosure sale.
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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 an 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 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 each Determination Date. 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 Securities
Administrator shall have been supplied with an Opinion of Counsel (such Opinion
of Counsel not to be an expense of the Trustee or the Securities Administrator),
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 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 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
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the Servicing Fee and any unreimbursed Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied 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 income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited into
the Collection Account. To the extent the 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 or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees with respect to such Liquidated Loan, pursuant to Section
3.08(a)(vi) or this Section 3.12; second, to reimburse the Servicer for any
unreimbursed Advances with respect to such Liquidated Loan, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to any prepayment penalties 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 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.
Notwithstanding the foregoing, as to any Mortgage Loan that becomes 180
days delinquent, the Servicer will determine whether any net recovery is
possible through foreclosure proceedings or other liquidation of the related
Mortgaged Property. If the Servicer determines that no such recovery is
possible, it will be obligated to charge off the related 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 Securities Administrator
and the Seller) to purchase for its own account from the Trust Fund any Mortgage
Loan that is 90 days or more Delinquent at a price equal to the Purchase Price.
The Purchase Price for any Mortgage Loan purchased hereunder shall be delivered
to the Securities Administrator for deposit to the Certificate Account and the
Securities Administrator, 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, as shall be necessary to vest in
the Servicer any Mortgage Loan 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 Securities Administrator or the Certificateholders with respect thereto.
(d) Upon the charge-off of any Mortgage Loan by the Servicer,
if so instructed by the Servicing Rights Owner, the Servicer shall transfer
servicing of such Mortgage Loan to the entity designated by the Servicing Rights
Owner, which entity shall not be JPMorgan Chase Bank, N.A; provided, however
that the Servicing Rights Owner may elect to have the Servicer continue to
service such Mortgage Loan. Transfer of servicing will be completed no later
than 30 days following the
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date of charge-off. The entity designated by the Servicing Rights Owner will
service such charged-off Mortgage Loan in accordance with Accepted Servicing
Practices.
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 Custodian by
delivering a Request for Release substantially in the form of Exhibit I. Upon
receipt of a copy of such request, the Custodian 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 Trustee shall at the Servicer's written direction execute
and deliver to the Servicer the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien of
the Mortgage in each case provided by the Servicer, 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"
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 Custodian, upon
delivery to the Custodian 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 Custodian 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 Custodian (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
Custodian shall mutually agree. The Custodian 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 Custodian to release such Mortgage Files, provided the Custodian 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 Custodian
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 Custodian shall immediately notify the Servicer
indicating the reason for such delay. If the Servicer is required to pay
penalties or damages due to the Custodian's negligent failure to release the
related Mortgage File or the Custodian's negligent failure to execute and
release documents in a timely manner, the Custodian, shall be liable for such
penalties or damages respectively caused by it.
Notwithstanding the foregoing, in connection with a Principal Prepayment
in full of any Mortgage Loan, the Servicing Administrator or the Backup Servicer
may request release of the related Mortgage File from the Custodian, in
accordance with the provisions of this Agreement, in the event the Servicer
fails to do so. If requested by the Servicing Administrator, the Backup Servicer
or the Servicer, the Custodian shall forward such Mortgage File or other
requested items to the requesting party by overnight mail at the requesting
party's expense.
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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 shall
deliver or cause to be delivered to the Trustee, for signature, as appropriate,
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
Custodian to be returned to the Custodian promptly after possession thereof
shall have been released by the Custodian 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 Custodian 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 Custodian an Officer's
Certificate of a Servicing Officer certifying as to the name and 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 the
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer shall
transmit to the Custodian on behalf of the Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Servicer from time to time required to be delivered to the
Trustee pursuant to the terms hereof and shall account fully to the Securities
Administrator for any funds received by the Servicer or which otherwise are
collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan. 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 Trust Fund 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 in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee, or the Securities
Administrator as its designee, 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
of interest on a Mortgage Loan included in the Trust Fund an amount equal to the
product of (x) the SLS Servicing Fee Rate and (y) 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, release and satisfaction fees (to the extent allowed by law), bad
check charges, assumption fees (i.e. fees related
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to the assumption of a Mortgage Loan upon the purchase of the related Mortgaged
Property) and similar items payable by the Mortgagor, 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. The
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided in Sections 3.08 and 3.12 hereof. The
Servicer shall not be entitled to any Prepayment Penalties. In no event shall
the Trustee, the Certificate Insurer, the Servicing Administrator or the
Securities Administrator be liable for any Servicing Fee or for any differential
between the Aggregate 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 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 Certificate
Insurer, Servicing Administrator and the Backup Servicer on or before March 15th
of each year beginning in 2006, (or such other date that the Depositor gives the
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 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. Copies of
such statement shall be provided by the Servicing Administrator to any
Certificateholder upon written request at the Certificateholder's expense,
provided such statement has been delivered by the Servicer to the Servicing
Administrator.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 15th 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, any Affiliate
thereof or the Certificate Insurer) that is a member of the American Institute
of Certified Public Accountants to furnish a USAP Report to the Securities
Administrator, the Servicing Administrator, the Trustee, the Certificate Insurer
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.
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SECTION 3.19. Duties and Removal of the Credit Risk Manager.
For and on behalf of the Seller, the Credit Risk Manager will provide
reports and recommendations concerning certain delinquent and defaulted Mortgage
Loans, and as to the collection of any Prepayment Penalties with respect to the
Mortgage Loans. Such reports and recommendations will be based upon information
provided to the Credit Risk Manager pursuant to the Credit Risk Management
Agreement, and the Credit Risk Manager shall look solely to the Servicer for all
information and data (including loss and delinquency information and data)
relating to the servicing of the Mortgage Loans. Upon any termination of the
Credit Risk Manager or the appointment of a successor Credit Risk Manager, the
Securities Administrator, if it has been notified in writing of such termination
or appointment, shall give written notice thereof to the Servicer, the Servicing
Administrator, the Trustee and the Depositor.
If Holders of the Certificates entitled to 66 2/3% or more of the Voting
Rights request in writing to the Trustee to terminate the Credit Risk Manager
under this Agreement, the Credit Risk Manager shall be removed pursuant to this
Section 3.19. Upon receipt of such notice, the Securities Administrator shall
provide written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager.
SECTION 3.20. Periodic Filings.
(a) As part of the Form 10-K required to be filed pursuant to
the terms of this Agreement, the Securities Administrator shall include the
accountants report required pursuant to Section 3.18 as well as 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.
(b) The Securities Administrator shall prepare for filing, and
execute (other than the initial filings, the Form 10-Ks and the Form 10-K
Certification), 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
Securities Administrator commencing with the Distribution Date in October 2005
and ending with the Distribution Date following the filing of a Form 15
Suspension Notice with respect to the Trust Fund, (ii) prior to January 30,
2006, the Securities Administrator shall, in accordance with industry standards,
file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable and (iii) prior to March 31, 2006, the Securities Administrator shall
file a Form 10-K (executed by SLS), in substance conforming to industry
standards, with respect to the Trust Fund. In addition, the Form 10-K shall
include the Form 10-K Certification signed by SLS. Upon such filing with the
Securities and Exchange Commission, the Securities Administrator 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 Securities
Administrator shall comply with the provisions set forth in this Section. The
Depositor hereby grants to the Securities Administrator a limited power of
attorney to execute (other than the Form 10-Ks and the Form 10-K Certification)
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 Securities
Administrator 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 Securities Administrator, 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 Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this section.
(c) [RESERVED].
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(d) The obligations set forth in paragraphs (a) through (c) of
this Section shall only apply with respect to periods for which the Securities
Administrator 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 commencing with 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 3.21. Annual Certificate by Securities Administrator.
(a) Within 15 days prior to the date on which a Form 10-K is
required to be filed, 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 SLS for the benefit of such Depositor and SLS 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, SLS and 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, SLS and the Trustee, then the
Securities Administrator agrees that it shall contribute to the amount paid or
payable by the Depositor, SLS and the Trustee as a result of the losses, claims,
damages or liabilities of the Depositor, SLS and the Trustee in such proportion
as is appropriate to reflect the relative fault of the Securities Administrator
on the one hand and the Depositor, SLS and the Trustee 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. [RESERVED].
SECTION 3.23. Prepayment Penalty Reporting Requirements.
Promptly after each Distribution Date, the Servicer shall
provide to the Depositor, the Servicing Administrator and the Securities
Administrator 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) original principal balance;
(v) Prepayment Penalty amount due; and
(vi) Prepayment Penalty amount collected.
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SECTION 3.24. Servicer Reports.
(a) On the Servicer Data Remittance Date, the Servicer shall
deliver to the Servicing Administrator, the Backup Servicer and the Securities
Administrator electronically at xxxxxxxxxxxxxxx@xxxxxxxx.xxx and
xxxx@xxxxxxxx.xxx (or by such other means as the Servicer, the Servicing
Administrator, the Backup Servicer and the Securities Administrator may agree
from time to time) a servicer report with respect to the related Distribution
Date, in a form mutually acceptable to the Servicer, the Servicing
Administrator, the Backup Servicer and the Securities Administrator and
containing the information set forth in Exhibit R. On the same date with respect
to the Servicer and on the 18th day of each month (or the next succeeding
Business Day) with respect to the Servicing Administrator shall electronically
transmit to the Securities Administrator and the Backup Servicer, a data file
containing the information set forth in such servicer report with respect to the
related Distribution Date. Such servicer report shall include (i) the amount of
Advances to be made by the Servicer (or the Servicing Administrator or Backup
Servicer, if any) in respect of the related Distribution Date, the aggregate
amount of Advances outstanding after giving effect to such Advances, and the
aggregate amount of Nonrecoverable Advances in respect of such Distribution Date
and (ii) such other information with respect to the Mortgage Loans (to the
extent such information is available on the systems of the Servicer) as the
Securities Administrator may reasonably require to perform the calculations
necessary to make the distributions contemplated by Section 5.05 and to prepare
the statements to Certificateholders contemplated by Section 5.06 and for the
Securities Administrator to perform its obligations under this Agreement.
Neither the Securities Administrator nor the Backup Servicer shall be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer and the Servicing Administrator.
(b) The Depositor acknowledges that it authorizes the Servicer
to release and provide to the Credit Risk Manager the mortgage loan information
described in Section 2.01 and Section 2.02 of the Servicer's Credit Risk
Management Agreement.
SECTION 3.25. Indemnification.
(a) The Servicer shall indemnify the Seller, the Trust Fund,
the Trustee, the Securities Administrator, the Servicing Administrator, the
Backup Servicer, the Certificate Insurer 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 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 Servicing
Administrator, the Backup Servicer, the Certificate 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 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 Servicer shall provide the Depositor, the
Securities Administrator, the Seller, the Backup Servicer, the Certificate
Insurer and the Servicing Administrator 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 applicable Collection Account for all expenses and advances incurred by the
Servicer pursuant to this Section 3.25(a). The Servicer shall promptly reimburse
itself from the assets of the Trust Fund in the Collection Account for all
amounts
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advanced by it pursuant to the preceding sentence except when the claim in any
way relates to the failure of the 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 Servicer. The provisions of
this paragraph shall survive the termination of this Agreement, the payment of
the outstanding Certificates and the resignation or removal of the Trustee,
Servicing Administrator, the Backup Servicer, the Securities Administrator and
the Servicer. Any payment hereunder made by the Servicer shall be from the
Servicer's own funds, without reimbursement from the Trust Fund therefor.
(b) The Servicing Administrator shall indemnify the Seller,
the Trust Fund, the Trustee, the Securities Administrator, the Servicer, the
Backup Servicer, the Certificate Insurer 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 Servicing Administrator to perform its duties and master service the
Mortgage Loans in compliance with the terms of this Agreement. The Servicing
Administrator immediately shall notify the Seller, the Trustee, the Servicer,
the Securities Administrator, the Backup Servicer, the Certificate 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 Servicing 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 Servicing Administrator shall
provide the Servicer, the Securities Administrator, the Seller, the Backup
Servicer and the Depositor with a written report of all expenses and advances
incurred by the Servicing Administrator pursuant to this Section 3.25(b). The
Servicing Administrator shall promptly reimburse itself from the assets of the
Trust Fund in the Servicing Administrator 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 Servicing Administrator 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 Servicing
Administrator. The provisions of this paragraph shall survive the termination of
this Agreement and the payment of the outstanding Certificates.
SECTION 3.26. Nonsolicitation
The Servicer covenants and agrees that it shall not take any action to
engage in solicitations of refinancings which are primarily directed towards the
Mortgagors following the date hereof or provide information to any other entity
to engage in solicitations of refinancings which are primarily directed towards
the Mortgagors; provided that, the foregoing shall not preclude the Servicer
from engaging in, or providing information to any other entity to engage in,
solicitations by newspaper, radio, television or any other media which are not
primarily directed toward the Mortgagors or preclude the Servicer from
refinancing, or providing information to any other entity to refinance, the
Mortgage Loan of any Mortgagor who contacts the Servicer to request the
refinancing of the related Mortgage Loan.
SECTION 3.27. SLS as Servicer.
Upon the Servicing Administrator's request, SLS shall make available
electronic data to the Servicing Administrator and the Backup Servicer in any
month during the first week of the subsequent month.
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SECTION 3.28. Quarterly Audit.
Not later than 30 days following the end of each fiscal quarter of SLS,
commencing with the quarter ending in June 2005, SLS shall, at its expense,
cause an independent third-party auditor selected by it to furnish to the
Trustee, the Depositor, the Servicing Administrator and the Backup Servicer a
report stating that the Mortgage Loans are being serviced in accordance with the
provisions of this Agreement or, if there has been a material default in the
fulfillment of any such obligation, specifying each such material default known
to such auditor and the nature and status thereof and the action being taken by
SLS to cure such material default. The conclusions of the auditor shall be based
on a statistical sample of the Mortgage Loans and a review of SLS's collection,
default management, escrow administration, cash management, insurance
administration and quality control procedures. In the event that such firm
requires the Securities Administrator to agree to the procedures performed by
such firm, the Servicer shall direct the Securities Administrator in writing to
so agree; it being understood and agreed that the Securities Administrator will
deliver such letter of agreement in conclusive reliance upon the direction of
the Servicer and the Securities Administrator makes no independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
SECTION 3.29. Maintenance of LPMI Policy:
The Servicer shall take all such actions as are necessary to service,
maintain and administer the LPMI Loans in accordance with the LPMI Policy and to
perform and enforce the rights of the insured under such LPMI Policy. Except as
expressly set forth herein, the Servicer shall have full authority on behalf of
the Trust Fund to do anything it reasonably deems appropriate or desirable in
connection with the servicing, maintenance and administration of the LPMI
Policy. The Servicer shall not modify or assume a Mortgage Loan covered by the
LPMI Policy or take any other action with respect to the Mortgage Loan which
would result in non-coverage under the LPMI Policy of any loss which, but for
the actions of the Servicer, would have been covered thereunder. If the LPMI
insurer fails to pay a claim under the LPMI Policy as a result of breach by the
Servicer of its obligations hereunder or under the LPMI Policy, the Servicer
shall be required to deposit in the related Collection Account on or prior to
the next succeeding Remittance Date an amount equal to such unpaid claim from
its own funds without any right to reimbursement from the Trust Fund. The
Servicer shall cooperate with the LPMI insurer and shall use its best efforts to
furnish all reasonable aid, evidence and information in the possession of the
Servicer to which such Servicer has access with respect to any LPMI Loan. None
of the Servicing Administrator, the Backup Servicer, the Trustee or the
Securities Administrator will under any circumstances be responsible for the
servicing, maintenance or administration of the LPMI Policy or the payment of
any fees or premiums in connection therewith.
SECTION 3.30. SLS Servicing Tape; Storage and Access to Servicing
Tape.
At the end of each Business Day, all servicing data related to the
Mortgage Loans will be saved in an electronic medium (the "SLS Servicing Tape")
in a format that is easily uploaded to the system of the Backup Servicer. SLS or
its designee shall (i) maintain the Servicing Tape at an off-site location, (ii)
provide ready access to the Servicing Tape to the Backup Servicer; and (iii)
send the SLS Servicing Tape directly to the Backup Servicer in an electronic
format acceptable to the Backup Servicer on a monthly basis; provided, however,
that neither the Servicing Administrator nor the Backup Servicer shall have any
obligation to open or review such servicing tape nor to verify any information
or data contained therein or to verify the presence of the servicing tape at
such location.
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ARTICLE IV
ADMINISTRATION AND BACKUP SERVICING OF THE MORTGAGE LOANS
SECTION 4.01. Servicing Administrator.
The Trustee shall furnish the Servicing Administrator with any limited
powers of attorney needed to enable the Servicing Administrator to administer
the related Mortgage Loans and REO Property. The Trustee shall have no
responsibility for any action of the Servicing Administrator pursuant to any
such limited power of attorney and shall be indemnified by the Servicing
Administrator 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.
For and on behalf of the Certificateholders, as independent contractors of
the Trustee, the Servicing Administrator shall, in accordance with this
Agreement, master service and administer the Mortgage Loans by overseeing and
enforcing the servicing of the Mortgage Loans by the Servicer according to the
terms of this Agreement.
The Trustee and the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the Certificate Insurer, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee or the Custodian; provided, however, that, unless otherwise
required by law, neither the Trustee or the Custodian shall be required to
provide access to such records and documentation to the Certificateholders. The
Trustee and the Custodian shall allow representatives of the above entities to
photocopy any of the records and documentation and shall provide equipment for
that purpose at a charge that covers the Trustee's or the Custodian's actual
costs.
The Trustee shall execute and deliver to the Servicing Administrator upon
written request any court pleadings, requests for trustee's sale or other
documents necessary or desirable prepared by the Servicing Administrator to (i)
the foreclosure or trustee's sale with respect to a Mortgaged Property; (ii) any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or any other Mortgage Loan Document; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or any other Mortgage Loan Document or otherwise available at
law or equity.
SECTION 4.02. REMIC Related Covenants.
For as long as any REMIC shall exist, the Securities Administrator and the
Trustee shall each act in accordance herewith to treat such REMIC as a REMIC,
and the Securities Administrator and the Trustee shall each comply with any
directions of the Seller, the Servicing Administrator, the Backup Servicer or
the Servicer to assure such continuing treatment. In particular, neither the
Trustee nor the Securities Administrator shall (a) sell or permit the sale of
all or any portion of the Mortgage Loans unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or Trustee has
received a REMIC Opinion prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution pursuant to Section 2.03 of this
Agreement, or with respect to a withdrawal of amounts on deposit in the
Pre-Funding Account or the Capitalized Interest Account on or prior to December
24, 2005, accept any contribution to any REMIC after the Startup Day without
receipt of a Opinion of Counsel at the expense of the Trust Fund stating that
such contribution will not result in the imposition of a tax upon any REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code).
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SECTION 4.03. Fidelity Bond.
The Servicing Administrator, 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 Servicing Administrator's behalf, and covering errors and
omissions in the performance of the Servicing Administrator's obligations
hereunder. The errors and omissions insurance policy and the fidelity bond shall
be in such form and amount generally acceptable for entities serving as master
servicers or trustees.
SECTION 4.04. Powers to Act; Procedures.
The Servicing Administrator shall master service the Mortgage Loans and
shall have full power and authority, subject to the REMIC Provisions and the
provisions of Section 9.13, to do any and all things that it may deem necessary
or desirable in connection with the administration of the Mortgage Loans,
including but not limited to the power and authority (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages,
(iii) to collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan, in each case, in accordance with the
provisions of this Agreement; provided, however, that the Servicing
Administrator shall not (and, consistent with its responsibilities under Section
4.02, 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 or any REMIC provided for herein
(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 Servicing Administrator has received
an Opinion of Counsel (but not at the expense of the Servicing Administrator) 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 formed hereby or the Trust Fund. The Trustee shall furnish the Servicing
Administrator, upon written request from a Servicing Officer, with any powers of
attorney empowering the Servicing Administrator or the Servicer to execute and
deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with this Agreement, and
the Trustee shall execute and deliver such other documents, as the Servicing
Administrator or the Servicer may request, to enable the Servicing Administrator
to master service and administer the Mortgage Loans and carry out its duties
hereunder, in each case in accordance with Accepted Administration Practices
(and the Trustee shall have no liability for misuse of any such powers of
attorney by the Servicing Administrator or the Servicer and shall be indemnified
by the Servicing Administrator or the Servicer, as applicable, for any cost,
liability or expense incurred by the Trustee in connection with such Person's
use or misuse of any such power of attorney). If the Servicing Administrator 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
Servicing Administrator shall join with the Trustee in the appointment of a
co-trustee pursuant to Section 9.12. In the performance of its duties hereunder,
the Servicing Administrator 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.
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SECTION 4.05. Due-on-Sale Clauses; Assumption Agreements.
To the extent Mortgage Loans contain enforceable due-on-sale clauses, the
Servicing Administrator shall cause the Servicer to enforce such clauses in
accordance with this Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this Agreement.
SECTION 4.06. Documents, Records and Funds in Possession of
Servicing Administrator to be Held for Trustee.
(a) The Servicing Administrator shall transmit to the Trustee
or Custodian such documents and instruments coming into the possession of the
Servicing Administrator from time to time as are required by the terms hereof to
be delivered to the Trustee or Custodian. Any funds received by the Servicing
Administrator in respect of any Mortgage Loan or which otherwise are collected
by the Servicing Administrator as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan shall be deposited in the Servicing Administrator
Collection Account. The Servicing Administrator shall, and shall cause the
Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Securities Administrator and the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Servicing Administrator designated by it. In fulfilling such a request the
Servicing Administrator 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 Servicing Administrator, in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be deposited in the Servicing
Administrator Collection Account.
SECTION 4.07. Monitoring of the Servicer.
(a) The Servicing Administrator 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 Servicing Administrator 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 Servicing
Administrator, 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 Servicing
Administrator shall notify the Seller, the Securities Administrator, the Backup
Servicer and the Trustee thereof and the Servicing Administrator shall issue
such notice or take such other action as it deems appropriate.
(b) The Servicing Administrator, for the benefit of the
Trustee, the Securities Administrator, the Certificate Insurer 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 and Article IX, cause the Trustee to terminate the rights and
obligations of the Servicer hereunder in accordance with the provisions of
Article IX. 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
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Servicing Administrator, in its good faith business judgment, would require were
it the owner of the related Mortgage Loans. The Servicing Administrator shall
pay the costs of such enforcement at its own expense, provided that the
Servicing Administrator shall not be required to prosecute or defend any legal
action except to the extent that the Servicing Administrator shall have received
reasonable indemnity for its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Servicing
Administrator related to the termination of the Servicer, appointment of a
successor Servicer or the transfer and assumption of the servicing by the Backup
Servicer (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Servicer as a result of a Servicer Event of Default
and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor servicer to service the
Mortgage Loans in accordance with this Agreement) are not fully and timely
reimbursed by the terminated Servicer, the Servicing Administrator shall be
entitled to reimbursement of such costs and expenses from the Servicing
Administrator Collection Account.
(d) The Servicing Administrator shall require the Servicer to
comply with the remittance requirements and other obligations set forth in this
Agreement.
(e) If the Servicing Administrator acts as successor Servicer,
it will not assume liability for the representations and warranties of the
terminated Servicer.
SECTION 4.08. [RESERVED]
SECTION 4.09. [RESERVED].
SECTION 4.10. Presentment of Claims and Collection of Proceeds.
The Servicing Administrator shall enforce the Servicer's obligations under
this Agreement to, prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Servicing Administrator in respect of such
policies, bonds or contracts shall be promptly deposited in the Servicing
Administrator Collection Account upon receipt, except that any amounts realized
that are to be applied to the repair or restoration of the related Mortgaged
Property as a condition precedent to the presentation of claims on the related
Mortgage Loan to the insurer under any applicable insurance policy need not be
so or remitted.
SECTION 4.11. Trustee or Custodian to Retain Possession of Certain
Insurance Policies and Documents.
The Custodian, shall retain possession and custody of the originals (to
the extent available) of any primary mortgage insurance policies, or certificate
of insurance if applicable, and any certificates of renewal as to the foregoing
as may be issued from time to time as contemplated by this Agreement. Until all
amounts distributable in respect of the Certificates has been distributed in
full and the Servicing Administrator and the Servicer have otherwise fulfilled
their respective obligations under this Agreement, the Custodian shall also
retain possession and custody of each Mortgage File in accordance with and
subject to the terms and conditions of this Agreement. The Servicing
Administrator shall promptly deliver or cause to be delivered to the Custodian,
upon the execution or receipt thereof the originals of any primary mortgage
insurance policies, any certificates of renewal, and such other documents or
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instruments that constitute Mortgage Loan Documents that come into the
possession of the Servicing Administrator from time to time.
SECTION 4.12. Realization Upon Defaulted Loans.
The Servicing Administrator shall cause the Servicer to foreclose upon,
repossess or otherwise comparably convert the ownership of Mortgaged 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, all in accordance with this Agreement.
SECTION 4.13. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Servicing Administrator shall cause the Servicer to
sell, any REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement. Further, the Servicing Administrator shall cause
the Servicer to sell any REO Property prior to three years after the end of the
calendar year of its acquisition by the Subsidiary REMIC unless (i) the Trustee,
the Securities Administrator and the Servicing Administrator shall have been
supplied by the Servicer with an Opinion of Counsel to the effect that the
holding by the Trust Fund of such REO Property subsequent to such three-year
period will not result in the imposition of taxes on "prohibited transactions"
of any REMIC hereunder as defined in section 860F of the Code or cause any REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel) or
(ii) the Servicer shall have obtained, prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Servicing
Administrator shall cause the Servicer to protect and conserve, such REO
Property in the manner and to the extent required by this Agreement, in
accordance with the REMIC Provisions and in a manner that does not result in a
tax on "net income from foreclosure property" or cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code.
(b) The Servicing Administrator shall cause the Servicer to
deposit all funds collected and received in connection with the operation of any
REO Property in the Collection Account.
SECTION 4.14. Annual Statement as to Compliance.
Pursuant to this Agreement, the Servicing Administrator shall deliver to
the Depositor, the Trustee, SLS and the Securities Administrator on or before
March 15 of each year beginning in 2006 (or such other date to which the
Depositor and Servicing Administrator mutually agree) 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
Servicing Administrator 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 Servicing Administrator 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
make available 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 Servicing Administrator to the
Securities Administrator.
