EXECUTION COPY
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
TERWIN ADVISORS LLC,
Seller
CHASE MANHATTAN MORTGAGE CORPORATION,
Master Servicer
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Securities Administrator And Backup Servicer
SPECIALIZED LOAN SERVICING, LLC,
Servicer
and
U.S. BANK NATIONAL
ASSOCIATION,
Trustee
-------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
--------------------------------------
TERWIN MORTGAGE TRUST
ASSET-BACKED CERTIFICATES, SERIES XXXX 0000-00XX
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS....................................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..................................38
SECTION 2.01. Conveyance of Mortgage Loans.....................................................38
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans..................................41
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.......................43
SECTION 2.04. Representations and Warranties of the Master Servicer; Representations and
Warranties of the Servicer; Representations and Warranties of the Securities
Administrator; Representations and Warranties of the Backup Servicer.............47
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are not "Qualified
Mortgages." .....................................................................50
SECTION 2.06. Authentication and Delivery of Certificates......................................50
SECTION 2.07. REMIC Elections..................................................................50
SECTION 2.08. Covenants of the Master Servicer.................................................54
SECTION 2.09. Covenants of the Servicer........................................................54
SECTION 2.10. Related Agreements...............................................................54
SECTION 2.11. Conveyance of Subsequent Mortgage Loans..........................................55
SECTION 2.12. Permitted Activities of the Trust................................................57
SECTION 2.13. Qualifying Special Purpose Entity................................................57
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................................................57
SECTION 3.01. Servicer to Service Mortgage Loans...............................................57
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of the Servicer.......59
SECTION 3.03. Rights of the Depositor, the Securities Administrator, the Backup Servicer and
the Trustee in Respect of the Servicer...........................................59
SECTION 3.04. The Master Servicer or Backup Servicer to Act as Servicer........................60
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account; Master Servicer
Collection Account; Certificate Account..........................................61
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts..............65
SECTION 3.07. Access to Certain Documentation and Information Regarding the Mortgage Loans.....65
SECTION 3.08. Withdrawals from a Collection Account, Master Servicer Collection Account and
Certificate Account..............................................................65
SECTION 3.09. [RESERVED].......................................................................68
SECTION 3.10. [RESERVED].......................................................................68
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements........................68
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds......69
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files..................................72
SECTION 3.14. Documents, Records and Funds in Possession of the Servicer to be Held for the
Trustee .........................................................................73
SECTION 3.15. Servicing Compensation...........................................................73
SECTION 3.16. Access to Certain Documentation..................................................74
SECTION 3.17. Annual Statement as to Compliance................................................74
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TABLE OF CONTENTS
(continued)
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SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements ......................................................................74
SECTION 3.19. Duties and Removal of the Credit Risk Manager....................................74
SECTION 3.20. Periodic Filings.................................................................75
SECTION 3.21. Annual Certificate by Securities Administrator...................................76
SECTION 3.22. [RESERVED].......................................................................76
SECTION 3.23. Prepayment Penalty Reporting Requirements........................................76
SECTION 3.24. Servicer Reports.................................................................76
SECTION 3.25. Indemnification..................................................................77
SECTION 3.26. Nonsolicitation..................................................................78
SECTION 3.27. SLS as Servicer..................................................................78
SECTION 3.28. Quarterly Audit..................................................................78
SECTION 3.29. [RESERVED].......................................................................79
SECTION 3.30. SLS Servicing Tape; Storage and Access to Servicing Tape.........................79
ARTICLE IV ADMINISTRATION, MASTER SERVICING AND BACKUP SERVICING OF THE MORTGAGE LOANS...................79
SECTION 4.01. Master Servicer..................................................................79
SECTION 4.02. REMIC Related Covenants..........................................................80
SECTION 4.03. Fidelity Bond....................................................................80
SECTION 4.04. Powers to Act; Procedures........................................................80
SECTION 4.05. Due-on-Sale Clauses; Assumption Agreements.......................................81
SECTION 4.06. Documents, Records and Funds in Possession of Master Servicer to be Held for
Trustee .........................................................................81
SECTION 4.07. Monitoring of the Servicer.......................................................82
SECTION 4.08. [RESERVED].......................................................................82
SECTION 4.09. [RESERVED].......................................................................82
SECTION 4.10. Presentment of Claims and Collection of Proceeds.................................82
SECTION 4.11. Trustee or Custodian to Retain Possession of Certain Insurance Policies and
Documents .......................................................................83
SECTION 4.12. Realization Upon Defaulted Loans.................................................83
SECTION 4.13. REO Property.....................................................................83
SECTION 4.14. Annual Statement as to Compliance................................................84
SECTION 4.15. Annual Independent Public Accountants' Servicing Statement; Financial Statements.84
SECTION 4.16. Annual Certificate by Master Servicer............................................84
SECTION 4.17. Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls...85
SECTION 4.18. Obligation of the Master Servicer in Respect of Collection Account...............85
SECTION 4.19. Backup Servicer..................................................................85
ARTICLE V DISTRIBUTIONS.................................................................................85
SECTION 5.01. Advances by the Master Servicer and the Servicer.................................85
SECTION 5.02. Advance Facility.................................................................86
SECTION 5.03. Reduction of Servicing Compensation in Connection with Prepayment Interest
Shortfalls ......................................................................89
SECTION 5.04. Distributions on the REMIC Interests.............................................89
SECTION 5.05. Distributions....................................................................90
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TABLE OF CONTENTS
(continued)
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SECTION 5.06. Monthly Statements to Certificateholders.........................................93
SECTION 5.07. Pre-Funding Account..............................................................95
SECTION 5.08. Capitalized Interest Account.....................................................96
ARTICLE VI THE CERTIFICATES..............................................................................97
SECTION 6.01. The Certificates.................................................................97
SECTION 6.02. Appointment of Certificate Registrar; Certificate Register; Registration of
Transfer and Exchange of Certificates............................................98
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates...............................102
SECTION 6.04. Persons Deemed Owners...........................................................103
SECTION 6.05. Access to List of Certificateholders' Names and Addresses.......................103
SECTION 6.06. Book-Entry Certificates.........................................................103
SECTION 6.07. Notices to Depository...........................................................104
SECTION 6.08. Definitive Certificates.........................................................104
SECTION 6.09. Maintenance of Office or Agency.................................................105
SECTION 6.10. Authenticating Agents...........................................................105
ARTICLE VII THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE SECURITIES ADMINISTRATOR............106
SECTION 7.01. Respective Liabilities of the Depositor, the Master Servicer, the Servicer and
the Securities Administrator....................................................106
SECTION 7.02. Merger or Consolidation of the Depositor, the Master Servicer, the Servicer or
the Securities Administrator....................................................106
SECTION 7.03. Limitation on Liability of the Depositor, Master Servicer, the Servicer, the
Backup Servicer, the Trustee, the Securities Administrator and Others...........106
SECTION 7.04. Limitation on Resignation of the Servicer.......................................108
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds..................................108
SECTION 7.06. Limitation on Resignation of the Master Servicer and the Backup Servicer........109
SECTION 7.07. Assignment of Backup Servicing and Master Servicing.............................109
SECTION 7.08. Limitation Upon Liability of the Credit Risk Manager............................110
ARTICLE VIII DEFAULT; TERMINATION OF SERVICER.............................................................110
SECTION 8.01. Events of Default...............................................................110
SECTION 8.02. Securities Administrator to Act; Master Servicer and Backup Servicer to Act;
Appointment of Successor........................................................112
SECTION 8.03. Notification to Certificateholders..............................................114
SECTION 8.04. Waiver of Servicer Events of Default............................................114
SECTION 8.05. SLS Events of Termination.......................................................114
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR......................................115
SECTION 9.01. Duties of the Trustee...........................................................115
SECTION 9.02. Certain Matters Affecting the Trustee...........................................116
SECTION 9.03. The Trustee Not Liable for Certificates or Mortgage Loans.......................118
SECTION 9.04. The Trustee May Own Certificates................................................118
SECTION 9.05. Trustee's Fees and Expenses.....................................................119
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 9.06. [RESERVED]......................................................................119
SECTION 9.07. Eligibility Requirements for the Trustee........................................119
SECTION 9.08. Resignation and Removal of the Trustee..........................................119
SECTION 9.09. [RESERVED]......................................................................120
SECTION 9.10. Successor Trustee...............................................................120
SECTION 9.11. Merger or Consolidation of the Trustee..........................................120
SECTION 9.12. Appointment of Co-Trustee or Separate Trustee...................................121
SECTION 9.13. Tax Matters.....................................................................122
SECTION 9.14. Duties of Securities Administrator..............................................124
SECTION 9.15. Certain Matters Affecting the Securities Administrator..........................125
SECTION 9.16. Securities Administrator Not Liable for Certificates or Mortgage Loans..........127
SECTION 9.17. Securities Administrator May Own Certificates...................................127
SECTION 9.18. Fees and Expenses of the Securities Administrator...............................127
SECTION 9.19. Eligibility Requirements for the Securities Administrator.......................127
SECTION 9.20. Resignation and Removal of the Securities Administrator.........................128
SECTION 9.21. Successor Securities Administrator..............................................129
SECTION 9.22. Merger or Consolidation of Securities Administrator.............................129
ARTICLE X TERMINATION..................................................................................129
SECTION 10.01. Termination upon Liquidation or Repurchase of all Mortgage Loans................129
SECTION 10.02. Final Distribution on the Certificates..........................................130
SECTION 10.03. Additional Termination Requirements.............................................131
ARTICLE XI MISCELLANEOUS PROVISIONS.....................................................................132
SECTION 11.01. Amendment.......................................................................132
SECTION 11.02. Counterparts....................................................................133
SECTION 11.03. Governing Law...................................................................133
SECTION 11.04. Intention of Parties............................................................133
SECTION 11.05. Notices.........................................................................134
SECTION 11.06. Severability of Provisions......................................................135
SECTION 11.07. Assignment......................................................................135
SECTION 11.08. Limitation on Rights of Certificateholders......................................135
SECTION 11.09. Inspection and Audit Rights.....................................................136
SECTION 11.10. Certificates Nonassessable and Fully Paid.......................................136
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TABLE OF CONTENTS
PAGE
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
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 RESERVED
EXHIBIT P FORM OF CERTIFICATE OF MASTER SERVICER
EXHIBIT Q FORM OF CUSTODIAL AGREEMENT
EXHIBIT R FORM OF SERVICER REPORT
v
POOLING AND SERVICING AGREEMENT, dated as of December 1, 2004, 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"), CHASE MANHATTAN MORTGAGE CORPORATION, a New Jersey
corporation, as master servicer (the "Master Servicer"), JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United Stats of America, as securities administrator (the "Securities
Administrator") and backup servicer (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) two real estate mortgage
investment conduits ("REMIC 1" and "REMIC 2" in a tiered REMIC structure, (ii)
the Initial ES Strip and amounts distributable with respect to the Class P
Certificates, (iii) the grantor trusts described in Section 2.07 and (iv) the
Pre-Funding Account and Capitalized Interest Account. REMIC 1 will consist of
all of the assets constituting the Trust Fund (other than assets described in
clauses (ii), (iii) and (iv) above and other than the interests in any of the
REMICs provided for herein) and will be evidenced by the REMIC 1 Regular
Interests (which will be uncertificated and 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 be uncertificated and will represent the
"regular interests" in REMIC 2) and the REMIC 2 Residual Interest as the single
"residual interest" in REMIC 2. The Class R Certificate will represent
beneficial ownership of the Class LT1-R Interest and the REMIC 2 Residual
Interest. The "latest possible maturity date" for federal income tax purposes of
all the interests created hereby will be the Last Scheduled Distribution 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.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, 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 Master Servicing 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 is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in Section 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 servicing practices, which will conform to the 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 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 Class B-2
and Class B-3A Certificates and any Distribution Date, the calendar month
immediately preceding the month in which such Distribution Date occurs. All
calculations of interest on the LIBOR Certificates and the REMIC 1 Regular
Interests 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 Class B-2 and Class B-3A Certificates 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 Subsequent Cut-off Date, the proposed Subsequent Transfer Date and the
aggregate Stated Principal Balance of such Subsequent Mortgage Loans as of the
Subsequent Cut-off Date. The Addition Notice shall be given to the Servicer, the
Trustee and the Securities Administrator not later than three Business Days
prior to the related Subsequent Transfer Date and shall be substantially in the
form of Exhibit 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 M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class B-1
Certificate Principal Balance, the Class B-2 Certificate Principal Balance, the
Class B-3A Certificate Principal Balance and the Class B-3B 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).
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Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
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 Master Servicer Collection Account (with respect to the Master
Servicer) 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.
Appraised Value: The amount set forth in an appraisal made in
connection with the origination of the Related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction where the related Mortgaged Property 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: As of any Distribution Date, for the Class A,
Class M, Class B-1, Class B-3A and Class B-3B Certificates a per annum rate
equal to 12 times the quotient obtained by dividing (x) the excess of (a) the
sum of (I) the total scheduled interest on the Included Mortgage Loans for the
related Due Period and (II) for the Distribution Date in January 2005,
one-twelfth of the product of the Original Pre-Funded Amount and the Net WAC for
such Distribution Date over (b) the Administration Fee for such Distribution
Date by (y) the Aggregate Certificate Principal Balance immediately prior to
such Distribution Date and for the Class A, Class M, Class B-1 and Class B-3B
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.
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.
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Book-Entry Regulation S Global Securities: As defined in Section 6.01
hereof.
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 or the Securities
Administrator is located, or financial and savings and loan institutions in the
States of California, Texas or Colorado are authorized or obligated by law or
executive order to be closed.
