EXECUTION COPY
EXHIBIT 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
TERWIN ADVISORS LLC,
Seller
CHASE MANHATTAN MORTGAGE CORPORATION,
Master Servicer
JPMORGAN CHASE BANK,
Securities Administrator And Backup Servicer
SPECIALIZED LOAN SERVICING, LLC,
Servicer
GREENPOINT MORTGAGE FUNDING, INC.,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
-------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2004
--------------------------------------
TERWIN MORTGAGE TRUST
ASSET-BACKED CERTIFICATES, SERIES XXXX 0000-00XX
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.................................................................................... 1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES................................ 46
SECTION 2.01. Conveyance of Mortgage Loans................................................... 46
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans and the Cap Contract........... 49
SECTION 2.03. Representations, Warranties and Covenants of the Depositor..................... 51
SECTION 2.04. Representations and Warranties of the Master Servicer;
Representations and Warranties of the Servicers; Representations and
Warranties of the Securities Administrator; Representations and
Warranties of the Backup Servicer.............................................. 55
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are not
"Qualified Mortgages".......................................................... 59
SECTION 2.06. Authentication and Delivery of Certificates.................................... 59
SECTION 2.07. REMIC Elections................................................................ 59
SECTION 2.08. Covenants of the Master Servicer............................................... 63
SECTION 2.09. Covenants of the Servicers..................................................... 63
SECTION 2.10. Related Agreements............................................................. 63
SECTION 2.11. Conveyance of Subsequent Mortgage Loans........................................ 64
SECTION 2.12. Permitted Activities of the Trust.............................................. 66
SECTION 2.13. Qualifying Special Purpose Entity.............................................. 66
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.............................................. 66
SECTION 3.01. Servicers to Service Mortgage Loans............................................ 66
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of the
Servicers...................................................................... 68
SECTION 3.03. Rights of the Depositor, the Securities Administrator, the Backup
Servicer and the Trustee in Respect of any Servicer............................ 68
SECTION 3.04. The Master Servicer or Backup Servicer to Act as Servicer...................... 68
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account; Master
Servicer Collection Account; Certificate Account............................... 69
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts............ 73
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans................................................................. 74
SECTION 3.08. Withdrawals from a Collection Account, Master Servicer Collection
Account and Certificate Account................................................ 74
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SECTION 3.09. [RESERVED]..................................................................... 77
SECTION 3.10. [RESERVED]..................................................................... 77
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements...................... 77
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds....................................................................... 78
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files................................ 80
SECTION 3.14. Documents, Records and Funds in Possession of the Servicers to be
Held for the Trustee........................................................... 81
SECTION 3.15. Servicing Compensation......................................................... 82
SECTION 3.16. Access to Certain Documentation................................................ 82
SECTION 3.17. Annual Statement as to Compliance.............................................. 82
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements..................................................................... 83
SECTION 3.19. Duties and Removal of the Credit Risk Manager.................................. 83
SECTION 3.20. Periodic Filings............................................................... 83
SECTION 3.21. Annual Certificate by Securities Administrator................................. 84
SECTION 3.22. Annual Certificate by GreenPoint............................................... 84
SECTION 3.23. Prepayment Penalty Reporting Requirements...................................... 85
SECTION 3.24. Servicer Reports............................................................... 85
SECTION 3.25. Indemnification................................................................ 86
SECTION 3.26. Nonsolicitation................................................................ 87
SECTION 3.27. SLS as Servicer................................................................ 87
SECTION 3.28. Quarterly Audit................................................................ 87
SECTION 3.29. Maintenance of LPMI Policy..................................................... 88
SECTION 3.30. SLS Servicing Tape; Storage and Access to Servicing Tape....................... 88
ARTICLE IV ADMINISTRATION, MASTER SERVICING AND BACKUP SERVICING OF THE MORTGAGE LOANS........................ 88
SECTION 4.01. Master Servicer................................................................ 88
SECTION 4.02. REMIC Related Covenants........................................................ 89
SECTION 4.03. Fidelity Bond.................................................................. 89
SECTION 4.04. Powers to Act; Procedures...................................................... 89
SECTION 4.05. Due-on-Sale Clauses; Assumption Agreements..................................... 90
SECTION 4.06. Documents, Records and Funds in Possession of Master Servicer to be
Held for Trustee............................................................... 90
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SECTION 4.07. Monitoring of the Servicers.................................................... 91
SECTION 4.08. [RESERVED]..................................................................... 92