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SECTION 4.15. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
If the Servicing Administrator has, during the course of any calendar
year, directly serviced any of the Mortgage Loans, then 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 Servicing Administrator 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, SLS, the Trustee 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 Servicing Administrator to the Securities
Administrator.
SECTION 4.16. Annual Certificate by Servicing Administrator.
(a) Within 15 days prior to the date on which a Form 10-K is
required to be filed, the Servicing Administrator shall execute and deliver an
Officer's Certificate signed by the senior officer in charge of servicing of the
Servicing Administrator or any officer to whom that officer reports, to the
Securities Administrator and Depositor for the benefit of the Securities
Administrator, SLS and Depositor and their respective officers, directors and
affiliates, certifying as to matters described in the Officer's Certificate
attached hereto as Exhibit P.
(b) The Servicing Administrator shall indemnify and hold
harmless the Securities Administrator, SLS, the Trustee and the Depositor and
their respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 4.16, any material misstatement
or omission in the Officer's Certificate required under this Section or the
negligence, bad faith or willful misconduct of the Servicing Administrator in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Securities Administrator, SLS and the
Depositor, then the Servicing Administrator agrees that it shall contribute to
the amount paid or payable by the Securities Administrator and the Depositor as
a result of the losses, claims, damages or liabilities of the Depositor in such
proportion as is appropriate to reflect the relative fault of the Depositor on
the one hand and the Servicing Administrator on the other in connection with a
breach of the Servicer's obligations under this Section 4.16, any material
misstatement or omission in the Officer's Certificate required under this
Section or the Servicing Administrator's negligence, bad faith or willful
misconduct in connection therewith.
SECTION 4.17. Obligation of the Servicing Administrator in Respect
of Prepayment Interest Shortfalls.
In the event a Prepayment Interest Shortfall occurs that is not otherwise
covered by Compensating Interest payments by the Servicer, the Servicing
Administrator shall deposit in the Servicing Administrator Collection Account
not later than the Servicing Administrator Remittance Date an amount equal to
the lesser of (i) the aggregate amounts required to be paid by the Servicer with
respect to Prepayment Interest Shortfalls attributable to Principal Prepayments
on the related Mortgage Loans for the related Distribution Date, and not so paid
by the Servicer, and (ii) the Securities Administrator Fee for such Distribution
Date, without reimbursement therefor.
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SECTION 4.18. Obligation of the Servicing Administrator in Respect
of Collection Account.
The Servicing Administrator shall enforce the obligation of the Servicer
to establish and maintain Collection Accounts in accordance with this Agreement,
with records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan
basis, into which accounts shall be deposited within two Business Days of
receipt all collections of principal and interest on any Mortgage Loan and with
respect to any REO Property received by the Servicer, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
the Servicer's own funds (less servicing compensation as permitted by Section
3.15) and all other amounts to be deposited in the Collection Account.
SECTION 4.19. Backup Servicer.
JPMorgan will act as Backup Servicer for the Mortgage Loans under this
Agreement. If the Servicer is terminated under this Agreement, JPMorgan (or its
affiliate or agent, which will meet the requirements of successor servicer set
forth in this Agreement) will be required to act as successor servicer
thereunder, provided, however, that the Seller may designate an entity other
than JPMorgan to act as successor servicer so long as that entity meets the
requirements set forth in Section 8.02 of this Agreement including the
obligation to make Advances in accordance with Section 5.01 hereof. The Backup
Servicer will have no servicing obligations until and unless it becomes a
successor servicer. At such time as the Backup Servicer (or its affiliate or
agent) becomes the successor servicer to the Servicer, the Backup Servicer will
assume all of the Servicer's servicing obligations as set forth in this
Agreement. The Seller has the right to terminate JPMorgan as Backup Servicer at
its discretion; provided, however, that the Trustee has received a letter from
each of the Rating Agencies that such a termination and appointment will not
result in a downgrading of the rating of any of the Certificates related to the
applicable Mortgage Loans and the consent of the Certificate Insurer has been
received.
ARTICLE V
DISTRIBUTIONS
SECTION 5.01. Advances by the Servicing Administrator and the
Servicer.
The Servicer shall deposit in the related Collection Account at the time
described below an amount equal to, with respect to the Mortgage Loans, all
Scheduled Payments of principal and interest at the Mortgage Rate less the
Servicing Fee which were due on the related Mortgage Loans during the applicable
Due Period; provided however, that with respect to any Balloon Loan that is
delinquent on its maturity date, the Servicer will not be required to advance
the related balloon payment but will be required to continue to make advances in
accordance with this Section 5.01 with respect to such Balloon Loan in an amount
equal to an assumed scheduled payment of interest at the Mortgage Rate less the
Servicing Fee that would otherwise be due based on the original amortization
schedule for that Mortgage Loan. The Servicer's obligation to make such Advances
as to any related Mortgage Loan will continue through the last Scheduled Payment
due prior to the payment in full of such Mortgage Loan, or the related Mortgaged
Property or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
the terms of this Agreement. The Servicer shall not be required to advance
shortfalls of principal or interest resulting from any related bankruptcy
proceedings or the application of the Relief Act.
To the extent required by Accepted Servicing Practices, the Servicer shall
be obligated to make Advances in accordance with the provisions of this
Agreement; provided however, that such obligation with respect to any related
Mortgage Loan shall cease if the Servicing Administrator or the Servicer
determines, in its sole discretion, that Advances with respect to such Mortgage
Loan are Nonrecoverable Advances. In the event that the Servicing Administrator
or the Servicer
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determines that any such Advances are Nonrecoverable Advances, the Servicing
Administrator or the Servicer shall provide the Servicing Administrator (with a
copy to the Certificate Insurer) with a certificate signed by a Servicing
Officer evidencing such determination.
By 2:00 p.m. New York time on the Servicer Remittance Date, the Servicer
shall remit in immediately available funds to the Servicing Administrator for
deposit in the Servicing Administrator Collection Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans for the related Distribution Date either (i) from its own funds or (ii)
from the Collection Account, to the extent of any Amounts For Future
Distribution on deposit therein (in which case it will cause to be made an
appropriate entry in the records of the Collection Account that Amounts For
Future Distribution have been, as permitted by this Section 5.01, used by the
Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Servicer with respect to the Mortgage Loans. In addition, the Servicer
shall have the right to reimburse itself for any such Advance made by it from
its own funds from Amounts For Future Distribution. In addition, the Servicer
shall have the right to reimburse itself for any outstanding Advance made by it
from its own funds 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 next following Servicer Remittance Date on which such funds are
required to be distributed pursuant to this Agreement.
SECTION 5.02. Advance Facility.
(a) With the prior consent of the Certificate Insurer, 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 5.02(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 Trustee, the Securities
Administrator, Certificateholders or any other party (other than the Certificate
Insurer) shall be required before the Servicer may enter into an Advance
Facility, nor shall the Trustee, the Securities Administrator 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 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 the
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 Trustee,
the Securities Administrator, the Seller and
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the Depositor at the address set forth in Section 11.05 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 5.02(c) hereof, have the right to receive
reimbursements of previously unreimbursed Advances and/or Servicing Advances
financed under the related Advance Facility ("Advance Reimbursement Amounts")
and (c) that the Servicer's Assignee shall agree to be bound by the provisions
of this Section 5.02. The Advance Facility Notice shall be executed by the
Advance Facility 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), provided, in each case, that
such Advance or Servicing Advance was financed under the related Advance
Facility, 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
5.02(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person and the Servicer's Assignee,
shall be entitled receive Advance Reimbursement Amounts in accordance with
Section 3.08 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice executed by the Advance Financing
Person (an "Advance Facility Default Notice") to the Trustee, the Securities
Administrator and the Depositor in the manner set forth in Section 11.05 hereof.
With respect to any successor servicer to SLS, upon receipt of an Advance
Facility Default Notice, such successor servicer shall no longer be entitled to
receive Advance Reimbursement Amounts and the Servicer's Assignee shall
immediately have the right to receive from the Collection Account reimbursement
of previously unreimbursed Advance Reimbursement Amounts.
(d) Upon receipt by the Trustee, the Securities Administrator
and the Depositor of an Advance Facility Default Notice with respect to SLS, (i)
SLS shall no longer be entitled to receive Advance Reimbursement Amounts in
accordance with Section 3.08 hereof and the Servicer's Assignee with respect to
such Advance Facility shall immediately have the right to receive all related
Advance Reimbursement Amounts in the manner set forth in this Section 5.02(d),
and (ii) the Securities Administrator shall establish an account in the name of
the Servicer's Assignee (the "SLS Advance Facility Account"). Thereafter, within
two (2) Business Days of SLS's receipt of Advance Reimbursement Amounts in the
manner set forth in Section 3.08, SLS will identify such amounts and remit them
to the Securities Administrator. The Securities Administrator shall, within a
reasonable time after receipt of such Advance Reimbursement Amounts from SLS,
deposit such Advance Reimbursement Amounts into the SLS Advance Facility
Account. On the last business day of each calendar week following the receipt of
an Advance Facility Default Notice with respect to SLS, the Securities
Administrator shall wire to the Servicer's Assignee identified in the related
Advance Facility Default Notice, at the payment instructions specified in the
Advance Facility Default Notice, any and all funds contained in the SLS Advance
Facility Account. The obligations of each of SLS and the Securities
Administrator under this clause (d) shall continue until the Securities
Administrator receives written notice from the Advance Financing Person of the
termination of the Advance Facility of SLS.
(e) Without limiting the foregoing, none of the Trustee, the
Securities Administrator or the Certificateholders shall have any right to
setoff against Advance Reimbursement Amounts hereunder. 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 and the Securities Administrator in the manner set forth in
Section 11.05 hereof. Except as expressly set forth in Section 5.02(d) with
respect to the establishment of the SLS Advance Facility Account, the deposit of
amounts therein and the remittances of amounts therefrom by the Securities
Administrator, none of the Depositor, the Securities Administrator or the
Trustee shall, as a result of the
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existence of any Advance Facility, have any additional duty or liability with
respect to the calculation or payment of any Advance Reimbursement Amount, and
(ii) none of the Depositor, the Securities Administrator or the Trustee shall,
as a result of the existence of any Advance Facility, 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 Trustee, the Seller, the Securities
Administrator, any successor Servicer and the Trust Fund for any claim, loss,
liability or damage resulting from any claim by the related Advance Financing
Person, or Servicer's Assignee, 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, the Seller, the
Securities Administrator or any successor Servicer, as the case may be, or
failure by the successor Servicer or the Securities Administrator, as the case
may be, to remit funds to the extent required by Section 5.02(d) of this
Agreement. The Servicer shall maintain and provide to any successor Servicer
and, upon request, the Trustee and the Securities Administrator a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information. Notwithstanding any of the foregoing, and for the
avoidance of doubt, the Servicer, the related Advance Financing Person and/or
the Servicer's Assignee shall only be entitled to reimbursement of Advance
Reimbursement Amounts hereunder from withdrawals from the Collection Account
pursuant to Section 3.08 of this Agreement and shall not otherwise be entitled
to make withdrawals or receive amounts that shall be deposited in the Servicing
Administrator Collection Account pursuant to Section 3.05 hereof or any other
account.
(f) An Advance Financing Person who receives an assignment or
pledge of rights to receive Advance Reimbursement Amounts and/or whose
obligations are limited to the funding of Advances and/or Servicing Advances
pursuant to an Advance Facility shall not be required to meet the criteria for
qualification as a Subservicer.
(g) 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 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 or that
relate to Advances or Servicing Advances that were not financed under the
related Advance Facility, 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.
(h) For purposes of any certification of a Servicing Officer
of the Servicer made pursuant to Section 3.19 any Nonrecoverable Advance
referred to therein may have been made by the Servicer or any predecessor
Servicer. In making its determination that any Advance theretofore made has
become a Nonrecoverable Advance, the Servicer shall apply the same criteria in
making such determination regardless of whether such Advance shall have been
made by the Servicer or any predecessor Servicer.
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(i) Any amendment to this Section 5.02 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 5.02,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor, the Seller, the Securities
Administrator, the Servicing Administrator and the Servicer without the consent
of any Certificateholder, provided such amendment complies with Section 11.01
hereof. All reasonable costs and expenses (including attorneys' fees) of each
party hereto of any such amendment shall be borne solely by the Servicer. The
parties hereto hereby acknowledge and agree that: (a) the Advances and/or
Servicing Advances financed by and/or pledged to an Advance Financing Person
under any Advance Facility are obligations owed to the Servicer payable only
from the cash flows and proceeds received under this Agreement for reimbursement
of Advances and/or Servicing Advances financed under the related Advance
Facility only to the extent provided herein, and the Trustee, the Securities
Administrator and the Trust are not, as a result of the existence of any Advance
Facility, obligated or liable to repay any Advances and/or Servicing Advances
financed by the Advance Financing Person; (b) the Servicer will be responsible
for remitting to the Advance Financing Person the applicable amounts collected
by it as reimbursement for Advances and/or Servicing Advances funded by the
Advance Financing Person, subject to the provisions of this Agreement; and (c)
neither the Trustee nor the Securities Administrator shall have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and any Advance Financing Person.
SECTION 5.03. 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, the Servicer shall, from amounts in respect of its Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of its Servicing Fee for such Distribution Date, no later than each
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall. In case of such deposit, the Servicer
shall not be entitled to any recovery or reimbursement from the Depositor, 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.
SECTION 5.04. 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 Pre-Funding REMIC, the SWAP REMIC, REMIC 1 and REMIC 2 in
an amount sufficient to make the distributions on the respective Certificates on
such Distribution Date in accordance with the provisions of Section 5.05.
SECTION 5.05. Distributions.
(a) On each Distribution Date, the Securities Administrator
shall distribute out of Interest Funds, to the holder of the Class ES
Certificates, the Class ES Distribution Amount for such Distribution Date.
(b) On each Distribution Date, the Securities Administrator
shall distribute from Interest Funds remaining after the distributions pursuant
to clause (a) above, to the extent available in the Certificate Account, in the
following order of priority:
(i) to the Supplemental Interest Trust, any Net Swap
Payments owed to the Swap Counterparty;
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(ii) to the Supplemental Interest Trust, any Swap
Termination Payment owed by the Trust to the Swap Counterparty (other than
Defaulted Swap Termination Payments);
(iii) to the Certificate Insurer, accrued and unpaid
Certificate Insurer Premiums for such Distribution Date;
(iv) to each class of the Class A Certificates,
concurrently, any Current Interest and any Interest Carry Forward Amount with
respect to each such class; provided, however, that if Interest Funds remaining
after distributions pursuant to clause (a) above are insufficient to make a full
distribution of the aggregate Current Interest and the aggregate Interest Carry
Forward Amount to each Class of the Class A Certificates, Interest Funds will be
distributed pro rata among each class of the Class A Certificates based upon the
ratio of (x) the Current Interest and Interest Carry Forward Amount for such
class to (y) the total amount of Current Interest and any Interest Carry Forward
Amount for the Class A Certificates in the aggregate;
(v) to the Certificate Insurer, any Certificate Insurer
Reimbursement Amounts;
(vi) to each class of the Class M-1 Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to such
class; provided, however, that if Interest Funds remaining after distributions
pursuant to clause (b)(v) above are insufficient to make a full distribution of
the aggregate Current Interest and the aggregate Interest Carry Forward Amount
to each Class of the Class M-1 Certificates, Interest Funds will be distributed
pro rata among each class of the Class M-1 Certificates based upon the ratio of
(x) the Current Interest and Interest Carry Forward Amount for such class to (y)
the total amount of Current Interest and any Interest Carry Forward Amount for
the Class M-1 Certificates in the aggregate;
(vii) to each class of the Class M-2 Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to such
class; provided, however, that if Interest Funds remaining after distributions
pursuant to clause (b)(vi) above are insufficient to make a full distribution of
the aggregate Current Interest and the aggregate Interest Carry Forward Amount
to each Class of the Class M-2 Certificates, Interest Funds will be distributed
pro rata among each class of the Class M-2 Certificates based upon the ratio of
(x) the Current Interest and Interest Carry Forward Amount for such class to (y)
the total amount of Current Interest and any Interest Carry Forward Amount for
the Class M-2 Certificates in the aggregate;
(viii) to each class of the Class M-3 Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to such
class; provided, however, that if Interest Funds remaining after distributions
pursuant to clause (b)(vii) above are insufficient to make a full distribution
of the aggregate Current Interest and the aggregate Interest Carry Forward
Amount to each Class of the Class M-3 Certificates, Interest Funds will be
distributed pro rata among each class of the Class M-3 Certificates based upon
the ratio of (x) the Current Interest and Interest Carry Forward Amount for such
class to (y) the total amount of Current Interest and any Interest Carry Forward
Amount for the Class M-3 Certificates in the aggregate;
(ix) to each class of the Class M-4 Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to such
class; provided, however, that if Interest Funds remaining after distributions
pursuant to clause (b)(viii) above are insufficient to make a full distribution
of the aggregate Current Interest and the aggregate Interest Carry Forward
Amount to each Class of the Class M-4 Certificates, Interest Funds will be
distributed pro rata among each class of the Class M-4 Certificates based upon
the ratio of (x) the Current Interest and Interest Carry Forward Amount
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for such class to (y) the total amount of Current Interest and any Interest
Carry Forward Amount for the Class M-4 Certificates in the aggregate;
(x) to each class of the Class M-5 Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to such
class; provided, however, that if Interest Funds remaining after distributions
pursuant to clause (b)(ix) above are insufficient to make a full distribution of
the aggregate Current Interest and the aggregate Interest Carry Forward Amount
to each Class of the Class M-5 Certificates, Interest Funds will be distributed
pro rata among each class of the Class M-5 Certificates based upon the ratio of
(x) the Current Interest and Interest Carry Forward Amount for such class to (y)
the total amount of Current Interest and any Interest Carry Forward Amount for
the Class M-5 Certificates in the aggregate;
(xi) to each class of the Class M-6 Certificates, the
Current Interest and any Interest Carry Forward Amount with respect to such
class; provided, however, that if Interest Funds remaining after distributions
pursuant to clause (b)(x) above are insufficient to make a full distribution of
the aggregate Current Interest and the aggregate Interest Carry Forward Amount
to each Class of the Class M-6 Certificates, Interest Funds will be distributed
pro rata among each class of the Class M-6 Certificates based upon the ratio of
(x) the Current Interest and Interest Carry Forward Amount for such class to (y)
the total amount of Current Interest and any Interest Carry Forward Amount for
the Class M-6 Certificates in the aggregate;
(xii) to the Class B-1 Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such class;
(xiii) to the Class B-2 Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such class;
(xiv) to the Class B-3 Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such class; and
(xv) any remainder pursuant to Section 5.05(f) hereof.
On each Distribution Date, subject to the proviso in (iv) above, Interest
Funds received on the Group I Mortgage Loans will be deemed to be distributed to
the Class R Certificate and Group I Senior Certificates and Interest Funds
received on the Group II Mortgage Loans will be deemed to be distributed to the
Group II Senior 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, 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 (other than Extra Principal
Distribution Amount) in the following order of priority, and each such
distribution shall be made only after all distributions pursuant to Section
5.05(b) above (excluding Section 5.05(b)(xv)) shall have been made until such
amount shall have been fully distributed for such Distribution Date:
(i) to the Class A and Class R Certificates, the Class A
Principal Distribution Amount as follows:
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(a) the Group I Principal Distribution Amount
shall be distributed as follows: (I) to the Class R Certificate until the
Certificate Principal Balance of such class is reduced to zero, (II) to the
Class AF-5 Certificates in an amount equal to the Class AF-5 Lockout
Distribution Amount until the Certificate Principal Balance of such class is
reduced to zero and then (III) to the Class AF-1, Class AF-2, Class AF-3, Class
AF-4 and Class AF-5 Certificates sequentially in that order until the
Certificate Principal Balance of each such class is reduced to zero; and
(b) the Group II Principal Distribution Amount
shall be distributed to the Class AV-1, Class AV-2 and Class AV-3 Certificates
sequentially in that order until the Certificate Principal Balance of each such
class is reduced to zero:
(ii) to the Certificate Insurer, any Certificate Insurer
Reimbursement Amounts, to the extent not otherwise paid pursuant to Section
5.05(b)(v);
(iii) to each class of the Class M-1 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, the Class M-1 Principal Distribution Amount;
(iv) to each class of the Class M-2 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, the Class M-2 Principal Distribution Amount;
(v) to each class of the Class M-3 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, the Class M-3 Principal Distribution Amount;
(vi) to each class of the Class M-4 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, the Class M-4 Principal Distribution Amount;
(vii) to each class of the Class M-5 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, the Class M-5 Principal Distribution Amount;
(viii) to each class of the Class M-6 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, the Class M-6 Principal Distribution Amount;
(ix) to the Class B-1 Certificates, the Class B-1
Principal Distribution Amount;
(x) to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount;
(xi) to the Class B-3 Certificates, the Class B-3
Principal Distribution Amount; and
(xii) any remainder pursuant to Section 5.05(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
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pursuant to Section 5.05(b)(xv) and Section 5.05(d)(xii) hereof, and each such
distribution shall be made only after all distributions pursuant to Sections
5.05(b) and (d) above (excluding Section 5.05(b)(xv) and Section 5.05(d)(xii))
shall have been made until such remainders shall have been fully distributed for
such Distribution Date; provided, however, that on each Distribution Date on or
prior to the Distribution Date in April 2006, 50% of such amount shall be
distributed first pursuant to Section 5.05(f)(xi) (without duplicating
distribution pursuant to such clause) and then to the Holders of the Class X
Certificates and 50% of such amount shall be distributed pursuant to Sections
5.05(f)(i)-(xiii):
(i) for distribution as part of the Principal
Distribution Amount, the Extra Principal Distribution Amount;
(ii) to each class of the Class M-1 Certificates, on a
pro rata based upon their respective outstanding Certificate Principal Balances,
any Unpaid Realized Loss Amount for such class;
(iii) to each class of the Class M-2 Certificates, on a
pro rata based upon their respective outstanding Certificate Principal Balances,
any Unpaid Realized Loss Amount for such class;
(iv) to each class of the Class M-3 Certificates, on a
pro rata based upon their respective outstanding Certificate Principal Balances,
any Unpaid Realized Loss Amount for such class;
(v) to each class of the Class M-4 Certificates, on a
pro rata based upon their respective outstanding Certificate Principal Balances,
any Unpaid Realized Loss Amount for such class;
(vi) to each class of the Class M-5 Certificates, on a
pro rata based upon their respective outstanding Certificate Principal Balances,
any Unpaid Realized Loss Amount for such class;
(vii) to each class of the Class M-6 Certificates, on a
pro rata based upon their respective outstanding Certificate Principal Balances,
any Unpaid Realized Loss Amount for such class;
(viii) to the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such class;
(ix) to the Class B-2 Certificates, any Unpaid Realized
Loss Amount for such class;
(x) to the Class B-3 Certificates, any Unpaid Realized
Loss Amount for such class;
(xi) to the Class R Certificate, the Residual Excess
Interest Amount;
(xii) to the Class A, Class M and Class B Certificates
on a pro rata basis based on the outstanding Certificate Principal Balance of
each such Class, any Floating Rate Certificate Carryover for each such Class;
and
(xiii) the remainder pursuant to Section 5.05(g) hereof.
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(g) on each Distribution Date, the Securities Administrator
shall allocate the remainder pursuant to Section 5.05(f)(xiii) as follows:
(i) to the Supplemental Interest Trust, any Defaulted
Swap Termination Payment;
(ii) to the Holders of the Class X Certificates, the
Class X Distributable Amount;
(iii) to the Securities Administrator and the Trustee,
on a pro-rata basis, any remaining unpaid fees, expenses and indemnities payable
to each of them pursuant to this agreement; and
(iv) the remainder pursuant to Section 5.05(h) hereof.
(h) On each Distribution Date, the Securities Administrator
shall allocate the remainder pursuant to Section 5.05(g)(iv) hereof 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, the Securities Administrator
shall distribute all amounts representing Prepayment Penalties, amounts paid by
the Servicer, the Seller or the Transferor in respect of Prepayment Penalties
pursuant to this Agreement or any Transfer Agreement, as applicable and amounts
received in respect of any indemnification paid as a result of a Prepayment
Penalty being unenforceable in breach of the representations and warranties set
forth in a Transfer Agreement to the Class X Certificates.
(j) 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 Subordinated Certificates in the following
order of priority:
(i) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;
(ii) to the Class B-2 Certificate until the Class B-2
Certificate Principal Balance is reduced to zero;
(iii) to the Class B-1 Certificate until the Class B-1
Certificate Principal Balance is reduced to zero;
(iv) to each class of the Class M-6 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, until the Class M-6 Certificate Principal Balance is reduced to zero;
(v) to each class of the Class M-5 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, until the Class M-5 Certificate Principal Balance is reduced to zero;
(vi) to each class of the Class M-4 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, until the Class M-4 Certificate Principal Balance is reduced to zero;
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(vii) to each class of the Class M-3 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, until the Class M-3 Certificate Principal Balance is reduced to zero;
(viii) to each class of the Class M-2 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, until the Class M-2 Certificate Principal Balance is reduced to zero;
and
(ix) to each class of the Class M-1 Certificates, on a
pro rata basis based on their respective outstanding Certificate Principal
Balances, until the Class M-1 Certificate Principal Balance is reduced to zero.
(k) Subject to Section 10.02 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 or if the Securities Administrator has not been
provided with a Holder's wire instruction or if such Holder has provided the
Securities Administrator with written request at least five (5) Business Days
prior to the related Record Date 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 10.02 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 Trustee and the Securities
Administrator in the form of a computer readable magnetic tape (or by such other
means as the Servicing Administrator or the Servicer, as applicable, the
Securities Administrator may agree from time to time) containing such data and
information such as to permit the Securities Administrator to prepare the
Monthly Statement to Certificateholders and make the required distributions for
the related Distribution Date.