Capitalized Interest Account: The account defined in Section 5.08
herein.
Capitalized Interest Amount: The amount paid by the Seller to the
Securities Administrator for deposit into the Capitalized Interest Account on
the Closing Date pursuant to Section 5.08, which amount is $57,000.00.
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 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 P, Class CE, Class ES or Class R 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).
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 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
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(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.
Certification: As defined in Section 3.20 hereof.
Class: All Certificates bearing the same Class designation as set forth
in Section 6.01 hereof.
Class A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A Certificates.
Class A Certificates: Any Certificate designated as a "Class A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A Pass-Through Rate on
the Class A 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 A Certificates.
Class A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A Current Interest with respect to prior
Distribution Dates (excluding any Floating Rate Certificate Carryover for the
Class A Certificates) over (B) the amount actually distributed to the Class A
Certificates with respect to Class A Current Interest and Class A Current
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 A
Pass-Through Rate for the related Accrual Period.
Class A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.39% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.78% per annum.
Class A Pass-Through Rate: For the first Distribution Date, 2.810% per
annum. As of any Distribution Date thereafter, the lesser of (1) One-Month LIBOR
plus the Class A Margin and (2) the Available Funds Cap for such Distribution
Date.
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 immediately prior to
such Distribution Date over (B) the lesser of (i) 22.25% of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period and the amount on deposit in the Pre-Funding Account 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 Class A
Certificate Principal Balance.
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Class B Certificates: The Class B-1 Certificates, Class B-2
Certificates, Class B-3A Certificates, and Class B-3B 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 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 (excluding any Floating Rate Certificate Carryover for
the Class B-1 Certificates) over (B) the amount actually distributed to the
Class B-1 Certificates with respect to Class B-1 Current Interest and Class B-1
Current 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.
Class B-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.95% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.925% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 4.370%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class B-1 Margin and (2) the Available Funds Cap for such
Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, 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 (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date) and (D) the Class B-1 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 73.85% 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 and Class M
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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 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.
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 (excluding any Floating Rate Certificate Carryover for
the Class B-2 Certificates) over (B) the amount actually distributed to the
Class B-2 Certificates with respect to Class B-2 Current Interest and Class B-2
Current 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, the lesser of
(i) 5.00% per annum and (ii) the Net WAC.
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
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 (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 B-1 Certificate Principal Balance (after taking into account
distributions of the Class B-1 Principal Distribution Amount on such
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Distribution Date) and (E) the Class B-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 78.15% 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 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 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 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
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 (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 B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date), (E) the Class B-2 Certificate
Principal Balance immediately prior to such Distribution Date and (F) the
aggregate Class B-3A Certificate Principal Balance and Class B-3B Certificate
Principal Balance (after taking into account distributions of the Class B-3A
Principal Distribution Amount and the Class B-3B Principal Distribution Amount
on such Distribution Date) over (2) the lesser of (A) 90.00% 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 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 aggregate Certificate
Principal Balance of the Class B-3A and Class B-3B Certificates and (y) 100% of
the Principal Distribution Amount remaining after any distributions on such
Class A, Class M, Class B-1 and Class B-2 Certificates and (II) in no event will
the Class B-3 Principal Distribution Amount with respect to any Distribution
Date exceed the aggregate of the Class B-3A Certificate Principal Balance and
the Class B-3B Certificate Principal Balance.
Class B-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 B-3A Certificates.
Class B-3A Certificate: Any Certificate designated as a "Class B-3A
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 B-3A Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-3A
Certificates.
Class B-3A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3A Pass-Through Rate on
the Class B-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 bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-3A Certificates.
Class B-3A Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class B-3A Current Interest with respect to
prior Distribution Dates (excluding any Floating Rate Certificate Carryover for
the Class B-3A Certificates) over (B) the amount actually distributed to the
Class B-3A Certificates with respect to Class B-3A Current Interest and Class
B-3A Current 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-3A Pass-Through Rate for the related Accrual Period.
Class B-3A Pass-Through Rate: As of any Distribution Date, the lesser
of (1) 6.00% per annum and (2) the Available Funds Cap for such Distribution
Date.
Class B-3A Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class B-3A Applied Realized Loss Amount over (2) the sum
of (x) all distributions in reduction of the Class B-3A Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class B-3A Certificates pursuant to the
definition of "Certificate Principal Balance."
Class B-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 B-3B Certificates.
Class B-3B Certificate: Any Certificate designated as a "Class B-3B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3B Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-3B
Certificates.
Class B-3B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3B Pass-Through Rate on
the Class B-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 B-3B Certificates.
Class B-3B Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class B-3B Current Interest with respect to
prior Distribution Dates (excluding any Floating Rate Certificate Carryover for
the Class B-3B Certificates) over (B) the amount actually distributed to the
Class B-3B Certificates with respect to Class B-3B Current Interest and Class
B-3B Current Interest Carry Forward Amounts on such prior Distribution Dates and
(2) interest on such excess
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(to the extent permitted by applicable law) at the Class B-3B Pass-Through Rate
for the related Accrual Period.
Class B-3B Margin: As of any Distribution Date for the Class B-3B
Certificates, 3.000% per annum.
Class B-3B Pass-Through Rate: For the first Distribution Date, 5.420%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class B-3B Margin and (2) the Available Funds Cap for such
Distribution Date.
Class B-3B Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class B-3B Applied Realized Loss Amount over (2) the sum
of (x) all distributions in reduction of the Class B-3B Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class B-3B Certificates pursuant to the
definition of "Certificate Principal Balance."
Class CE Certificate: The Class CE Certificates executed by the Trustee
and authenticated by the Trustee in substantially the form set forth in Exhibit
A.
Class CE Distributable Amount: The excess of (x) the sum of (i) the
initial Overcollateralization Amount and (ii) all interest payments accrued on
the REMIC 2 CE Interest over (y) the sum of (i) all prior distributions to the
Class CE Certifiates pursuant to Section 5.05(g) and (ii) all payments treated
as distributed by REMIC 2 to the REMIC 2 CE Interest then paid to the holders of
the Class A, Class B and Class M Certificates pursuant to an interest rate cap
contract as described in Section 2.07(d).
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-A Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to $87,615,500 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 $8,811,000 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 $2,848,500 and an interest rate equal
to the Net Rate.
Class LT1-B3A Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to $3,890,425 and an interest rate equal
to the Net Rate.
Class LT1-B3B Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to $3,963,925 and an interest rate equal
to the Net Rate.
Class LT1-CE Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to the excess of (i) the sum of (x) the
Cut-off Date Principal Balance of the Initial Mortgage Loans and (y) the
Original Pre-Funded Amount over (ii) the aggregate initial principal balances of
the REMIC 1 Marker Interests and an interest rate equal to the Net Rate.
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Class LT1-M1 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to $15,900,000 and an interest rate
equal to the Net Rate.
Class LT1-M2 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to $9,473,500 and an interest rate equal
to the Net Rate.
Class LT1-R Interest: The sole class of "residual interest" in REMIC 1.
Class M Certificates: The Class M-1 Certificates and Class M-2
Certificates.
Class M-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of 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-1 Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates (excluding any Floating Rate Certificate Carryover for
the Class M-1 Certificates) over (B) the amount actually distributed to the
Class M-1 Certificates with respect to Class M-1 Current Interest and Class M-1
Current 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-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.65% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.975% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 3.070%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-1 Margin and (2) the Available Funds Cap for such
Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance has been reduced to zero and a 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 (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) 46.25% 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
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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 Class A Certificate
Principal Balance 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 Certificates and (II) in no event will
the Class M-1 Principal Distribution Amount with respect to any Distribution
Date exceed the Class M-1 Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the definition of
"Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of 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-2 Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates (excluding any Floating Rate Certificate Carryover for
the Class M-2 Certificates) over (B) the amount actually distributed to the
Class M-2 Certificates with respect to Class M-2 Current Interest and Class M-2
Current 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-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.200% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.800% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 3.620%
per annum. As of any Distribution Date thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-2 Margin and (2) the Available Funds Cap for such
Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance and the Class M-1 Certificate Principal Balance have been
reduced to zero and a Trigger Event exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum of (A)
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the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (C) the Class M-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 60.55% 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 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 and Class M-1 Certificates and (II) in
no event will the Class M-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the definition of
"Certificate Principal Balance."
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.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A, representing the
rights to Prepayment Penalties as provided herein.
Closing Date: December 30, 2004.
CMMC: Chase Manhattan Mortgage Corporation, a New Jersey corporation,
or its successor in interest.
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, the lesser of (x)
the appraisal value of such Mortgaged Property 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 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 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.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the sum of (A)
the original principal balance of the related
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Mortgage Loan and (B) any outstanding principal balance of the mortgage loan the
lien of which is senior to the lien on such Mortgage Loan and the denominator of
which is the lesser of (X) the Appraised Value of the related Mortgaged Property
and (Y) the Collateral Value of the related Mortgaged Property at the time of
origination.
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 Master Servicer shall not exceed the
Securities Administrator Fee for such Distribution Date.
Corporate Trust Office: With respect to (a) the Trustee, 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 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attn: Corporate Trust Structured
Finance, Terwin Mortgage Trust 2004-22SL, or at such other address as the
Trustee may designate from time to time by notice to the Certificateholders, the
Depositor, the Seller, the Master Servicer, 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:
Institutional Trust Services/Global Debt--Terwin Mortgage Trust 2004-22SL, 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 Master Servicer, 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: Institutional Trust Services/Global Debt--Terwin
Mortgage Trust 2004-22SL.
Corresponding Certificates: With respect to the Class LT1-A Interest,
the Class A 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-B3A Interest, the Class B-3A
Certificates. With respect to the Class LT1-B3B Interest, the Class B-3B
Certificates. With respect to the Class LT1-M1 Interest, the Class M-1
Certificates. With respect to the Class LT1-M2 Interest, the Class M-2
Certificates.
Credit Risk Management Agreements: The agreement between the Servicer
and the Credit Risk Manager dated as of December 30, 2004.
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 A Current Interest, the Class M-1
Current Interest, the Class M-2 Current Interest, the Class B-1 Current
Interest, the Class B-2 Current Interest, the Class B-3A Current Interest and
the Class B-3B Current Interest.
Custodian: Deutsche Bank National Trust Company, as custodian, or its
successor in interest.
Custodian Fee: The fee payable to the Custodian as set forth in the
Custodial Agreement, a form of which is attached hereto as Exhibit Q.
Cut-off Date: December 1, 2004 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 on and
after the Cut-off Date.
Definitive Certificates: As defined in Section 6.06 hereof.
Definitive Regulation S Global Securities: As defined in Section 6.01
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
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.
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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 January 2005.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
Eligible Account: An account that is (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 Moody's 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 Moody's 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
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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 CE Certificates, Class ES
Certificates, Class P Certificates and Class R Certificate and any other
Certificate, unless the acquisition and holding of such other Certificate is
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, all amounts received by any
of the Class A Certificates, Class M Certificates and Class B Certificates
(other than the Class B-2 Certificates) to the extent attributable to the
excess, if any, of the Pass-Through Rates on such Certificates over the Net
Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) the Targeted Overcollateralization Amount over (B) the Pool Stated
Principal Balance of the Mortgage Loans as of such Distribution Date 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) 10.00% 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.
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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.
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 Available Funds Cap, the excess of (x)
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 Available Funds Cap over (y) the amount of interest
distributable on such Class on such Distribution Date based on the 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 for such Class, without giving effect to the 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.
Xxxxxxx Mac: A corporate instrumentality of the United States created
and existing under Title III of the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Funding Period: The period beginning on the Closing Date and ending on
the earlier of (a) the date on which the amount on deposit in the Pre-Funding
Account is reduced to zero or (b) 2:00 p.m., New York City time, on January 24,
2005.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
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; 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 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 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.
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
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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 A Interest Carry
Forward Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2
Interest Carry Forward Amount, the Class B-1 Interest Carry Forward Amount, the
Class B-2 Interest Carry Forward Amount, the Class B-3A Interest Carry Forward
Amount or the Class B-3B Interest Carry Forward Amount as the case may be.
Interest Determination Date: With respect to the Class A, Class M,
Class B-1 and Class B-3B 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, December 24, 2004.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the 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 Master
Servicer, 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 November
2035.
Lender: As defined in Section 5.02(a) hereof.
LIBOR Certificates: Each of the Class A, Class M-1, Class M-2, Class
B-1 and Class B-3B Certificates and "LIBOR Certificates" is collectively, the
Class A, Class M-1, Class M-2, Class B-1 and Class B-3B Certificates.
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.
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
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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.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Margin: Any of the Class A Margin, the Class M-1 Margin, the Class M-2
Margin, the Class B-1 Margin and the Class B-3B Margin.
Master Servicer: CMMC, or its successor in interest.
Master Servicer Collection Account: The account established and
maintained by the Master Servicer in accordance with Section 3.05.
Master Servicer 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.
Master Servicer Withdrawals: As defined in Section 3.08(b) hereof.
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 (x) the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date and (y) the Original Pre-Funded Amount.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly 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, the mortgage, deed of trust
or other instrument creating a second lien or a second priority ownership
interest in an estate in fee simple in real property securing a Mortgage Note.
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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 Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO 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 Exhibit B, 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;
(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 Combined 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;
(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.
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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 Mortgage Rate less the Servicing Fee Rate, the
Securities Administrator Fee Rate and the Credit Risk Manager Fee Rate.
Net Rate: The Net WAC multiplied by 30 and divided by the actual number
of days in the applicable Accrual Period.
Net WAC: As of any Distribution Date, 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 for the related Due Period
over (ii) the Administration Fee for such Distribution Date by (y) the
Outstanding Principal Balances of the Included Mortgage Loans for such
Distribution Date.