SECTION 4.09. [RESERVED]..................................................................... 92
SECTION 4.10. Presentment of Claims and Collection of Proceeds............................... 92
SECTION 4.11. Trustee or Custodian to Retain Possession of Certain Insurance
Policies and Documents......................................................... 92
SECTION 4.12. Realization Upon Defaulted Loans............................................... 92
SECTION 4.13. REO Property................................................................... 92
SECTION 4.14. Annual Statement as to Compliance.............................................. 93
SECTION 4.15. Annual Independent Public Accountants' Servicing Statement; Financial
Statements..................................................................... 93
SECTION 4.16. Annual Certificate by Master Servicer.......................................... 93
SECTION 4.17. Obligation of the Master Servicer in Respect of Prepayment Interest
Shortfalls..................................................................... 94
SECTION 4.18. Obligation of the Master Servicer in Respect of Collection Account............. 94
SECTION 4.19. Backup Servicer................................................................ 94
ARTICLE V DISTRIBUTIONS............................................................................... 95
SECTION 5.01. Advances by the Master Servicer and the Servicers.............................. 95
SECTION 5.02. Advance Facility............................................................... 95
SECTION 5.03. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls............................................................ 98
SECTION 5.04. Distributions on the REMIC Interests........................................... 98
SECTION 5.05. Distributions.................................................................. 98
SECTION 5.06. Monthly Statements to Certificateholders....................................... 103
SECTION 5.07. Pre-Funding Account............................................................ 107
SECTION 5.08. Capitalized Interest Account................................................... 107
SECTION 5.09. Certificate Insurance Policy Matters........................................... 108
SECTION 5.10. Effect of Payments by the Certificate Insurer.................................. 112
ARTICLE VI THE CERTIFICATES............................................................................ 112
SECTION 6.01. The Certificates............................................................... 112
SECTION 6.02. Appointment of Certificate Registrar; Certificate Register;
Registration of Transfer and Exchange of Certificates.......................... 114
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................. 118
SECTION 6.04. Persons Deemed Owners.......................................................... 118
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SECTION 6.05. Access to List of Certificateholders' Names and Addresses...................... 118
SECTION 6.06. Book-Entry Certificates........................................................ 119
SECTION 6.07. Notices to Depository.......................................................... 119
SECTION 6.08. Definitive Certificates........................................................ 120
SECTION 6.09. Maintenance of Office or Agency................................................ 120
SECTION 6.10. Authenticating Agents.......................................................... 120
SECTION 6.11. Trustee To Act with Consent of the Certificate Insurer......................... 121
SECTION 6.12. Mortgage Loans, Trust Fund Held for Benefit of Certificate Insurer
and Holders of Certificates.................................................... 121
ARTICLE VII THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE SECURITIES ADMINISTRATOR........... 122
SECTION 7.01. Respective Liabilities of the Depositor, the Master Servicer, each
Servicer and the Securities Administrator...................................... 122
SECTION 7.02. Merger or Consolidation of the Depositor, the Master Servicer, each
Servicer or the Securities Administrator....................................... 122
SECTION 7.03. Limitation on Liability of the Depositor, Master Servicer, each
Servicer, the Backup Servicer, the Trustee, the Securities
Administrator and Others....................................................... 122
SECTION 7.04. Limitation on Resignation of the Servicers..................................... 123
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds................................. 124
SECTION 7.06. Limitation on Resignation of the Master Servicer and the Backup
Servicer....................................................................... 124
SECTION 7.07. Assignment of Master Servicing................................................. 125
SECTION 7.08. Limitation Upon Liability of the Credit Risk Manager........................... 125
ARTICLE VIII DEFAULT; TERMINATION OF SERVICER............................................................ 125
SECTION 8.01. Events of Default.............................................................. 125
SECTION 8.02. Securities Administrator to Act; Master Servicer and Backup Servicer
to Act; Appointment of Successor............................................... 127
SECTION 8.03. Notification to Certificateholders............................................. 129
SECTION 8.04. Waiver of Servicer Events of Default........................................... 129
SECTION 8.05. SLS Events of Default.......................................................... 130
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR..................................... 130
SECTION 9.01. Duties of the Trustee.......................................................... 130
SECTION 9.02. Certain Matters Affecting the Trustee.......................................... 132
SECTION 9.03. The Trustee Not Liable for Certificates or Mortgage Loans...................... 133
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SECTION 9.04. The Trustee May Own Certificates............................................... 134
SECTION 9.05. Trustee's Fees and Expenses.................................................... 134
SECTION 9.06. [RESERVED]..................................................................... 134
SECTION 9.07. Eligibility Requirements for the Trustee....................................... 134
SECTION 9.08. Resignation and Removal of the Trustee......................................... 135
SECTION 9.09. [RESERVED]..................................................................... 135