(l) On the Closing Date, the Securities Administrator shall
establish and maintain in its name, a separate non-interest bearing subtrust for
the benefit of the holders of the Certificates (the "Supplemental Interest
Trust") as a segregated subtrust of the Trust Fund. The Supplemental Interest
Trust shall be an Eligible Account, and funds deposited therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including, without limitation, other moneys of the Securities Administrator held
pursuant to this Agreement. In no event shall any funds deposited in the
Supplemental Interest Trust be credited to or made available to any other
account of the Trust Fund. The records of the Trustee and the Securities
Administrator shall at all times reflect that the Supplemental Interest Trust is
a subtrust of the Trust Fund, the assets of which are segregated from other
assets of the Trust Fund.
The Securities Administrator shall enforce all of the rights of the Trust and
exercise any remedies under the Swap Agreement and, in the event the Swap
Agreement is terminated as a result of the designation by either party thereto
of an Early Termination Date (as defined therein), find a replacement
counterparty to enter into a replacement swap agreement utilizing the amounts of
the net Swap Termination Payments received.
Any Swap Termination Payment received by the Securities Administrator shall be
deposited in to the Supplemental Interest Trust and shall be used to make any
upfront payment required under a replacement swap agreement and any upfront
payment received from the counterparty to a replacement swap agreement shall be
used to pay any Swap Termination Payment owed to the Swap Provider.
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Notwithstanding anything contained herein, in the event that a replacement swap
agreement cannot be obtained within 30 days after receipt by the Securities
Administrator of the Swap Termination Payment paid by the terminated Swap
Provider, the Securities Administrator shall deposit such Swap Termination
Payment into a separate, segregated non-interest bearing subtrust established by
the Securities Administrator and the Securities Administrator shall, on each
Distribution Date following receipt of such Swap Termination Payment, withdraw
from such subtrust, an amount equal to the Net Swap Payment, if any, that would
have been paid to the Trust by the original Swap Provider (computed in
accordance with the original Swap Agreement attached hereto as Exhibit O) and
distribute such amount in accordance with Section 5.05 of this Agreement. Any
such subtrust shall not be an asset of any REMIC. Any amounts remaining in such
subtrust shall be distributed to the holders of the Class X Certificates on the
Distribution Date following the earlier of (i) the termination of the Trust Fund
pursuant to Section 10.01 and (ii) October 25, 2010.
On any Distribution Date, any Swap Termination Payments or Net Swap
Payments owed to the Swap Counterparty will be paid out of, or any Net Swap
Payments or Swap Termination Payments received from the Swap Counterparty will
be deposited into, the Supplemental Interest Trust. The Supplemental Interest
Trust will not be an asset of any REMIC. Funds in the Supplemental Interest
Trust shall be distributed in the following order of priority by the Securities
Administrator:
(i) to the Swap Counterparty, all Net Swap Payments, if
any, owed to the Swap Counterparty for such Distribution Date;
(ii) to the Swap Counterparty, any Swap Termination
Payment, other than a Defaulted Swap Termination Payment, if any, owed to the
Swap Counterparty;
(iii) to the Certificate Insurer, to the extent unpaid
after application of payments pursuant to Section 5.05(b)(iii), any accrued and
unpaid Certificate Insurer Premiums for such Distribution Date;
(iv) to each class of the Class A Certificates, on a pro
rata basis, any Current Interest and any Interest Carry Forward Amount with
respect to such class to the extent unpaid;
(v) to the Certificate Insurer, to the extent unpaid
after application of payments pursuant to Section 5.05(b)(v) and Section
5.05(d)(ii), any Certificate Insurer Reimbursement Amounts;
(vi) sequentially, to the Class M-1 Certificates on a
pro rata basis, Class M-2 Certificates on a pro rata basis, Class M-3
Certificates on a pro rata basis, Class M-4 Certificates on a pro rata basis,
Class M-5 Certificates on a pro rata basis and Class M-6 Certificates on a pro
rata basis, in that order, any Current Interest for such class to the extent
unpaid;
(vii) to the Class A, Class R, Class M and Class B
Certificates, to pay principal as described and in the same manner and order of
priority as set forth in Sections 5.05(d)(i) through 5.05(d)(xi) in order to
restore any previously attained levels of the Overcollateralization Amount, and
after giving effect to distributions from Principal Distribution Amount for each
such Class;
(viii) sequentially, to the Class M-1 Certificates on a
pro rata basis, Class M-2 Certificates on a pro rata basis, Class M-3
Certificates on a pro rata basis, Class M-4 Certificates on a pro rata basis,
Class M-5 Certificates on a pro rata basis and Class M-6 Certificates on a pro
rata basis, in that order, any Interest Carry Forward with respect to such class
to the extent unpaid;
(ix) sequentially, to the Class M-1 Certificates on a
pro rata basis, Class M-2 Certificates on a pro rata basis, Class M-3
Certificates on a pro rata basis, Class M-4
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Certificates on a pro rata basis, Class M-5 Certificates on a pro rata basis and
Class M-6 Certificates on a pro rata basis, in that order, any Unpaid Realized
Loss Amount for such class to the extent unpaid;
(x) to the Class A, Class R, Class M and Class B
Certificates, on a pro rata basis, any Floating Rate Certificate Carryover to
the extent not paid based on the amount of such unpaid Floating Rate Certificate
Carryover;
(xi) to the Swap Counterparty, any Defaulted Swap
Termination Payment owed to the Swap Counterparty to the extent not already
paid; and
(xii) to the Class X Certificates any remaining amount.
Upon termination of the Trust, any amounts remaining in the Supplemental
Interest Trust shall be distributed pursuant to the priorities set forth in this
Section 5.05(l).
(m) With respect to the failure of the Swap Provider to
perform any of its obligations under the Swap Agreement, the breach by the Swap
Provider of any of its representations and warranties made pursuant to the Swap
Agreement, or the termination of the Swap Agreement, the Securities
Administrator shall send any notices and make any demands, on behalf of the
Trustee, as are required under the Swap Agreement.
(n) On the Closing Date, the Securities Administrator shall
establish and maintain in its name, a separate Mortgage Loan Subtrust for the
benefit of the holders of the Certificates as a segregated subtrust of the Trust
Fund. The Mortgage Loans held in the Mortgage Loan Subtrust shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including, without limitation, other moneys of the Securities Administrator held
pursuant to this Agreement. In no event shall any funds deposited in the
Mortgage Loan Subtrust be credited to or made available to any other account of
the Trust Fund. The records of the Trustee and the Securities Administrator
shall at all times reflect that the Mortgage Loan Subtrust is a subtrust of the
Trust Fund, the assets of which are segregated from other assets of the Trust
Fund.
SECTION 5.06. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on
information provided by the Servicing Administrator or the Servicer pursuant to
Section 3.24, as applicable, the Securities Administrator shall prepare and make
available on its website located at xxx.xxxxxxxx.xxx/xxx to each Holder of a
Class of Certificates of the Trust Fund, the Servicing Administrator, the
Trustee, the Certificate Insurer, the Credit Risk Manager, the Rating Agency and
the Depositor a statement setting forth for each $1,000 principal amount of
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 and (C) the Extra Principal
Distribution Amount, 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) any Interest Carry Forward Amount for each Class
of the Certificates;
(iv) the Certificate Principal Balance of each Class
after giving effect to all distributions allocable to principal on such
Distribution Date;
(v) the aggregate outstanding principal balance of each
Class of Certificates for the following Distribution Date;
(vi) the Pool Stated Principal Balance for such
Distribution Date;
(vii) the related amount of the Aggregate Servicing Fee,
the Servicing Fee paid to or retained by the Servicer, the amount of the
Securities Administrator Fee paid to the Securities Administrator, the amount of
the Credit Risk Manager Fee paid to the Credit Risk Manager and the amount of
any Certificate Insurer Premium paid to the Certificate Insurer;
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(viii) the Pass-Through Rate for each Class of
Certificates for such Distribution Date;
(ix) the amount of Advances included in the distribution
on such Distribution Date;
(x) [RESERVED];
(xi) the aggregate amount of reimbursement to the
Servicer of Non-Recoverable Advances previously made;
(xii) the aggregate amount of recovery to the Trust Fund
of reimbursement previously deemed non-recoverable;
(xiii) the cumulative amount (in the aggregate and with
respect to the Group I Mortgage Loans and the Group II Mortgage Loans) of (A)
Realized Losses, (B) Applied Realized Loss Amounts to date and (C) Unpaid
Realized Loss Amounts;
(xiv) the amount (in the aggregate and with respect to
the Group I Mortgage Loans and the Group II Mortgage Loans) of (A) Realized
Losses and (B) Applied Realized Loss Amounts with respect to such Distribution
Date;
(xv) the number and aggregate principal amounts of
Mortgage Loans Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30
days, (2) 60 days, (3) 90 days and (4) 120 days to include such Delinquent
Mortgage Loans which are also in foreclosure or bankruptcy 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 I Mortgage Loans and the Group II
Mortgage Loans;
(xvi) the number and aggregate principal amounts of
Mortgage Loans that were in bankruptcy 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 I Mortgage Loans and the Group II Mortgage Loans;
(xvii) the number and aggregate principal amounts of
Mortgage Loans that were in foreclosure 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 I Mortgage Loans and the Group II Mortgage Loans;
(xviii) 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
I Mortgage Loans and the Group II Mortgage Loans;
(xix) whether a Trigger Event has occurred;
(xx) with respect to each Class of the Class A, Class B
and Class M Certificates any Floating Rate Certificate Carryover with respect to
such Distribution Date for each such Class, any Floating Rate Certificate
Carryover paid for each such Class and any remaining Floating Rate Certificate
Carryover for each such Class;
(xxi) the amount distributed as interest to each Class
of Certificates attributable to a regular interest in a REMIC and the amount
distributed to each Class of Certificates not attributable to a regular interest
in a REMIC;
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(xxii) the number and aggregate Stated Principal Balance
of all Subsequent Mortgage Loans added during the preceding Due Period;
(xxiii) any amounts distributed as Excess Interest to
the Class A, Class M or Class B Certificates;
(xxiv) the number and aggregate Stated Principal Balance
of Mortgage Loans for which prepayment penalties were received during the
related Prepayment Period and, for each such Mortgage Loan, the amount of
prepayment penalties received during the related Prepayment Period and in the
aggregate of such amounts for all such Mortgage Loans since the Cut-off Date;
(xxv) the current and cumulative number and amount of
prepayment penalties and the current and cumulative amount of late payment fees
received during the related Prepayment Period;
(xxvi) the total number and principal balance of any
Mortgage Loans that were repurchased during the calendar month preceding such
Distribution Date and the total number and principal balance of any Mortgage
Loans that were repurchased from the Closing Date to such Distribution Date, in
the aggregate and with respect to the Group I Mortgage Loans and the Group II
Mortgage Loans;
(xxvii) the aggregate amount of Subsequent Recoveries
for such Distribution Date and the aggregate amount of Subsequent Recoveries
collected after the Closing Date to such Distribution Date, in the aggregate and
with respect to the Group I Mortgage Loans and the Group II Mortgage Loans;
(xxviii) the weighted average remaining term to maturity
of the Mortgage Loans as of the first day of the calendar month preceding such
Distribution Date, in the aggregate and with respect to the Group I Mortgage
Loans and the Group II Mortgage Loans;
(xxix) as of each Distribution Date, the amount, if any,
to be deposited in the Supplemental Interest Trust pursuant to the Swap
Agreement as described in Section 5.05(l) and the amount thereof to be paid to
the Certificates; and
(xxx) as of each Distribution Date, the Floating Rate
Certificate Carryover for each Class of Certificates (other than the Class X
Certificates) and the portion of such Floating Rate Certificate Carryover that
is attributable to the fact that Applied Realized Loss Amounts are not allocated
to the Class A or Class R Certificates.
(b) If so requested in writing or as required by applicable
law, 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 (and to the Certificate Insurer), a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.06 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect. Within a reasonable period of time after the end of each calendar year
if requested in writing or required by applicable law, the Securities
Administrator will prepare and deliver to each certificateholder of record
during the previous calendar year, a statement containing information necessary
to enable certificateholders to prepare their tax returns. The Securities
Administrator will not be responsible for any errors, omissions or misstatements
that may be incorporated in such statement.
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(c) Upon filing with the Internal Revenue Service, the
Securities Administrator shall furnish to the Holders of the Class R Certificate
the Form 1066 and each Form 1066Q and shall respond promptly to written requests
made not more frequently than quarterly by any Holder of Class R Certificate
with respect to the following matters: 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;
(i) 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;
(ii) The Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash flows
described above;
(iii) 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;
(iv) 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;
(v) The amount and timing of any non-interest expenses
of the REMICs; and
(vi) 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 Securities Administrator shall only be required to provide the
information pursuant to clauses (i), (ii) and (iii) above if such information is
provided to the Securities Administrator by the Depositor.
SECTION 5.07. Certificate Insurance Policy Matters.
(a) As soon as possible, and in no event later than 11:00 a.m., New
York time, on the second Business Day immediately preceding each Distribution
Date, the Securities Administrator, on behalf of the Trustee, shall determine
the amount of funds available for such Distribution Date minus the amount of any
Certificate Insurer Premium on such Distribution Date.
(b) If for any Distribution Date, the Securities Administrator
determines that the funds that will be available for such Distribution Date
distributable to the Holders of the Class AF-2, Class AF-4 or Class AF-5
Certificates pursuant to Section 5.05 will be insufficient to pay the related
Guaranteed Distributions on such Distribution Date, the Securities
Administrator, on behalf of the Trustee, shall determine the amount of any such
deficiency and shall give notice to the Certificate Insurer and the Fiscal Agent
(as defined in the Certificate Insurance Policy), if any, by telephone or
telecopy of the amount of such deficiency, confirmed in writing by notice
substantially in the form of Exhibit A to the Certificate Insurance Policy by
12:00 noon, New York City time, on such second Business Day. The notice shall
constitute a claim for payment pursuant to the Certificate Insurance Policy.
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(c) The Trustee designates, appoints, authorizes and directs the
Securities Administrator to deliver on behalf of the Trustee the notice in the
form of Exhibit A to the Certificate Insurance Policy in accordance with Section
5.07 and to make, on behalf of and with full power to bind the Trustee, any of
the agreements, assignments or covenants of the Trustee contained therein. To
the extent necessary, this Agreement shall constitute an irrevocable limited
power of attorney, coupled with an interest, from the Trustee to the Securities
Administrator, to accomplish the foregoing;
(d) The Securities Administrator, on behalf of the Trustee, shall
receive as attorney-in-fact of each Holder of a Class AF-2, Class AF-4 or Class
AF-5 Certificate, as applicable, any Guaranteed Distributions from the
Certificate Insurer and disburse the same to each Holder of a Class AF-2, Class
AF-4 or Class AF Certificate, as applicable, in accordance with the provisions
of this Article V. Guaranteed Distributions disbursed by the Securities
Administrator, on behalf of the Trustee, from proceeds of the Certificate
Insurance Policy shall not (other than for purposes of the REMIC Provisions) be
considered payment by the Trust Fund nor shall such payments discharge the
obligation of the Trust Fund with respect to such Class AF-2, Class AF-4 or
Class AF-5 Certificate, as applicable, and the Certificate Insurer shall become
the owner of such unpaid amounts due from the Trust Fund in respect of such
Guaranteed Distributions as the deemed assignee of such Holder and shall be
entitled to receive the Certificate Insurer Reimbursement Amount pursuant to
Section 5.05. The Securities Administrator and the Trustee hereby agrees on
behalf of each Holder of a Class AF-2, Class AF-4 or Class AF-5 Certificate for
the benefit of the Certificate Insurer that it recognizes that to the extent
that the Certificate Insurer makes Guaranteed Distributions, either directly or
indirectly (as by paying through the Securities Administrator), to the Class
AF-2, Class AF-4 or Class AF-5 Certificateholders, the Certificate Insurer will
be entitled to receive the Certificate Insurer Reimbursement Amount pursuant to
Section 5.05.
(e) It is understood and agreed that the intention of the parties is
that the Certificate Insurer shall not be entitled to reimbursement on any
Distribution Date for amounts previously paid by it unless on such Distribution
Date the Holders of the Class AF-2, Class AF-4 or Class AF-5 Certificates, as
applicable, shall also have received the full amount of the Guaranteed
Distributions for such Distribution Date.
(f) In the event the Securities Administrator receives, on behalf of
the Trustee, a certified copy of an order of the appropriate court that any
payment of principal or interest on a Class AF-2, Class AF-4 or Class AF-5
Certificate has been voided in whole or in part as a preference payment under
applicable bankruptcy law, the Securities Administrator shall, on behalf of the
Trustee, (i) promptly notify the Certificate Insurer and the Fiscal Agent, if
any, and (ii) comply with the provisions of the Certificate Insurance Policy to
obtain payment by the Certificate Insurer of such voided payment. In addition,
the Securities Administrator shall, on behalf of the Trustee, mail notice to all
Holders of the Class AF-2, Class AF-4 or Class AF-5 Certificates so affected
that, in the event that any such Holder's scheduled payment is so recovered,
such Holder will be entitled to payment pursuant to the terms of the Certificate
Insurance Policy a copy of which shall be made available to such Holders by the
Securities Administrator. The Securities Administrator shall, on behalf of the
Trustee, furnish to the Certificate Insurer and the Fiscal Agent, if any, its
records listing the payments on the affected Class AF-2, Class AF-4 or Class
AF-5 Certificates, if any, that have been made by the Securities Administrator
and subsequently recovered from the affected Holders, and the dates on which
such payments were made by the Securities Administrator.
(g) At the time of the execution hereof, and for the purposes
hereof, the Securities Administrator, on behalf of the Trustee, shall establish
a separate special purpose trust account in the name of the Trustee for the
benefit of Holders of the Class AF-2, Class AF-4 and Class AF-5 Certificates
(the "Certificate Insurer Account") over which the Securities Administrator, on
behalf of the Trustee, shall have exclusive control and sole right of
withdrawal. The Certificate Insurer Account shall be an
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Eligible Account. The Securities Administrator, on behalf of the Trustee, shall
deposit any amount paid under the Certificate Insurance Policy into the
Certificate Insurer Account and distribute such amount only for the purposes of
making the payments to Holders of the Class AF-2, Class AF-4 and Class AF-5
Certificates in respect of the Guaranteed Distributions for which the related
claim was made under the Certificate Insurance Policy. Such amounts shall be
allocated by the Securities Administrator to Holders of Class AF-2, Class AF-4
and Class AF-5 Certificates affected by such shortfalls in the same manner as
principal and interest payments are to be allocated with respect to such
Certificates pursuant to Section 5.05. It shall not be necessary for such
payments to be made by checks or wire transfers separated from the checks or
wire transfers used to make regular payments hereunder with funds withdrawn from
the Certificate Account. However, any payments made on the Class AF-2, Class
AF-4 and Class AF-5 Certificates from funds in the Certificate Insurer Account
shall be noted as provided in subsection (h) below. Funds held in the
Certificate Insurer Account shall not be invested by the Securities
Administrator.
(h) Any funds received from the Certificate Insurer for deposit into
the Certificate Insurer Account pursuant to the Certificate Insurance Policy in
respect of a Distribution Date or otherwise as a result of any claim under the
Certificate Insurance Policy shall be applied by the Securities Administrator,
on behalf of the Trustee, directly to the payment in full (i) of the Guaranteed
Distributions due on such Distribution Date on the Class AF-2, Class AF-4 and
Class AF-5 Certificates, or (ii) of other amounts payable under the Certificate
Insurance Policy. Funds received by the Securities Administrator on behalf of
the Trustee, as a result of any claim under the Certificate Insurance Policy
shall be used solely for payment to the Holders of the Class AF-2, Class AF-4
and Class AF-5 Certificates, as applicable, and may not be applied for any other
purpose, including, without limitation, satisfaction of any costs, expenses or
liabilities of the Securities Administrator, the Trustee, any Servicer or the
Trust Fund. Any funds (other than funds deposited therein in respect of a
Preference Amount (as defined in the Certificate Insurance Policy) payable under
the Certificate Insurance Policy) remaining in the Certificate Insurer Account
on the first Business Day after each Distribution Date shall be remitted
promptly to the Certificate Insurer pursuant to the written instruction of the
Certificate Insurer.
(i) The Securities Administrator, on behalf of the Trustee, shall
keep complete and accurate records in respect of (i) all funds remitted to it by
the Certificate Insurer and deposited into the Certificate Insurer Account and
(ii) the allocation of such funds to payments of interest on and principal in
respect of any Class AF-2, Class AF-4 or Class AF-5 Certificates. The
Certificate Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon three Business Days' prior notice to the
Securities Administrator.
(j) The Securities Administrator and the Trustee acknowledge, and
each Holder of a Class AF-2, Class AF-4 or Class AF-5 Certificate by its
acceptance of such Certificate agrees, that, without the need for any further
action on the part of the Certificate Insurer, the Securities Administrator or
the Trustee, to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of principal of or interest on any Class AF-2, Class AF-4
or Class AF-5 Certificates, the Certificate Insurer will be fully subrogated to
the rights of the Holders of such related Certificates to receive such principal
and interest from the Trust Fund. The Holders of the Class AF-2, Class AF-4 and
Class AF-5 Certificates, by acceptance of such Certificates, assign their rights
as Holders of the Class AF-2, Class AF-4 and Class AF-5 Certificates, as
applicable, to the extent of the Certificate Insurer's interest with respect to
amounts paid under the Certificate Insurance Policy. Anything herein to the
contrary notwithstanding, solely for purposes of determining the Certificate
Insurer's rights, as applicable, as subrogee for payments distributable pursuant
to Section 5.05, any payment with respect to distributions to the Class AF-2,
Class AF-4 or Class AF-5 Certificates which is made with funds received pursuant
to the terms of the Certificate Insurance Policy, shall not be considered
payment of the Class AF-2, Class AF-4 or Class AF-5 Certificates, as applicable,
from the Trust Fund and shall not result in the distribution or the provision
for the distribution in reduction of the Certificate Principal Balance of the
Class AF-2, Class AF-4 or
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Class AF-5 Certificates, as applicable, except to the extent such payment has
been reimbursed to the Certificate Insurer pursuant to the terms hereof.
(k) Upon a Responsible Officer of the Securities Administrator
becoming aware of the occurrence of an Event of Default, the Securities
Administrator, on behalf of the Trustee, shall promptly notify the Certificate
Insurer of such Event of Default.
(l) The Securities Administrator, on behalf of the Trustee, shall
promptly notify the Certificate Insurer of either of the following as to which a
Responsible Officer of the Securities Administrator has actual knowledge: (A)
the commencement of any proceeding by or against the Depositor commenced under
the United States bankruptcy code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding") and (B) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer (a "Preference
Claim") of any distribution made with respect to a Class AF-2 Certificate as to
which it has actual knowledge. Each Holder of a Class AF-2, Class AF-4 or Class
AF-5 Certificate, by its purchase of such Certificate, the Securities
Administrator and the Trustee hereby agree that the Certificate Insurer (so long
as no Certificate Insurer Default exists) 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 any 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 Certificate
Insurer shall be subrogated to the rights of the Securities Administrator, on
behalf of the Trustee and each Holder of a Class AF-2, Class AF-4 or Class AF-5
Certificate, as applicable, in the conduct of any 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.
(m) Each Servicer shall designate at least one Certificate Insurer
Contact Person who shall be available to the Certificate Insurer to provide
reasonable access to information regarding the Mortgage Loans. The initial
Certificate Insurer Contact Persons are the Servicing Officers.
(n) The Securities Administrator, on behalf of the Trustee, shall
surrender the Certificate Insurance Policy to the Certificate Insurer for
cancellation upon the reduction of the aggregate Certificate Principal Balances
of the Class AF-2, Class AF-4 and Class AF-5 Certificates to zero.
(o) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to the Trustee, the Securities
Administrator, the Rating Agencies or the Holders of the Class AF-2, Class AF-4
and Class AF-5 Certificates (including without limitation the reports prepared
pursuant to Sections 3.17 and 3.18 and the statements prepared pursuant to
Section 5.06) shall also be sent, at the same time such reports are otherwise
sent, by overnight delivery, telecopy or email to the Certificate Insurer at
Financial Security Assurance Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, xxxxxxxxxx@xxx.xxx.
(p) With respect to this Section 5.07, (i) the terms "Receipt" and
"Received" shall mean actual delivery to the Certificate Insurer and its Fiscal
Agent, if any, prior to 12:00 noon, New York City time, on a Business Day;
delivery either on a day that is not a Business Day or after 12:00 noon, New
York City time, shall be deemed to be Receipt on the next succeeding Business
Day and (ii) "Business Day" means any day other than (A) a Saturday or Sunday or
(B) a day on which the Certificate Insurer or banking institutions in the City
of New York, New York, or the city in which the Corporate Trust Office of the
Trustee is located or the States of Colorado, Texas, Illinois, California or
Minnesota, are authorized or obligated by law or executive order to be closed.
If any notice or certificate given under the Certificate Insurance Policy by the
Securities Administrator, on behalf of the Trustee, is not in proper form or is
not properly completed, executed or delivered, or contains a misstatement, it
shall be deemed
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not to have been Received. The Certificate Insurer or its Fiscal Agent, if any,
shall promptly so advise the Securities Administrator and the Securities
Administrator, on behalf of the Trustee, may submit an amended notice.
(q) The Certificate Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions hereof
to the extent of the Certificate Insurer's rights explicitly specified herein as
if a party hereto.
(r) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Certificate Insurance Policy.
(s) The Securities Administrator, the Trustee, the Servicing
Administrator and the Servicer shall cooperate with any reasonable request by
the Certificate Insurer to preserve or enforce the rights granted to the
Certificate Insurer hereunder.
(t) For so long as there is no continuing Certificate Insurer
Default, each Holder of a Class AF-2, Class AF-4 or Class AF-5 Certificate
agrees that the Certificate Insurer shall be treated by the Depositor, the
Seller, each Servicer, the Servicing Administrator, the Securities Administrator
and the Trustee as if the Certificate Insurer were the Holder of all of the
Class AF-2, Class AF-4 and Class AF-5 Certificates for the purpose (and solely
for the purpose) of the giving of any consent, the making of any direction or
the exercise of any voting or other control rights otherwise given to the
Holders of the Class AF-2, Class AF-4 and Class AF-5 Certificates hereunder and
the Holders of the Class AF-2, Class AF-4 and Class AF-5 Certificates shall only
exercise such rights with the prior written consent of the Certificate Insurer.