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 to the
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 to the 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-1 and Class M-2
Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Master Servicer, the Servicer, 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 Master Servicer, the Servicer, the
Backup Servicer, the Securities Administrator or the Trustee, as the case may
be, as required by this Agreement.
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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.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor, the Master Servicer, the Servicer, the Backup Servicers or
the Securities Administrator, reasonably acceptable to each addressee of such
opinion; provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor, the Master Servicer, the Servicer, the
Backup Servicers or the Securities Administrator, (2) not have any direct
financial interest in the Depositor, the Master Servicer, the Servicer or the
Securities Administrator or in any affiliate of any, and (3) not be connected
with the Depositor, the Master Servicer, 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, Master
Servicer 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 CE 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, Servicing Advances and Administration Fees (including
any costs and expenses incurred in connection with the Optional Terminations)
and (C) any unreimbursed costs, penalties and/or damages incurred by the Trust
Fund in connection with any violation relating to any of the Mortgage Loans of
any predatory or abusive lending law.
Original Pre-Funded Amount: The amount deposited by the Depositor in
the Pre-Funding Account on the Closing Date from the proceeds of the issuance of
the Certificates, which amount is $23,735,108.50.
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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).
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 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 A Certificates, the Class
A Pass-Through Rate; with respect to the Class M-1 Certificates, the Class M-1
Pass-Through Rate; with respect to the Class M-2 Certificates, the Class M-2
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; with respect to the Class B-3A Certificates, the Class B-3A
Pass-Through Rate; and, with respect to the Class B-3B Certificates, the Class
B-3B 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 Class 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 CE 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 Mortgage Loans transferred from the
Depositor and other assets of the Trust Fund,
and any credit enhancement and passive
derivative
-24-
financial instruments that pertain to beneficial
interests issued or sold to parties other than
the Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the
assets of the Trust Fund;
(iii) receiving collections on the Mortgage Loans and
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;
-00-
(xxx) xxxxxxxxxx obligations with respect to any
security described in clauses (i) and (ii)
above, in either case entered into with a
depository institution or trust company (acting
as principal) described in clause (v) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price
in excess of 115% of the face amount thereof)
bearing interest or sold at a discount issued by
any corporation, other than the Securities
Administrator or any of its Affiliates,
incorporated under the laws of the United States
or any state thereof which, at the time of such
investment, have one of the two highest long
term ratings of 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. The
Trustee specifically authorizes JPMorgan or an
affiliate thereof 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,
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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 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, or its successor in interest.
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 5.07.
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 Master Servicer,
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 December 21,
2004 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 Xxxxx'x 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.
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 (or, in the case of the first Distribution
Date, December 28, 2004).
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.
Regulation S: Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.
-29-
Regulation S Global Securities: The Book-Entry Regulation S Global
Securities and the Definitive Regulation S Global Securities.
Related Certificates: As to the REMIC 2 A Interest, the Class A
Certificates; as to the REMIC 2 B1 Interest, the Class B-1 Certificates; as to
the REMIC 2 B3A Interest, the Class B-3A Certificates; as to the REMIC 2 B3B
Interest, the Class B-3B Certificates; as to the REMIC 2 M1 Interest, the Class
M-1 Certificates; and as to the REMIC 2 M2 Interest, the Class M-2 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 REMIC 1and REMIC 2.
REMIC 1: As described in the Preliminary Statement and Section 2.07.
REMIC 1 Interests: Each of the Class LT1-A Interest, the Class LT1-B1
Interest, the Class LT1-B2 Interest, the Class LT1-B3A Interest, the Class
LT1-B3B Interest, the Class LT1-M1 Interest, the Class LT1-M2 Interest, the
Class LT1-CE Interest and the Class LT1-R Interest.
REMIC 1 Marker Interests: Each REMIC 1 Regular Interest other than the
Class LT1-CE Interest.
REMIC 1 Regular Interests: Each REMIC 1 Interest other than the Class
LT1-R Interest.
REMIC 2: As described in the Preliminary Statement and Section 2.07.
REMIC 2 Regular Interests: Each REMIC 2 Interest other than the REMIC 2
Residual Interest.
REMIC 2 A Interest: An uncertificated interest in REMIC 2 with an
initial principal balance equal to the initial Certificate Principal Balance of
the Related Certificates and with an interest rate, on each Distribution Date,
equal to the lesser of (i) One-Month LIBOR plus the Class A Margin and (ii) the
Net Rate.
REMIC 2 B1 Interest: An uncertificated interest in REMIC 2 with an
initial principal balance equal to the initial Certificate Principal Balance of
the Related Certificates and with an interest rate, on each Distribution Date,
equal to the lesser of (i) One-Month LIBOR plus the Class B-1 Margin and (ii)
the Net Rate.
REMIC 2 B3A Interest: An uncertificated interest in REMIC 2 with an
initial principal balance equal to the initial Certificate Principal Balance of
the Related Certificates and with an interest rate, on each Distribution Date,
equal to the lesser of (i) One-Month LIBOR plus the Class B-3A Margin and (ii)
the Net Rate.
REMIC 2 B3B Interest: An uncertificated interest in REMIC 2 with an
initial principal balance equal to the initial Certificate Principal Balance of
the Related Certificates and with an interest rate, on each Distribution Date,
equal to the lesser of (i) One-Month LIBOR plus the Class B-3B Margin and (ii)
the Net Rate.
REMIC 2 CE Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the excess of the sum of (x) the Cut-off
Date Principal Balance of the Initial Mortgage
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Loans and (y) the Orginal Pre-Funded Amount over the initial Aggregate
Certificate Principal Balance and bearing interest on a notional amount equal to
the aggregate principal balance of the REMIC 1 Regular Interests outstanding at
the beginning of the related Accrual Period at a rate equal to the REMIC 2 CE
Interest Rate. The REMIC 2 CE Interest will not include any obligation to make
any payments in respect of the deemed interest rate cap contracts described in
Section 2.07.
REMIC 2 CE 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 over (b) two times the weighted average of the interest rates on the
REMIC 1 Regular Interests (treating for purposes of this clause (b) the interest
rate on each of the REMIC 1 Marker Interests as capped at the interest rate (as
adjusted for the length of the accrual period) on the Corresponding Certificates
and treating the Class LT1-CE interest as capped at 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 such Distribution Date.
REMIC 2 M1 Interest: An uncertificated interest in REMIC 2 with an
initial principal balance equal to the initial Certificate Principal Balance of
the Related Certificates and with an interest rate, on each Distribution Date,
equal to the lesser of (i) One-Month LIBOR plus the Class M-1 Margin and (ii)
the Net Rate.
REMIC 2 M2 Interest: An uncertificated interest in REMIC 2 with an
initial principal balance equal to the initial Certificate Principal Balance of
the Related Certificates and with an interest rate, on each Distribution Date,
equal to the lesser of (i) One-Month LIBOR plus the Class M-2 Margin and (ii)
the Net Rate.
REMIC 2 Interests: Each of the REMIC 2 A Interest, the REMIC 2 B1
Interest, the Class B-2 Certificates, the REMIC 2 B3A Interest, the REMIC 2 B3B
Interest, the REMIC 2 M1 Interest, the REMIC 2 M2 Interest, the REMIC 2 CE
Interest and the REMIC 2 Residual Interest.
REMIC 2 Residual Interest: An interest in REMIC 2 that is entitled to
all distributions on the Class R Certificate other than distributions in respect
of the Class LT1-R Interest.
REMIC Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing "Available Funds Cap" in such definition
with "Net Rate."
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interest: Any REMIC 2 Regular Interest.
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: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan
(provided that if such Stated Principal Balance is less the Stated Principal
Balance of the Deleted Mortgage Loan, the Seller must also deposit the
Substitution
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Adjustment Amount along with Replacement Mortgage Loan); (2) with respect to any
Mortgage Loan, have a Mortgage Rate not less than or no more than 1% per annum
higher than the Mortgage Rate of the Deleted Mortgage Loan; (3) have a similar
or higher FICO score or credit grade than that of the Deleted Mortgage Loan; (4)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (5)
have a remaining term to maturity no greater than (and not more than one year
less than) that of the Deleted Mortgage Loan; (6) provide for a prepayment
charge on terms substantially similar to those of the prepayment charge, if any,
of the Deleted Mortgage Loan; (7) have the same lien priority as the Deleted
Mortgage Loan; (8) constitute the same occupancy type as the Deleted Mortgage
Loan; and (9) comply with each representation and warranty set forth in Section
2.03 hereof.
Request for Release: The Request for Release of Documents submitted by
the Servicer to the Trustee, 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
--------------------------------------- ------------------------
January 2008 - December 2008 6.00% with respect to January
2008, plus an additional 1/12 of
1.00% for each month thereafter
January 2009 - December 2009 7.00% with respect to January
2009, plus an additional 1/12 of
1.00% for each month thereafter
January 2010 - December 2010 8.00% with respect to January
2010, plus an additional 1/12 of
1.50% for each month thereafter
January 2011 - December 2011 9.50% with respect to January
2011, plus an additional 1/12 of
0.50% for each month thereafter
January 2012 and thereafter 10.00%
Required Percentage: As of any Distribution Date following a 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 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 the Distribution Date in January
2005, an amount equal to the product of (i) the Pre-Funded Amount as of the
close of the preceding calendar month (or, if such date
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would be prior to the Closing Date, the Original Pre-Funded Amount) and (ii) the
Net WAC for such Distribution Date.
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.
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 Managing Director, any Director, Vice President, any Assistant Vice
President, any Associate, any Assistant Secretary, any trust officer, or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers who at such time shall be
officers to whom, with respect to a particular matter, the matter is referred
because of the officer's knowledge of and familiarity with the particular
subject and 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.
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 December 1, 2004 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).
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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: 0.01% 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 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, 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, 0.50% per annum.
Servicing Officer: Any officer of the Servicer or the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the 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.
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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, as a result of an event of default by SLS thereunder.
SLS Event of Termination: As defined in Section 8.05 thereof.
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 the 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 an agreement among the Depositor, the Seller, the
Trustee, the Securities Administrator and the successor servicer.
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
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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
January 2008 or (2) the first Distribution Date on which (A) the Class A
Certificate Principal Balance (reduced by the Principal Funds with respect to
such Distribution Date) is less than or equal to (B) 22.25% of the Stated
Principal Balances of the Mortgage Loans as of such Distribution Date.
Subordinated Certificates: The Class M and Class B Certificates.
Subsequent Cut-off Date Principal Balance: As to any Subsequent
Mortgage Loan, the unpaid principal balance thereof as of the close of business
on the calendar day immediately preceding the Subsequent Cut-off Date after
application of all payments of principal due on or prior to the Subsequent
Cut-off Date, whether or not received, and all Principal Prepayments received
prior to the Subsequent Cut-off Date, but without giving effect to any
installments of principal received in respect of Due Dates after the Subsequent
Cut-off Date.
Subsequent Cut-off Date: With respect to those Subsequent Mortgage
Loans sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the
first day of the month in which the related Subsequent Transfer Date occurs.
Subsequent Mortgage Loan: A Mortgage Loan sold by the Depositor to the
Trust Fund pursuant to Section 2.11, 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 Trustee substantially in the form of Exhibit M, by which
Subsequent Mortgage Loans are sold to the Trust Fund.
Subservicer: As defined in Section 3.02(a) hereof.
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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).
Targeted Overcollateralization Amount: The product of (i) 5.00% 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.
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 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 plus the Pre-Funded Amount allocable as of the such
Distribution Date, equals or exceeds the product of (i) 11.00% 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 aggregate principal
balance of the Mortgage Loans as of the Cut-off Date 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 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
Master Servicer 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; and (v) 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.
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
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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-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3A Unpaid Realized Loss Amount
and Class B-3B 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 B and Class M Certificates and
2.00% to the Class CE, Class ES and Class P Certificates, with the allocation
among the Class A, 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).
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 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 Master
Servicer 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 2004-22SL, Asset-Backed Certificates, Series 2004-22SL,
without recourse" together with all riders thereto. The Mortgage
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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 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 "U.S. Bank
National Association, as Trustee for Terwin Mortgage Trust 2004-22SL,
Asset-Backed Certificates, Series 2004-22SL, 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.
If in connection with any Mortgage Loan that is not a MERS Mortgage
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 (or 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 Trustee (or the Custodian) 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.
As promptly as practicable subsequent to such transfer and assignment
and delivery to it of each Assignment of Mortgage pursuant to clause (F) above,
and in any event, within thirty (30) days thereafter, the Seller shall (i) affix
the Trustee's name to each Assignment of Mortgage, as the assignee thereof, (ii)
cause such Assignment of Mortgage to be completed in proper form for recording
in the appropriate public office for real property records within thirty (30)
days after receipt
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thereof and (iii) cause to be delivered for recording in the appropriate public
office for real property records the Assignments of Mortgages to the Trustee,
except that, with respect to any Assignment of Mortgage as to which the Seller
has not received the information required to prepare such Assignment of Mortgage
in recordable form, the Seller's obligation to do so and to deliver the same for
such recording shall be as soon as practicable after receipt of such information
and in any event within thirty (30) days after the receipt thereof, and the
Seller need not cause to be recorded any assignment of Mortgage referred to in
clause (F) above which relates to a Mortgage Loan in any jurisdiction under the
laws of which, as evidenced by an Opinion of Counsel delivered by the Seller (at
the Seller's expense) to the Trustee and the Securities Administrator within
thirty (30) days of the Closing Date, acceptable to the Rating Agencies, the
recordation of such assignment of Mortgage is not necessary to protect the
Trustee's and the Certificateholders' interest in the related Mortgage Loan. In
the event that any such assignment of Mortgage is not recorded, the Master
Servicer, the Trustee, the Securities Administrator, the Backup Servicer and the
Servicer shall have no liability for its failure to receive or act on notices
related to such assignment of Mortgage or otherwise.