SECTION 9.10. Successor Trustee.............................................................. 135
SECTION 9.11. Merger or Consolidation of the Trustee......................................... 136
SECTION 9.12. Appointment of Co-Trustee or Separate Trustee.................................. 136
SECTION 9.13. Tax Matters.................................................................... 137
SECTION 9.14. Duties of Securities Administrator............................................. 139
SECTION 9.15. Certain Matters Affecting the Securities Administrator......................... 140
SECTION 9.16. Securities Administrator Not Liable for Certificates or Mortgage Loans......... 142
SECTION 9.17. Securities Administrator May Own Certificates.................................. 142
SECTION 9.18. Fees and Expenses of the Securities Administrator.............................. 142
SECTION 9.19. Eligibility Requirements for the Securities Administrator...................... 143
SECTION 9.20. Resignation and Removal of the Securities Administrator........................ 143
SECTION 9.21. Successor Securities Administrator............................................. 144
SECTION 9.22. Merger or Consolidation of Securities Administrator............................ 144
ARTICLE X TERMINATION................................................................................. 145
SECTION 10.01. Termination upon Liquidation or Repurchase of all Mortgage Loans............... 145
SECTION 10.02. Final Distribution on the Certificates......................................... 145
SECTION 10.03. Additional Termination Requirements............................................ 146
ARTICLE XI MISCELLANEOUS PROVISIONS.................................................................... 147
SECTION 11.01. Amendment...................................................................... 147
SECTION 11.02. Counterparts................................................................... 148
SECTION 11.03. Governing Law.................................................................. 149
SECTION 11.04. Intention of Parties........................................................... 149
SECTION 11.05. Notices........................................................................ 149
SECTION 11.06. Severability of Provisions..................................................... 150
SECTION 11.07. Assignment..................................................................... 151
SECTION 11.08. Limitation on Rights of Certificateholders..................................... 151
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SECTION 11.09. Inspection and Audit Rights.................................................... 151
SECTION 11.10. Certificates Nonassessable and Fully Paid...................................... 152
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EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER
EXHIBIT H FORM OF RULE 144A LETTER
EXHIBIT I REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M FORM OF SUBSEQUENT TRANSFER INSTRUMENT
EXHIBIT N FORM OF ADDITION NOTICE
EXHIBIT O FORM OF CAP CONTRACT
EXHIBIT P FORM OF CERTIFICATE OF MASTER SERVICER
EXHIBIT Q FORM OF CUSTODIAL AGREEMENT
EXHIBIT R FORM OF SERVICER REPORT
vii
POOLING AND SERVICING AGREEMENT, dated as of September 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, a
New York banking corporation, as securities administrator (the "Securities
Administrator") and backup servicer (the "Backup Servicer"), GREENPOINT MORTGAGE
FUNDING, INC., a New York corporation ("GreenPoint" or a "servicer"),
SPECIALIZED LOAN SERVICING , LLC, a Delaware limited liability company, as
servicer ("SLS" or a "Servicer," and together with GreenPoint, the "Servicers")
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) three real estate mortgage
investment conduits ("REMIC 1", "REMIC 2" and "REMIC 3" in a tiered REMIC
structure, (ii) the rights to receive Prepayment Penalties amounts paid by the
Servicer, the Seller or any Transferor in respect of Prepayment Penalties,
pursuant to this Agreement or the 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, (iii) the Cap Contract and the Cap Contract
Account, (iv) the grantor trusts and partnership described in Section 2.07 and
(v) 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), (iv) and (v) 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 Class LT2-R Interest
as the single "residual interest" in REMIC 2. The Trustee will hold the REMIC 2
Regular Interests. REMIC 3 will consist of the REMIC 2 Regular Interests and
will be evidenced by the REMIC 3 Regular Interests (which will be uncertificated
and will represent the "regular interests" in REMIC 3) and the REMIC 3 Residual
Interest as the single "residual interest" in REMIC 3. The Class R Certificate
will represent beneficial ownership of the Class LT1-R Interest, the Class LT2-R
Interest and the REMIC 3 Residual Interest. The "latest possible maturity date"
for federal income tax purposes of all the interests created hereby will be the
Latest Possible Maturity Date.
All covenants and agreements made by the Seller in the Sale Agreement and
by the Depositor and the Trustee herein with respect to the Mortgage Loans and
the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, each 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
each 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 Certificates, the REMIC 1 Regular
Interests, the REMIC 2 Regular Interests and the REMIC 3 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. All
calculations of interest on the Certificates will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.
Addition Notice: With respect to the transfer of Subsequent Mortgage Loans
to the Trust Fund pursuant to Section 2.11, 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,
the Securities Administrator and the Certificate Insurer 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 Servicing Fees, the Master Servicing
Fee and the Credit Risk Manager Fee.
Advance: The aggregate of the advances required to be made by a Servicer
with respect to any Distribution Date pursuant to Section 5.01.
Advance Facility: A financing or other facility as described in Section
5.02(a).
Advance Facility Notice: As defined in Section 5.02(b) hereof.
Advance Financing Person: As defined in Section 5.02(a) hereof.
Advance Reimbursement Amounts: As defined in Section 5.02(b) hereof.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination,
the sum of the Class A Certificate Principal Balance, the Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate Principal
Balance and the Class B-3 Certificate Principal Balance, in each case as of such
date of determination.