(u) Guaranteed Distributions shall not include, nor shall coverage
be provided under the Certificate Insurance Policy in respect of, any Floating
Rate Certificate Carryovers, taxes, withholding or other charge imposed by any
government authority due in connection with any payment of any Guaranteed
Distribution to a Class AF-2, Class AF-4 or Class AF-5 Certificateholder.
SECTION 5.08. Effect of Payments by the Certificate Insurer.
Anything herein to the contrary notwithstanding, any payment with respect
to principal of or interest on the Class AF-2, Class AF-4 or Class AF-5
Certificates which is made with moneys received pursuant to the terms of the
Certificate Insurance Policy shall not (other than for purposes of the REMIC
Provisions) be considered payment of the Class AF-2, Class AF-4 or Class AF-5
Certificates from the Trust Fund. The Custodian, the Servicer, the Servicing
Administrator, the Securities Administrator and the Trustee acknowledge, and
each Holder by its acceptance of a Class AF-2, Class AF-4 or Class AF-5
Certificate agrees, that without the need for any further action on the part of
the Certificate Insurer, the Custodian, the Servicer, the Servicing
Administrator, the Securities Administrator or the Trustee (a) to the extent the
Certificate Insurer makes payments, directly or indirectly, on account of
principal of or interest on the Class AF-2, Class AF-4 or Class AF-5
Certificates to the Holders of such Certificates, the Certificate Insurer will
be fully subrogated to, and each Class AF-2, Class AF-4 and Class AF-5
Certificateholder, as applicable, the Servicer and the Trustee hereby delegate
and assign to the Certificate Insurer, to the fullest extent permitted by law,
the rights of such Holders to receive such principal and interest from the Trust
Fund, including, without limitation, any amounts due to the Class AF-2, Class
AF-4 or Class AF-5 Certificateholders in respect of securities law violations
arising from the offer and sale of the Class AF-2, Class AF-4 or Class AF-5
Certificates, as applicable, and (b) the Certificate Insurer shall be paid such
amounts from the sources and in the manner provided herein for the payment of
such amounts and as provided in the Certificate Insurance Policy and the
Commitment Letter between the Certificate Insurer, the Depositor and the Seller
dated as of October 17, 2005. The Trustee, the Securities Administrator, the
Servicing Administrator and the Servicer shall cooperate in all respects with
any
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reasonable request by the Certificate Insurer for action to preserve or enforce
the Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.
SECTION 5.09. 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, U.S. Bank National
Association, as trustee for the registered holders of Terwin Mortgage Trust
2005-16HE, Asset-Backed Certificates, TMTS Series 2005-16HE" (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 Securities
Administrator on behalf of the Trustee by the Seller. Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee and the Securities
Administrator on behalf of the Certificateholders for the uses and purposes set
forth herein.
(b) The funds deposited in the Pre-Funding Account shall
remain uninvested. For federal income tax purposes, the Seller shall be the
owner of the Pre-Funding Account and shall report all items of income,
deduction, gain or loss arising therefrom. 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 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 2.11 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 5.10. 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, U.S. Bank National Association, as trustee for
the registered holders of Terwin Mortgage Trust 2005-16HE, Asset-Backed
Certificates, Series XXXX 0000-00XX" (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.
Funds deposited in the Capitalized Interest Account shall be held in trust by
the Trustee and the Securities Administrator on behalf of the Certificateholders
for the uses and purposes set forth herein. With respect to any Distribution
Date up to and including the Distribution Date in October 2005, the Securities
Administrator will withdraw from the
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Capitalized Interest Account and deposit into the Certificate Account an amount
equal to the Required Withdrawal. The Seller is required to deposit into the
Capitalized Interest Account an amount sufficient to permit the Securities
Administrator to make the withdrawals required by this Section 5.10.
(b) The funds deposited in the Capitalized Interest Account
shall remain uninvested. For federal income tax purposes, the Seller 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.
(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 10.01, any amount remaining on deposit in
the Capitalized Interest Account after withdrawals pursuant to paragraph (a)
above shall be withdrawn by the Securities Administrator and paid to the Seller
or its designee.
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. 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:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ ----------------- -----------------
AF-1 $25,000.00 $1.00 $109,500,000.00
AF-2 $25,000.00 $1.00 $70,398,000.00
AF-3 $25,000.00 $1.00 $4,887,000.00
AF-4 $25,000.00 $1.00 $29,721,000.00
AF-5 $25,000.00 $1.00 $23,834,000.00
AV-1 $25,000.00 $1.00 $120,066,000.00
AV-2 $25,000.00 $1.00 $102,297,000.00
AV-3 $25,000.00 $1.00 $20,000,000.00
M-1A $25,000.00 $1.00 $11,293,000.00
M-1B $25,000.00 $1.00 $11,257,000.00
M-2A $25,000.00 $1.00 $5,508,000.00
M-2B $25,000.00 $1.00 $5,492,000.00
M-3A $25,000.00 $1.00 $2,892,000.00
M-3B $25,000.00 $1.00 $2,883,000.00
M-4A $25,000.00 $1.00 $7,437,000.00
M-4B $25,000.00 $1.00 $7,413,000.00
M-5A $25,000.00 $1.00 $1,652,000.00
M-5B $25,000.00 $1.00 $1,648,000.00
M-6A $25,000.00 $1.00 $1,377,000.00
M-6B $25,000.00 $1.00 $1,373,000.00
B-1 $25,000.00 $1.00 $2,750,000.00
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Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ ----------------- -----------------
B-2 $25,000.00 $1.00 $2,750,000.00
B-3 $25,000.00 $1.00 $3,575,000.00
ES N/A N/A N/A
R $ 100.00 N/A $ 100.00
X N/A N/A
* The Initial Certificate Principal Balance of the Class X Certificates is equal
to the initial Overcollateralization Amount.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trust by an authorized officer of the Trustee. Upon the written
order of the Depositor, 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 Trustee 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 Authenticating Agent 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 Authenticating Agent shall authenticate the Certificates
to be issued at the written direction of the Depositor, or any Affiliate
thereof.
SECTION 6.02. Appointment of Certificate Registrar; Certificate
Register; Registration of Transfer and Exchange of Certificates.
(a) The Securities Administrator is hereby appointed
Certificate Registrar (the "Certificate Registrar") and in such capacity, it
shall maintain, or cause to be maintained, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Securities Administrator
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. The Certificate Registrar shall
provide to the Trustee, from time to time upon request, a copy of the
Certificate Register. Upon surrender for registration of Transfer of any
Certificate, the Authenticating Agent 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 and the Authenticating Agent shall 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
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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.
No Transfer of a Class ES or Class X Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In 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 any initial transfers of the Class X Certificate (after original
issuance) to an indenture trustee in connection with a resecuritization
transaction or originally issued to an indenture trustee or its nominee in
connection with a resecuritization transaction) each certify to the Securities
Administrator and the Trustee in writing the facts surrounding the Transfer in
substantially the forms set forth in Exhibit F (the "Transferor Certificate")
and (i) deliver a letter in substantially the form of Exhibit H (the "Rule 144A
Letter") (except with respect to an initial transfer, after original issuance,
of the Class ES or Class X Certificate to an "accredited investor" within the
meaning of Rule 501(a) of Regulation D under the Securities Act, in which case
such accredited investor may deliver a letter in substantially the form of
Exhibit G (the "Investment Letter")) or (ii) there shall be delivered to the
Securities Administrator and the Trustee 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 ES or Class X 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 ES or Class X 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 a Class X Certificate, or a beneficial interest therein,
may be made to a non-United States Person unless the Securities Administrator
and the Trustee have received, in the manner required by applicable United
States Treasury Regulations (and with all required attachments, including, where
the non-United States Person is providing an Internal Revenue Service Form
W-8IMY (or any successor form), Internal Revenue Service Forms W-8BEN or W-9 (or
any successor forms) from all persons treated as beneficially owning an interest
in the Class X Certificate through such non-United States Person either
directly, through an intermediary or through an entity that is treated as a
partnership or other look-through entity for non-United States federal tax
purposes), a properly completed Internal Revenue Service Form W-8IMY, W-8BEN or
W-8ECI (or any successor form) from such non-United States Person.
Until the termination of the Swap Agreement, no transfer of a Certificate
that is not an ERISA Restricted Certificate shall be made unless the transferee
provides the Trustee and the Securities Administrator with a representation that
either (A) such transferee is not, and is not directly or indirectly acquiring
the Certificate for, on behalf of or with any assets of, any employee benefit
plan or other arrangement subject to Title I of ERISA or any plan subject to
Section 4975 of the Code, or (B) the
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transferee's acquisition and holding of the Certificate is covered by and exempt
under any of Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0,
XXXX 91-38, PTCE 95-60, or PTCE 96-23, each as amended.
No transfer of an ERISA Restricted Certificate shall be registered unless
the transferee provides the Trustee and the Securities Administrator with (A) a
representation that the transferee is not an employee benefit plan or
arrangement subject to Title I of ERISA, a plan subject to Section 4975 of the
Code or a plan subject to any provisions under any federal, state, local,
non-U.S. or other laws or regulations that are substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), or any Person that is directly or indirectly acquiring the ERISA
Restricted Certificate for, on behalf of or with any assets of any such Plan,
(B) other than in the case of the Class R Certificate and if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, a representation that the
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 is covered and exempt under Sections I and III of
PTCE 95-60 (in the case of any non-Class R ERISA Restricted Certificate other
than Class ES Certificates or Class X Certificates, after the termination of the
Swap Agreement), or (C) solely in the case of a Definitive Certificate, an
Opinion of Counsel satisfactory to the Trustee and the Securities Administrator,
and upon which the Trustee and the Securities Administrator shall be entitled to
rely, to the effect that the acquisition and holding of the Certificates by the
transferee will not 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 Seller, the Placement Agent, the Securities Administrator, the
Depositor, the Servicer or the Trustee to any obligation in addition to those
undertaken by such entities in this Agreement, which Opinion of Counsel shall
not be an expense of the Seller, the Placement Agent, the Securities
Administrator, the Depositor, the Servicer or the Trustee.
Except in the case of Definitive Certificates, for purposes of the two
immediately preceding paragraphs of this Subsection 6.02(a), other than clause
(C) in the immediately preceding paragraph, the representations as set forth
therein shall be deemed to have been made to the Trustee and the Securities
Administrator by the transferee's acceptance of the particular ERISA Restricted
Certificate (or the acceptance by a Certificate Owner of the beneficial interest
in any Class of ERISA Restricted Certificates).
In the event that such representation is violated, and (solely in the case
of a Definitive Certificate) in the event that any attempt is made to transfer
to a Plan or to any Person acting for, on behalf of or with any assets of any
Plan without the Opinion of Counsel described above, such attempted transfer or
acquisition shall be void and of no effect and the last preceding qualified
transferee shall be deemed restored to all rights as beneficial owner thereof
retroactive to the date of such purported transfer. The Trustee and 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 6.02(a) nor shall the Trustee and 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 Trustee and the Securities Administrator in accordance with
the foregoing requirements. The Trustee and 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 6.02(a) 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 qualified
transferee.
(b) 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
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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 and the
Trustee shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached hereto as
Exhibit 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
6.02(b)(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, the Trustee and the
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 6.02(b) 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 6.02(b),
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 and the Trustee 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 6.02(a) and this Section
6.02(b) or for making any payments due on such Certificate to the Holder thereof
or taking any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered 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.
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(v) At the option of the Holder of the Class R
Certificate, the Class PF-R Interest, the Class SW-R Interest, the Class LT1-R
Interest and the Class LT2-R Interest may be severed and represented by separate
certificates; provided, however, that such separate certification may not occur
until the Securities Administrator receives 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 6.02(a) and (b)
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 PF-R Interest, the Class SW-R Interest, the Class LT1-R Interest and
the Class LT2-R Interest shall be severed and represented by separate
certificates.
The restrictions on Transfers of a Class R Certificate set forth in this
Section 6.02(b) 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 Trustee of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Securities
Administrator 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 and the Trustee, 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.
(c) The transferor of the Class R Certificate shall notify the
Securities Administrator and the Trustee in writing upon the transfer of the
Class R Certificate.
(d) The preparation and delivery of all certificates, opinions
and other writings referred to above in this Section 6.02 shall not be an
expense of the Trust Fund, the Depositor, the Securities Administrator or the
Trustee.
SECTION 6.03. 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,
the Certificate Insurer 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 6.03, 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, the Certificate Insurer and the Trustee and their
counsel) connected therewith. Any replacement Certificate issued pursuant to
this Section 6.03 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
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Securities Administrator under the terms of this Section 6.03 shall be canceled
and destroyed by the Securities Administrator in accordance with its standard
procedures without liability on its part.
SECTION 6.04. Persons Deemed Owners.
The Trustee, the Securities Administrator, the Certificate Insurer and any
agent of 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 Trustee, the Certificate Insurer or
the Securities Administrator, or any agent of the Trustee or the Securities
Administrator shall be affected by any notice to the contrary.
SECTION 6.05. 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 Depositor shall request such information in writing from the
Securities Administrator, then the Securities Administrator shall, within ten
Business Days after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of 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 6.06. 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 Class ES, Class R and Class X Certificates shall be definitive
certificates. The Book-Entry Certificates shall initially be registered on the
Certificate 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 6.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Securities Administrator 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 6.08, the
Depository will make book-entry
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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 6.07. 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 6.08. 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 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, at its sole option, advises the Securities Administrator and the
Trustee that it elects to terminate the book-entry system with respect to such
Certificates through the Depository 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, 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 Authenticating Agent shall authenticate and
the Securities Administrator shall 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
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Certificates and the Securities Administrator shall recognize the Holders of
such Definitive Certificates as Certificateholders hereunder.
SECTION 6.09. 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 0000 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxx 00000, Attention: Worldwide Securities Services, Terwin Mortgage
Trust 2005-16HE 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.
SECTION 6.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents
(each, an "Authenticating Agent") which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates. Wherever reference is made in
this Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. If the Authenticating Agent is a party other than
the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Authenticating Agent. The Trustee
hereby appoints JPMorgan as the initial Authenticating Agent. The Trustee shall
be the Authenticating Agent during any such time as no other Authenticating
Agent has been appointed and has not resigned.
(b) Any Person into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any Person succeeding to the corporate
agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving
at least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance within the provisions of this Section
6.10, the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 6.10. No Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any Authenticating Agent (except the Securities Administrator) shall be entitled
to reasonable compensation for its services and any such compensation shall be
payable solely by the Trust Fund, without any right of reimbursement from the
Depositor, the Servicer, the Securities Administrator, the
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Servicing Administrator or the Trustee; provided that the Securities
Administrator shall not be entitled to any additional compensation for serving
as Authenticating Agent.
SECTION 6.11. Trustee To Act with Consent of the Certificate
Insurer.
(a) Unless a Certificate Insurer Default exists, the Trustee shall
not, without the Certificate Insurer's consent or unless directed by the
Certificate Insurer (a) terminate the rights and obligations of a Servicer as
Servicer pursuant to Section 8.01, (b) agree to any amendment pursuant to
Section 11.01 or (c) undertake any litigation related to the Trust Fund.
(b) The Certificate Insurer may, in writing and in its sole
discretion renounce all or any of its rights under this Agreement or any
requirement for the Certificate Insurer's consent for any period of time.
SECTION 6.12. Mortgage Loans, Trust Fund Held for Benefit of
Certificate Insurer and Holders of Certificates.
(a) The Trustee shall hold the Trust Fund and, through the
Custodian, the Custodial Files for the benefit of the Certificateholders and the
Certificate Insurer and all references in this Agreement and in the Certificates
to the benefit of Holders of the Certificates shall be deemed to include the
Certificate Insurer. The Trustee shall follow all reasonable instructions and
requests of the Certificate Insurer to assist it to take action to preserve or
enforce the Certificate Insurer's rights or interests under this Agreement
unless a Certificate Insurer Default exists.
(b) The Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders and for the
benefit of the Certificate Insurer, and all references in this Agreement to the
benefit of or actions on behalf of the Certificateholders shall be deemed to
include the Certificate Insurer.
ARTICLE VII
THE DEPOSITOR, THE SERVICING ADMINISTRATOR, THE SERVICER AND THE
SECURITIES ADMINISTRATOR
SECTION 7.01. Respective Liabilities of the Depositor, the Servicing
Administrator, the Servicer and the Securities Administrator.
The Depositor, the Servicing Administrator, 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 7.02. Merger or Consolidation of the Depositor, the
Servicing Administrator, the Servicer or the Securities Administrator.
Except as provided in the next paragraph, the Depositor, the Servicing
Administrator, the Servicer and the Securities Administrator will each keep in
full effect its existence, rights and franchises as a corporation or banking
association under the laws of the United States or under the laws of one of the
States thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
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Any Person into which the Depositor, the Servicing Administrator, 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
Servicing Administrator, the Servicer or the Securities Administrator shall be a
party, or any Person succeeding to the business of the Depositor, the Servicing
Administrator, the Servicer or the Securities Administrator, shall be the
successor of the Depositor, the Servicing Administrator or 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 7.03. Limitation on Liability of the Depositor, Servicing
Administrator, the Servicer, the Backup Servicer, the Trustee, the Securities
Administrator and Others.
None of the Depositor, the Servicing Administrator, the Servicer, the
Backup Servicer, the Trustee, the Securities Administrator nor any of the
directors, officers, employees or agents of the Depositor, the Servicing
Administrator, the Servicer, the Backup Servicer, the Trustee 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
Servicing Administrator, the Servicer, the Backup Servicer, the Trustee, the
Securities Administrator or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicing Administrator, the Servicer, the Backup Servicer, the Trustee, 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 Servicing Administrator, the Servicer,
the Backup Servicer, the Trustee or the Securities Administrator and any
director, officer, employee or agent of the Depositor, the Servicing
Administrator, the Servicer, the Backup Servicer, the Trustee 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 Servicing Administrator, the Servicer, the Backup
Servicer, the Trustee, the Securities Administrator and any director, officer,
employee or agent of the Depositor, the Servicing Administrator, the Servicer,
the Backup Servicer, the Trustee 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 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. None of the Depositor, the Servicing
Administrator, the Servicer, the Backup Servicer, the Trustee 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 Servicing Administrator, the Servicer,
the Backup Servicer, the Trustee or the Securities Administrator its discretion
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 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
Servicing Administrator, the Servicer, the Backup Servicer, the Trustee 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 Servicing Administrator, the Backup Servicer, the Trustee
and Securities Administrator shall be entitled to be reimbursed out of the
Certificate Account or the Servicing Administrator Collection Account, as
provided by Section 3.08 hereof, for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Servicing Administrator, the
Backup Servicer, the Trustee 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 the Servicing
Administrator, the Backup Servicer, Trustee or Securities Administrator acting
in its respective capacity hereunder and (B) to the extent that the Securities
Administrator or the Trustee 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 trustee, 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).
On each Distribution Date, the Securities Administrator shall be entitled
to the Securities Administrator Fee as compensation for its services hereunder.
SECTION 7.04. Limitation on Resignation of the 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 and the Securities Administrator. No such
resignation shall become effective until the Backup Servicer (or other successor
servicer) reasonably acceptable to the Securities Administrator (with the
consent of the Certificate Insurer) 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 Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer.
The Securities Administrator and the Depositor hereby specifically (i)
consent to the pledge and assignment by the Servicer of all of the Servicer's
right, title and interest in, to and under this Agreement to the Servicing
Rights Pledgee, 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,
the Trustee shall appoint the Servicing Rights Pledgee or its designee 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
as set forth herein and 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 (except if such successor Servicer is appointed by the
Servicing Rights Owner) the entire amount of the Aggregate Servicing Fee and
other compensation payable to the Servicer pursuant hereto shall thereafter be
payable to such successor Servicer, and, notwithstanding anything to the
contrary herein, the SLS Servicing Fee Rate shall be deemed to be 0.500% per
annum.
Notwithstanding the foregoing, at the Servicing Rights Owner's request,
the Servicer shall resign upon the selection and appointment of a successor
Servicer by the Servicing Rights Owner; provided that (a) the Certificate
Insurer consents to such resignation and appointment, (b) the Servicing Rights
Owner delivers to the Trustee and the Securities Administrator the letter
required pursuant to the paragraph above and (c) such successor Servicer
designated by the Servicing Rights Owner meets the eligibility requirements for
a successor Servicer. Upon such appointment, such successor Servicer will become
the
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Servicer pursuant to the terms of this Agreement. JPMorgan Chase Bank, N.A., may
at its sole discretion elect not to act as Backup Servicer with respect to such
successor Servicer.
Except as expressly provided herein, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Servicer from designating a Subservicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.02, no Subservicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Subservicer as an indemnitee under this Agreement. Notwithstanding the
foregoing, the Servicing Rights Owner may finance, pledge or assign all of its
right, title and interest in, to and under this Agreement to one or more lenders
(each, a "Servicing Rights Pledgee") selected by the Servicing Rights Owner.
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). Any such Fidelity
Bond and Errors and Omissions Insurance Policy shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of the Servicer Employees. Each Fidelity Bond
and Errors and Omissions Insurance Policy also shall protect and insure the
Servicer against losses in connection with the release or satisfaction of a
related Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.19 requiring such
Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by FNMA. The Servicer
will furnish a copy of the Fidelity Bond or Errors and Omissions Insurance
Policy to the Trustee upon request.
SECTION 7.06. Limitation on Resignation of the Servicing
Administrator and the Backup Servicer.
Neither the Servicing Administrator nor the Backup Servicer shall resign
from the obligations and duties hereby imposed on it except upon determination
that its duties hereunder are no longer permissible under applicable law or
unless a successor servicer has been appointed. Any such determination
permitting the resignation of the Servicing Administrator or the Backup Servicer
shall be evidenced by an Opinion of Counsel at the expense of the Servicing
Administrator or the Backup Servicer, as applicable, to such effect delivered to
the Trustee and the Securities Administrator. No such resignation shall become
effective until a successor Servicing Administrator or successor Backup Servicer
reasonably acceptable to the Securities Administrator and the Certificate
Insurer is appointed and has assumed the Servicing Administrator's or the Backup
Servicer's, as applicable, responsibilities, duties, liabilities and obligations
hereunder. Any such resignation shall not relieve the Servicing Administrator or
the Backup Servicer of any of the obligations specified in Sections 7.01 and
7.02 as obligations that survive the resignation or termination of the Servicing
Administrator or the Backup Servicer.
SECTION 7.07. Assignment by Backup Servicer and Servicing
Administrator.
The Backup Servicer may sell and assign its rights and delegate its duties
and obligations in its entirety as Backup Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee
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accept in writing such assignment and delegation and assume the obligations of
the Backup Servicer hereunder and (a) shall be a Person which shall be qualified
to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac or a Person who has an
Affiliate who is so qualified; (b) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Depositor, the
Certificate Insurer and the Trustee; and (d) shall execute and deliver to the
Trustee and the Certificate Insurer an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as Backup 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 Backup 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 Backup Servicer and the Trustee; and (iii) the
Backup Servicer assigning and selling the backup 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 Backup Servicer arising out of acts or omissions prior to the effective date
thereof.
The Servicing Administrator may sell and assign its rights and delegate
its duties and obligations in its entirety as Servicing Administrator under this
Agreement; provided, however, that: (i) any purchaser or transferee must accept
in writing such assignment and delegation and assume the obligations of the
Servicing Administrator hereunder and shall (a) be a Person which shall be
qualified to service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac or a Person
who has an Affiliate who is qualified; (b) have a net worth of not less than
$15,000,000 (unless otherwise approved by the Rating Agencies pursuant to clause
(ii) below); (c) be reasonably satisfactory to the Trustee, the Depositor and
the Certificate Insurer; and (d) execute and deliver to the Trustee and the
Certificate Insurer an agreement, in form and substance reasonably satisfactory
to the Trustee, which contains an assumption by such Person of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by it as Servicing Administrator under this Agreement, any
custodial agreement from and after the effective date of such agreement; (ii)
the Rating Agencies shall be given prior written notice of the identity of the
proposed successor to the Servicing Administrator 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 Servicing Administrator and the Trustee; and (iii) the
Servicing Administrator 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 Servicing Administrator arising out of acts or omissions prior to the
effective date thereof.
SECTION 7.08. Limitation Upon Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trust Fund or the
Certificateholders, for any action taken or for refraining from the taking of
any action made in good faith pursuant to this Agreement or the Credit Risk
Management Agreement, in reliance upon information provided by the Servicer
under the Credit Risk Management Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance, gross negligence or bad faith in its performance of its
duties or by reason of reckless
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disregard for its obligations and duties under this Agreement or the applicable
Credit Risk Management Agreement. The Credit Risk Manager and any director,
officer, employee, or agent of the Credit Risk Manager may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder, and may rely in good faith upon
the accuracy of information furnished by the Servicer pursuant to the Credit
Risk Management Agreement in the performance of its duties thereunder and
hereunder.
ARTICLE VIII
DEFAULT; TERMINATION OF SERVICER
SECTION 8.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer or the Servicing
Administrator, as applicable, to make any Advance, to deposit in the Collection
Account, the Certificate Account or the Servicing Administrator Collection
Account or remit to the Securities Administrator any payment (excluding a
payment required to be made from its own funds under Section 5.01 hereof)
required to be made under the terms of this Agreement, which failure shall
continue unremedied for one Business Day after the date on which written notice
of such failure shall have been given to the Servicer or the Servicing
Administrator, as applicable, by the Securities Administrator, the Certificate
Insurer or the Depositor, or to the Securities Administrator and the Servicer or
the Servicing Administrator, as applicable, by the Holders of Certificates
evidencing not less than 50% of the Voting Rights evidenced by the Certificates;
or
(ii) any failure by the Servicer or the Servicing
Administrator, as applicable, to observe or perform in any material respect any
other of the covenants or agreements on the part of the Servicer or the
Servicing Administrator, as applicable 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 30 days after the date on which
written notice of such failure shall have been given to the Servicer or the
Servicing Administrator, as applicable, by the Securities Administrator, the
Certificate Insurer or the Depositor, or to the Securities Administrator by the
Holders of Certificates evidencing not less than 50% of the Voting Rights
evidenced by the Certificates; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or similar
law or the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicing Administrator or the Servicer and, if
such proceeding is being contested by the Servicing Administrator or the
Servicer in good faith, such decree or order shall have remained in force
undischarged or unstayed for a period of 90 days or results in the entry of an
order for relief of any such adjudication or appointment; or
(iv) consent by the Servicer or the Servicing
Administrator, as applicable, 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 the Servicing
Administrator, as applicable or all or substantially all of the property of the
Servicer or the Servicing Administrator; or
(v) admission by the Servicer or the Servicing
Administrator, as applicable, in writing of its inability to pay its debts
generally as they become due, file a petition to take
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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) an SLS Event of Termination shall have occurred.