In connection with the assignment of any MERS Mortgage Loan, the Seller
agrees that it will take (or shall cause the Master Servicer 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 by the Seller 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.
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 Master Servicer, 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
Master Servicer, the Servicer and Securities Administrator shall respond to any
third party inquiries with respect to ownership of the Mortgage Loans by stating
that such ownership is held by the Trustee on behalf of the Certificateholders.
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
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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.
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 either (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003, in the New Mexico Home Loan
Protection Act, effective January 1, 2004 and the Massachusetts Predatory Home
Loan Practices Act, effective November 7, 2004.
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 delivered with the Initial
Certification (the "Exception Report") 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 holds and will hold such documents and any other
documents constituting a part of the Mortgage Files delivered to it in trust for
the use and benefit of all present and future Certificateholders. The Depositor
will cause the Seller to repurchase any Mortgage Loan to which a material
exception was taken in the Exception Report unless such exception is cured to
the satisfaction of the Trustee within 45 Business Days of the Closing Date (or
the Subsequent Transfer Date with respect to Subsequent Mortgage Loans).
The Trustee 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, and the Servicer
an Initial Certification in the form annexed hereto as Exhibit B-1 to Exhibit Q.
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 Securities
Administrator and the Servicer a Final Certification in the form annexed hereto
as Exhibit B-3 to Exhibit Q, 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
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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, if the Seller does not
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, 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 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
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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 Master
Servicer, the Securities Administrator and the Trustee shall keep confidential
the name of each Mortgagor except as required by this Agreement and the
Servicer, the Master Servicer, the Securities Administrator and the Trustee
shall not solicit any such Mortgagor for the purpose of refinancing the related
Mortgage Loan; notwithstanding anything herein to 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 Master Servicer'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 Master Servicer 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 Master Servicer 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 Master Servicer.
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 Master Servicer, the Securities Administrator, the Seller 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
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of business of the Depositor and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it may
be bound or (C) constitute a material violation of any statute, order or
regulation applicable to the Depositor of any court, 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 Master
Servicer, 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, 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
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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 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 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 Master
Servicer, 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 Master
Servicer, 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 860(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 Master
Servicer; Representations and Warranties of the Servicer; Representations and
Warranties of the Securities Administrator; Representations and Warranties of
the Backup Servicer.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Servicer, the Securities Administrator, the Seller, the Backup
Servicer and the Trustee as follows, as of the date hereof:
(i) The Master Servicer is duly organized and is
validly existing as a corporation in good standing under the laws of the state
of New Jersey and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Master Servicer
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 Master Servicer has the power and authority
to master service each Mortgage Loan, and to execute, deliver and perform, and
to enter into and consummate the transactions contemplated by this Agreement and
has duly authorized by all necessary action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its terms,
except that (A) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The execution and delivery of this Agreement by
the Master Servicer, the master servicing of the Mortgage Loans under this
Agreement, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Master Servicer and will not (A)
result in a material breach of any term or provision of the charter or by-laws
of the Master Servicer or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Master Servicer
is a party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not in breach
or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Master Servicer's
ability to perform or meet any of its obligations under this Agreement.
(iv) The Master Servicer, or an affiliate thereof, is
an approved servicer of mortgage loans for Xxxxxx Xxx and for Xxxxxxx Mac.
(v) Except as previously disclosed to the Depositor,
no litigation is pending or, to the best of the Master Servicer's knowledge,
threatened, against the Master Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or to perform
any of its other obligations under this Agreement in accordance with the terms
hereof.
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(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is required,
the Master Servicer has obtained the same.
(b) The Servicer hereby represents and warrants to the
Depositor, the Master Servicer, the Securities Administrator, the Seller, the
Backup Servicer 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 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, 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.
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(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
December 1, 2004.
(c) The Securities Administrator and Backup Servicer hereby
represents and warrants to the Depositor, the Master Servicer, the Seller, the
Servicer 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 Master Servicer, 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 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 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.
REMIC 1 shall consist of all of the assets of the Trust Fund other than
(i) the interests issued by REMIC 1 and REMIC 2, (ii) the Initial ES Strip and
amounts distributable with respect to the Class P
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Certificates, (iii) the grantor trusts described in Section 2.07 hereof, (iv)
the Pre-Funding Account and (v) the Capitalized Interest Account. 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 its definition and this Section 2.07. For federal
income tax purposes, the interest rate on each REMIC 2 Regular Interest (other
than the REMIC 2 CE Interest) and on the REMIC 2 Residual Interest shall be
subject to a cap equal to the Net Rate.
The beneficial ownership of the Class LT1-R Interest and the REMIC 2
Residual Interest shall be represented by the Class R Certificate. None of the
Class LT1-R Interest and the REMIC 2 Residual Interest shall 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) It is intended that the rights of the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class B-1
Certificates, Class B-3A Certificates and Class B-3B 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 Certificates,
Class M-1 Certificates, Class M-2 Certificates, Class B-1 Certificates, Class
B-3A Certificates and Class B-3B Certificates by the holder of the Class CE
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
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class B-1
Certificates, Class B-3A Certificates and Class B-3B Certificates. For
information reporting requirements, the rights of the Class A, Class M-1, Class
M-2, Class B-1, Class B-3A and Class B-3B 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 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 Certificates, M-1 Certificates, Class M-2 Certificates, Class
B-1 Certificates, Class B-3A Certificates and Class B-3B Certificates receive
payments of Excess Interest, such amounts will be treated as distributed by
REMIC 2 with respect to the REMIC 2 CE Interest and then paid to the relevant
Class of Certificates pursuant to the related interest rate cap contract.
(e) The parties intend that the portion of the Trust Fund
consisting of the uncertificated REMIC 2 CE Interest, and the obligation of the
holders of the Class CE Certificates to make payments in respect of Excess
Interest to the holders of the Class A, Class M-1, Class M-2, Class B-1, Class
B-3A and Class B-3B Certificates 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 CE Certificates information
regarding their allocable share, if any, of the income with respect to such
grantor trust, (ii) file or cause to
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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-1, Class M-2, Class B-1,
Class B-3A, Class B-3B and Class CE Certificates as may be applicable under the
Code.
The parties intend that the portion of the Trust Fund consisting of
amounts distributable with respect to the Class P Certificates 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 P Certificates information regarding their allocable share of the income
with respect to such grantor trust and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) and
such other forms as may be applicable.
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 Trustee 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 and (ii) file
or cause to be filed with the Internal Revenue Servie Form 1041 (together with
any necessary attachments) and such other forms as may be applicable.
Notwithstanding the foregoing, the parties intent 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, such servicer's entitlement
to a fee at such excess rate shall be attributable to such servicer having
acquired a portion of the Initial ES Strip from the holders of the Class ES
Certificates.
(f) All payments of principal and interest (net of the
Administration Fee) on each of the Mortgage Loans received from the Mortgage
Loans 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 excess amounts shall be distributed to the
Class LT1-R Interest. On each Distribution Date, an amount equal to 50% of the
increase in the Overcollateralization Amount shall be payable as a reduction of
the principal amounts of the REMIC 1 Marker Interests (with such amount
allocated among the REMIC 1 Marker Interests so that each REMIC 1 Marker
Interest will have its principal reduced by an amount equal to 50% of any
increase in the Overcollateralization Amount that results in a reduction in the
principal balance of its Corresponding Certificates) and will be accrued and
added to the principal balance of the Class LT1-CE Interest. All payments of
scheduled principal and prepayments of principal on the Mortgage Loans shall be
allocated 50% to the Class LT1-CE Interest and 50% to the REMIC 1 Marker
Interests (with principal payments allocated to each of the REMIC 1 Marker
Interests in an amount equal to 50% of the principal amounts distributed to the
Corresponding Certificates in reduction of their principal amounts).
Notwithstanding the preceding sentence, an amount equal to the principal
payments that result in a reduction in the Overcollateralization Amount shall be
treated as payable entirely to the Class LT1-CE Interest. Realized Losses, other
than Realized Losses that are not applied against overcollateralization or the
principal amount of the Class M, Class B or Class CE Certificates, shall be
applied to the REMIC 1 Marker Interests and the Class LT1-CE Interest so that
after all distributions have been made on each Distribution Date (i) the
principal balance of each of the REMIC 1 Marker Interests is equal to 50% of the
principal balance of the Corresponding Certificates and (ii) the principal
balance of the Class LT1-CE Interest is equal to the sum of (x) 50% of the sum
of (i) the aggregate Stated Principal Balance of the Mortgage Loans and (ii) the
Pre-Funded Amount and (y) 50% of the Overcollateralization Amount. Each REMIC 1
Marker Interest shall be entitled to receive an amount equal to 50% of all
amounts distributed to the Corresponding Certificates in respect of unreimbursed
amounts of Realized Losses. The Class LT1-CE Interest shall be entitled to
receive all other amounts distributed to the Certificates in respect of
unreimbursed amounts of Realized Losses. The principal balance of the REMIC 1
Regular Interests will
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be increased on each Distribution Date in an amount equal to any increase on
such Distribution Date in the Certificate Principal Balance of the Certificates
pursuant to the definition of "Certificate Principal Balance." The increase
described in the preceding sentence shall be 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 (i) the
principal balance of each of the REMIC 1 Marker Interests is equal to 50% of the
principal balance of the Corresponding Certificates and (ii) the principal
balance of the Class LT1-CE Interest is equal to the sum of (x) 50% of the sum
of (I) the aggregate Stated Principal Balance of the Mortgage Loans and (II) the
Pre-Funded Amount and (y) 50% of the Overcollateralization Amount.
(g) All payments of scheduled principal and prepayments on the
Mortgage Loans, Realized Losses and shortfalls on the Mortgage Loans that are
allocated to the Certificates, shall be allocated among the REMIC 2 Regular
Interests in the same manner as such payments, Realized Losses or shortfalls are
allocated to the Related Certificates. Each REMIC 2 Regular Interest shall be
entitled to receive all amounts distributed to the Related Certificates in
respect of unreimbursed amounts of Realized Losses or shortfalls treating the
Class CE Certificates as Related Certificates with respect to the Class LT2-CE
Interest). If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the definition of "Certificate
Principal Balance," then there shall be an equivalent increase in the principal
amounts of the REMIC 2 Regular Interests, with such increase allocated (before
the making of distributions and the allocation of losses on the REMIC 2 Regular
Interests on such Distribution Date) among the REMIC 2 Regular Interests in the
same manner as such increase is allocated to the Related Certificates.
(h) All payments of scheduled principal and prepayments on the
Mortgage Loans, and Realized Losses and shortfalls on the Mortgage Loans, shall
be allocated among the REMIC 2 Interests (other than the Class B-2 Certificates)
in the same manner as such payments or Realized Losses or shortfalls are
allocated to the Related Certificates (treating the Class CE Certificates as
related to the REMIC 2 CE Interest for this purpose). Each REMIC 2 Interest
(other than the Class B-2 Certificates), shall be entitled to receive all
amounts distributed to the Related Certificates in respect of unreimbursed
amounts of Realized Losses or shortfalls (treating the Class CE Certificates as
related to the REMIC 2 CE Interest for this purpose). The principal balance of
the REMIC 2 Interests (other than the Class B-2 Certificates) will be increased
on each Distribution Date in an amount equal to any increase on such
Distribution Date in the Certificate Principal Balance of the Related
Certificates pursuant to the definition of "Certificate Principal Balance."
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 Master Servicer and the Trust Fund against any and
all Losses resulting from such negligence; provided, however, that the Servicer
shall not be liable for any such Losses attributable to the action or inaction
of the Securities Administrator, the Depositor, the Trustee or the Holder of
such Class R Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such 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 such 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).
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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 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 such Class R Certificate,
as applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Class R Certificate on which the Securities Administrator has
relied. The foregoing shall not be deemed to limit or restrict the rights and
remedies of the Holder of such 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 Master Servicer.
The Master Servicer hereby covenants to each of the other parties to
this Agreement as follows:
(a) the Master Servicer 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 Master
Servicer 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
Master Servicer pursuant to this Agreement will be inaccurate in any material
respect, provided, however, that the Master Servicer shall not be responsible
for inaccurate information provided to it by third parties.
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
(ii) No written information, certificate of an
officer, statement furnished in writing or written report delivered to the
Depositor, the Master Servicer, the Securities Administrator, the Backup
Servicer or the Trustee, any affiliate of the Depositor, the Master Servicer,
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 Sale Agreement and the Transfer
Agreements.
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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; 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 the removal of such Subsequent
Mortgage Loans. After the Subsequent Transfer Date, the Subsequent 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.
Upon delivery by the Depositor of timely Addition Notices, and subject
to satisfaction of the conditions set forth in paragraphs (c) and (d) below, the
Trust Fund shall be obligated to purchase, in accordance with the provisions of
this Agreement, Subsequent Mortgage Loans offered for sale by the Depositor
during the Funding Period (subject to the limitation that the aggregate purchase
price for such Subsequent Mortgage Loans may not exceed the Original Pre-Funded
Amount). The purchase price paid by the Trust Fund for the Subsequent Mortgage
Loans on each Subsequent Transfer Date shall be one-hundred percent (100%) of
the aggregate Stated Principal Balance of the Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor) as of the related Subsequent Cut-off Date. On each Subsequent
Transfer Date, the aggregate purchase price for all Subsequent Mortgage Loans
purchased on such date shall be withdrawn by the Securities Administrator from
the Pre-Funding Account and paid to the Depositor. Thereafter, the Pre-Funded
Amount will equal the Original Pre-Funded Amount reduced by the purchase price
paid for Subsequent Mortgage Loans. This Agreement shall constitute a
fixed-price purchase contract in accordance with Section 860G(a)(3)(A)(ii) of
the Code.