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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 a
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: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for the Seller by an independent fee appraiser at the time of the
origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
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, a per annum rate equal
to the product of (A) 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 Distribution Dates on or prior to
the Distribution Date in December 2004, one-twelfth of the product of the
Pre-Funded Amount as of the close of the calendar month preceding the month in
which such Distribution Date occurs (or, if such date would be prior to the
Closing Date, the Original Pre-Funded Amount) and the Net WAC for such
Distribution Date over (b) the sum of the Administration Fee and the Certificate
Insurer Premium for such Distribution Date by (y) the Aggregate Certificate
Principal Balance immediately prior to such Distribution Date and (B) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the related Accrual Period.
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.
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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 S, Class M and Class B Certificates constitutes a Class of
Book-Entry Certificates.
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, the Securities Administrator or
the Certificate Insurer is located, or financial and savings and loan
institutions in the States of New Jersey, California, Texas or Colorado are
authorized or obligated by law or executive order to be closed.
Cap Contract: The amended confirmation and agreement and any related
confirmation thereto, between the Cap Contract Counterparty and Terwin Advisors
LLC (in the form of Exhibit O hereto).
Cap Contract Account: The separate Eligible Account created and maintained
by the Securities Administrator, on behalf of the Trustee, pursuant to Section
5.05(l) in the name of the Trustee for the benefit of the Trust Fund and
designated "U.S. Bank National Association, as Trustee, in trust for registered
holders of Terwin Mortgage Trust 2004-11HE, Asset-Backed Certificates, Series
XXXX 0000-00XX." Funds in the Cap Contract Account shall be held in trust for
the Trust Fund for the uses and purposes set forth in this Agreement.
Cap Contract Counterparty: Bear Xxxxxxx Financial Products, Inc.
Cap Contract Notional Balance: With respect to any Distribution Date, the
Cap Contract Notional Balance set forth below for such Distribution Date:
ONE-MONTH LIBOR CAP TABLE
BEGINNING ENDING NOTIONAL INDEX RATE LOWER UPPER
ACCRUAL ACCRUAL BALANCE($) MULTIPLIER COLLAR(%) COLLAR(%)
------- ------- ---------- ---------- --------- ---------
9/28/04 10/25/04 26,798,500.00 10 6.691 9.610
10/25/04 11/25/04 26,565,402.80 10 5.768 9.610
11/25/04 12/25/04 26,275,671.90 10 5.973 9.610
12/25/04 1/25/05 25,929,836.00 10 5.769 9.610
1/25/05 2/25/05 25,528,659.40 10 5.769 9.610
2/25/05 3/25/05 25,073,036.90 10 6.430 9.610
3/25/05 4/25/05 24,564,704.50 10 5.771 9.610
4/25/05 5/25/05 24,013,500.20 10 5.978 9.610
5/25/05 6/25/05 23,429,089.60 10 5.774 9.610
6/25/05 7/25/05 22,814,912.80 10 5.981 9.610
7/25/05 8/25/05 22,210,257.90 10 5.777 9.610
8/25/05 9/25/05 21,621,902.00 10 5.779 9.610
9/25/05 10/25/05 21,049,394,30 10 5.987 9.610
10/25/05 11/25/05 20,492,327.90 10 5.783 9.610
-4-
BEGINNING ENDING NOTIONAL INDEX RATE LOWER UPPER
ACCRUAL ACCRUAL BALANCE($) MULTIPLIER COLLAR(%) COLLAR(%)
------- ------- ---------- ---------- --------- ---------
11/25/05 12/25/05 19,950,275.80 10 5.991 9.610
12/25/05 1/25/06 19,422,823.00 10 5.787 9.610
1/25/06 2/25/06 18,909,566.20 10 5.789 9.610
2/25/06 3/25/06 18,410,113.40 10 6.454 9.610
3/25/06 4/25/06 17,923,788.00 10 5.793 9.610
4/25/06 5/25/06 17,444,047.90 10 6.004 9.610
5/25/06 6/25/06 16,730,462.10 10 5.825 9.610
6/25/06 7/25/06 16,005,699.40 10 7.395 9.610
7/25/06 8/25/06 15,319,145.40 10 7.238 9.610
8/25/06 9/25/06 14,666,742.40 10 7.221 9.610
9/25/06 10/25/06 14,050,490.00 10 7.458 9.610
10/25/06 11/25/06 13,608,144.70 10 7.202 9.610