If an Event of Default shall occur with respect to the Servicer or the
Servicing Administrator, as applicable, 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 5:00 p.m.
on the Servicer Remittance Date or the Servicing Administrator Remittance Date,
as applicable, the Trustee may, or upon the receipt of instructions from the
Certificate Insurer or Certificateholders having greater than 50% of the voting
rights evidenced by the Certificates shall, by notice in writing to the Servicer
or the Servicing Administrator, as applicable (with a copy to the Trustee and
the Rating Agencies), terminate all of the rights and obligations of the
Servicer or the Servicing Administrator, as applicable 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 or the
Servicing Administrator, as applicable of such written notice, all authority and
power of the Servicer or the Servicing Administrator, as applicable, hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Securities Administrator. If an Event of Default described in
clause (i) hereof shall occur, the Trustee shall, upon a Responsible Officer of
the Trustee receiving actual knowledge of such Event of Default, by notice in
writing to the Servicer or the Servicing Administrator, as applicable, and the
Depositor, terminate all of the rights and obligations of the Servicing
Administrator or the Servicer, as applicable, in its capacity as Servicer or
Servicing Administrator, as applicable, under this Agreement and in and to the
Mortgage Loans and the proceeds thereof. The Securities Administrator is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer or
the Servicing Administrator, as applicable, and the Trustee, 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 or the Servicing Administrator, as
applicable, to pay amounts owed pursuant to Article VIII. The Servicer or the
Servicing Administrator, as applicable, agrees to cooperate with the Securities
Administrator in effecting the termination of the Servicer's or the Servicing
Administrator, as applicable, responsibilities and rights hereunder, including,
without limitation, the transfer to the Securities Administrator 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
Servicing Administrator and the Securities Administrator hereby agree that it
shall promptly notify the Rating Agencies of the occurrence of an Event of
Default relating to such Person 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 or the
Servicing Administrator, as applicable, hereunder, the Servicer or the Servicing
Administrator, as applicable 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 or the Servicing Administrator's rights and
obligations as Servicer or the Servicing Administrator, as applicable, hereunder
and received after such notice, that portion thereof to which the Servicer or
the Servicing Administrator, as applicable would have been entitled pursuant to
Sections 3.08(a)(i) through (viii), and any other amounts payable to the
Servicer or the Servicing Administrator, as applicable 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 or the Servicing Administrator, as applicable, hereunder, any
liabilities of the Servicer or the Servicing Administrator, as applicable, which
accrued prior to such termination shall survive such termination.
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Notwithstanding the above, if an Event of Default described in clauses
(a)(ii) through (a)(vi) of this Section 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, the Servicing Rights Owner shall have 30
days to appoint a successor Servicer, provided that (a) the Certificated Insurer
consents to such resignation and appointment, (b) the Rating Agencies have
confirmed to the Trustee and the Securities Administrator that the appointment
of the proposed successor servicer as the Servicer will not result in the
reduction or withdrawal of the then current ratings of the Certificates and (c)
such successor Servicer meets the eligibility requirement for a successor
Servicer.
SECTION 8.02. Securities Administrator to Act; Servicing
Administrator and Backup Servicer to Act; Appointment of Successor.
(a) On and after the time the Servicing Administrator or the
Servicer receives a notice of termination, the Securities Administrator (in the
case of the Servicing Administrator), or the Backup Servicer (in the case of
SLS) shall be the successor in all respects to the Servicing Administrator or
the Servicer, as applicable, in its capacity as Servicing Administrator or
servicer under this Agreement and the transactions set forth or provided for
herein, and all the responsibilities, duties and liabilities relating thereto
and arising thereafter shall be assumed by the Securities Administrator (except
for any representations or warranties of the Servicing Administrator under this
Agreement, the responsibilities, duties and liabilities contained in Section
2.03) (in the case of the Servicing Administrator), or the Backup Servicer
(except for any representations and warranties of SLS contained in Section 2.03)
(in the case of SLS) by the terms and provisions hereof including, without
limitation, the Servicer's obligations to make Advances pursuant to Section 5.01
and subject Section 3.08; provided, however, that any failure to perform such
duties or responsibilities caused by the Servicing Administrator's or the
Servicer's failure to provide information required by Section 9.01 shall not be
considered a default by the Securities Administrator (in the case of the
Servicing Administrator), or the Backup Servicer (in the case of SLS) as
successor to the Servicer hereunder. As compensation therefore the Backup
Servicer (in the case of SLS) shall be entitled to the Aggregate Servicing Fee
and all other compensation to which the Servicer would have been entitled if it
had continued to act hereunder and the Securities Administrator (in the case of
the Servicing Administrator) shall be entitled to all compensation to which the
Servicing Administrator is entitled hereunder. Nothing in this Section 8.02(a)
shall require the Securities Administrator to make an Advance with respect to
any Mortgage Loan for which the Servicing Administrator or the Servicer was not
required to make such an advance or to the extent such entity is prohibited by
law or regulation from obligating itself to make such Advances.
(b) No appointment of a successor to the Servicing
Administrator or the Servicer under this Agreement shall be effective until the
assumption by the successor of all of the Servicing Administrator's or
Servicer's, as applicable, responsibilities, duties and liabilities hereunder.
In connection with such appointment and assumption described herein, the
Securities Administrator, the Servicing Administrator and the Backup 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
Servicing Administrator or Servicer as such hereunder. The Depositor, the
Securities Administrator, the Servicing Administrator, the Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Pending appointment of a successor
to the Servicing Administrator or the Servicer under this Agreement, the
Securities Administrator (in the case of the Servicing Administrator) or the
Backup Servicer (in the case of SLS) shall act in such capacity as hereinabove
provided.
(c) (1) In the event of an SLS Event of Termination,
notwithstanding anything to the contrary above, the Trustee, the Servicing
Administrator, the Backup Servicer and the Depositor hereby agree that upon
delivery to the Trustee, the Securities Administrator, the Certificate
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Insurer, the Servicing Administrator and the Backup Servicer by the Servicing
Rights Pledgee of a letter signed by the Servicing Rights Pledgee within 10 days
of when the terminated Servicer provides the Servicing Rights Pledgee notice of
a SLS Event of Termination related to it, 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 in paragraph (c)(3) below and the
Servicing Rights Pledgee or such designee agrees to be subject to the terms of
this Agreement.
(2) In the event that the Servicing Rights Pledgee does not deliver to the
Trustee, the Securities Administrator, the Servicing Administrator and the
Backup Servicer the letter described in preceding paragraph within the 10-day
period referred to in the preceding paragraph and a successor servicer is not
appointed pursuant to Section 8.02(c), then the Backup Servicer shall be the
successor in all respects to the Servicer in the manner set forth in Section
8.02(a) hereof.
(3) It is understood and acknowledged by the parties hereto that (a) there
will be a period of transition (not to exceed 90 days when servicing is being
transferred to the Backup Servicer) before the actual servicing functions can be
fully transferred to any successor Servicing Administrator or Servicer appointed
in accordance with the provisions hereof and (b) any failure to perform such
duties or responsibilities caused by the Servicing Administrator's or the
Servicer's, as applicable, failure to provide information required by Section
9.01 shall not be considered a default by the Securities Administrator (in the
case of the Servicing Administrator) or the Backup Servicer (in the case of SLS)
as successor to the Servicing Administrator or the Servicer, as applicable,
hereunder. Notwithstanding the above and subject to the immediately following
paragraph, the Securities Administrator, the Servicing Administrator or the
Backup Servicer, as applicable, may, if it shall be unwilling to so act, or
shall, if it is unable to so act promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to the Rating Agencies and the Certificate Insurer and
having a net worth of not less than $15,000,000, as the successor to the
Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under this Agreement.
Notwithstanding anything to the contrary herein, any successor Servicing
Administrator or Servicer appointed pursuant to this Section 8.02(c)(2) shall
agree to fully effect the servicing transfer within the 90-day or 30-day period
referred to in Section 8.02(c)(2) above and to make all Advances that would
otherwise be made by another party under Section 8.01 as of the date of such
appointment. Each successor Servicing Administrator and Servicer shall be
entitled to reimbursement for any unreimbursed Advances it has made in
connection with this Section 8.02 pursuant to Section 3.08. In addition, any
successor to the Servicer shall give notice to the Mortgagors of such change of
Servicer and shall, during the term of its service as the Servicer, maintain in
force the policy or policies that the Servicer is required to maintain pursuant
to this Agreement.
(d) In connection with the termination or resignation of the
Servicer hereunder, (i) the successor Servicer, including the Servicing
Administrator or Backup Servicer, as applicable, shall represent and warrant
that it or an Affiliate is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Servicer shall cooperate with the successor
Servicer in causing MERS to revise its records to reflect the transfer of
servicing to the successor Servicer as necessary under MERS' rules and
regulations, and (ii) the predecessor Servicer shall cooperate with the
successor Servicer in causing MERS to transfer the servicing of such Mortgage
Loan on the MERS(R) System to the successor Servicer. The predecessor Servicer
shall file or cause to be filed any such assignment in the appropriate recording
office. The predecessor Servicer, as applicable, shall bear any and all fees of
MERS, costs of preparing any assignments of Mortgage, and fees and costs of
filing any assignments of Mortgage that may be required under this Section 8.02.
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SECTION 8.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Securities Administrator and the Rating Agencies.
(b) Within 60 days after the occurrence of any Event of
Default of which a Responsible Officer of the Trustee has actual knowledge, the
Trustee shall transmit by mail to all Certificateholders and the Securities
Administrator notice of each such Event of Default hereunder known to the
Trustee, unless such Event of Default shall have been cured or waived.
SECTION 8.04. Waiver of Servicer Events of Default.
The Holders representing at least 66 2/3% of the Voting Rights evidenced
by all Classes of Certificates affected by any SLS Event of Termination
hereunder, may, with the consent of the Certificate Insurer, waive such SLS
Event of Termination; provided, however, that a SLS Event of Termination under
clause (i) or (vi) of Section 8.01 may be waived only by all of the Holders of
the Regular Certificates. Upon any such waiver of an Event of Default, such
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent Event
of Default or impair any right consequent thereon except to the extent expressly
so waived.
SECTION 8.05. SLS Events of Termination.
(a) "SLS Event of Termination," wherever used herein, means
any one of the following events:
(i) any failure by SLS to provide the monthly data tape
to the Backup Servicer, which failure continues for three Business Days after
the date such action is required hereunder;
(ii) SLS fails to make the Advance required pursuant to
Section 5.01 of this Agreement and such failure continues for two Business Days
after the date such action is required hereunder;
(iii) an SLS Financial Trigger Event occurs and is
continuing; or
(iv) an SLS Cross Default occurs.
ARTICLE IX
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 9.01. Duties of the Trustee.
(a) The Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement as duties of the
Trustee. During the continuance of an Event of Default, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs. Any permissive right of the Trustee enumerated in this Agreement shall
not be construed as a duty.
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(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to it, which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform on their face to the requirements of this Agreement. If any
such instrument is found not to conform on their face to the requirements of
this Agreement, the Trustee shall take such action as it deems appropriate to
have the instrument corrected, and if the instrument is not corrected to its
satisfaction, the Trustee will provide notice to the Certificateholders.
Notwithstanding the foregoing, the Trustee shall have no obligation to
reconcile, recompute or recalculate any remittances or reports of the Servicer,
and the Trustee may fully rely upon and shall have no liability with respect to
information provided by the Servicer, the Securities Administrator, the
Servicing Administrator, the Custodian, the Backup Servicer or the Depositor.
(c) The Trustee shall promptly remit to the Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to a Responsible Officer of the Trustee at is
Corporate Trust Office, and (ii) contains information sufficient to permit the
Trustee to make a determination that the real property to which such document
relates is a Mortgaged Property. The Trustee shall have no duty hereunder with
respect to any Notice it may receive or which may be alleged to have been
delivered to or served upon it unless such Notice is delivered to it or served
upon a Responsible Officer of the Trustee at its Corporate Trust Office and such
Notice contains the information required pursuant to clause (ii) of the
preceding sentence.
(d) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement; the Trustee shall
not be liable except for the performance of 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 and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee that conform to the
requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee unless it
shall be proved that the Trustee was negligent in ascertaining or investigating
the facts related thereto;
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in good faith
in accordance with the consent or at the direction of Holders of Certificates as
provided herein relating to the time, method and place of conducting any remedy
pursuant to this Agreement, or exercising or omitting to exercise any trust or
power conferred upon the Trustee under this Agreement; and
(iv) The Trustee shall not be required to expend or risk
its own funds or otherwise incur financial or other liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or indemnity satisfactory to it against such risk or liability is not
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer, the Securities
Administrator, the Servicing Administrator, the Custodian or the Backup Servicer
under this Agreement.
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(v) 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 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 9.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 9.01:
(i) The Trustee 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 reasonably believed by it to
be genuine and to have been signed or presented by the proper party or parties,
and the manner of obtaining consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe;
(ii) The Trustee may consult with counsel of its
selection and any advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) The Trustee shall not be under any obligation to
exercise any of the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities which may be incurred therein or
thereby;
(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(v) Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates entitled to at least 25% of the Voting Rights; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee not reasonably assured to the
Trustee by such Certificateholders, the Trustee may require reasonable indemnity
satisfactory to it against such expense, or liability from such
Certificateholders as a condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, attorneys or a custodian, and shall not be responsible for any
misconduct or negligence on the part of any agent, nominee, attorney or
custodian appointed by the Trustee in good faith; and
(vii) The Trustee shall not be liable 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) The Trustee shall not be deemed to have notice of
any Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by a Responsible Officer of the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Certificates and
this Agreement. The Trustee shall not have any responsibility or liability for
any action or failure to act by the Servicing Administrator, the Securities
Administrator, the Custodian, the Backup Servicer or the Servicer nor shall the
Trustee be obligated to supervise or monitor the performance of the Servicing
Administrator, Backup Servicer, Securities Administrator, Custodian or the
Servicer hereunder or otherwise;
(ix) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, each agent, custodian
and other Person employed to act hereunder;
(x) The right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed as a duty,
and the Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(xi) The Depositor and the Seller hereby approve of the
appointment of the Custodian to act as custodian pursuant to the Custodial
Agreement and the Securities Administrator to act as authenticating agent
hereunder and each further agree that the Trustee appointed the Custodian to act
as custodian and the Securities Administrator with due care;
(xii) if requested by the Servicer, the Trustee may
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 and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and
(xiii) The Trustee is directed to enter into any Letter
Agreement necessary to provide for the setting of the SLS Servicing Fee Rate.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Trustee be liable to any Person for any act or
omission of the Servicing Administrator, the Backup Servicer, the Servicer or
the Securities Administrator or the Custodian.
SECTION 9.03. The Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other than the
authentication and countersignature on the Certificates which are the
certification of the authenticating agent) shall be taken as the statements of
the Seller, and neither the Trustee nor the Certificate Registrar assumes any
responsibility for the correctness of the same. The Trustee does not make any
representations or warranties as to the validity or sufficiency of this
Agreement, the Custodial Agreement or of the Certificates (other than the
signature on behalf of the Trust on the Certificates) or of any Mortgage Loan
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or related document or of MERS or the MERS System or the Trust Fund. The Trustee
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor in respect of the Mortgage Loans
or deposited in or withdrawn from the Collection Account by the Servicer. The
Trustee shall not have any 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 such recording, filing or depositing 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 9.04. The Trustee May Own Certificates.
The Trustee, in its individual capacity, or in any capacity other than as
Trustee, may become the owner or pledgee of any Certificates with the same
rights as it would have if it was not the Trustee, and may otherwise deal with
the parties hereto.
SECTION 9.05. Trustee's Fees and Expenses.
The Trustee shall be paid by the Securities Administrator from the fee
paid to the Securities Administrator pursuant to an agreement between the
Trustee and the Securities Administrator. In addition, the Trustee and its
officers, directors, employees and agents will be entitled to recover from the
Certificate Account, the Collection Account and the Servicing Administrator
Collection Account, and shall be indemnified from the Trust Fund for, all
reasonable out-of-pocket expenses, disbursements and advances, upon any Event of
Default, any breach of this Agreement or the Custodial Agreement or any loss,
liability, expense, claim or legal action (including any pending or threatened
claim or legal action) incurred or made by any of them in the performance of
their duties or the administration of the trusts hereunder or under the
Custodial Agreement (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, loss, liability,
disbursement or advance (i) as may arise from its negligence or intentional
misconduct or (ii) that does not constitute an "unanticipated expense" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii); provided,
however, that any recoveries pursuant to this sentence shall not exceed $500,000
per year prior to disbursements to the Certificateholders and thereafter any
recoveries shall be limited to any excess amounts pursuant to Section
5.05(g)(iii). If funds in the Certificate Account, the Collection Account and
the Servicing Administrator Collection Account are insufficient therefor, the
Trustee shall recover such expenses from future collections on the Mortgage
Loans or as otherwise agreed by the Certificateholders. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust. Such obligations shall
survive the termination of this Agreement and the removal or resignation of the
Trustee.
SECTION 9.06. [RESERVED].
SECTION 9.07. Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be an entity duly organized and
validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, and
shall each have a combined capital and surplus of at least $50,000,000, a
minimum long-term debt rating in the third highest rating category by a Rating
Agency, a minimum short-term debt rating in the second highest rating category
by a Rating Agency, and shall each be subject to supervision or examination by
federal or state authority. If such entity publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority,
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then for the purposes of this Section 9.07, the combined capital and surplus of
such entity shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time such
Trustee is appointed Trustee to the effect that the Trust will not be a taxable
entity under the laws of such state. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 9.07, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.08 hereof.
SECTION 9.08. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice thereof to the Depositor, the Seller, the
Servicing Administrator, the Backup Servicer, the Servicer, the Certificate
Insurer and the Rating Agencies. Upon receiving such notice of resignation of
the Trustee, the Depositor shall promptly appoint a successor Trustee that meets
the requirements in Section 9.07, by written instrument, in duplicate, one copy
of which instrument shall be delivered to each of the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 9.07 hereof or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a 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, then the
Depositor may remove the Trustee. If the Depositor removes the Trustee under the
authority of the immediately preceding sentence, the Depositor shall promptly
appoint a successor Trustee that meets the requirements of Section 9.07, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the successor Trustee and one copy to each of the Servicing
Administrator, the Backup Servicer and the Servicer.
The Certificate Insurer or the Holders of Certificates entitled to at
least 51% of the Voting Rights (with the consent of the Certificate Insurer) may
at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee so removed and
one complete set to the successor so appointed. A copy of such instrument shall
be delivered to the Certificateholders, the Trustee and the Servicing
Administrator, the Backup Servicer, the Certificate Insurer and the Servicer by
the Depositor.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 9.08 shall not become
effective until acceptance of appointment by the successor Trustee, as provided
in Section 9.10 hereof.
SECTION 9.09. [RESERVED].
SECTION 9.10. Successor Trustee.
Any successor Trustee appointed as provided in Section 9.08 hereof shall
execute, acknowledge and deliver to the Depositor, the Seller, the Servicer, the
Backup Servicer, the Certificate Insurer, the Servicing Administrator and to its
predecessor Trustee 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
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all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee. The Depositor, the Seller,
the Servicer, the Backup Servicer, the Certificate Insurer, the Servicing
Administrator and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee, all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
9.10 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 9.07 hereof and the appointment of such
successor Trustee shall not result in a downgrading of the Classes of
Certificates rated by the Rating Agencies, as evidenced by a letter from each
Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 9.10, the successor Trustee shall mail notice of such appointment
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register and to the Rating Agencies.
SECTION 9.11. Merger or Consolidation of the Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee shall be the successor of the Trustee hereunder, provided such
corporation or association shall be eligible under the provisions of Section
9.07, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 9.12. 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 Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Certificate Insurer, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 9.12, such powers, duties, obligations, rights
and trusts as the Depositor and the Trustee may consider necessary or desirable.
If the Depositor 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
9.07 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 9.10.
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) To the extent necessary to effectuate the purposes
of this Section 9.12, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee in its
capacity as successor servicer 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
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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 set or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicing Administrator, Backup Servicer or 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 such
appointment shall not, and shall not be deemed to, constitute any such separate
trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable
for the payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. 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
Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 9.13. 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 and grantor trusts 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
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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 SS-4 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 tax law or with respect to the grantor trusts provided for herein,
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 to herein or result in the imposition of tax upon any such grantor
trusts; (i) pay, from the sources specified in the last paragraph of this
Section 9.13(a), the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on each of the REMICs
or grantor trusts 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 by the required person
federal, state or local income tax or information returns; (k) maintain records
relating to each of the REMICs and grantor trusts provided 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, in each instance, to the extent provided
by the Servicer; and (l) as and when necessary and appropriate, represent each
of the REMICs and grantor trusts 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 and grantor trusts provided for herein in relation to any
tax matter involving any of such REMICs or any controversy involving the Trust
Fund. The Trustee agrees to sign such tax returns prepared by the Securities
Administrator pursuant to this Agreement as may be required by applicable law.
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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 Trustee, if any such other tax arises out of or results from a breach by
the Trustee of any of its obligations under this Agreement or as a result of the
location of the Trustee, (ii) any party hereto (other than the Trustee) 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 Supplemental Interest Trust from a payment on the Swap Agreement)
otherwise to be distributed to the Class R Certificateholder pursuant to Section
5.05, and second with amounts (other than amounts derived by the Supplemental
Interest Trust from a payment on the Swap Agreement) otherwise to be distributed
to all other Certificateholders in the following order of priority: first, to
the Class X Certificates (pro rata), second, to the Class B-3 Certificates (pro
rata), third, to the Class B-2 Certificates (pro rata), fourth to the Class B-1
Certificates (pro rata), fifth, to the Class M-6 Certificates (pro rata), sixth,
to the Class M-5 Certificates (pro rata), seventh, to the Class M-4 Certificates
(pro rata), eighth, to the Class M-3 Certificates, ninth, to the Class M-2
Certificates, tenth, to the Class M-1 Certificates and eleventh, to the Class A
and Class R Certificates (pro rata). Notwithstanding anything to the contrary
contained herein, to the extent that such tax is payable by the Class R
Certificate, the Trustee is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holder 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 Trustee 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.
(b) Each of the Depositor, the Securities Administrator and the Trustee
agrees not to knowingly or intentionally take any action or omit to take any
action that would (i) 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 or (ii) cause the termination of the grantor trust
status of any of the grantor trusts provided for herein or result in the
imposition of a tax upon any of the grantor trusts provided for herein.
SECTION 9.14. Duties of Securities Administrator.
(a) The Securities Administrator undertakes to perform such
duties and only such duties as are specifically set forth in this Agreement as
duties of the Securities Administrator. Any
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permissive right of the Securities Administrator enumerated in this Agreement
shall not be construed as a duty.
(b) The Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to it, which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement; provided,
however, that the Securities Administrator shall not be responsible for the
accuracy or content of any resolution, certificate statement, opinion, report,
document, order or other instrument furnished by the Servicer, the Servicing
Administrator, or the Depositor. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Securities
Administrator shall take such action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to its
satisfaction, the Securities Administrator will provide notice to the
Certificateholders. Notwithstanding the foregoing, the Securities Administrator
shall have no obligation to reconcile, recompute or recalculate any remittances
or reports of the Servicer, and the Securities Administrator may fully rely upon
and shall have no liability with respect to information provided by the
Servicer.
(c) On each Distribution Date, the Securities Administrator,
as paying agent, shall make monthly distributions and the final distribution to
the Certificateholders from funds in the Certificate Account as provided in
Sections 6.01 and 10.02 herein.
(d) No provision of this Agreement shall be construed to
relieve the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) The duties and obligations of the Securities
Administrator shall be determined solely by the express provisions of this
Agreement; the Securities Administrator shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement; no implied covenants or obligations shall be read into this Agreement
against the Securities Administrator and, in the absence of bad faith on the
part of the Securities Administrator, 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
Securities Administrator that conform to the requirements of this Agreement;
(ii) The Securities Administrator shall not be liable
for an error of judgment made in good faith by a Responsible Officer of the
Securities Administrator unless it shall be proved that the Securities
Administrator was negligent in ascertaining or investigating the facts related
thereto;
(iii) The Securities Administrator shall not be
personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the consent or at the direction of
Holders of Certificates as provided herein relating to the time, method and
place of conducting any remedy pursuant to this Agreement, or exercising or
omitting to exercise any trust or power conferred upon the Securities
Administrator under this Agreement; and
(iv) The Securities Administrator shall not be required
to expend or risk its own funds or otherwise incur financial or other liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it, and none of the provisions contained in this
Agreement shall in any event require the Securities Administrator to perform, or
be responsible for the manner of performance of, any of the obligations of the
Servicer under this Agreement, except during such time, if any, as the
Securities Administrator shall
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be the successor to, and be vested with the rights, duties, powers and
privileges of, the Servicing Administrator in accordance with the terms of this
Agreement.
SECTION 9.15. Certain Matters Affecting the Securities
Administrator.
(a) Except as otherwise provided in Section 9.14:
(i) The Securities Administrator may request and
conclusively rely upon, and shall be fully protected in acting or refraining
from acting upon, any resolution, Officers' Certificate, certificate of auditors
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the proper
party or parties, and the manner of obtaining 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;
(ii) The Securities Administrator may consult with
counsel of its selection and any advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) The Securities Administrator shall not be under
any obligation to exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Securities Administrator reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
(iv) The Securities Administrator shall not be
personally liable for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Securities Administrator shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing to
do so by the Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time to the
Securities Administrator of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Securities Administrator not reasonably assured to the Securities Administrator
by such Certificateholders, the Securities Administrator may require reasonable
indemnity satisfactory to it against such expense, or liability from such
Certificateholders as a condition to taking any such action;
(vi) The Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, attorneys or a custodian, and shall not be
responsible for any misconduct or negligence on the part of any agent, nominee,
attorney or custodian appointed by the Securities Administrator in good faith;
(vii) The Securities Administrator shall not be liable
for any loss on any investment of funds pursuant to this Agreement (other than
as issuer of the investment security);
(viii) The Securities Administrator shall not be deemed
to have notice of any Event of Default unless a Responsible Officer of the
Securities Administrator has actual knowledge thereof or unless written notice
of any event which is in fact such a default is received by the
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Securities Administrator at the Corporate Trust Office of the Securities
Administrator, and such notice references the Certificates and this Agreement.