(b) The Depositor shall transfer to the Trustee for deposit in
the Mortgage Pool the Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Securities
Administrator shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Depositor shall have provided the Trustee,
the Securities Administrator and the Servicer with a timely Addition Notice;
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(ii) the Depositor shall have delivered to the
Trustee (with a copy to the Securities Administrator) a duly executed Subsequent
Transfer Instrument, which shall include a Mortgage Loan Schedule listing the
Subsequent Mortgage Loans, and the Depositor shall have delivered a computer
file containing such Mortgage Loan Schedule to the Securities Administrator, the
Trustee and the Servicer at least three Business Days prior to the related
Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as
evidenced by delivery of the Subsequent Transfer Instrument, the Depositor shall
not be insolvent nor shall it have been rendered insolvent by such transfer nor
shall it be aware of any pending insolvency;
(iv) the Funding Period shall not have terminated;
(v) the Depositor shall have delivered to the Trustee
(with a copy to the Securities Administrator) a Subsequent Transfer Instrument
confirming the satisfaction of the conditions precedent specified in this
Section 2.11 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 letter (with copies provided to the Rating Agencies 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 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 2.0% 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 February 24, 2005; (vii) the
Subsequent Mortgage Loan must bear interest at a fixed rate throughout its term
and must have a Net Mortgage Rate of no less than 5.00%; (viii) the Subsequent
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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, (ix) the Subsequent Mortgage Loan must
provide for monthly interest payments due on the first day of each calendar
month, (x) as of the Subsequent Transfer Date for such Subsequent Mortgage Loan,
the Subsequent Mortgage Loan must be a "qualified mortgage" within the meaning
of Section 860G of the Code and Treasury Regulations Section 1.860G-2 (as
determined without regard to Treasury Regulations Section 1.860G-2(a)(3) or any
similar provision that treats a defective obligation as a qualified mortgage for
a temporary period), (xi) as of the Subsequent Transfer Date for such Subsequent
Mortgage Loan, the Subsequent Mortgage Loan does not provide for interest other
than at either (a) a single fixed rate in effect throughout the term of the
Subsequent Mortgage Loan or (b) a "variable rate" (within the meaning of
Treasury Regulations Section 1.860G-1(a)(3)) in effect throughout the term of
the Subsequent Mortgage Loan, (xii) as of the Subsequent Transfer Date for such
Subsequent Mortgage Loan, the Depositor would not, based on the delinquency
status of such Subsequent Mortgage Loan, institute foreclosure proceedings prior
to the next scheduled payment date for such Subsequent Mortgage Loan, (xiii) as
of the Subsequent Transfer Date for such Subsequent Mortgage Loan, the
Subsequent Mortgage Loan was not the subject of pending or final foreclosure
proceedings and (xiv) as of the Subsequent Transfer Date for such Subsequent
Mortgage Loan, each of the representations and warranties of the Seller in the
Sale Agreement shall be true, complete and correct with respect to such
Subsequent Mortgage Loan.
(d) Following the purchase of the Subsequent Mortgage Loans by
the Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans)
will have characteristics that, as of the Subsequent Cut-off Date, are not
materially inconsistent with the Initial Mortgage Loans.
Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by a Rating Agency if the inclusion of any such Subsequent Mortgage
Loan would adversely affect the ratings of any Class of Certificates.
SECTION 2.12. 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 and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any
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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 securing any Mortgage Loan; provided that, subject to Section
6.03, the Servicer shall not take any action that is inconsistent with or
prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan serviced by it under this Agreement or the rights and interests of
the other parties to this Agreement except as otherwise required by this
Agreement or by law. The Servicer shall not make or permit any modification,
waiver or amendment of any term of any Mortgage Loan which would cause any of
the REMICs provided for herein to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860G(a) or 860G(d) of the Code. The Servicer
shall represent and protect the interest of the Trust Fund in the same manner as
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 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, 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 50 powers of
attorney (intended to be one power of attorney for each state in the United
States) 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 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 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
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connection with the MERS System, shall be 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 and (ii) 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 Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every Subservicing
Agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement 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.
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SECTION 3.04. The Master Servicer 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 Master Servicer, 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 Master Servicer 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 Master Servicer 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 Master Servicer 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
Master Servicer 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 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 Master
Servicer 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 Master Servicer's or the Backup Servicer's invoice, as applicable, thereof,
such amounts shall be payable out of funds on deposit in the Master Servicer
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 Master Servicer or the Backup
Servicer is unwilling or unable to act as servicer, the Master Servicer shall
seek to appoint a successor servicer that is eligible in accordance with the
criteria specified this Agreement.
The Servicer shall, upon request of the Securities Administrator, the
Master Servicer 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.
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Notwithstanding anything to the contrary herein, in the event that any
of the Master Servicer, the Backup Servicer, the Securities Administrator, or
the Trustee 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 0.50% per annum). In addition, none
of the Master Servicer, 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; Master Servicer 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 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
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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 or other instrument pursuant to which such payment
is required is prohibited by 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 2004-22SL, 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;
(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 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) and other similar ancillary fees (other than
Prepayment Penalties) if collected, need not be remitted by the
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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
Master Servicer, the Backup Servicer 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 Master Servicer shall establish and maintain an
account, for the benefit of the Certificateholders, as a segregated account (the
"Master Servicer Collection Account"), which shall be an Eligible Account. The
Master Servicer shall, promptly upon receipt from the Servicer on the Servicer
Remittance Date, deposit into the Master Servicer Collection Account and retain
on deposit until the related Master Servicer Remittance Date, the following
amounts:
(i) the aggregate amount remitted by the Servicer to
the Master Servicer pursuant to Section 3.08(a)(viii); and
(ii) any other amounts deposited hereunder which are
required to be deposited in the Master Servicer 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 Master Servicer any
amount not required to be remitted, the Servicer may at any time in writing
direct the Master Servicer to withdraw such amount from the Master Servicer
Collection Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering written notice to the Master
Servicer (upon which the Master Servicer may conclusively rely) which describes
the amounts deposited in error in the Master Servicer Collection Account. All
funds deposited in the Master Servicer Collection Account shall be held by the
Master Servicer 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 Master Servicer incur liability for withdrawals from the
Master Servicer Collection Account at the direction of the Servicer. The Master
Servicer shall give notice to the Securities Administrator, the Trustee, the
Backup Servicer and the Servicer of the location of the Master Servicer
Collection Account maintained by it when established and prior to any change
thereof. The Master Servicer 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 Master Servicer on the
Master Servicer Remittance Date, deposit or cause to be deposited in the
Certificate Account and retain therein the following:
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(i) The aggregate amount remitted by the Master
Servicer to the Securities Administrator pursuant to Section 3.08(b); and;
(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 Master
Servicer and deposit by the Servicer and Master Servicer into the Certificate
Account shall be exclusive. In the event that the Master Servicer 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 Master
Servicer. The Securities Administrator shall give notice to the Trustee, the
Master Servicer 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.
(g) Each institution that maintains a Collection Account or
the Master Servicer Collection Account shall invest the funds in each such
account, as directed by the Servicer, the Master Servicer, 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 Master Servicer
Collection Account, the Business Day preceding the related Master Servicer
Remittance Date (except that if such Permitted Investment is an obligation of
the institution that maintains such Master Servicer Collection Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than each Master Servicer 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 Master Servicer, 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
Master Servicer Collection Account shall be for the benefit of the Master
Servicer as master servicing compensation and shall be remitted to it monthly as
provided herein. The amount of any losses incurred in the Master Servicer
Collection Account in respect of any such investments shall be deposited by the
Master Servicer in the Master Servicer Collection Account out of such Master
Servicer's own funds immediately as realized. The Securities Administrator shall
retain the funds in the Certificate Account uninvested.
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SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or Advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, 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.
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 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 Servicers 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, Master
Servicer 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
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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;
(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 Master Servicer,
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 of
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 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;
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(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 Master Servicer
Collection Account; provided, however, if the Master Servicer does not receive
the Servicer Withdrawals by 4:00 p.m. Eastern Time, the Servicer Withdrawals
shall be deposited by the Master Servicer in the Master Servicer 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
Master Servicer's Prime Rate for each date or part thereof.
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
Master Servicer 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 Master Servicer 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 Master Servicer may from time to time make withdrawals
from the Master Servicer Collection Account for the following purposes:
(i) to withdraw any amounts deposited in such Master
Servicer Collection Account and not required to be deposited therein;
(ii) to clear and terminate the Master Servicer
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 Master Servicer Collection Account and any
sub-account thereof.
In addition, no later than 2:00 p.m. Eastern Time on the Master
Servicer Remittance Date, the Master Servicer shall cause to be withdrawn from
the Master Servicer Collection Account the Interest Funds, the Principal Funds
and the Administration Fee (other than the Servicing Fee) (collectively, the
"Master Servicer 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 Master Servicer Withdrawals by 4:00 p.m.
Eastern Time, such Master Servicer Withdrawals shall be deposited by the
Securities Administrator in the Certificate Account by 2:00 p.m. Eastern Time on
the next
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Business Day. In the event such Master Servicer Withdrawals are not deposited by
2:00 p.m. Eastern Time, the Master Servicer 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 Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Master Servicer Collection Account.
Unless otherwise specified, any amounts reimbursable to the Servicer,
the Master Servicer or the Trustee from amounts on deposit in the Collection
Account, the Master Servicer 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 in the manner
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 Master Servicer
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 Master Servicer, 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 Master Servicer 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
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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 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, and (iii) 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
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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, as contemplated in Section 3.08 hereof. If the Servicer has knowledge
that a Mortgaged Property 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, 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 at
any foreclosure sale.
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 as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property 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 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 (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property 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 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 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.
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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 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.
(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,
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.. Transfer of servicing will be completed no later than 30 days
following the 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.
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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 Master Servicer 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 Master Servicer, 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.
If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property 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
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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
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 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
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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 Master Servicer 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 Master
Servicer and the Backup Servicer on or before March 15th of each year beginning
in 2005, (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 Master Servicer to any Certificateholder upon
written request at the Certificateholder's expense, provided such statement has
been delivered by the Servicer to the Master Servicer.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 15th of each year, beginning in 2005 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) that is a member of the American Institute of Certified
Public Accountants to furnish a USAP Report to the Securities Administrator, the
Master Servicer, 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 Servicer to the Securities Administrator.
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
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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 Master
Servicer, 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 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 January 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, 2005, 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, 2005, 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 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 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].
(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
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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.
(a) Promptly after each Distribution Date, the Servicer shall
provide to the Depositor, the Master Servicer 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.
SECTION 3.24. Servicer Reports.
(a) On the Servicer Data Remittance Date, the Servicer shall
deliver to the Master Servicer, 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 Master Servicer,
the Backup Servicer and the Securities Administrator may agree from time to
time) a
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servicer report with respect to the related Distribution Date, in a form
mutually acceptable to the Servicer, the Master Servicer, 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 Master
Servicer 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 Master Servicer 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 Master Servicer.
(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 Master Servicer, the Backup
Servicer and the Depositor and their officers, directors, employees and agents
and hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the failure of the Servicer to perform
its duties and service the Mortgage Loans in compliance with the terms of this
Agreement. The Servicer immediately shall notify the Seller, the Trustee, the
Securities Administrator, the Master Servicer, the Backup Servicer and the
Depositor or any other relevant party if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld or delayed) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any of such
parties in respect of such claim. The 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 and the
Master Servicer with a written report of all expenses and advances incurred by
the Servicer pursuant to this Section 3.25(a), and the Servicer shall promptly
reimburse itself from the assets of the Trust Fund in the 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 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, Master Servicer, 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.
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(b) The Master Servicer shall indemnify the Seller, the Trust
Fund, the Trustee, the Securities Administrator, the Servicer, the Backup
Servicer and the Depositor and their officers, directors, employees and agents
and hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the failure of the Master Servicer to
perform its duties and master service the Mortgage Loans in compliance with the
terms of this Agreement. The Master Servicer immediately shall notify the
Seller, the Trustee, the Servicer, the Securities Administrator, the Backup
Servicer and the Depositor or any other relevant party if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans, assume (with
the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any of such parties in respect of such claim. The Master Servicer shall follow
any written instructions received from the Trustee in connection with such claim
it being understood that the Trustee shall have no duty to monitor or give
instructions with respect to such claims. The Master Servicer shall provide the
Servicer, the Securities Administrator, the Seller, the Backup Servicer and the
Depositor with a written report of all expenses and advances incurred by the
Master Servicer pursuant to this Section 3.25(b). The Master Servicer shall
promptly reimburse itself from the assets of the Trust Fund in the Master
Servicer Collection Account for all amounts advanced by it pursuant to the
preceding sentence except when the claim in any way relates to the failure of
the Master Servicer to service and administer the Mortgage Loans in material
compliance with the terms of this Agreement or the negligence, bad faith or
willful misconduct of the Master Servicer. The provisions of this paragraph
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
SECTION 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents, will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
SECTION 3.27. SLS as Servicer.
Upon the Master Servicer's request, SLS shall make available electronic
data to the Master Servicer and the Backup Servicer in any month during the
first week of the subsequent month.
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 March 2005, SLS shall, at its expense,
cause an independent third-party auditor selected by it to furnish to the
Trustee, the Depositor, the Master Servicer and the Backup Servicer a report
stating that the SLS Serviced 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 SLS Serviced 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
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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. [RESERVED].