11/25/06 12/25/06 13,207,702.10 10 7.458 9.610
12/25/06 1/25/07 12,819,609.40 10 7.615 9.610
1/25/07 2/25/07 12,443,790.60 10 7.648 9.610
2/25/07 3/25/07 12,079,614.00 10 8.501 9.610
3/25/07 4/25/07 11,726,648.10 10 7.632 9.610
4/25/07 5/25/07 11,384,528.80 10 7.892 9.610
5/25/07 6/25/07 11,052,871.40 10 7.632 9.610
6/25/07 7/25/07 10,731,387.90 10 8.449 9.610
7/25/07 8/25/07 10,420,109.00 10 8.266 9.610
8/25/07 9/25/07 10,118,352.70 10 8.254 9.610
9/25/07 10/25/07 9,825,772.50 10 8.531 9.610
10/25/07 11/25/07 9,601,561.00 10 8.174 9.610
11/25/07 12/25/07 9,330,338.60 10 8.445 9.610
12/25/07 1/25/08 9,067,437.10 10 8.554 9.610
1/25/08 2/25/08 8,812,710.40 10 8.556 9.610
2/25/08 3/25/08 8,565,666.00 10 9.150 9.610
3/25/08 4/25/08 8,325,980.20 10 8.513 9.610
4/25/08 5/25/08 8,090,021.40 10 8.791 9.610
5/25/08 6/25/08 7,860,839.60 10 8.480 9.610
6/25/08 7/25/08 7,638,517.40 10 8.853 9.610
7/25/08 8/25/08 7,422,879.10 10 8.558 9.610
8/25/08 9/25/08 7,213,607.10 10 8.540 9.610
9/25/08 10/25/08 7,010,561.20 10 8.820 9.610
10/25/08 11/25/08 6,813,544.20 10 8.505 9.610
11/25/08 12/25/08 6,622,365.50 10 8.785 9.610
12/25/08 1/25/09 6,436,841.70 10 8.507 9.610
1/25/09 2/25/09 6,256,813.30 10 8.504 9.610
2/25/09 3/25/09 6,082,076.20 10 9.437 9.610
3/25/09 4/25/09 5,912,475.00 10 8.469 9.610
4/25/09 5/25/09 5,747,848.80 10 8.746 9.610
5/25/09 6/25/09 5,588,041.60 10 8.438 9.610
6/25/09 7/25/09 5,432,896.40 10 8.730 9.610
7/25/09 8/25/09 5,432,896.40 10 8.730 9.610
-5-
BEGINNING ENDING NOTIONAL INDEX RATE LOWER UPPER
ACCRUAL ACCRUAL BALANCE($) MULTIPLIER COLLAR(%) COLLAR(%)
--------- -------- ------------ ---------- --------- ---------
8/25/09 9/25/09 5,282,216.40 10 8.526 9.610
9/25/09 10/25/09 5,135,962.00 10 8.508 9.610
10/25/09 11/25/09 4,856,053.40 10 8.475 9.610
11/25/09 12/25/09 4,722,139.90 10 8.754 9.610
12/25/09 1/25/10 4,592,089.00 10 8.443 9.610
1/25/10 2/25/10 4,465,780.80 10 8.440 9.610
2/25/10 3/25/10 4,343,107.10 10 9.368 9.610
3/25/10 4/25/10 4,223,948.10 10 8.407 9.610
4/25/10 5/25/10 4,108,195.90 10 8.684 9.610
5/25/10 6/25/10 3,995,745.90 10 8.376 9.610
6/25/10 7/25/10 3,886,497.00 10 8.652 9.610
7/25/10 8/25/10 3,780,352.50 10 8.353 9.610
8/25/10 9/25/10 3,677,219.50 10 8.338 9.610
9/25/10 10/25/10 3,577,003.20 10 8.613 9.610
10/25/10 11/25/10 3,479,614.90 10 8.308 9.610
11/25/10 12/25/10 3,384,968.80 10 8.583 9.610
12/25/10 1/25/11 3,292,981.90 10 8.280 9.610
1/25/11 2/25/11 3,203,573.70 10 8.270 9.610
2/25/11 3/25/11 3,116,668.00 10 9.183 9.610
3/25/11 4/25/11 3,032,187.80 10 8.243 9.610
4/25/11 5/25/11 2,950,060.30 10 8.517 9.610
5/25/11 6/25/11 2,870,214.90 10 8.218 9.610
6/25/11 7/25/11 2,792,583.30 10 8.492 9.610
7/25/11 8/25/11 2,717,099.30 10 8.194 9.610
8/25/11 9/25/11 2,643,698.90 10 8.182 9.610
9/25/11 10/25/11 2,572,320.20 10 8.456 9.610
10/25/11 11/25/11
Cap Contract Termination Date: The Distribution Date in October 2011.
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 $361,339.00.
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, 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.
-6-
Certificate Insurance Policy: The irrevocable Certificate Guaranty
Insurance Policy, No. 51564-N, including any endorsements thereto, issued by the
Certificate Insurer with respect to the Class A Certificates.
Certificate Insurer: Financial Security Assurance Inc., a New York stock
insurance company, or any successor thereto.
Certificate Insurer Account: The account established pursuant to Section
5.09(g) hereof.
Certificate Insurer Contact Persons: Collectively, the officers designated
by each Servicer to provide information to the Certificate Insurer pursuant to
Section 5.09(m).
Certificate Insurer Default: A default by the Certificate Insurer in its
obligations under the Certificate Insurance Policy.
Certificate Insurer Premium: With respect to any Distribution Date, an
amount equal to 1/12th of the product of (a) the Certificate Principal Balance
of the Class A Certificates as of such Distribution Date (prior to giving effect
to any distributions thereon on such Distribution Date) and (b) the Certificate
Insurer Premium Rate.