The Securities Administrator shall not have any responsibility or liability for
any action or failure to act by the Servicing Administrator, Backup Servicer or
the Servicer nor shall the Securities Administrator be obligated to supervise or
monitor the performance of the Servicing Administrator, Backup Servicer or the
Servicer hereunder or otherwise;
(ix) The rights, privileges, protections, immunities and
benefits given to the Securities Administrator, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, each
agent, custodian and other Person employed to act hereunder;
(x) The right of the Securities Administrator to perform
any discretionary act enumerated in this Agreement shall not be construed as a
duty, and the Securities Administrator shall not be answerable for other than
its negligence or willful misconduct in the performance of such act; and
(xi) The Depositor and the Seller hereby approve of the
appointment of Deutsche Bank National Trust Company to act as custodian pursuant
to the Custodial Agreement and each further agrees that the Custodian was
appointed to act as custodian with due care.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Securities Administrator, may be enforced
by it without the possession of any of the Certificates, or the production
thereof at the trial or other proceeding relating thereto, and any such suit,
action or proceeding instituted by the Securities Administrator shall be brought
in its name for the benefit of all the Holders of such Certificates, subject to
the provisions of this Agreement.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Securities Administrator be liable to any Person
for any act or omission of the Servicing Administrator, the Backup Servicer, the
Servicer or the Custodian.
SECTION 9.16. Securities Administrator Not Liable for Certificates
or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication and countersignature on the Certificates) shall be taken as the
statements of the Seller, and neither the Securities Administrator nor the
Certificate Registrar assumes any responsibility for the correctness of the
same. The Securities Administrator does not make any representations or
warranties as to the validity or sufficiency of this Agreement, the Custodial
Agreement or of the Certificates (other than the signature and countersignature
on the Certificates) or of any Mortgage Loan or related document or of MERS or
the MERS System. The Securities Administrator shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account by the Servicer. The Securities Administrator shall
not have any 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 such recording, filing or depositing 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.
SECTION 9.17. Securities Administrator May Own Certificates.
The Securities Administrator, in its individual capacities, or in any
capacity other than as Securities Administrator hereunder, may become the owner
or pledgee of any Certificates with the same
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rights as they would have if they were not Securities Administrator, and may
otherwise deal with the parties hereto.
SECTION 9.18. Fees and Expenses of the Securities Administrator.
The Securities Administrator shall be entitled to the Securities
Administrator Fee. In addition, the Securities Administrator and its officers,
directors, employees and agents will be entitled to recover from the Certificate
Account, Collection Account and Servicing Administrator Collection Account, and
shall be indemnified from the Trust Fund for, all reasonable out-of-pocket
expenses, disbursements and advances, upon any Event of Default, any breach of
this Agreement or the Custodial Agreement or any loss, liability, expense, claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by any of them in the performance of their duties or the
administration of the trusts hereunder or under the Custodial Agreement
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, loss, liability, disbursement or advance (i)
as may arise from its negligence or intentional misconduct or (ii) that does not
constitute an "unanticipated expense" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii); provided, however, that any recoveries pursuant to
this sentence shall not exceed $500,000 per year prior to disbursements to the
Certificateholders and thereafter any recoveries shall be limited to any excess
amounts pursuant to Section 5.05(g)(iii). If funds in the Certificate Account,
Collection Account and Servicing Administrator Collection Account are
insufficient therefor, the Securities Administrator shall recover such expenses
from future collections on the Mortgage Loans or as otherwise agreed by the
Certificateholders. Such compensation and reimbursement obligation shall not be
limited by any provision of law in regard to the compensation of a Securities
Administrator of an express trust. Such obligations shall survive the
termination of this Agreement and the removal or resignation of the Securities
Administrator.
SECTION 9.19. Eligibility Requirements for the Securities
Administrator.
The Securities Administrator hereunder shall at all times be an entity
duly organized and validly existing under the laws of the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, and shall each have a combined capital and surplus of at least
$50,000,000, a minimum long-term debt rating in the third highest rating
category by each Rating Agency, a minimum short-term debt rating in the second
highest rating category by a Rating Agency, and shall each be subject to
supervision or examination by federal or state authority. If such entity
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 9.19, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Securities
Administrator (other than the initial Securities Administrator) shall be in a
state with respect to which an Opinion of Counsel has been delivered to such
Securities Administrator at the time such Securities Administrator is appointed
Securities Administrator to the effect that the Trust will not be a taxable
entity under the laws of such state. In case at any time the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section 9.19, the Securities Administrator shall resign immediately in the
manner and with the effect specified in Section 9.20 hereof.
SECTION 9.20. Resignation and Removal of the Securities
Administrator.
The Securities Administrator (including the Securities Administrator as
paying agent and as Certificate Registrar) may at any time resign and be
discharged from the trust hereby created by giving written notice thereof to the
Depositor, the Seller, the Servicing Administrator, the Backup Servicer, the
Servicer and each Rating Agency. Upon receiving such notice of resignation of
the Securities Administrator, the Depositor shall promptly appoint a successor
Securities Administrator that meets the
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requirements in Section 9.19, by written instrument, in duplicate, one copy of
which instrument shall be delivered to each of the resigning Securities
Administrator and one copy to the successor Securities Administrator. If no
successor Securities Administrator shall have been so appointed and having
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Securities Administrator may petition any court of
competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of Section 9.19 hereof or if at any time the
Securities Administrator shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Securities Administrator or of its
property shall be appointed, or any public officer shall take charge or control
of the Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove the
Securities Administrator. If the Depositor removes the Securities Administrator
under the authority of the immediately preceding sentence, the Depositor shall
promptly appoint a successor Securities Administrator that meets the
requirements of Section 9.19, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the successor Securities Administrator
and one copy to each of the Servicing Administrator, the Backup Servicer and the
Servicer.
The Certificate Insurer or the Holders of Certificates entitled to at
least 51% of the Voting Rights (with the consent of the Certificate Insurer) may
at any time remove the Securities Administrator and appoint a successor
Securities Administrator by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, one complete set
to the Securities Administrator so removed and one complete set to the successor
so appointed. A copy of such instrument shall be delivered to the
Certificateholders, the Securities Administrator and the Servicing
Administrator, the Backup Servicer and the Servicer by the Depositor.
Any resignation or removal of the Securities Administrator and appointment
of a successor Securities Administrator pursuant to any of the provisions of
this Section 9.20 shall not become effective until acceptance of appointment by
the successor Securities Administrator, as provided in Section 9.21 hereof.
SECTION 9.21. Successor Securities Administrator.
Any successor Securities Administrator appointed as provided in Section
9.20 hereof shall execute, acknowledge and deliver to the Depositor, the Seller,
the Servicer, the Backup Servicer, the Certificate Insurer, the Servicing
Administrator and to its predecessor Securities Administrator an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Securities Administrator shall become effective, and such
successor Securities Administrator without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with like effect as if originally named as Securities
Administrator. The Depositor, the Seller, the Servicer, the Backup Servicer, the
Servicing Administrator and the predecessor Securities Administrator shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Securities Administrator, all such rights, powers, duties and obligations.
No successor Securities Administrator shall accept appointment as provided
in this Section 9.21 unless at the time of such acceptance such successor
Securities Administrator shall be eligible under the provisions of Section 9.19
hereof and the appointment of such successor Securities Administrator shall not
result in a downgrading of the Classes of Certificates rated by any Rating
Agency, as evidenced by a letter from each Rating Agency.
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Upon acceptance of appointment by a successor Securities Administrator as
provided in this Section 9.21, the successor Securities Administrator shall mail
notice of such appointment hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to the Rating Agencies.
SECTION 9.22. Merger or Consolidation of Securities Administrator.
Any corporation or association into which the Securities Administrator may
be merged or converted or with which it may be consolidated or any corporation
or association resulting from any merger, conversion or consolidation to which
the Securities Administrator shall be a party, or any corporation or association
succeeding to the business of the Securities Administrator shall be the
successor of the Securities Administrator hereunder, provided such corporation
or association shall be eligible under the provisions of Section 9.19, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
ARTICLE X
TERMINATION
SECTION 10.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Servicing Administrator, the Servicer, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of (a) the exercise by SLS of an Optional
Termination in accordance with the last paragraph of this Section 10.01; and (b)
the later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, 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 Final
Scheduled Distribution Date.
Any termination pursuant to clause (a) above shall be effected by SLS
purchasing all Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. Notwithstanding anything to the contrary herein, the
Optional Termination Price paid by SLS shall be deposited by the Securities
Administrator directly into the Certificate Account immediately upon Optional
Termination.
The right of SLS to effect an Optional Termination pursuant to clause (a)
above shall be conditioned upon (i) the consent of the holders of the majority
interest in the Class X Certificates and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans, at the time of any such repurchase, aggregating
ten (10) percent or less of sum of (x) the aggregate Stated Principal Balance of
the Mortgage Loans as of the Cut-off Date and (y) the Original Pre-Funded
Amount. Notwithstanding the foregoing, no termination under this section will be
permitted without the consent of the Certificate Insurer if a draw on the
Certificate Insurance Policy will be made or if any amounts due to the
Certificate Insurer would remain unreimbursed on the final Distribution Date.
SECTION 10.02. 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 or (ii) the Securities Administrator determines that a Class
of Certificates shall be retired
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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. If the Servicer
elects to terminate the Trust Fund pursuant to clause (a) of Section 10.01, at
least 10 days prior to the date notice is to be mailed to the affected
Certificateholders, the Securities Administrator shall notify the Depositor and
the Trustee of the date such electing party intends to terminate the Trust Fund
and of the applicable repurchase price of the Mortgage Loans and REO Properties.
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 not earlier than
the 10th day and no later than the 15th 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 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 and the Servicing Administrator
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
and, if applicable, the Certificate Insurer the amounts allocable to such
Certificates held in the Certificate Account in the order and priority set forth
in Section 5.05 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.
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SECTION 10.03. Additional Termination Requirements.
(a) In the event SLS exercises its option to effect an
Optional Termination as provided in Section 10.01, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless the
Trustee and the Certificate Insurer have been supplied with an Opinion of
Counsel, at the expense of SLS to the effect that the failure of the Trust Fund
to comply with the requirements of this Section 10.03 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, which
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, as evidenced by an Opinion of Counsel obtained at the
expense of the Servicer;
(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) The Trustee, at the request of the Securities
Administrator, as agent for each REMIC, hereby agrees to adopt and sign such a
plan of complete liquidation prepared and delivered to it by Depositor upon the
written request of the Depositor, and the receipt of the Opinion of Counsel
referred to in Section 10.03(a) and to take such other action in connection
therewith as may be reasonably requested by the Depositor.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicing Administrator, the Servicer, the Securities Administrator and the
Trustee, without the consent of any of the Certificateholders, but with the
consent of the Certificate Insurer to:
(i) cure any ambiguity or correct any mistake,
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(ii) correct, modify or supplement any provision therein
which may be inconsistent with any other provision herein,
(iii) add any other provisions with respect to matters
or questions arising under this Agreement, or
(iv) 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 to such effect, adversely effect 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 Servicing Administrator, the Servicer,
the Securities Administrator and the Trustee may at any time and from time 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 and the Securities Administrator shall
have been provided an Opinion of Counsel, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee 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
Servicer, the Securities Administrator, the Trustee, the Certificate Insurer and
the Holders of the Certificates affected thereby evidencing not less than 66
2/3% of the Voting Rights 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, 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 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.
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,
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the Securities Administrator shall furnish written notification of the substance
of such amendment to each Certificateholder and the Rating Agencies.
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 and 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 11.01.
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 11.02. 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 11.03. 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 11.04. 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.
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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 11.05. Notices.
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to the Rating Agencies 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;
(iii) The resignation or termination of the Trustee, the
Securities Administrator 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.
The Securities Administrator shall promptly furnish or make available to
the Rating Agencies 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 Seller, to Terwin Advisors LLC, 45 Rockefeller
Plaza: Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel, or such
other address or telecopy number as may hereafter be furnished to the Depositor,
the Servicing Administrator, the Backup Servicer, the Servicer and the Trustee
in writing by the Seller; (c) in the case of the Trustee, to U.S. Bank National
Association, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000,
Attention: Terwin 2005-16HE (telecopy number: (000) 000-0000), or such other
address or telecopy number as may hereafter be furnished to the Depositor, the
Servicing Administrator, the Backup Servicer, the Servicer and the Seller in
writing by the Trustee; (d) in the case of the Certificate Registrar, to the
Securities Administrator's Corporate Trust Office; (e) in the case of SLS as
Servicer, to Specialized Loan Servicing, LLC, 0000 Xxxxxx Xxxx, 0xx Xxxxx,
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000, Attention: General Counsel, or such other
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address or telecopy number as may be furnished to the Depositor, the Seller, the
Servicing Administrator, the Backup Servicer, any other Servicer and the Trustee
in writing by the Servicer; (f) in the case of the Securities Administrator and
Backup Servicer, to its Corporate Trust Office, or such other address or
telecopy number as may be furnished to the Depositor, the Seller, the Servicer
and the Trustee in writing by the Securities Administrator or the Backup
Servicer, as applicable; (g) in the case of the Servicing Administrator, 0000
Xxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000-0000, Attention Terwin 2005-16HE; (h) in the
case of the Credit Risk Manager, The Murrayhill Company, 0000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention: General Counsel or such other
address or telecopy number as may be furnished to the Depositor, the Seller, the
Servicing Administrator, the Backup Servicer, the Servicer and the Trustee in
writing by the Credit Risk Manager; (i) in the case of Moody's, 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (j) in the case of Fitch, Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (k) in the case of S&P, 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance
Monitoring, or such other address as S&P may hereafter furnish to the Depositor,
the Seller, the Servicing Administrator, the Backup Servicer, the Servicer and
the Trustee in writing; and (l) in the case of the Certificate Insurer, to
Financial Security Assurance Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Notice of any Event of Default
shall be given by telecopy and by certified mail. Any notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
duly been given when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder shall also be
mailed to the appropriate party in the manner set forth above.
SECTION 11.06. 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 11.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Securities Administrator without the prior written consent of the Depositor.
SECTION 11.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal 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.
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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 indemnity satisfactory to it as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.09. Inspection and Audit Rights.
The Servicing Administrator, the Backup Servicer and the Servicer each
agree that, on reasonable prior notice, it will permit any representative of the
Depositor or the Trustee during the Servicing Administrator's, the Backup
Servicer's or the Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Servicing Administrator, the
Backup Servicer or the Servicer relating to the Mortgage Loans, to make copies
and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the Depositor or the Trustee and to
discuss its affairs, finances and accounts relating to the Mortgage Loans with
its officers, employees, agents, counsel and independent public accountants (and
by this provision the Servicing Administrator, the Backup Servicer or the
Servicer 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 11.09
shall be borne by the party requesting such inspection (except in the case of
the Trustee in which case such expenses shall be borne by the requesting
Certificateholder(s)); all other such expenses shall be borne by the Servicer.
SECTION 11.10. 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 nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Authenticating Agent pursuant to this Agreement, are and shall be deemed fully
paid.
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IN WITNESS WHEREOF, the Depositor, the Servicing Administrator, the
Servicer, the Securities Administrator and the Trustee 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:
Title:
TERWIN ADVISORS LLC,
as Seller
By: ____________________________________________________
Name:___________________________________________________
Title:__________________________________________________
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
as Servicing Administrator, Securities Administrator
and Backup Servicer
By: ____________________________________________________
Name:___________________________________________________
Title:__________________________________________________
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
By: ____________________________________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
SPECIALIZED LOAN SERVICING, LLC,
as Servicer
By: ____________________________________________________
Name:___________________________________________________
Title:__________________________________________________
Acknowledged and Agreed for purposes of Section 3.19 and
Section 7.08
THE MURRAYHILL COMPANY,
as Credit Risk Manager
By: ____________________________________________________
Name:___________________________________________________
Title:__________________________________________________
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
B-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
FORM OF CUSTODIAN CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Specialized Loan Servicing, LLC
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx and Xxxxxxxx Xxxxxxxxx
Financial Security Assurance Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
US Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Terwin 2005-16HE
Re: Pooling and Servicing Agreement dated as of October 1, 2005 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), JPMorgan Chase Bank, N.A., as
servicing administrator (the "Servicing Administrator"), securities
administrator (the "Securities Administrator") and backup servicer (the
"Backup Servicer"), Specialized Loan Servicing, LLC, as servicer (the
"Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), relating to Terwin Mortgage Trust, Asset-Backed Certificates,
Series XXXX 0000-00XX
--------------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that[,
except as set forth in Schedule A hereto,] (based solely on the Custodian's
Initial Certification) 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) the Custodian has reviewed the Mortgage File and the
Mortgage Loan Schedule and has determined that:
D-1
(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 and the name of the Mortgagor 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 (G), inclusive, 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.
Within 90 days after the end of the Pre-Funding Period, based solely on
the list of MERS Mortgage Loans provided to the Trustee by the Custodian (such
to be provided to the Trustee by the Custodian no later than 45 days from the
end of the Pre-Funding Period), the Trustee shall confirm, on behalf of the
Trust Fund, that the Trust Fund is shown as the beneficial owner of any MERS
Mortgage Loans on the MERS System. If the Trust Fund, or the Trustee on behalf
of the Trust Fund, is not shown as the beneficial owner of any MERS Mortgage
Loans on the MERS System, the Trustee shall promptly notify the Seller and the
Certificate Insurer of such fact.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Custodian
By: _________________________________
Name: _______________________________
Title: ______________________________
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER
TERWIN MORTGAGE TRUST,
ASSET-BACKED CERTIFICATES, SERIES XXXX 0000-00XX
[DATE]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
US Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Terwin 2005-16HE
Ladies and Gentlemen:
We propose to purchase Terwin Mortgage Trust, Asset-Backed Certificates,
Series XXXX 0000-00XX, Class R, described in the Prospectus Supplement, dated
October 17, 2005, and Prospectus, dated August 26, 2005.
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.
4. We certify that we are not an employee benefit plan or arrangement
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 any provisions under any
federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the foregoing provisions of ERISA or the Code
(collectively, a "Plan"), and we are not directly or indirectly acquiring the
Class R Certificate for, on behalf of or with any assets of any such 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, the Trustee 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, the Trustee 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 Trustee and the Securities Administrator a letter in
the form of this letter (including the affidavit appended hereto) and, we will
provide the Trustee and the Securities Administrator a written statement
substantially in the form of Exhibit E-2 to the Agreement.
----------
(1) Check appropriate box and if necessary fill in the name of the
Transferee's nominee.
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 Agreement.
Very truly yours,
[PURCHASER]
By: ______________________________
Name:
Title:
Accepted as of __________ __, 200__
[TERWIN MORTGAGE TRUST] 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 Terwin Mortgage Trust,
Asset-Backed Certificates, Series XXXX 0000-00XX, Class R 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 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
E-1-4
(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: _____________
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR'S AFFIDAVIT
TERWIN MORTGAGE TRUST,
ASSET-BACKED CERTIFICATES, SERIES XXXX 0000-00XX
[DATE]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
US Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Terwin 2005-16HE
Re: Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
_______________________ (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 FOR
CLASS __ CERTIFICATES
[DATE]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
US Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Terwin 2005-16HE
RE: Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
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 October 1,
2005, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Terwin
Advisors LLC, as seller, JPMorgan Chase Bank, N.A., as servicing administrator,
securities administrator and backup servicer, Specialized Loan Servicing, LLC,
as servicer and U.S. Bank National Association, as trustee.
Very truly yours,
______________________________
Name of Transferor
By: ___________________________
Name:
Title
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
US Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Terwin 2005-16HE
Re: Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS
2005-16HE, Class [____] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement dated as of October 1, 2005 among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), Terwin Advisors LLC, as seller
(the "Seller"), JPMorgan Chase Bank, N.A., as servicing administrator (the
"Servicing Administrator"), securities administrator (the "Securities
Administrator") and backup servicer (the "Backup Servicer"), Specialized Loan
Servicing, LLC, as servicer (the "Servicer") and U.S. Bank National Association,
as trustee (the "Trustee"). [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:
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:
G-1
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 PROVISIONS OF SECTION 6.02 OF THE POOLING AND
SERVICING AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS
THE SECURITIES ADMINISTRATOR AND THE TRUSTEE SHALL HAVE RECEIVED, IN FORM
AND SUBSTANCE SATISFACTORY TO THE SECURITIES ADMINISTRATOR AND THE TRUSTEE
(A) AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF THE
CERTIFICATES.
[IN THE CASE OF ERISA RESTRICTED CERTIFICATES (OTHER THAN THE CLASS R
CERTIFICATE)]
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRANSFEREE PROVIDES THE
TRUSTEE AND THE SECURITIES ADMINISTRATOR WITH (A) A REPRESENTATION THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT 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 ANY PROVISIONS UNDER ANY FEDERAL, STATE,
LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO
THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) OTHER THAN IN THE CASE OF THE
CLASS R CERTIFICATE AND 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 THIS
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 (IN
THE CASE OF ANY NON-CLASS R ERISA RESTRICTED CERTIFICATE OTHER THAN CLASS ES
CERTIFICATES OR CLASS X CERTIFICATES, AFTER THE TERMINATION OF THE SWAP
AGREEMENT), OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AND THE SECURITIES ADMINISTRATOR, AND UPON
WHICH THE TRUSTEE AND THE SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO
THE EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE
CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE SECURITIES
ADMINISTRATOR, THE DEPOSITOR, THE SELLER, THE PLACEMENT AGENT, THE SERVICER OR
THE TRUSTEE 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 SECURITIES ADMINISTRATOR, THE DEPOSITOR, THE SELLER, THE
PLACEMENT AGENT, THE SERVICER OR THE TRUSTEE.
[IN THE CASE OF CLASS R CERTIFICATES ONLY]
G-2
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRANSFEREE
PROVIDES THE TRUSTEE AND THE SECURITIES ADMINISTRATOR WITH A REPRESENTATION THAT
THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT 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 ANY PROVISIONS UNDER ANY FEDERAL,
STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN.
[IN THE CASE OF CERTIFICATES OTHER THAN ERISA RESTRICTED CERTIFICATES]
UNTIL THE TERMINATION OF THE INTEREST RATE SWAP AGREEMENT, EACH TRANSFEREE OF
THIS CERTIFICATE SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE
CERTIFICATE, SHALL REPRESENT) TO THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY
ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), OR (B) THE TRANSFEREE'S ACQUISITION AND HOLDING OF THIS
CERTIFICATE IS COVERED BY AND EXEMPT UNDER ANY OF PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX 00-00, XXXX 00-00, XXXX 96-23, EACH AS
AMENDED.
3. 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.
____________________
**/ Not required of a broker/dealer purchaser.
G-3
4. The Purchaser (a) is a substantial, sophisticated 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.
5. 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.
6. The Purchaser of a Class R Certificate is not an employee benefit plan
or arrangement 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 any
provisions under any federal, state, local, non-U.S. or other laws or
regulations that are substantively similar to the foregoing provisions of ERISA
or the Code ("Similar Law") (collectively, a "Plan"), and is not directly or
indirectly acquiring the Class R Certificate for, on behalf of or with any
assets of any such Plan.
7. The Purchaser of an ERISA Restricted Certificate (other than the Class
R Certificate) (i) is not a Plan, and is not directly or indirectly acquiring
the Certificate for, on behalf of or with any assets of any such Plan, (ii)
other than in the case of the Class R Certificate and 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 is covered and
exempt under Sections I and III of PTCE 95-60 (in the case of any non-Class R
ERISA Restricted Certificate other than Class ES Certificates or Class X
Certificates, after the termination of the Swap Agreement), or (iii) solely in
the case of a Definitive Certificate, will deliver herewith an Opinion of
Counsel satisfactory to the Trustee and the Securities Administrator, and upon
which the Trustee and the Securities Administrator shall be entitled to rely, to
the effect that the acquisition and holding of the Certificate by the Purchaser
will not 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 Seller, the Placement Agent, the Securities Administrator, the Depositor,
the Servicer or the Trustee 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 Seller, the Placement Agent, the Securities
Administrator, the Depositor, the Servicer or the Trustee.
8. Until the termination of the Swap Agreement, either (i) the Purchaser
is not, and is not acquiring the Certificate for, on behalf of or with any
assets of, any employee benefit plan or other arrangement subject to Title I of
ERISA or any plan subject to Section 4975 of the Code, or (ii) the Purchaser's
acquisition and holding of the Certificate is covered by and exempt under any of
Prohibited
G-4
Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0, XXXX 91-38, PTCE 95-60,
or PTCE 96-23, each as amended.
9. 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.