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 Master Servicer 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.
ARTICLE IV
ADMINISTRATION, MASTER SERVICING AND BACKUP SERVICING OF THE MORTGAGE LOANS
SECTION 4.01. Master Servicer.
The Trustee shall furnish the Master Servicer with any limited powers
of attorney needed to enable the Master Servicer to service and administer the
related Mortgage Loans and REO Property. The Trustee shall have no
responsibility for any action of the Master Servicer pursuant to any such
limited power of attorney and shall be indemnified by the Master Servicer for
any cost, liability or expense incurred by the Trustee in connection with such
Person's use or misuse of any such power of attorney.
For and on behalf of the Certificateholders, as independent contractors
of the Trustee, the Master Servicer 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 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 Master Servicer upon
written request any court pleadings, requests for trustee's sale or other
documents necessary or desirable prepared by the Master Servicer 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
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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 Master Servicer, the Backup Servicer or the
Servicer to assure such continuing treatment. In particular, the Trustee shall
not (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 January 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).
SECTION 4.03. Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
SECTION 4.04. Powers to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Section 9.13, to do any and all things that it may deem necessary
or desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, 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 Master Servicer has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action will not cause any REMIC formed
hereby to fail to qualify as a REMIC or result in the imposition of a tax upon
any REMIC formed hereby or the Trust Fund. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or the Servicer to execute and deliver
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instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
or the Servicer may request, to enable the Master Servicer to master service and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Accepted Master Servicing Practices (and the Trustee shall
have no liability for misuse of any such powers of attorney by the Master
Servicer or the Servicer and shall be indemnified by the Master Servicer or the
Servicer, as applicable, for any cost, liability or expense incurred by the
Trustee in connection with such Person's use or misuse of any such power of
attorney). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.12. In the performance of
its duties hereunder, the Master Servicer shall be an independent contractor and
shall not, except in those instances where it is taking action in the name of
the Trustee, be deemed to be the agent of the Trustee.
SECTION 4.05. Due-on-Sale Clauses; Assumption Agreements.
To the extent Mortgage Loans contain enforceable due-on-sale clauses,
the Master Servicer 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 Master
Servicer to be Held for Trustee.
(a) The Master Servicer shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
in respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be deposited in the Master Servicer Collection Account. The
Master Servicer shall, and shall cause the Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Securities
Administrator 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 Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or
under the control of, the Master Servicer, in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be deposited in the Master
Servicer Collection Account.
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SECTION 4.07. Monitoring of the Servicer.
(a) The Master Servicer shall be responsible for monitoring
the compliance by the Servicer with their respective duties under this
Agreement. In the review of the Servicer's activities, the Master Servicer may
rely upon an Officer's Certificate of the Servicer with regard to the Servicer's
compliance with the terms of this Agreement. In the event that the Master
Servicer, in its judgment, determines that the Servicer should be terminated in
accordance with the terms hereof, or that a notice should be sent pursuant to
the terms hereof with respect to the occurrence of an event that, unless cured,
would constitute a Servicer Event of Default, the Master Servicer shall notify
the Seller, the Securities Administrator, the Backup Servicer and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee, the
Securities Administrator and the Certificateholders, shall enforce the
obligations of the Servicer under this Agreement, and shall, in the event that
the Servicer fails to perform its obligations in accordance with this Agreement,
subject to the preceding paragraph 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 Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except to
the extent that the Master Servicer shall have received reasonable indemnity for
its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master
Servicer 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 Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Master Servicer Collection Account.
(d) The Master Servicer shall require the Servicer to comply
with the remittance requirements and other obligations set forth in this
Agreement.
(e) If the Master Servicer acts as successor 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 Master Servicer 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
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shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the Master Servicer in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer 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 Master Servicer 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 Master Servicer 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 instruments that constitute
Mortgage Loan Documents that come into the possession of the Master Servicer
from time to time.
SECTION 4.12. Realization Upon Defaulted Loans.
The Master Servicer 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 Master Servicer shall cause the Servicer to sell, any
REO Property as expeditiously as possible and in accordance with the provisions
of this Agreement. Further, the Master Servicer 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 Master Servicer 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 Master Servicer 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 Master Servicer shall cause the Servicer to deposit
all funds collected and received in connection with the operation of any REO
Property in the Collection Account.
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SECTION 4.14. Annual Statement as to Compliance.
Pursuant to this Agreement, the Master Servicer shall deliver to the
Depositor, the Trustee, SLS and the Securities Administrator on or before March
15 of each year beginning in 2005, (or such other date to which the Depositor
and Master Servicer 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 Master Servicer during the
preceding calendar year and of performance under this Agreement or a similar
agreement has been made under such officer's supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and status
thereof. The Securities Administrator shall 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 Master Servicer to the Securities Administrator.
SECTION 4.15. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
If the Master Servicer 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 2005 or such other date in order to remain in compliance with
the Section 302 Requirements, the Master Servicer at its expense shall cause a
nationally recognized firm of independent public accountants (who may also
render other services to the Servicer or any Affiliate thereof) that is a member
of the American Institute of Certified Public Accountants to furnish a USAP
Report to the Securities Administrator, SLS and the Depositor. Copies of the
USAP Report shall be provided by the Securities Administrator and the Trustee to
any Certificateholder upon request at the Certificateholder's expense, provided
such report has been delivered by the Master Servicer to the Securities
Administrator.
SECTION 4.16. Annual Certificate by Master Servicer.
(a) Within 15 days prior to the date on which a Form 10-K is
required to be filed, the Master Servicer shall execute and deliver an Officer's
Certificate signed by the senior officer in charge of servicing of the Master
Servicer 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 Master Servicer 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 Master Servicer 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 Master Servicer 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 Master Servicer 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
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Certificate required under this Section or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith.
SECTION 4.17. Obligation of the Master Servicer 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 Master
Servicer shall deposit in the Master Servicer Collection Account not later than
the Master Servicer 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.
SECTION 4.18. Obligation of the Master Servicer in Respect of
Collection Account.
The Master Servicer 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, 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) 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.
ARTICLE V
DISTRIBUTIONS
SECTION 5.01. Advances by the Master Servicer 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
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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 Master Servicer or the Servicer determines, in
its sole discretion, that Advances with respect to such Mortgage Loan are
Nonrecoverable Advances. In the event that the Master Servicer or the Servicer
determines that any such Advances are Nonrecoverable Advances, the Master
Servicer or the Servicer shall provide the Master Servicer 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 Master Servicer for
deposit in the Master Servicer 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) 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
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
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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 Seller and 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 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 with
respect to the Advance Facility of SLS.
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(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(c) 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 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 Advancing 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(c) 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 Advancing
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 Master Servicer 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 of 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.
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(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.
(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 Master Servicer and the Servicer without the consent of any
Certificateholder, provided such amendment complies with the 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 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.
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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 Class A Certificates, the Current Interest
and any Interest Carry Forward Amount with respect to such Class;
(ii) to the Class M-1 Certificates, the Class M-1
Current Interest and any Class M-1 Interest Carry Forward Amount;
(iii) to the Class M-2 Certificates, the Class M-2
Current Interest and any Class M-2 Interest Carry Forward Amount;
(iv) to the Class B-1 Certificates, the Class B-1
Current Interest and any Class B-1 Interest Carry Forward Amount;
(v) to the Class B-2 Certificates, the Class B-2
Current Interest and any Class B-2 Interest Carry Forward Amount;
(vi) to the Class B-3A and Class B-3B Certificates
concurrently, the Current Interest for such Class and Interest Carry Forward
Amount, with respect to such Class; provided, however, that if such amount is
insufficient to make a full distribution of Current Interest and Interest Carry
Forward Amount to the Class B-3A and Class B-3B Certificates, Interest Funds
will be distributed pro rata among each class of the Class B-3A and Class B-3B
Certificates based upon the ratio of (A) 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 B-3A and Class B-3B
Certificates; and
(vii) any remainder pursuant to Section 5.05(f)
hereof.
(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)(vii)) shall have been made until such
amount shall have been fully distributed for such Distribution Date:
(i) to the Class A Certificates, the Class A
Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the Class M-1
Principal Distribution Amount;
(iii) to the Class M-2 Certificates, the Class M-2
Principal Distribution Amount;
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(iv) to the Class B-1 Certificates, the Class B-1
Principal Distribution Amount;
(v) to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount;
(vi) to the Class B-3A and Class B-3B Certificates,
on a pro rata basis based on the outstanding Certificate Principal Balance of
each such Class, the Class B-3 Principal Distribution Amount; and
(vii) 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 pursuant to Section 5.05(b)(vii) and
Section 5.05(d)(vii) 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)(vii) and Section 5.05(d)(vii)) shall have been made until such
remainders shall have been fully distributed for such Distribution Date:
(i) for distribution as part of the Principal
Distribution Amount, the Extra Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the Class M-1
Unpaid Realized Loss Amount;
(iii) to the Class M-2 Certificates, the Class M-2
Unpaid Realized Loss Amount;
(iv) to the Class B-1 Certificates, the Class B-1
Unpaid Realized Loss Amount;
(v) to the Class B-2 Certificates, the Class B-2
Unpaid Realized Loss Amount;
(vi) to the Class B-3A and Class B-3B Certificates,
on a pro rata basis, based on the outstanding Certificate Principal Balance, any
Unpaid Realized Loss Amount for each such Class;
(vii) to the Class A, Class M-1, Class M-2, Class
B-1, Class B-2, Class B-3A and Class B-3B 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;
(viii) the remainder pursuant to Section 5.05(g)
hereof.
(g) on each Distribution Date, the Securities Administrator
shall allocate the remainder pursuant to Section 5.05(f)(viii) as follows:
(i) to the Holders of the Class CE Certificates, the
Class CE Distributable Amount; and
(ii) the remainder pursuant to Section 5.05(h)
hereof.
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(h) On each Distribution Date, the Securities Administrator
shall allocate the remainder pursuant to Section 5.05(g)(ii) 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 P 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-3A and Class B-3B Certificates, on
a pro rata basis based upon the outstanding Certificate Principal Balance of
each such Class, until the Class B-3A and Class B-3B Certificate Principal
Balance are reduced to zero;
(ii) to the Class B-2 Certificate until the Class B-2
Principal Balance is reduced to zero;
(iii) to the Class B-1 Certificate until the Class
B-1 Principal Balance is reduced to zero;
(iv) to the Class M-2 Certificates until the Class
M-2 Certificate Principal Balance is reduced to zero; and
(v) to the Class M-1 Certificates 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 Master Servicer or the Servicer, as applicable, the Securities
Administrator may agree from time to time) containing such data and information
such as to permit the Trustee to prepare the Monthly Statement to
Certificateholders and make the required distributions for the related
Distribution Date.
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SECTION 5.06. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on
information provided by the Master Servicer 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 Master Servicer, the Trustee, 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 Pool Stated Principal Balance for such
Distribution Date;
(vi) 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;
(vii) the Pass-Through Rate for each Class of
Certificates for such Distribution Date;
(viii) the amount of Advances included in the
distribution on such Distribution Date;
(ix) [RESERVED];
(x) the aggregate amount of reimbursement to the
Servicer of Non-Recoverable Advances previously made;
(xi) the aggregate amount of recovery to the Trust
Fund of reimbursement previously deemed non-recoverable;
(xii) the cumulative amount of (A) Realized Losses,
(B) Applied Realized Loss Amounts to date and (C) Unpaid Realized Loss Amounts;
(xiii) the amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts with respect to such Distribution Date;
(xiv) 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;
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(xv) 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;
(xvi) 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;
(xvii) 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;
(xviii) whether a Trigger Event has occurred;
(xix) 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;
(xx) the number and aggregate Stated Principal
Balance of all Subsequent Mortgage Loans added during the preceding Due Period;
(xxi) any amounts distributed as Excess Interest to
the Class A, Class M or Class B Certificates;
(xxii) 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;
(xxiii) 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;
(xxiv) 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;
(xxv) 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; and
(xxvi) the weighted average remaining term to
maturity of the Mortgage Loans as of the first day of the calendar month
preceding such Distribution Date.
(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, 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
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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.
(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. 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
2004-22SL, Asset-Backed Certificates, TMTS Series 2004-22SL" (the "Pre-Funding
Account"). The Securities Administrator, as agent for the Trustee, shall,
promptly upon receipt, deposit in the Pre-Funding Account and retain therein the
Original Pre-Funded Amount remitted on the Closing Date to the Trustee by the
Seller. Funds deposited in the Pre-Funding Account shall be held in trust by the
Trustee on behalf of the Certificateholders for the uses and purposes set forth
herein. The Trustee hereby appoints the Securities
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Administrator as its agent in connection with establishing and maintaining the
Pre-Funding Account pursuant to this Section 5.07.
(b) The Securities Administrator shall invest funds deposited
in the Pre-Funding Account in Permitted Investments as directed in writing by
the Seller (provided that if the Securities Administrator does not receive
written direction from the Seller, then amounts in the Pre-Funding Account shall
not be invested) with a maturity date no later than the Business Day preceding
each Distribution Date or Subsequent Transfer Date, as the case may be. For
federal income tax purposes, the Seller shall be the owner of the Pre-Funding
Account and shall report all items of income, deduction, gain or loss arising
therefrom. All income and gain realized from investment of funds deposited in
the Pre-Funding Account shall be transferred to the Capitalized Interest Account
on the Business Day immediately preceding each Distribution Date or Subsequent
Transfer Date, as the case may be. The Seller shall deposit in the Pre-Funding
Account the amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss without any right of
reimbursement therefor. The Pre-Funding Account will not be an asset of any of
the REMICs provided for herein.