Certificate Insurer Premium Rate: The per annum rate at which the
Certificate Insurer Premium is determined, as described in the commitment letter
dated as of September 27, 2004, between the Depositor, the Seller and the
Certificate Insurer.
Certificate Insurer Reimbursement Amount: The sum of (i) all amounts paid
by the Certificate Insurer under the Certificate Insurance Policy which have not
been previously reimbursed, (ii) all unpaid Certificate Insurer Premiums, (iii)
all costs and expenses incurred by the Certificate Insurer on behalf of itself
or the Class A Certificates in connection with any actions, suits or proceedings
with respect to the exercise or enforcement of any rights under the Certificate
Insurance Policy or this Agreement and (iv) interest on the foregoing at the
Pass-Through Rate on the Class A Certificates.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than a Class S
or Class X 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 a Servicer, the Certificate Principal
Balance of any Class of Certificates then outstanding for which any Applied
Realized Loss Amount has been allocated will be increased, in order of
seniority, by an amount equal to the lesser of (i) the Unpaid Realized Loss
Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery in respect of principal distributed on such date to the
Certificateholders (reduced by the amount of the increase in the Certificate
Principal Balance of any more senior Class of Certificates pursuant to this
sentence on such Distribution Date). Solely for the purposes of determining the
Certificate Insurer's rights as subrogee for payments pursuant to Section 5.05,
"Certificate Principal Balance" of the Class A Certificates shall not be reduced
by the amount of any payments made by the Certificate Insurer in respect of
principal on such Certificates under the Certificate Insurance Policy, except to
the extent such payment shall have been reimbursed to the
-7-
Certificate Insurer pursuant to the provisions of this Agreement. Instead, the
Certificate Insurer shall be subrogated to such amounts paid under the
Certificate Insurance Policy.
Certificate Register: The register maintained pursuant to Section 6.02
hereof.
Certificate Registrar: The Certificate Registrar appointed pursuant to
Section 6.02 hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of the Book-Entry Certificates) in the case of any
Class of Regular Certificates, Class X Certificates or the Class R Certificate,
and, with respect to the Class A Certificates, the Certificate Insurer to the
extent of any amount paid under the Certificate Insurance Policy in respect of
principal except that solely for the purpose of giving any consent pursuant to
this Agreement, any Certificate registered in the name of the Depositor or any
Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Securities Administrator, the Trustee and the Certificate
Registrar are entitled to rely conclusively on a certification of the Depositor
or any Affiliate of the Depositor in determining which Certificates are
registered in the name of an Affiliate of the Depositor.
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.
-8-
Class A Pass-Through Rate: For the first Distribution Date, 2.230% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A Margin, (2) the Maximum Rate Cap and (3) 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 and the Class R
Certificate Principal Balance immediately prior to such Distribution Date over
(B) the lesser of (i) 76.40% 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 aggregate Certificate Principal Balance of the
Class A and Class R Certificates
Class B Certificates: The Class B-1 Certificates, Class B-2 Certificates
and Class B-3 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of 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, 2.500% per annum and, as of any
Distribution Date after the Optional Termination Date, 3.750% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 4.340% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
-9-
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance and the Class M-3
Certificate Principal Balance have been reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance and the Class R Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date and (E) the Class B-1 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 98.40% of
the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A, Class R and Class M
Certificates has been reduced to zero, the Class B-1 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-1 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class R and Class M
Certificates and (II) in no event will the Class B-1 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-1 Certificate
Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the definition of
"Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.
Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-2 Certificates.
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
-10-
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 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.000% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.500% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 4.840% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have been
reduced to zero and a Trigger Event exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance and the Class R Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date) and (F) the Class B-2 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 96.60% of the Stated Principal Balance of the Mortgage Loans as of
the end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period over Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class R, Class M and Class B-1 Certificates has been reduced to zero, the
Class B-2 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class B-2 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class R, Class M and Class B-1 Certificates and (II) in no event
will the Class B-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-2 Certificate Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the definition of
"Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
-11-
Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.
Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the Current Interest and Interest Carry
Forward Amount portions of any previous distributions on such Class that are
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class B-3 Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates (excluding any Floating Rate Certificate Carryover
Class B-3 Certificates) over (B) the amount actually distributed to the Class
B-3 Certificates with respect to Class B-3 Current Interest and Class B-3
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-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.000% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.500% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 4.480% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance and the Class B-2
Certificate Principal Balance have been reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance and the Class R Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class B-1 Certificate Principal Balance (after
taking into account distributions of the Class B-1 Principal Distribution Amount
on such Distribution Date), (F) the Class B-2 Certificate Principal Balance
immediately prior to such Distribution Date and (G) the Class B-3 Certificate
Principal Balance (after taking into account distributions of the Class B-3
Principal Distribution Amount on such Distribution Date) over (2) the lesser of
(A) 92.60% of the Stated Principal Balance of the Mortgage Loans as of the end
of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period over Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class R, Class M, Class B-1 and Class B-2 Certificates has been reduced to
zero, the Class B-3 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class B-3 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class R, Class M, Class
-12-
B-1 and Class B-2 Certificates and (II) in no event will the Class B-3
Principal Distribution Amount with respect to any Distribution Date exceed the
Class B-3 Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the definition of
"Certificate Principal Balance."