10. The Purchaser agrees to indemnify the Trustee, the Securities
Administrator, the Servicing 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-5
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
US Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Terwin 2005-16HE
Re: Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS
2005-16HE, Class [_____] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement dated as of October 1, 2005 among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), Terwin Advisors LLC, as seller
(the "Seller"), JPMorgan Chase Bank, N.A., as servicing administrator (the
"Servicing Administrator"), securities administrator (the "Securities
Administrator") and backup servicer (the "Backup Servicer"), Specialized Loan
Servicing, LLC, as servicer (the "Servicer") and U.S. Bank National Association,
as trustee (the "Trustee"). [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) (i) (in the case of an
ERISA Restricted Certificate) we are not an employee benefit plan or arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to
H-1
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code") or a
plan subject to any provisions under any federal, state, local, non-U.S. or
other laws or regulations that are substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law") (collectively, a "Plan"), and
are not directly or indirectly acquiring the Transferred Certificate for, on
behalf of or with any assets of any such Plan, (ii) (in the case of an ERISA
Restricted Certificate other than a Class R Certificate) if the Transferred
Certificate has been the subject of an ERISA-Qualifying Underwriting, we are an
insurance company that is acquiring the Transferred 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 Transferred Certificate is covered and exempt under Sections I and III of
PTCE 95-60 (in the case of any non-Class R ERISA Restricted Certificate other
than Class ES Certificates or Class X Certificates, after the termination of the
Swap Agreement), or (iii) (in the case of an ERISA Restricted Certificate other
than a Class R Certificate) solely in the case of a Definitive Certificate, we
shall deliver herewith an Opinion of Counsel satisfactory to the Trustee and the
Securities Administrator, and upon which the Trustee and the Securities
Administrator shall be entitled to rely, to the effect that our acquisition and
holding of the Transferred Certificate will not 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 Securities Administrator, the
Depositor, the Servicer or the Trustee 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 Securities Administrator, the
Depositor, the Servicer or the Trustee, (e) in the case of a Certificate other
than an ERISA Restricted Certificate, until the termination of the Swap
Agreement, either (i) we are not, and are not acquiring the Certificate for, on
behalf of or with any assets of, any employee benefit plan or other arrangement
subject to Title I of ERISA or any plan subject to Section 4975 of the Code, or
(ii) our acquisition and holding of the Certificate is covered by and exempt
under any of Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0,
XXXX 91-38, PTCE 95-60, or PTCE 96-23, each as amended, (f) 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, (g) 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 Securities Administrator, the
Servicing Administrator, the Servicer and the Depositor against any liability
that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
H-2
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 $____________(2)* 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.
____ 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.
----------
(2) 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-4
____ 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.
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.
H-5
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: ____________________________
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX 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-7
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-8
EXHIBIT I
REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
To: Deutsche Bank National Trust Company
____________________________________
____________________________________
Re: Pooling and Servicing Agreement dated as of October 1, 2005 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), JPMorgan Chase Bank, N.A., as
servicing administrator (the "Servicing Administrator"), securities
administrator (the "Securities Administrator") and backup servicer (the
"Backup Servicer"), Specialized Loan Servicing, LLC, as servicer (the
"Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), relating to Terwin Mortgage Trust, Asset-Backed Certificates,
Series XXXX 0000-00XX
In connection with the administration of the Mortgage Loans held by you,
as Custodian, pursuant to the above-captioned 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
_______ 6. Other Reason: __________________________
Address to which the Trustee should deliver the Mortgage File:
By: _______________________________
(authorized signer)
Address: __________________________
I-1
Date: _____________________________
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:
U.S. Bank National Association,
as Trustee
By: _________________________________ _________________________________
Signature Date
Documents returned to Trustee:
By: _________________________________ _________________________________
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
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: Pooling and Servicing Agreement dated as of October 1, 2005 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), JPMorgan Chase Bank, N.A., as
servicing administrator, securities administrator (the "Securities
Administrator") and backup servicer (the "Backup Servicer"), Specialized
Loan Servicing, LLC, as servicer (the "Servicer") and U.S. Bank National
Association, as trustee (the "Trustee") (the "Agreement), relating to
Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
--------------------------------------------------------------------------
The Securities Administrator hereby certifies to the Depositor and SLS,
and their respective officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. The Securities Administrator has reviewed the annual report on Form 10-K
for the fiscal year [[ ]], and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year
covered by that annual report, relating to the above referenced trust.
2. Based solely upon the information provided to us by the Servicing
Administrator, the information set forth in the reports referenced in (i)
above does not contain any untrue statement of material fact; and;
3. Based on its knowledge, the distribution information required to be
provided by the Securities Administrator under the Pooling and Servicing
Agreement is included in these reports.
Date:
JPMorgan Chase Bank, N.A.
not in its individual capacity but solely
as Securities Administrator
By: ________________________________
Name: ________________________________
Title: ________________________________
K-1
EXHIBIT L
OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Chase Manhattan Mortgage Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
Re: Pooling and Servicing Agreement dated as of October 1, 2005 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), JPMorgan Chase Bank, N.A., as
servicing administrator, securities administrator (the "Securities
Administrator") and backup servicer (the "Backup Servicer"), Specialized
Loan Servicing, LLC, as servicer (the "Servicer") and U.S. Bank National
Association, as trustee (the "Trustee") (the "Agreement"), relating to
Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
I, [identify the certifying individual], an authorized representative of
[Name of the Servicer] hereby certify to the Servicing Administrator, the
Servicer, 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. I have reviewed the information required to be delivered to the Servicing
Administrator pursuant to the Agreement (the "Servicing Information").
2. Based on my knowledge, the information in the Annual Statement of
Compliance, and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans submitted to
the Servicing Administrator by [Name of the Servicer] 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 last day of the period covered by the Annual Statement of Compliance;
3. Based on my knowledge, the Servicing Information required to be provided
to the Servicing Administrator by [Name of the Servicer] under the
Agreement has been provided to the Servicing Administrator; and
L-1
4. I am responsible for reviewing the activities performed by [Name of the
Servicer] under the Agreement and based upon the review required
hereunder, and except as disclosed in the Annual Statement of Compliance,
the Annual Independent Certified Public Accountant's Servicing Report and
all servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans submitted to the Servicing
Administrator by [Name of the Servicer], [Name of the Servicer] has, as of
the last day of the period covered by the Annual Statement of Compliance
fulfilled its obligations under this Agreement.
Date:
[NAME OF SERVICER]
By: ____________________________
Name: ____________________________
Title: ____________________________
L-2
EXHIBIT M
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 U.S. Bank National Association, as trustee of the Terwin
Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX, as purchaser
(the "Trustee"), and relates to the transfer pursuant to the Pooling and
Servicing Agreement, dated as of October 1, 2005 (the "Pooling and Servicing
Agreement"), among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Terwin
Advisors LLC, as seller, JPMorgan Chase Bank, N.A., as servicing administrator,
securities administrator and backup servicer, Specialized Loan Servicing, LLC,
as servicer and U.S. Bank National Association, as trustee, on behalf of the
Trust Fund, of the Subsequent Mortgage Loans identified on the schedule of
Mortgage Loans attached hereto as Attachment B (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 and has taken all actions required under Section 2.01 regarding the
assignment of a MERS Mortgage Loan. The transfer to the Trustee by the Depositor
of the Subsequent Mortgage Loans identified on the schedule of Mortgage Loans
attached hereto as Attachment 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 of Depositor; 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 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof with
respect to the Subsequent Mortgage Loans.
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(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.
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.
M-2
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.
By:
Name:
Title:
Acknowledged and Agreed:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee for Terwin Mortgage Trust,
Asset-Backed Certificates, Series XXXX 0000-00XX
By:
Name:
Title:
FINANCIAL SECURITY ASSURANCE INC.
as Certificate Insurer
By:
Name:
Title:
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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.
M-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 I: $__________
b. Aggregate Stated Principal Balance as of the Subsequent
Cut-off Date of the Subsequent Mortgage Loans to be added to
Group II: $__________
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
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 December 16, 2005; (vii) the
Subsequent Mortgage Loan shall be underwritten in accordance with the criteria
set forth under the section "Underwriting Guidelines--The Winter Group
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 and (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.
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 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.
M-5
Very truly yours,
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.
By:
Name:
Title:
Acknowledged and Agreed:
FINANCIAL SECURITY ASSURANCE INC.
as Certificate Insurer
By:
Name:
Title:
M-6
EXHIBIT N
FORM OF ADDITION NOTICE
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc. U.S. Bank National Association
000 Xxxxx Xxxxxx 000 X. XxXxxxx Xxxxxx, Xxxxx 000
4 World Financial Center, 10th Floor Chicago, Illinois 60604
Xxx Xxxx, Xxx Xxxx 00000
Financial Security Assurance Inc. Deutsche Bank National Trust Co.
00 Xxxx 00xx Xxxxxx 0000 Xxxx Xxxxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxx Xxx, XX 00000
Specialized Loan Servicing, LLC JPMorgan Chase Bank, N.A.
0000 Xxxxxx Xxxxxxxxx 0 Xxx Xxxx Xxxxx
Xxxxx 000 Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000 Attention: Worldwide Securities
Attention: Xxxx Xxxxx and Services/Global Debt (XXXX 0000-00XX)
Xxxxxxxx Xxxxxxxxx
Re: Pooling and Servicing Agreement dated as of October 1, 2005 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), JPMorgan Chase Bank, N.A., as
servicing administrator, securities administrator (the "Securities
Administrator") and backup servicer (the "Backup Servicer"), Specialized
Loan Servicing, LLC, as servicer (the "Servicer") and U.S. Bank National
Association, as trustee (the "Trustee") relating to Terwin Mortgage Trust,
Asset-Backed Certificates, Series XXXX 0000-00XX
Ladies and Gentlemen:
Pursuant to Section 2.11 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-off 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 2.11(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 [I/II][and Group II, 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.
N-1
EXHIBIT O
BEAR XXXXXXX [LOGO]
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: October 19, 2005
TO: Terwin Mortgage Trust, Series XXXX 0000-00XX
ATTENTION: Xxxxxxx X. Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
TO: Terwin Advisors LLC
ATTENTION: Xxxxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
RE: Novation Confirmation
REFERENCE NUMBER(S): XXXXX0000-BXNS161691
The purpose of this letter is to confirm the terms and conditions of the
Novation Transaction entered into between the parties and effective from the
Novation Date specified below. This Novation Confirmation constitutes a
"Confirmation" as referred to in the New Agreement specified below.
1. The definitions and provisions contained in the 2004 ISDA Novation
Definitions (the "Definitions") and the terms and provisions of the 2000
ISDA Definitions, as published by the International Swaps and Derivatives
Association, Inc. and amended from time to time, are incorporated in this
Novation Confirmation. In the event of any inconsistency between (i) the
Definitions, (ii) the 2000 ISDA Definitions, and/or (iii) the Novation
Agreement and this Novation Confirmation, this Novation Confirmation will
govern.
2. The terms of the Novation Transaction to which this Novation Confirmation
relates are as follows:
Novation Trade Date: October 12, 2005
Novation Date: October 19, 2005
Novated Amount: USD 285,448,000
Transferor 1: Terwin Advisors LLC
Transferor 2: Bear Xxxxxxx Bank plc
Transferee 1: Terwin Mortgage Trust, Series TMTS
2005-16HE
Transferee 2: Bear Xxxxxxx Financial Products Inc.
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3. The terms of each Old Transaction to which this Novation Confirmation
relates, for identification purposes, are as specified in the Old
Confirmation attached hereto as Exhibit A:
4. The terms of the New Transaction to which this Novation Confirmation
relates shall be as specified in the New Confirmation attached hereto as
Exhibit B.
Full First Calculation Period: Applicable, commencing on October 19,
2005
5. Offices:
Transferor 1: New York
Transferor 2: Not Applicable
Transferee 1: Chicago
Transferee 2: Not Applicable
6. Other Provisions: Additional Provisions relating to this Novation
Confirmation and the New Transaction:
No transfer, amendment, waiver, supplement, assignment or other modification of
the Novated Transaction shall be permitted by either party without written
consent by Financial Security Assurance Inc. ("FSA"). FSA shall not unreasonably
withhold its consent to any transfer or assignment of the Novated Transaction.
The parties confirm their acceptance to be bound by this Novation Confirmation
as of the Novation Date by executing a copy of this Novation Confirmation and
returning a facsimile of the fully-executed Novation Confirmation to
000-000-0000. Transferor 1 and Transferor 2, by their respective execution of a
copy of this Novation Confirmation, each agrees to the terms of the Novation
Confirmation as it relates to the Old Transaction. Transferee 1 and Transferee
2, by their respective execution of a copy of this Novation Confirmation, each
agrees to the terms of the Novation Confirmation as it relates to the New
Transaction. For inquiries regarding U.S. Transactions, please contact Xxxxx
Xxxxxx by telephone at 000-000-0000. For all other inquiries please contact
Derivatives Documentation by telephone at 000-0-000-0000.
Terwin Advisors LLC Bear Xxxxxxx Bank Plc
By: _____________________________ By: _______________________________
Name: Name:
Title: Title:
Date: Date:
U.S. Bank National Association, not in Bear Xxxxxxx Financial Products Inc.
its individual capacity, but solely as
Trustee for Terwin Mortgage Trust,
Series XXXX 0000-00XX
By: _____________________________ By: _______________________________
Name: Name:
Title: Title:
Date: Date:
lm
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BEAR XXXXXXX [LOGO]
BEAR XXXXXXX BANK PLC
BLOCK 0, XXXXXXXX XXXXXX
XXXXXXXXX XXX
XXXXXX 0, XXXXXXX
Tel (000-0) 000 0000
Fax (000-0) 000-0000
Exhibit A
DATE: October 19, 2005
TO: Terwin Advisors LLC
ATTENTION: Xxxxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 353-1-402-6233
FACSIMILE: 353-1-402-6223
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER(S): BXNS161691
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into on the Trade Date specified below (the
"Transaction") between Bear Xxxxxxx Bank plc ("Bear Xxxxxxx") and Terwin
Advisors LLC ("Counterparty"). This letter agreement constitutes the sole and
complete "Confirmation," as referred to in the "Master Agreement" (as defined
below), with respect to the Transaction.
1. This Confirmation is subject to and incorporates the 2000 ISDA Definitions
(the "Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). The parties agree to negotiate, execute and deliver
an agreement in the form of the ISDA Master Agreement (Multicurrency--Cross
Border) (the "Form Master Agreement"), together with the schedule thereto and
any other related documents, each in form and substance as the parties shall in
good faith agree (collectively, the "Executed Master Agreement"). In addition,
the parties agree that until execution and delivery of the Executed Master
Agreement, a Form Master Agreement, shall be deemed to have been executed and
delivered by the parties on the Trade Date of the first transaction that by its
terms is intended to be governed by a Master Agreement. All provisions contained
in, or incorporated by reference to, the Form Master Agreement or the Executed
Master Agreement (as applicable, the "Master Agreement") shall govern the
Transaction referenced in this Confirmation, except as expressly modified below.
This Confirmation, together with all of the other documents confirming any and
all Transactions entered into between us (regardless of which branch, if any,
either of us has acted through) that by their terms are intended to be governed
by a Master Agreement, shall supplement, form a part of and be subject to the
Master Agreement. In the event of any inconsistency between the provisions of
this Confirmation and the Definitions or Master Agreement, this Confirmation
shall prevail for the purpose of this Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
X-0
Xxxxxxxx Xxxxxx: With respect to any Calculation Period, the amount
as detailed in the Schedule of Notional Amounts
and Fixed Rates attached hereto.
Trade Date: August 23, 2005
Effective Date: October 31, 2005
Termination Date: October 25, 2010, subject to (i) adjustment in
accordance with the Business Day Convention and
(ii) the Mandatory Early Termination Date
(described below).
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Dates: The 25th calendar day of each month during the
Term of this Transaction, commencing November 25,
2005 and ending on the Termination Date, subject
to adjustment in accordance with the Business Day
Convention.
Fixed Rate: See Schedule of Notional Amounts and Fixed Rates
attached hereto.
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: Bear Xxxxxxx
Floating Rate Payer
Payment Dates: The 25th calendar day of each month during the
Term of this Transaction, commencing November 25,
2005 and ending on the Termination Date, subject
to adjustment in accordance with the Business Day
Convention.
Floating Rate for
initial Calculation
Period: To be determined
Floating Rate
Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day
O-4
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Business Day
Convention: Modified Following
Additional Amount: In connection with entering into this Transaction
USD 155,000 is payable by Counterparty to Bear
Xxxxxxx on August 25, 2005.
Collateral Provisions: (a) On any Local Business Day (any such date
referred to as a "Credit Support Valuation Date"),
a party may determine the following: (i) the
Exposure (as defined below), (ii) the market value
(determined in accordance with the Eligible
Collateral Annex hereto) of all Collateral (as
defined in the Eligible Collateral Annex), if any,
pledged by a party, and (iii) the Credit Support
Amount (as defined below) for such date.
"Exposure" means for any Credit Support Valuation
Date, the amount, if any, that would be payable to
a party (the "Secured Party") by the other party
(the "Pledgor") (expressed as a positive number)
or by the Secured Party to the Pledgor (expressed
as a negative number) to replace all of the
Transactions that are or may be entered into and
governed by the Master Agreement so as to preserve
the economic equivalent of the payment obligations
of the parties with respect thereto. "Credit
Support Amount" means the Secured Party's Exposure
plus, the aggregate of the Initial Collateral
Requirements (as set forth in paragraph (b) below
and as expressed in Confirmations in connection
with other Transactions, if any), applicable to
the Pledgor, if any, minus the aggregate of the
Initial Collateral Requirements applicable to the
Secured Party, if any. If the Credit Support
Amount exceeds the market value of all Collateral
held by the Secured Party by an amount (the
"Delivery Amount") equal to or greater than USD
250,000, then the Pledgor shall transfer to the
Secured Party Collateral with a market value equal
to or greater than the Delivery Amount. If the
market value of all Collateral held by the Secured
Party exceeds the Credit Support Amount by an
amount (the "Return Amount") equal to or greater
than USD 250,000, then the Secured Party shall
return to the Pledgor Collateral with a market
value as close as practicable (but not greater
than) the Return Amount. Each delivery or return
of Collateral required under this paragraph shall
be made by the close of business on the relevant
Credit Support Valuation Date if notice requesting
such delivery or return is received by 11 A.M. New
York City time, or by the next Local Business Day
if notice is received after 11 A.M. New York City
time.
(b) In addition to any Collateral required to be
delivered pursuant to paragraph (a) above,
Counterparty shall deliver to and at all
O-5
times maintain with the other party Collateral
having a market value equal to or greater than USD
1,130,000 (such amount being the "Initial
Collateral Requirement" applicable to such party).
The party providing the Initial Collateral
Requirement shall deliver such collateral to the
other party on or before the Local Business Day
following the Trade Date.
(c) These Collateral Provisions shall be deemed a
security agreement, and notwithstanding anything
to the contrary contained in the Executed Master
Agreement or this Confirmation, these provisions
shall be governed by the laws of the State of New
York, without giving effect to the conflicts or
choice of law provisions thereof. Notwithstanding
anything to the contrary set forth in this
Confirmation or the Master Agreement, in the event
of any inconsistency between the Master Agreement
and these Collateral Provisions, the Master
Agreement shall prevail, except as set forth in
the preceding sentence. Any party pledging
Collateral hereunder hereby grants a first
priority continuing security interest in all
Collateral provided hereunder and in any and all
substitutions therefor, proceeds thereof and
distributions thereon. Interest on any cash
Collateral held hereunder shall be credited at a
rate equal to the "Federal Funds (Effective)" rate
as such rate is displayed on Telerate page 118 for
such day under the caption "Effective" for USD or
the "EONIA" as such rate is displayed on Telerate
Page 247 for such day for Euro, as applicable. The
amount of interest calculated for each day of the
interest period shall be compounded monthly. These
Collateral Provisions constitute a Credit Support
Document and the failure by a party to deliver or
return Collateral in accordance with these
Collateral Provisions (if such failure is not
remedied on or before the Local Business Day after
notice of such failure is given to such party)
shall constitute an Event of Default for purposes
of Section 5(a)(iii) of the Master Agreement with
respect to such party. For purposes of these
Collateral Provisions, the term "Local Business
Day" shall have the meaning given such term in the
Master Agreement, except that references to a
payment in clause (b) thereof will be deemed to
include a delivery or return of Collateral
hereunder.
3. Early Termination:
Mandatory Early
(a) Termination: Applicable
Settlement Terms:
(b) Mandatory Early
(c) Termination Date: October 31, 2005
O-6
(d)
II. Cash Settlement
Valuation Time: l1:00 a.m., New York time
Cash Settlement
Valuation Date: The second Valuation Business Day preceding the
Cash Settlement Payment Date.
Valuation Business
Days: New York
Cash Settlement
Method: Cash Price - Alternate Method
Quotation Rate: mid
Calculation Agent: Bear Xxxxxxx
4. Account Details and
Settlement
Information: Payments to Bear Xxxxxxx:
Citibank N.A., New York
ABA Number: 000-000-000, for the account of
Bear, Xxxxxxx Securities Corp.
Account Number: 0925-3186, for further credit to
Bear Xxxxxxx Bank plc
Sub-Account Number: 000-00000-00
Payments to Counterparty:
Commerce Bank, NA
Cherry Hill, NJ
ABA Number: 000000000
Account Number: 7915096783
Credit to: Terwin Advisors LLC
Attn: Xxxxxxx Xxxxx
Additional Provisions:
Agency. Counterparty acknowledges that Bear, Xxxxxxx & Co. Inc. ("BS&C") has
acted as agent for Counterparty solely for the purposes of arranging this
Transaction with its Affiliate, Bear Xxxxxxx. This Confirmation is being
provided by BS&C in such capacity. Upon your written request, BS&C will furnish
you with the time at which this Transaction was entered into. Bear Xxxxxxx is
not a member of the Securities Investor Protection Corporation.
Incorporation of Terms. For the avoidance of doubt, Sections 5 and 6 of the Form
Master Agreement are incorporated herein, and the parties expressly specify that
Market Quotation and Second Method shall apply unless otherwise specified
herein.
Non-Reliance. Each party represents to the other party that (a) it has not
received and is not relying upon any legal, tax, regulatory, accounting or other
advice (whether written or oral) of the other party regarding this Transaction,
other than representations expressly made by that other party in this
Confirmation and in
O-7
the Master Agreement and (b) in respect of this Transaction, (i) it has the
capacity to evaluate (internally or through independent professional advice)
this Transaction and has made its own decision to enter into this Transaction
and (ii) it understands the terms, conditions and risks of this Transaction and
is willing to assume (financially and otherwise) those risks. Counterparty
acknowledges that Bear Xxxxxxx has advised Counterparty to consult its own tax,
accounting and legal advisors in connection with this Transaction evidenced by
this Confirmation and that the Counterparty has done so.
Eligible Contract Participant. Each party represents that it constitutes an
"eligible contract participant" as such term is defined in Section 1(a)12 of the
Commodity Exchange Act, as amended.
Payment Date Netting. The parties agree that subparagraph (ii) of Section 2(c)
of the Master Agreement will not apply to any Transactions that are or will be
governed by the Master Agreement. Thus all amounts payable on the same date in
the same currency in respect of all Transactions shall be netted.
Governing Law: Unless otherwise specified in the Executed Master Agreement, the
laws of the State of New York, without reference to the choice or conflicts of
law principles thereof.
Waiver of Jury Trial: Each party irrevocably waives any and all right to trail
by jury in any legal proceeding in connection with this Transaction or any
Transactions, as the case may be, hereunder.
Termination Currency. Unless otherwise specified in the Executed Master
Agreement or agreed by the parties, USD shall be the Termination Currency.
Transfer. Bear Xxxxxxx may transfer the Transaction(s) pursuant to this
Confirmation and all of its interests in such Transaction(s) and all of its
Obligations in or under this Confirmation to its Credit Support Provider or any
Affiliates thereof, and if such transfer is to an entity other than its Credit
Support Provider, Bear Xxxxxxx will furnish to Counterparty a Guaranty of such
Credit Support Provider which guarantees all of such transferee's Obligations in
substantially the form of the Guaranty of the Credit Support Provider of Bear
Xxxxxxx delivered in connection with this Confirmation. Upon such transfer, Bear
Xxxxxxx will be fully released from any and all Obligations and liabilities
related to the interests assigned.
This Confirmation may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Bear Xxxxxxx a facsimile of the
fully-executed Confirmation to 000-000-0000. For inquiries regarding U.S.