(c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Securities Administrator as follows:
(i) On any Subsequent Transfer Date, the Securities
Administrator shall withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate Stated Principal Balances 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 5.08. 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 2004-22SL, 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 on behalf of the Certificateholders for the uses and purposes set
forth herein. The Trustee hereby appoints the Securities Administrator as its
agent in connection with establishing and maintaining the Capitalized Interest
Account pursuant to this Section 5.08. With respect to the Distribution Date in
January 2005, the Securities Administrator will withdraw from the 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 5.08.
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(b) The Securities Administrator will invest funds
deposited in the Capitalized Interest Account in Permitted Investments as
directed in writing by the Seller (provided that if the Securities Administrator
does not receive written direction from the Seller, then amounts in the
Capitalized Interest Account shall not be invested) with a maturity date no
later than the Business Day preceding each Distribution Date. For federal income
tax purposes, the 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. All income and gain realized from investment of
funds deposited in the Capitalized Interest Account shall be for the sole and
exclusive benefit of the Seller and shall be remitted by the Securities
Administrator to the Seller on each Distribution Date. The Seller shall deposit
in the Capitalized Interest Account the amount of any net loss incurred in
respect of any such Permitted Investment immediately upon realization of such
loss.
(c) Upon the earliest of (i) the Distribution Date
immediately following the end of the Funding Period and (ii) the termination of
this Agreement in accordance with Section 10.01, any amount remaining on deposit
in the Capitalized Interest Account after withdrawals pursuant to paragraph (a)
above shall be withdrawn by the Trustee and paid to the 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
----- ------------ ----------------- -----------------
A $25,000.00 $1.00 $175,231,000.00
M-1 $25,000.00 $1.00 $31,800,000.00
M-2 $25,000.00 $1.00 $18,947,000.00
B-1 $25,000.00 $1.00 $17,622,000.00
B-2 $25,000.00 $1.00 $5,697,000.00
B-3A $25,000.00 $1.00 $7,778,850.00
B-3B $25,000.00 $1.00 $7,925,850.00
CE N/A N/A $24.18*
ES X/X X/X X/X
X X/X X/X X/X
P N/A N/A N/A
* The Initial Certificate Principal Balance of the Class CE Certificates is
equal to the initial Overcollateralization Amount.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. 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
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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.
The Class B Certificates may be sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent global certificates in definitive, fully registered form without
interest coupons with the applicable legends set forth in Exhibit A hereto added
to the forms of such Certificates (each, a "Book-Entry Regulation S Global
Security"), which shall be deposited on behalf of the Holders of such
Certificates represented thereby with the Securities Administrator, as custodian
for DTC and registered in the name of a nominee of DTC, duly executed and
authenticated by the Securities Administrator and the Authenticating Agent as
hereinafter provided. The aggregate principal amounts of the Book-Entry
Regulation S Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Securities Administrator or DTC or its
nominee, as the case may be, as hereinafter provided.
The Class CE Certificates sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global certificates in physical, fully registered form without interest coupons
with the applicable legends set forth in Exhibit A hereto added to the forms of
such Certificates (each, a "Definitive Regulation S Global Security"), which
shall be delivered to the Holders of such Certificates represented thereby by
the Securities Administrator, duly executed and authenticated by the Securities
Administrator and the Authenticating Agent as hereinafter provided. The
aggregate principal amounts of the Definitive Regulation S Global Securities may
from time to time be increased or decreased by adjustments made on the records
of the Securities Administrator, as hereinafter provided.
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. 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.
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No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Securities Administrator in accordance
with such Securities Administrator's customary procedures.
No Transfer of a Class CE 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 transfers of the Class CE Certificate originally issued to
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated to an indenture trustee in
connection with a resecuritization transaction) each certify to the Securities
Administrator 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 either Exhibit G (the "Investment Letter")
or Exhibit H (the "Rule 144A Letter") or (ii) there shall be delivered to the
Securities Administrator an Opinion of Counsel that such Transfer may be made
pursuant to an exemption from the Securities Act, which Opinion of Counsel shall
not be an expense of the Depositor, the Securities Administrator or the Trustee.
The Depositor shall provide to any Holder of a Class CE 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 CE
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.
By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Depositor, the Securities Administrator and any
of their respective successors that: (i) such Person is not a "U.S. person"
within the meaning of Regulation S and was, at the time the buy order was
originated, outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" (a "QIB") as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule 144A or (B) in an offshore
transaction (as defined in Regulation S) in compliance with
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the provisions of Regulation S, in each case in compliance with the requirements
of this Agreement; and it will notify such transferee of the transfer
restrictions specified in this Section.
No Transfer of a Class CE Certificate, or a beneficial interest
therein, may be made to a non-United States Person unless the Securities
Administrator has 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 CE 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.
No transfer of an ERISA Restricted Certificate that is a Class R
Certificate may be made to any Person that is 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 to any Person who is directly or indirectly acquiring the Class R
Certificate for, on behalf of or with any assets of any such Plan.
No transfer of an ERISA Restricted Certificate (other than the Class R
Certificate) shall be made unless the transferee provides the Trustee and the
Securities Administrator with (A) a representation that the transferee 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, (B) 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, 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.
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
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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 to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Securities Administrator of any change or impending change
in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate
may be purchased, transferred or sold, directly or indirectly, except in
accordance with the provisions hereof. No Ownership Interest in a Class R
Certificate may be registered on the Closing Date or thereafter transferred, and
the Securities Administrator shall not register the Transfer of any Class R
Certificate unless, in addition to the certificates required to be delivered to
the Securities Administrator under subparagraph (b) above, the Securities
Administrator shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form attached
hereto as Exhibit E-1 and an affidavit of the proposed transferor in the form
attached hereto as Exhibit E-2. In the absence of a contrary instruction from
the transferor of a Class R Certificate, declaration (11) in Appendix A of the
Transfer Affidavit may be left blank. If the transferor requests by written
notice to the Securities Administrator prior to the date of the proposed
transfer that one of the two other forms of declaration (11) in Appendix A of
the Transfer Affidavit be used, then the requirements of this Section
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 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 shall be under no liability to any
Person for any registration of Transfer of a Class R Certificate that is in fact
not permitted
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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.
(v) At the option of the Holder of the Class R
Certificate, the Class LT1-R Interest and the REMIC 2 Residual Interest may be
severed and represented by separate certificates (with the separate certificate
that represents the REMIC 2 Residual Interest also representing all rights of
the Class R Certificate to distributions attributable to a Pass-Through Rate on
the Class R Certificate in excess of the Net Rate); provided, however, that such
separate certification may not occur until the Securities Administrator 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 LT1-R Interest and the REMIC
2 Residual Interest shall be severed and represented by separate certificates
(with the separate certificate that represents the REMIC 2 Residual Interest
also representing all rights of the Class R Certificate to distributions
attributable to a Pass-Through Rate on the Class R Certificate in excess of the
Net Rate).
The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(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 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, 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 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
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the ownership thereof and (b) there is delivered to the Securities Administrator
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Securities
Administrator that such Certificate has been acquired by a bona fide purchaser,
the Securities Administrator shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 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 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 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 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 neither the Trustee nor the Securities Administrator, nor 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 R and Class CE 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;
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(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 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
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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 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: Institutional Trust Services, Terwin Mortgage
Trust 2004-22SL 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
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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 Master Servicer or the Trustee; provided that the
Securities Administrator shall not be entitled to any additional compensation
for serving as Authenticating Agent.
ARTICLE VII
THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE
SECURITIES ADMINISTRATOR
SECTION 7.01. Respective Liabilities of the Depositor, the Master
Servicer, the Servicer and the Securities Administrator.
The Depositor, the Master Servicer, the Servicer and the Securities
Administrator shall each be liable in accordance herewith only to the extent of
the obligations specifically and respectively imposed upon and undertaken by
them herein.
SECTION 7.02. Merger or Consolidation of the Depositor, the Master
Servicer, the Servicer or the Securities Administrator.
Except as provided in the next paragraph, the Depositor, the Master
Servicer, the Servicer and the Securities Administrator will each keep in full
effect its existence, rights and franchises as a corporation 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.
Any Person into which the Depositor, the Master Servicer, the Servicer
or the Securities Administrator may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Depositor, the Master
Servicer, the Servicer or the Securities Administrator shall be a party, or any
Person succeeding to the business of the Depositor, the Master Servicer, the
Servicer or the Securities Administrator, shall be the successor of the
Depositor, the Master Servicer 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, Master
Servicer, the Servicer, the Backup Servicer, the Trustee, the Securities
Administrator and Others.
None of the Depositor, the Master Servicer, the Servicer, the Backup
Servicer, the Trustee, the Securities Administrator nor any of the directors,
officers, employees or agents of the Depositor, the
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Master Servicer, 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
Master Servicer, 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 Master Servicer, 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 Master Servicer, the Servicer, the Backup Servicer, the Trustee or the
Securities Administrator and any director, officer, employee or agent of the
Depositor, the Master Servicer, 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 Master Servicer, the Servicer, the
Backup Servicer, the Trustee, the Securities Administrator and any director,
officer, employee or agent of the Depositor, the Master Servicer, 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 Master Servicer,
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 Master Servicer, 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 Master Servicer, 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.
In addition, the Master Servicer, the Backup Servicer, the Trustee and
Securities Administrator shall be entitled to be reimbursed out of the
Certificate Account or the Master Servicer Collection Account for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the
Master Servicer, 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 Master Servicer, the Backup Servicer, Trustee or Securities Administrator
acting in its capacity as Master Servicer or Securities Administrator 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.
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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 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 0.50% 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 Servicing Rights
Owner delivers to the Trustee and the Securities Administrator the letter
required pursuant to the paragraph above and (b) 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 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
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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 Master Servicer and
the Backup Servicer.
Neither the Master Servicer 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 Master Servicer or the Backup Servicer shall be evidenced by
an Opinion of Counsel at the expense of the Master Servicer 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 Master Servicer or successor Backup Servicer reasonably acceptable to
the Securities Administrator is appointed and has assumed the Master Servicer's
or the Backup Servicer's, as applicable, responsibilities, duties, liabilities
and obligations hereunder. Any such resignation shall not relieve the Master
Servicer 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
Master Servicer or the Backup Servicer.
SECTION 7.07. Assignment of Backup Servicing and Master Servicing.
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 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 and the Trustee; and (d) shall
execute and deliver to the Trustee 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 master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the 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 Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) any purchaser or transferee
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must accept in writing such assignment and delegation and assume the obligations
of the Master Servicer hereunder and shall (a) be a Person which shall be
qualified to service mortgage loans for Xxxxxx 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 and the Depositor;
and (d) execute and deliver to the Trustee 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 master servicer 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 Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver to the
Trustee an officer's certificate and an Independent opinion of counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.
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 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 Master
Servicer, as applicable, to make any Advance, to deposit in the Collection
Account or the Certificate Account or remit to the Securities Administrator any
payment (excluding a payment required to be made 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 Master Servicer, as applicable, by the Securities Administrator or the
Depositor, or to the Securities Administrator and the Servicer or the Master
Servicer, as applicable, by
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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 Master
Servicer, 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 Master
Servicer, 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 Master Servicer, as
applicable, by the Securities Administrator 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 for the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer or the Master Servicer, as
applicable, and such decree or order shall have remained in force undischarged
or unstayed for a period of 90 consecutive days; or
(iv) consent by the Servicer or the Master Servicer,
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 Master Servicer, as applicable
or all or substantially all of the property of the Servicer or the Master
Servicer; or
(v) admission by the Servicer or the Master Servicer,
as applicable, in writing of its inability to pay its debts generally as they
become due, file a petition to take advantage of, or commence a voluntary case
under, any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) an SLS Event of Termination shall have occurred.
If an Event of Default shall occur with respect to the Servicer or the
Master Servicer, 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 Master Servicer Remittance Date, as applicable,
the Securities Administrator may with the consent of Holders of Certificates
evidencing not less than 50% of the Voting Rights evidenced by the Certificates,
shall, by notice in writing to the Servicer or the Master Servicer, as
applicable, (with a copy to the Rating Agencies), terminate all of the rights
and obligations of the Servicer or the Master Servicer, 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 Master Servicer, as applicable of such written notice, all
authority and power of the Servicer or the Master Servicer, 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, by notice in
writing to the Master Servicer or the Servicer or the Master Servicer, as
applicable, and the Depositor, terminate all of the rights and obligations of
the Master Servicer or the Servicer, as applicable, in its capacity as Servicer
or Master Servicer, 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 Master Servicer, 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 Master Servicer,
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as applicable, to pay amounts owed pursuant to Article VIII. The Servicer or the
Master Servicer, as applicable, agrees to cooperate with the Securities
Administrator in effecting the termination of the Servicer's or the Master
Servicer, 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
Master Servicer 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 Master Servicer, as applicable, hereunder, the Servicer or the Master
Servicer, 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 Master Servicer's rights and obligations as
Servicer or the Master Servicer, as applicable, hereunder and received after
such notice, that portion thereof to which the Servicer or the Master Servicer,
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 Master Servicer, 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 Master Servicer, as applicable, hereunder,
any liabilities of the Servicer or the Master Servicer, as applicable, which
accrued prior to such termination shall survive such termination.
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; Master Servicer and
Backup Servicer to Act; Appointment of Successor.