Class LT1-A Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to $119,135,550 and an interest rate equal to
the Net Rate.
Class LT1-B1 Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to $1,350,000 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 $1,350,000 and an interest rate equal to
the Net Rate.
Class LT1-B3 Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to $1,222,000 and an interest rate equal to
the Net Rate.
Class LT1-X 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.
Class LT1-M1 Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to $6,480,000 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 $2,565,000 and an interest rate equal to
the Net Rate.
Class LT1-M3 Interest: An uncertificated regular interest in REMIC 1 with
an initial principal balance equal to $1,890,000 and an interest rate equal to
the Net Rate.
Class LT1-R Interest: The sole class of "residual interest" in REMIC 1.
Class LT2-A Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
Class LT2-B1 Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
Class LT2-B2 Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
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Class LT2-B3 Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
Class LT2-M1 Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
Class LT2-M2 Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
Class LT2-M3 Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the initial principal balance of the
Related Certificates and an interest rate equal to the lesser of (i) the greater
of (A) One-Month LIBOR plus the Margin for the Related Certificates and (B)
1.80% plus the Margin for the Related Certificates and (ii) the Net Rate.
Class LT2-R Interest: The sole class of "residual interest" in REMIC 2.
Class LT2-X Interest: An uncertificated regular interest in REMIC 2 with
an initial principal balance equal to the excess of (i) the sum of (x) the
Cut-off Date Principal Balance of the Initial Mortgage Loans and (y) the
Original Pre-Funded Amount over (ii) the aggregate Initial Certificate Principal
Balance of the Class A Certificates, Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates and Class R Certificates and bearing
interest on a notional amount equal to the aggregate principal balance of the
REMIC 1 Regular Interests outstanding as of the beginning of the related Accrual
Period at a rate equal to the Class LT2-X Interest Rate.
Class LT2-X Interest Rate: 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 being capped at the interest rate on the Corresponding
REMIC 2 Interest and treating the Class LT1-X Interest as being capped at zero).
The weighted averages described in the preceding sentence shall be weighted on
the basis of the respective principal balances of the REMIC 1 Regular Interests
immediately prior to any date of determination.
Class M Certificates: The Class M-1 Certificates, Class M-2 Certificates
and Class M-3 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.
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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, 0.870% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.305% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 2.710% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Maximum Rate Cap and (3) 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 and the
Class R Certificate Principal Balance has been reduced to zero and a Trigger
Event exists, or as long as a Trigger Event does not exist, the excess of (1)
the sum of (A) the Class A Certificate Principal Balance and the Class R
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 86.00% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A and Class R Certificates has been reduced to
zero, the Class M-1 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class M-1 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A and Class R Certificates and (II) in no event will the Class M-1
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-1 Certificate Principal Balance.
Class M-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.
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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, 1.650% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.475% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 3.490% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Maximum Rate Cap and (3) 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, the
Class R Certificate Principal Balance and the Class M-1 Certificate Principal
Balance have been reduced to zero and a Trigger Event exists, or as long as a
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance and the Class R Certificate Principal Balance
(after taking into account distributions of the Class A Principal Distribution
Amount on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance (after taking into account distributions of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (C) the Class M-2 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 89.80% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class R and Class M-1 Certificates has been reduced to zero, the Class M-2
Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class M-2 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A,
Class R and Class M-1 Certificates and (II) in no event will the Class M-2
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-2 Certificate Principal Balance.
Class M-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
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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 M-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of 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-3 Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates (excluding any Floating Rate Certificate Carryover for
the Class M-3 Certificates) over (B) the amount actually distributed to the
Class M-3 Certificates with respect to Class M-3 Current Interest and Class M-3
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-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.850% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.775% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 3.690% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance and the Class M-2 Certificate Principal Balance has been reduced to zero
and a Trigger Event exists, or as long as a Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance and the
Class R Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 92.60% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required
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Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class R, Class M-1 and Class M-2 Certificates
has been reduced to zero, the Class M-3 Principal Distribution Amount will equal
the lesser of (x) the outstanding Certificate Principal Balance of the Class M-3
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class R, Class M-1 and Class M-2 Certificates
and (II) in no event will the Class M-3 Principal Distribution Amount with
respect to any Distribution Date exceed the Class M-3 Certificate Principal
Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the 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 R Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class R Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of 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 R Certificate.
Class R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates (excluding any Floating Rate Certificate Carryover for the
Class R Certificate) over (B) the amount actually distributed to the Class R
Certificate with respect to Class R Current Interest and Class R 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 R Pass-Through Rate for
the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.39% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.78% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 2.230% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Available Funds Cap for such Distribution Date
and (3) the Maximum Rate Cap.