Transactions, please contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all
other inquiries please contact Derivatives Documentation by telephone at
000-0-000-0000. Originals will be provided for your execution upon your request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX BANK PLC
By: _______________________________
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Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
TERWIN ADVISORS LLC
By: _______________________________
As authorized agent or officer for Terwin Advisors LLC
Name:
Title:
er
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SCHEDULE OF NOTIONAL AMOUNTS AND FIXED RATES
(all such dates subject to adjustment in accordance
with the Business Day Convention)
From and including To but excluding Notional Amount (USD) Fixed Rate
------------------ ---------------- --------------------- ----------
Effective Date 25-Nov-05 285,448,000 4.005%
25-Nov-05 27-Dec-05 281,448,808 4.110%
27-Dec-05 25-Jan-06 276,471,716 4.249%
25-Jan-06 27-Feb-06 270,477,123 4.379%
27-Feb-06 27-Mar-06 263,480,179 4.410%
27-Mar-06 25-Apr-06 255,486,213 4.394%
25-Apr-06 25-May-06 246,552,844 4.362%
25-May-06 26-Jun-06 236,516,435 4.327%
26-Jun-06 25-Jul-06 225,641,699 4.302%
25-Jul-06 25-Aug-06 214,064,052 4.300%
25-Aug-06 25-Sep-06 203,315,727 4.322%
25-Sep-06 25-Oct-06 193,089,794 4.350%
25-Oct-06 27-Nov-06 183,360,863 4.376%
27-Nov-06 26-Dec-06 174,104,779 4.398%
26-Dec-06 25-Jan-07 165,298,562 4.416%
25-Jan-07 26-Feb-07 156,920,345 4.429%
26-Feb-07 26-Mar-07 148,949,329 4.438%
26-Mar-07 25-Apr-07 141,365,722 4.444%
25-Apr-07 25-May-07 134,150,696 4.450%
25-May-07 25-Jun-07 127,286,336 4.455%
25-Jun-07 25-Jul-07 111,525,219 4.460%
25-Jul-07 27-Aug-07 97,650,472 4.464%
27-Aug-07 25-Sep-07 85,546,643 4.468%
25-Sep-07 25-Oct-07 74,979,270 4.471%
25-Oct-07 26-Nov-07 65,745,490 4.472%
26-Nov-07 26-Dec-07 61,538,507 4.472%
26-Dec-07 25-Jan-08 57,619,908 4.471%
25-Jan-08 25-Feb-08 53,926,914 4.469%
25-Feb-08 25-Mar-08 50,446,507 4.466%
25-Mar-08 25-Apr-08 47,166,339 4.463%
25-Apr-08 27-May-08 44,074,762 4.461%
27-May-08 25-Jun-08 41,113,504 4.459%
25-Jun-08 25-Jul-08 37,128,843 4.457%
25-Jul-08 25-Aug-08 33,525,558 4.457%
O-10
25-Aug-08 25-Sep-08 31,772,000 4.458%
25-Sep-08 27-Oct-08 31,772,000 4.459%
27-Oct-08 25-Nov-08 31,772,000 4.459%
25-Nov-08 26-Dec-08 31,772,000 4.460%
26-Dec-08 26-Jan-09 31,772,000 4.460%
26-Jan-09 25-Feb-09 29,841,528 4.461%
25-Feb-09 25-Mar-09 27,875,322 4.462%
25-Mar-09 27-Apr-09 26,004,795 4.463%
27-Apr-09 26-May-09 24,225,057 4.466%
26-May-09 25-Jun-09 22,531,345 4.469%
25-Jun-09 27-Jul-09 20,919,148 4.473%
27-Jul-09 25-Aug-09 19,384,821 4.479%
25-Aug-09 25-Sep-09 17,924,311 4.485%
25-Sep-09 26-Oct-09 16,533,853 4.492%
26-Oct-09 25-Nov-09 15,188,424 4.498%
25-Nov-09 28-Dec-09 13,862,051 4.505%
28-Dec-09 25-Jan-10 12,592,604 4.511%
25-Jan-10 25-Feb-10 11,383,625 4.517%
25-Feb-10 25-Mar-10 10,232,133 4.524%
25-Mar-10 26-Apr-10 9,135,240 4.530%
26-Apr-10 25-May-10 8,090,189 4.538%
25-May-10 25-Jun-10 7,093,597 4.546%
25-Jun-10 26-Jul-10 5,856,998 4.556%
26-Jul-10 25-Aug-10 4,716,133 4.566%
25-Aug-10 27-Sep-10 3,663,046 4.576%
27-Sep-10 Termination Date 3,016,471 4.586%
O-11
ELIGIBLE COLLATERAL ANNEX TO COLLATERAL PROVISIONS
--------------------------------------------------------------------------------
A. Valuation
Percentage
B. Eligible Collateral
--------------------------------------------------------------------------------
Cash 100%
--------------------------------------------------------------------------------
U.S. Treasuries (as defined below) having a remaining term to 100%
maturity of not more than one year
--------------------------------------------------------------------------------
Direct Obligations of US-Government Sponsored Entities (as 99%
defined below) having a remaining term to maturity of not more
than one year
--------------------------------------------------------------------------------
U.S. Treasuries having a remaining term to maturity of more than 99%
one year but not more than five years
--------------------------------------------------------------------------------
Direct Obligations of US-Government Sponsored Entities having a 98%
remaining term to maturity of more than one year but not more
than five years
--------------------------------------------------------------------------------
U.S. Treasuries having a remaining term to maturity of more than 99%
five years but not more than ten years
--------------------------------------------------------------------------------
Direct Obligations of US-Government Sponsored Entities having a 98%
remaining term to maturity of more than five years but not more
than ten years
--------------------------------------------------------------------------------
U.S. Treasuries having a remaining term to maturity of more than 98%
ten years but not more than twenty years
--------------------------------------------------------------------------------
Direct Obligations of US-Government Sponsored Entities having a 97%
remaining term to maturity of more than ten years but not more
than twenty years
--------------------------------------------------------------------------------
U.S. Treasuries having a remaining term to maturity of more than 98%
twenty years but not more than thirty years
--------------------------------------------------------------------------------
Direct Obligations of US-Government Sponsored Entities having a 97%
remaining term to maturity of more than twenty years but not more
than thirty years
--------------------------------------------------------------------------------
O-12
--------------------------------------------------------------------------------
Mortgage participation certificates in book-entry form, the 97%
timely payment of interest at the applicable certificate rate and
the ultimate collection of principal of which are guaranteed by
the Federal Home Loan Mortgage Corporation (excluding multi-class
REMIC pass-through certificates and pass-through certificates
backed by adjustable rate mortgages and excluding securities
paying interest or principal only)
--------------------------------------------------------------------------------
Mortgage pass-through certificates in book-entry form, the full 97%
and timely payment of interest at the applicable certificate rate
and the ultimate collection of principal of which are guaranteed
by the Federal National Mortgage Association (excluding
multi-class REMIC pass-through certificates and pass-through
certificates backed by adjustable rate mortgages and excluding
securities paying interest or principal only)
--------------------------------------------------------------------------------
Fully modified pass-through certificates in book-entry form, the 97%
full and timely payment of principal and interest of which are
guaranteed by the Government National Mortgage Association
(excluding multi-class REMIC pass-through certificates and
pass-through certificates backed by adjustable rate mortgages and
excluding securities paying interest or principal only)
--------------------------------------------------------------------------------
For the purposes of the Eligible Collateral Annex set forth above, the words
indicated below shall have the following definitions:
"US Treasuries" shall mean negotiable debt obligations issued by the United
States Treasury Department.
"Direct Obligations of US-Government Sponsored Entities" shall mean non-callable
negotiable debt obligations of the Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association and Government National Mortgage
Association.
O-13
BEAR XXXXXXX [LOGO]
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
Exhibit B
DATE: October 19, 2005
TO: Terwin Mortgage Trust, Series XXXX 0000-00XX
ATTENTION: Xxxxxxx X. Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: XXXXX0000
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear Xxxxxxx Financial Products Inc. ("BSFP") and
Terwin Mortgage Trust, Series XXXX 0000-00XX ("Counterparty"). This Transaction
is the result of the novation by (i) Terwin Advisors LLC to Counterparty of its
rights, liabilities, duties and obligations in a transaction with Bear Xxxxxxx
Bank plc ("Bear Xxxxxxx") Reference Number BXNS161691 with an Original Trade
Date of August 23, 2005 ("Original Transaction") and (ii) Bear Xxxxxxx to BSFP
of its rights, liabilities, duties and obligations in the Original Transaction.
This Agreement, which evidences a complete and binding agreement between you and
us to enter into the Transaction on the terms set forth below, constitutes a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the "Definitions"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we
entered into the Transaction. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: With respect to any Calculation Period, the amount
as detailed in the Schedule of Notional Amounts
and Fixed Rates attached hereto.
O-14
Trade Date: October 12, 2005
Effective Date: October 19, 2005
Termination Date: October 25, 2010, subject to (i) adjustment in
accordance with the Business Day Convention and
(ii) the Mandatory Early Termination Date
(described below).
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Dates: The 25th calendar day of each month during the
Term of this Transaction, commencing November 25,
2005 and ending on the Termination Date, subject
to adjustment in accordance with the Business Day
Convention.
Fixed Rate: See Schedule of Notional Amounts and Fixed Rates
attached hereto.
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate
Payer: Bear Xxxxxxx
Floating Rate Payer
Payment Dates: The 25th calendar day of each month during the
Term of this Transaction, commencing November 25,
2005 and ending on the Termination Date, subject
to adjustment in accordance with the Business Day
Convention.
Floating Rate for
initial Calculation
Period: To be determined
Floating Rate
Option: USD-LIBOR-BBA
Designated
Maturity: One month
Spread: None
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
O-15
Business Days: New York
Business Day
Convention: Modified Following
3. Additional Provisions: 1) Each party hereto is hereby advised and
acknowledges that the other party has engaged in
(or refrained from engaging in) substantial
financial transactions and has taken (or refrained
from taking) other material actions in reliance
upon the entry by the parties into the Transaction
being entered into on the terms and conditions set
forth herein and in the Confirmation relating to
such Transaction, as applicable. This paragraph
(1) shall be deemed repeated on the trade date of
each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
Master Agreement will apply to any Transaction.
2) Termination Provisions. For purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) of the ISDA Form Master Agreement
shall not apply to BSFP or Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form Master
Agreement will not apply to BSFP or to Counterparty.
(d) The provisions of Section 5 (a) (ii), (iii), and (iv) of the ISDA Form
Master Agreement will not apply to Counterparty.
(e) "Bankruptcy". The provision of Section 5(a)(vii)(2) of the ISDA Form Master
Agreement will not apply to Counterparty.
(f) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA
Form Master Agreement will not apply to BSFP or Counterparty.
(g) The "Automatic Early Termination" provision of Section 6(a) of the ISDA Form
Master Agreement will not apply to BSFP or to Counterparty.
(h) Payments on Early Termination. For the purpose of Section 6(e) of ISDA Form
Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(i) "Termination Currency" means United States Dollars.
3) Tax Representations.
O-16
(a) Payer Representations. For the purpose of Section 3(e) of the ISDA Form
Master Agreement, each of BSFP and the Counterparty will make the following
representations:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of the ISDA Form
Master Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:
(i) the accuracy of any representations made by the other party pursuant
to Section 3(f) of this Agreement;
(ii)the satisfaction of the agreement contained in Section 4(a)(iii) of
the ISDA Form Master Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(iii) of the
ISDA Form Master Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of the ISDA Form Master Agreement, provided that it shall not
be a breach of this representation where reliance is placed on clause (ii)
and the other party does not deliver a form or document under Section
4(a)(iii) by reason of material prejudice to its legal or commercial
position.
(b) Payee Representations. For the purpose of Section 3(f) of the ISDA
Form Master Agreement, each of BSFP and the Counterparty make the
following representations.
The following representation will apply to BSFP:
BSFP is a corporation organized under the laws of the United States
and its U.S. taxpayer identification number is 00-0000000.
The following representation will apply to the Counterparty:
Counterparty represents that it is the Trustee under the Pooling and
Servicing Agreement.
4) [Reserved]
5) Documents to be Delivered. For the purpose of Section 4(a) of the ISDA Form
Master Agreement:
O-17
(1) Tax forms, documents, or certificates to be delivered are:
Party required Form/Document/ Date by which to
to deliver Certificate be delivered
document
BSFP and Any document required or Promptly after the earlier
the Counterparty reasonably requested to of (i) reasonable demand by
allow the other party to either party or (ii)
make payments under this learning that such form or
Agreement without any document is required
deduction or withholding for
or on the account of any Tax
or with such deduction or
withholding at a reduced
rate
(2) Other documents to be delivered are:
Party required Form/Document/ Date by which to Covered by
to deliver Certificate be delivered Section 3(d)
document Representation
BSFP and Any documents Upon the execution Yes
the Counterparty required by the and delivery of this
receiving party to Agreement and such
evidence the Confirmation
authority of the
delivering party or
its Credit Support
Provider, if any,
for it to execute
and deliver this
Agreement, any
Confirmation, and
any Credit Support
Documents to which
it is a party, and
to evidence the
authority of the
delivering party or
its Credit Support
Provider to perform
its obligations
under this
Agreement, such
Confirmation and/or
Credit Support
Document, as the
case may be
BSFP and A certificate of an Upon the execution Yes
the Counterparty authorized officer and delivery of this
of the party, as to Agreement and such
the incumbency and Confirmation
authority of the
respective officers
of the party signing
this Agreement, any
relevant Credit
Support Document, or
any Confirmation, as
the case may be
O-18
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of ISDA Form Master
Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to the Counterparty:
Address: US Bank
c/o XXXX 0000-00XX
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
with a copy to:
Attention: Xxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) of the ISDA Form Master Agreement
will not apply to this Agreement; neither BSFP nor the Counterparty have any
Offices other than as set forth in the Notices Section and BSFP agrees that, for
purposes of Section 6(b) of this Agreement, it shall not in future have any
Office other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of the ISDA Form Master
Agreement:
O-19
BSFP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP
(f) Credit Support Document. Not applicable for either BSFP or the Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole, without
regard to conflict of law provisions thereof, other than New York General
Obligation Law Section 5-1401.
(i) Non-Petition. BSFP hereby irrevocably and unconditionally agrees that it
will not institute against, or join any other person in instituting against or
cause any other person to institute against Counterparty, any bankruptcy,
reorganization, arrangement, insolvency, or similar proceeding under the laws of
the United States, or any other jurisdiction for the non-payment of any amount
due hereunder or any other reason until the payment in full of the Certificates
and the expiration of a period of one year plus ten days (or, if longer, the
applicable preference period) following such payment.
(j) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(k) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(l) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(m) Transfer, Amendment and Assignment. Except for the initial assignment of
this Confirmation by Counterparty to its assignee, no transfer, amendment,
waiver, supplement, assignment or other modification of this Transaction shall
be permitted by either party unless the applicable Rating Agencies have been
O-20
provided notice of the same and confirms in writing (including by facsimile
transmission) within five Business Days after such notice is given that it will
not downgrade, withdraw or otherwise modify its then-current rating of any
securities related to this Confirmation (the "Securities"). BSFP shall not
unreasonably withhold its consent to any Assignment of this Confirmation.
(n) Proceedings. BSFP shall not institute against or cause any other person to
institute against, or join any other person in instituting against, Counterparty
or any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law for a period of one year and one day following payment in full of
the Securities.
(o) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Novation Agreement is executed by the Trustee (i)
this Novation Agreement is executed and delivered by U.S. Bank National
Association ("U.S. Bank"), not in its individual capacity but solely as Trustee
under the Pooling and Servicing Agreement, dated as of October 1, 2005, among
Terwin Securitization, as Depositor, Terwin Advisors LLC, as Seller, XX Xxxxxx
Chase Bank, National Association, as Securities Administrator, Servicing
Administrator and Backup Servicer, Specialized Loan Servicing, LLC, as Servicer,
The Murrayhill Company, as Credit Risk Manager and U.S. Bank, as Trustee (the
"Pooling and Servicing Agreement") in the exercise of the powers and authority
conferred and vested in the Trustee thereunder, (ii) each of the
representations, undertakings and agreements herein made by the Trustee is made
by it on behalf of the Trust Fund created under the Pooling and Servicing
Agreement, and is made and intended not as personal representations of the
Trustee but is made and intended for the purpose of binding only the Trust Fund,
and (iii) under no circumstances will U.S. Bank in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken under this Novation Agreement in
connection with the New Transaction.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that BSFP shall not be deemed to have any Affiliates
for purposes of this Agreement, including for purposes of Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date when it enters
into a Transaction that:--
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether
written or oral), other than the representations expressly made in
this Agreement or the Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
O-21
(i) BSFP is acting for its own account. Each Party has made its own
independent decisions to enter into this Transaction and as to
whether this Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral)
of the other party as investment advice or as a recommendation to
enter into this Transaction; it being understood that information
and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a
recommendation to enter into this Transaction. It has not received
from the other party any assurance or guarantee as to the expected
results of this Transaction.
(ii) It is capable of evaluating and understanding (on its own
behalf or through independent professional advice), and understands
and accepts, the terms, conditions and risks of this Transaction. It
is also capable of assuming, and assumes, the financial and other
risks of this Transaction.
(iii) The other party is not acting as a fiduciary or an advisor for
it in respect of this Transaction.
(3) Purpose. It is an "eligible swap participant" as such term is
defined in Section 35.1(b)(2) of the regulations (17 C.F.R 35)
promulgated under, an and "eligible contract participant" as defined
in Section 1(a)(12) of, the Commodity Exchange Act, as amended, and
it is entering into the Transaction for the purposes of managing its
borrowings or investments, hedging its underlying assets or
liabilities or in connection with a line of business."
9) Additional Provisions. Notwithstanding the terms of Sections 5 and 6 of the
ISDA form Master Agreement, if Counterparty has satisfied its payment
obligations under Section 2(a)(i) of the ISDA form Master Agreement, then unless
BSFP is required pursuant to appropriate proceedings to return to Counterparty
or otherwise returns to Counterparty upon demand of Counterparty any portion of
such payment, (a) the occurrence of an event described in Section 5(a) of the
ISDA form Master Agreement with respect to Counterparty shall not constitute an
Event of Default or Potential Event of Default with respect to Counterparty as
the Defaulting Party and (b) BSFP shall be entitled to designate an Early
Termination Event pursuant to Section 6 of the ISDA form Master Agreement only
as a result of a Termination Event set forth in either Section 5(b)(i) or
Section 5(b)(ii) of the ISDA form Master Agreement with respect to BSFP as the
Affected Party or Section 5(b)(iii) of the ISDA form Master Agreement with
respect to BSFP as the Burdened Party. For purposes of the Transaction to which
this Agreement relates, Counterparty's only obligation under Section 2(a)(i) of
the ISDA form Master Agreement is to pay the Fixed Amount on the Fixed Rate
Payer Payment Date.
10) Set-off. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.
11) Additional Termination Events. Additional Termination Events will apply.
(a) If a Rating Agency Downgrade has occurred and BSFP has not, within 30
days, complied with Section 12 below, then an Additional Termination Event shall
have occurred with respect to BSFP and BSFP shall be the sole Affected Party
with respect to such an Additional Termination Event.
O-22
(b) If the Counterparty is unable to pay its Class A Certificates or fails
or admits in writing its inability to pay it's Class A Certificates as they
become due, then an Additional Termination Event shall have occurred with
respect to Counterparty and Counterparty shall be the sole Affected Party with
respect to such Additional Termination Event.
(c) Reduction of Aggregate Certificate Principal Balance of the
Certificates to Zero. An Additional Termination Event, in respect of which the
Counterparty is the sole Affected Party, will occur if on any Determination Date
for which it is determined that the aggregate Certificate Principal Balance of
the Certificates will be reduced to zero on the related Distribution Date after
giving effect to distribution of Interest Proceeds and Principal Proceeds in
accordance with the Priority of Payments in Section 5.05 of the Pooling and
Servicing Agreement (including any termination payments due hereunder). The
Early Termination Date shall be the Determination Date and all payments in
respect of the related Early Termination Date shall be paid on the related
Distribution Date.
12) Rating Agency Downgrade. If a Rating Event (as defined below) occurs with
respect to BSFP, then BSFP shall, at its own expense, (i) assign the New
Transaction hereunder to a third party within thirty (30) days of such Ratings
Event that meets or exceeds, or as to which any applicable credit support
provider meets or exceeds, the Approved Ratings Thresholds (as defined below)
and subject to Standard & Poor's Ratings Services, Inc.'s ("S&P") and Xxxxx'x
Investors Service, Inc.'s ("Moody's") written confirmation that such assignment
in the context of such downgrade will not result in a withdrawal, qualification
or downgrade of the then current ratings assigned to the Certificates without
regard to the Certificate Guaranty Insurance Policy (as defined in the Pooling
and Servicing Agreement) (the "Rating Agency Condition") or (ii) deliver
collateral and an executed ISDA Credit Support Annex, within thirty (30) days of
such Ratings Event and subject to satisfaction of the Rating Agency Condition.
For the avoidance of doubt, a downgrade of the rating on the Certificates could
occur in the event that BSFP does not post sufficient collateral. For purposes
of this Transaction, a "Ratings Event" shall occur with respect to BSFP, if its
counterparty credit rating ceases to be rated at least "AA-" by S&P, or any
successor thereto, and at least "Aa3" by Moody's, or any successor thereto
(including in connection with a merger, consolidation or other similar
transaction by BSFP) such ratings being referred to herein as the "Approved
Ratings Thresholds", (unless, within 30 days after such withdrawal or downgrade,
each of Moody's and S&P has reconfirmed the rating of the Certificates, without
regard to the Certificate Guaranty Insurance Policy, as applicable, which was in
effect immediately prior to such withdrawal or downgrade.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF
THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BEAR XXXXXXX FINANCIAL PRODUCTS
INC. IS AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: Payments to BSFP:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the account of
Bear, Xxxxxxx Securities Corp.
Account Number: 0925-3186, for further credit to
Bear Xxxxxxx Financial Products Inc.
O-23
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
Payments to Counterparty:
JPMorgan Chase Bank
ABA Number: 021 000 021
Account Number: 507 947 541
Ref: XXXX 0000-00XX
Attention: Xxx Xxxxx
FFC to: Terwin 2005-16HE
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions, please
contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all other inquiries
please contact Derivatives Documentation by telephone at 000-0-000-0000.
Originals will be provided for your execution upon your request.
O-24
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: _______________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
TRUSTEE FOR TERWIN MORTGAGE TRUST, SERIES XXXX 0000-00XX
By: _______________________________
Name:
Title:
lm
O-25
SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance
with the Business Day Convention)
From and including To but excluding Notional Amount (USD) Fixed Rate
------------------ ---------------- --------------------- ----------
Effective Date 25-Nov-05 285,448,000 4.005%
25-Nov-05 27-Dec-05 281,448,808 4.110%
27-Dec-05 25-Jan-06 276,471,716 4.249%
25-Jan-06 27-Feb-06 270,477,123 4.379%
27-Feb-06 27-Mar-06 263,480,179 4.410%
27-Mar-06 25-Apr-06 255,486,213 4.394%
25-Apr-06 25-May-06 246,552,844 4.362%
25-May-06 26-Jun-06 236,516,435 4.327%
26-Jun-06 25-Jul-06 225,641,699 4.302%
25-Jul-06 25-Aug-06 214,064,052 4.300%
25-Aug-06 25-Sep-06 203,315,727 4.322%
25-Sep-06 25-Oct-06 193,089,794 4.350%
25-Oct-06 27-Nov-06 183,360,863 4.376%
27-Nov-06 26-Dec-06 174,104,779 4.398%
26-Dec-06 25-Jan-07 165,298,562 4.416%
25-Jan-07 26-Feb-07 156,920,345 4.429%
26-Feb-07 26-Mar-07 148,949,329 4.438%
26-Mar-07 25-Apr-07 141,365,722 4.444%
25-Apr-07 25-May-07 134,150,696 4.450%
25-May-07 25-Jun-07 127,286,336 4.455%
25-Jun-07 25-Jul-07 111,525,219 4.460%
25-Jul-07 27-Aug-07 97,650,472 4.464%
27-Aug-07 25-Sep-07 85,546,643 4.468%
25-Sep-07 25-Oct-07 74,979,270 4.471%
25-Oct-07 26-Nov-07 65,745,490 4.472%
26-Nov-07 26-Dec-07 61,538,507 4.472%
26-Dec-07 25-Jan-08 57,619,908 4.471%
25-Jan-08 25-Feb-08 53,926,914 4.469%
25-Feb-08 25-Mar-08 50,446,507 4.466%
25-Mar-08 25-Apr-08 47,166,339 4.463%
25-Apr-08 27-May-08 44,074,762 4.461%
27-May-08 25-Jun-08 41,113,504 4.459%
25-Jun-08 25-Jul-08 37,128,843 4.457%
25-Jul-08 25-Aug-08 33,525,558 4.457%
O-26
25-Aug-08 25-Sep-08 31,772,000 4.458%
25-Sep-08 27-Oct-08 31,772,000 4.459%
27-Oct-08 25-Nov-08 31,772,000 4.459%
25-Nov-08 26-Dec-08 31,772,000 4.460%
26-Dec-08 26-Jan-09 31,772,000 4.460%
26-Jan-09 25-Feb-09 29,841,528 4.461%
25-Feb-09 25-Mar-09 27,875,322 4.462%
25-Mar-09 27-Apr-09 26,004,795 4.463%
27-Apr-09 26-May-09 24,225,057 4.466%
26-May-09 25-Jun-09 22,531,345 4.469%
25-Jun-09 27-Jul-09 20,919,148 4.473%
27-Jul-09 25-Aug-09 19,384,821 4.479%
25-Aug-09 25-Sep-09 17,924,311 4.485%
25-Sep-09 26-Oct-09 16,533,853 4.492%
26-Oct-09 25-Nov-09 15,188,424 4.498%
25-Nov-09 28-Dec-09 13,862,051 4.505%
28-Dec-09 25-Jan-10 12,592,604 4.511%
25-Jan-10 25-Feb-10 11,383,625 4.517%
25-Feb-10 25-Mar-10 10,232,133 4.524%
25-Mar-10 26-Apr-10 9,135,240 4.530%
26-Apr-10 25-May-10 8,090,189 4.538%
25-May-10 25-Jun-10 7,093,597 4.546%
25-Jun-10 26-Jul-10 5,856,998 4.556%
26-Jul-10 25-Aug-10 4,716,133 4.566%
25-Aug-10 27-Sep-10 3,663,046 4.576%
27-Sep-10 Termination Date 3,016,471 4.586%
O-27
EXHIBIT P
OFFICER'S CERTIFICATE OF SERVICING ADMINISTRATOR
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Worldwide Securities Services/Global Debt (XXXX 0000-00XX)
Re: Pooling and Servicing Agreement dated as of October 1, 2005 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), JPMorgan Chase Bank, N.A., as
servicing administrator (the "Servicing Administrator"), securities
administrator (the "Securities Administrator") and backup servicer (the
"Backup Servicer"), Specialized Loan Servicing, LLC, as servicer (the
"Servicer") and U.S. Bank National Association, as trustee (the "Trustee")
(the "Agreement"), relating to Terwin Mortgage Trust, Asset-Backed
Certificates, Series XXXX 0000-00XX
The Servicing Administrator hereby certifies to the Depositor, the
Securities Administrator, SLS and their respective officers, directors and
affiliates, that:
1. Based on our knowledge, the information prepared by the Servicing
Administrator and relating to the mortgage loans master serviced by the
Servicing Administrator and provided by the Servicing Administrator to the
Securities Administrator in its reports to the Securities Administrator is
accurate and complete in all material respects as of the last day of the
period covered by such report;
2. Based on our knowledge, the master servicing information required to be
provided to the Securities Administrator by the Servicing Administrator
pursuant to the Agreement has been provided to the Securities
Administrator;
3. Based upon the review required under the Agreement, and except as
disclosed in its reports, the Servicing Administrator as of the last day
of the period covered by such reports has fulfilled its obligations under
the Agreement;
4. The Servicing Administrator has disclosed to its independent auditor, who
issues the independent auditor's report on the Uniform Single Attestation
Program for Mortgage Bankers for the Servicing Administrator, any
significant deficiencies relating to the Servicing Administrator's
compliance with minimum master servicing standards; and
P-1
5. In compiling the information and making the foregoing certifications, the
Servicing Administrator has relied upon information furnished to it by the
Servicer under the Agreements. The Servicing Administrator shall have no
responsibility or liability for any inaccuracy in such reports resulting
from information so provided by the Servicer.
Date:
JPMorgan Chase Bank, N.A.,
as Servicing Administrator
____________________________________
Authorized Signature
P-2
EXHIBIT Q
FORM OF CUSTODIAL AGREEMENT
[INTENTIONALLY OMITTED]
Q-1
EXHIBIT R
FORM OF SERVICER REPORT
[INTENTIONALLY OMITTED]
R-1