(a) On and after the time the Master Servicer or the Servicer
receives a notice of termination, the Securities Administrator (in the case of
the Master Servicer), or the Backup Servicer (in the case of SLS) shall be the
successor in all respects to the Master Servicer or the Servicer, as applicable,
in its capacity as master servicer 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 Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03) (in the case of the Master Servicer), 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 Master
Servicer'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 Master Servicer), 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 Master Servicer) shall be entitled to all compensation to which
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the Master Servicer 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 Master Servicer 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 Master Servicer or
the Servicer under this Agreement shall be effective until the assumption by the
successor of all of the Master Servicer's or Servicer's, as applicable,
responsibilities, duties and liabilities hereunder. In connection with such
appointment and assumption described herein, the Securities Administrator, the
Master Servicer 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 Master Servicer or Servicer as such hereunder. The
Depositor, the Securities Administrator, the Master Servicer, 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 Master Servicer or the Servicer under this Agreement, the
Securities Administrator (in the case of the Master Servicer) 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 Master
Servicer, the Backup Servicer and the Depositor hereby agree that upon delivery
to the Trustee, the Securities Administrator, the Master Servicer 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 Master Servicer 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 Master Servicer or Servicer appointed
in accordance with the provisions hereof and (b) any failure to perform such
duties or responsibilities caused by the Master Servicer'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 Master
Servicer) or the Backup Servicer (in the case of SLS) as successor to the Master
Servicer or the Servicer, as applicable, hereunder. Notwithstanding the above
and subject to the immediately following paragraph, the Securities
Administrator, the Master Servicer 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 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 Master
Servicer 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
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otherwise be made by another party under Section 8.01 as of the date of such
appointment. Each successor Master Servicer 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 Master Servicer 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.
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
theTrustee, 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 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;
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(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;
(iv) as of any Determination Date, the Rolling Three
Month Delinquency Rate exceeds 25%;
(v) an SLS Cross Default occurs; or
(vi) as of any Determination Date, the quotient
(expressed as a percentage) of (1) the aggregate Realized Losses on the SLS
Serviced Mortgage Loans incurred from the applicable Cut-off Date through the
last day of the calendar month preceding such Determination Date divided by (2)
the Aggregate Stated Principal Balance of the SLS Serviced Mortgage Loans as of
the applicable Cut-off Date exceeds the percentage (the "Cumulative Loss
Percentage") for such Determination Date set forth in the table below:
RANGE OF DETERMINATION DATES CUMULATIVE LOSS PERCENTAGE
---------------------------- -------------------------------------------------------
Months 1-48 6.50% with respect to December 2004 and 1/12th of 3.25%
for each month thereafter
Months 49-60 9.75% with respect to December 2008 and 1/12th of 2.75%
for each month thereafter
Month 61 and thereafter 12.50%
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.
(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 to the requirements of this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement in a
material manner, the Trustee 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.
(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
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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 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 it 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 under this Agreement,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(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,
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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);
(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 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 Master Servicer, Backup Servicer or the Servicer nor shall the Trustee be
obligated to supervise or monitor the performance of the Master Servicer, Backup
Servicer 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;
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(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; and
(xi) The Depositor and the Seller hereby approve of
the appointment of the Custodian to act as custodian pursuant to the Custodial
Agreement and each further agree that the Trustee appointed the Custodian to act
as custodian 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
(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 Master Servicer, the Backup Servicer or the Servicer.
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) 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 and countersignature on the Certificates) or of any Mortgage Loan or
related document or of MERS or the MERS System. 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.
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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 Master Servicer 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). If funds in the Certificate 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, 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 Master Servicer, the Backup Servicer, the Servicer and the Rating Agency.
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.
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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 Master Servicer,
the Backup Servicer and the Servicer.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which 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 Master
Servicer, the Backup Servicer 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 Master Servicer 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 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 Master Servicer
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
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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, 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 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 Master
Servicer, 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
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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
REMIC 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 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
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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.
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 the 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
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amounts otherwise to be distributed to the Class R Certificateholder pursuant to
Section 5.05, and second with amounts otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class CE
Certificates (pro rata), second, to the Class B-3A and Class B-3B 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-2 Certificates (pro
rata), sixth, to the Class M-1 Certificates (pro rata), and seventh to the Class
A Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificate, the
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 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 Master
Servicer, 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
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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 be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer 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;
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(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
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 Master Servicer, Backup Servicer or the
Servicer nor shall the Securities Administrator be obligated to supervise or
monitor the performance of the Master Servicer, 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.
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(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 Master Servicer, 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 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 Master Servicer 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). If funds in the Certificate 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
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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 Master Servicer, 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 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 Master Servicer, the Backup Servicer and the
Servicer.
Holders of Certificates entitled to at least 51% of the Voting Rights
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 Master Servicer, 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.
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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 Master Servicer 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 Master Servicer 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.
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 Master Servicer, the Servicer, the Securities Administrator and
the Trustee created hereby with respect to the Trust Fund shall terminate upon
the earlier of (a) 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.
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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 CE 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 the 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.
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 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 Master Servicer Collection
Account to be deposited in the Certificate Account on the Business Day prior to
the applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund, certification to the Trustee that such required amount has been deposited
in the Trust Fund and the receipt by the Trustee of a Request for Release
therefor, the Trustee shall promptly release to the Mortgage Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the
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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.
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 has 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 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.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer, the Securities Administrator and the Trustee,
without the consent of any of the Certificateholders to:
(i) cure any ambiguity or correct any mistake,
(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 Master Servicer, 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 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.
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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, 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 or the Securities Administrator that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 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,
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in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 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, 0 Xxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx, or such other
address or telecopy number as may
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hereafter be furnished to the Depositor, the Master Servicer, 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 2004-22SL (telecopy
number: (000) 000-0000), or such other address or telecopy number as may
hereafter be furnished to the Depositor, the Master Servicer, 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 CMMC, 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000,
Attention: Xxxxx Xxxxx with a copy to: 000 Xxxx Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx
00000, Attention General Counsel, or such other addresses or telecopy number as
may be furnished to the Depositor, the Seller, the Master Servicer, the Backup
Servicer, the Servicer and the Trustee in writing by CMMC; (f) in the case of
the Servicer, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
Xxxx Xxxxx and Xxxxx Xxxxx, or such other address or telecopy number as may be
furnished to the Depositor, the Seller, the Master Servicer, the Backup
Servicer, any other Servicer and the Trustee in writing by the Servicer; (g) 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 Master Servicer, the Servicer and the Trustee in
writing by the Securities Administrator or the Backup Servicer, as applicable;
(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 Master Servicer, 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 and (j) 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 Master Servicer, the Backup Servicer, the Servicer and the
Trustee in writing. 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.
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No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such 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 Master Servicer, 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 Master Servicer'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 Master Servicer, 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 Master Servicer, 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 Master Servicer, 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: Xxxxxxx Xxxxxx
Title: President
TERWIN ADVISORS LLC,
as Seller
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
as 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
CHASE MANHATTAN MORTGAGE CORPORATION,
as Master Servicer
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx and Xxxxx Xxxxx
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
Re: Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer"), JPMorgan Chase
Bank, N.A., as 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:
(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.
D-1
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 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: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
[Add appropriate parties]
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 December 27, 2004, and Prospectus, dated October 25, 2004.
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.
1 Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
______ 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.
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
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: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
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 CE CERTIFICATES
[DATE]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
RE: Terwin Mortgage Trust, Asset-Backed Certificates, Series XXXX 0000-00XX
Ladies and Gentlemen:
In connection with our disposition of the Class CE 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 December 1,
2004, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Terwin
Advisors LLC, as seller, Chase Manhattan Mortgage Corporation, as master
servicer, JPMorgan Chase Bank, N.A., as 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: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
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 XXXX 0000-00XX, Class [____] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx Xxxxx
Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin Advisors LLC,
as seller (the "Seller"), Chase Manhattan Mortgage Corporation, as master
servicer (the "Master Servicer"), JPMorgan Chase Bank, as 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:
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
G-1
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 SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY
TO THE SERVICER (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 CLASS CE, CLASS ES AND CLASS P CERTIFICATES ONLY]
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) 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, 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]
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE 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,
G-2
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.
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 institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
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 a Class CE, Class ES or Class P 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) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, is an insurance company that is
acquiring the Certificates 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, 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. 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.
G-4
9. The Purchaser agrees to indemnify the Trustee, the Securities
Administrator, the Master Servicer, 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: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
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 XXXX 0000-00XX, Class [_____] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx Xxxxx
Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin Advisors LLC,
as seller (the "Seller"), Chase Manhattan Mortgage Corporation, as master
servicer (the "Master Servicer"), JPMorgan Chase Bank, N.A., as 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 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
H-1
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, 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) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
We agree to indemnify the Trustee, the Securities Administrator, the
Master Servicer, the Servicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
-------------------------
Name:
Title:
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________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
--------------
(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-3
insurance commissioner or a similar official or
agency of the State, territory or the District of
Columbia.
____ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan
subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended.
____ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940, as amended.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958, as
amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
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.
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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-6
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:
-----------------------------------
Name:
Title:
IF AN ADVISER:
--------------------------------------
Print Name of Buyer
Date:
---------------------------------
H-7
EXHIBIT I
REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
To: Deustche Bank National Trust Company
-------------------------------
-------------------------------
Re: Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer"), JPMorgan Chase
Bank, N.A., as 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]
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 December 1, 2004 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer"), JPMorgan Chase
Bank, N.A., as 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 Master Servicer,
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: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
Re: Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer"), JPMorgan Chase
Bank, as 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 Master Servicer, 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 Master
Servicer 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 Master Servicer 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 Master Servicer by [Name of the Servicer] under the Agreement has been
provided to the Master Servicer; 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 Master Servicer 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
Pursuant to this Subsequent Transfer Instrument, dated _________, 2004
(the "Instrument"), 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 pursuant to the Pooling and Servicing Agreement, dated as
of December 1, 2004 (the "Pooling and Servicing Agreement"), among the Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor, Terwin Advisors LLC, as seller,
Chase Manhattan Mortgage Corporation, as master servicer, JPMorgan Chase Bank,
N.A., as 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 Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. Conveyance of Subsequent Mortgage Loans.
(a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trustee, on behalf of the Trust Fund, without recourse, all of its
right, title and interest in and to the Subsequent Mortgage Loans, and including
all amounts due on the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be
delivered pursuant to Section 2.01 of the Pooling and Servicing Agreement;
provided, however, that the Depositor reserves and retains all right, title and
interest in and to amounts due on the Subsequent Mortgage Loans on or prior to
the related Subsequent Cut-off Date. The Depositor, contemporaneously with the
delivery of this Instrument, has delivered or caused to be delivered to the
Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule attached hereto as
Exhibit B shall be absolute and is intended by the Depositor, the Servicer, the
Trustee and the Certificateholders to constitute and to be treated as a sale by
the Depositor to the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated the date hereof, between the Depositor as purchaser
and the Servicer as seller, to the extent of the Subsequent Mortgage Loans, a
copy of which agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. Representations and Warranties; Conditions Precedent.
(a) The Depositor hereby confirms that each of the conditions precedent
and the representations and warranties set forth in Sections 2.03 and 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof with
respect to the Subsequent Mortgage Loans.
M-1
(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:
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:
M-3
Attachments
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
M-4
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: ___________ 1, 2005
2. Subsequent Transfer Date: ____________, 2005
3. Aggregate Principal Balance of the Subsequent
Mortgage Loans as of the Subsequent Cut-off Date:
$___________
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 February 24, 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, (xii) as
of the Subsequent Transfer Date for such Subsequent Mortgage Loan, the
Subsequent Mortgage Loan was not the subject of pending or final foreclosure
proceedings and (xiii) the Subsequent Mortgage Loan must bear interest at a
fixed rate throughout its term and must have a Net Mortgage Rate equal to no
less than 5.00% per annum.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust Fund,
the Mortgage Loans (including the related Subsequent Mortgage Loans) will as of
the Subsequent Cut-off Date not be materially inconsistent with the Initial
Mortgage Loans. Notwithstanding the foregoing, any Subsequent 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:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as Trustee
By:
Name:
Title:
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EXHIBIT N
FORM OF ADDITION NOTICE
[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 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: [______________]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
Re: Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer"), JPMorgan Chase
Bank, N.A., as 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 an aggregate
principal balance of $___________________, which Subsequent Mortgage Loans have
not been rejected by any Rating Agency pursuant to Section 2.11(e) of the
Pooling and Servicing Agreement. 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.
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EXHIBIT O
[RESERVED]
O-1
EXHIBIT P
OFFICER'S CERTIFICATE OF MASTER SERVICER
[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: Institutional Trust Services/Global Debt (XXXX 0000-00XX)
Re: Pooling and Servicing Agreement dated as of December 1, 2004 among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), Terwin
Advisors LLC, as seller (the "Seller"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer"), JPMorgan Chase
Bank, N.A., as 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 Master Servicer 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 Master Servicer and
relating to the mortgage loans master serviced by the Master Servicer and
provided by the Master Servicer 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 Master Servicer 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 Master Servicer as of the last day of the period
covered by such reports has fulfilled its obligations under the Agreement;
4. The Master Servicer has disclosed to its independent auditor, who issues
the independent auditor's report on the Uniform Single Attestation Program
for Mortgage Bankers for the Master Servicer, any significant deficiencies
relating to the Master Servicer's compliance with minimum master servicing
standards; and
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5. In compiling the information and making the foregoing certifications, the
Master Servicer has relied upon information furnished to it by the Servicer
under the Agreements. The Master Servicer shall have no responsibility or
liability for any inaccuracy in such reports resulting from information so
provided by the Servicer.
Date:
Chase Manhattan Mortgage Corporation,
as Master Servicer
------------------------------------
Authorized Signature
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EXHIBIT Q
FORM OF CUSTODIAL AGREEMENT
[INTENTIONALLY OMITTED]
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EXHIBIT R
FORM OF SERVICER REPORT
[INTENTIONALLY OMITTED]
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