Class S Certificate: Any Certificate designated as a "Class S Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein. For federal income tax purposes, the Class S
Certificates represent each of the REMIC 3 S Components each of which is a
"regular interest" in REMIC 3.
Class S Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class S Pass-Through Rate on
the Class S Notional Amount as of the first day of such Accrual Period (after
giving effect to any 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
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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 S Certificates.
Class S Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class S Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class S
Certificate with respect to Class S Current Interest and Class S 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 S Pass-Through Rate for
the related Accrual Period.
Class S Notional Amount: For any Distribution Date, the aggregate
Certificate Principal Balance of the Class A, Class R, Class M and Class B
Certificates for such Distribution Date.
Class S Pass-Through Rate: As of any Distribution Date, the greater of (1)
1.80% minus One-Month LIBOR and (2) 0.00%; provided, however, that the rate on
each portion of the notional balance of the Class S Certificates that
corresponds to each Class of the Class A, Class R, Class M and Class B
Certificates will be subject to a cap in each case equal to the excess of (x)
the product of (1) the quotient obtained by dividing (a) the total scheduled
interest based on the Net Mortgage Rates in effect on the related Due Date less
the Certificate Insurer Premium for such Distribution Date by (b) the aggregate
Stated Principal Balance of the Mortgage Loans as of the first day of the
applicable Accrual Period and (2) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the related Accrual
Period over (y) One-Month LIBOR plus the applicable margin for such Class of
Certificates.
Class X Certificates: The Class X Certificates executed by the Trustee and
authenticated by the Trustee in substantially the form set forth in Exhibit A.
Class X Distributable Amount: The excess of (x) the sum of (i) the initial
Overcollateralization Amount and (ii) all interest payments accrued on the REMIC
3 X Interest over (y) the sum of (i) all prior distributions to the Class X
Certificates pursuant to Section 5.05(g) and (ii) all payments treated as
distributed by REMIC 3 to the REMIC 3 X Interest then paid to the holders of
Offered Certificates and the Class B-2 and Class B-3 Certificates pursuant to an
interest rate cap contract as described in Section 2.07(d).
Closing Date: September 28, 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.
Collection Account: The separate Eligible Accounts created and initially
maintained by the Servicers pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated (i) in the case
of GreenPoint, "GreenPoint Mortgage Funding, Inc., 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"and (ii) in the
case of SLS, "Specialized Loan Servicing LLC, as servicer for U.S. Bank National
Association, as trustee, in trust for registered holders of Terwin Mortgage
Trust, Asset-Backed Certificates, Series XXXX 0000-00XX". Funds in the
Collection Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Compensating Interest: For any Distribution Date and with respect to each
voluntary Principal Prepayment on the related Mortgage Loans serviced by a
Servicer, the lesser of (i) one-half of the
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aggregate Servicing Fee payable to such Servicer 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 Master Servicing Fee.
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 2004-11HE, 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 Servicers 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 2004-11HE, 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 Servicers, the Backup Servicer and the
Securities Administrator. With respect to the 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 2004-11HE.
Corresponding REMIC 2 Interests: With respect to the Class LT1-A Interest,
the Class LT2-A Interest. With respect to the Class LT1-B1 Interest, the Class
LT2-B1 Interest. With respect to the Class LT1-B2 Interest, the Class LT2-B2
Interest. With respect to the Class LT1-B3 Interest, the Class LT2-B3 Interest.
With respect to the Class LT1-M1 Interest, the Class LT2-M1 Interest. With
respect to the Class LT1-M2 Interest, the Class LT2-M2 Interest. With respect to
the Class LT1-M3 Interest, the Class LT2-M3 Interest.
Credit Risk Management Agreements: The respective agreements between each
Servicer and the Credit Risk Manager dated as of September 28, 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.
Current Interest: Any of the Class A Current Interest, the Class S Current
Interest, the Class R Current Interest, the Class M-1 Current Interest, the
Class M-2 Current Interest, the Class M-3 Current Interest, the Class B-1
Current Interest, the Class B-2 Current Interest and the Class B-3 Current
Interest.
Custodian: Deutsche Bank National Trust Company, as custodian, or its
successor in interest.
Custodian Fee: The fee payable to the Custodian by the Securities
Administrator as set forth in the Custodial Agreement, a form of which is
attached hereto as Exhibit Q.
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Cut-off Date: September 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.
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.
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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 October 2004.
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 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 meets the requirements of an
underwriter's exemption granted by the U.S. Department of Labor.
ERISA Restricted Certificates: The Class X Certificates and Class R
Certificate and any other Certificate, unless such other Certificate (i) shall
have received a rating from a Rating Agency at the time
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of a transfer of such other Certificate that is in one of the three (or in the
case of Designated Transactions, four) highest generic rating categories and
(ii) is sold pursuant to an "underwriter 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 R Certificate, Class M Certificates and Class B
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 each 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) 1.60% of the Pool Stated Principal Balance of the Mortgage Loans and (b) the
Minimum Required Overcollateralization Amount less (B) the Pool Stated Principal
Balance of the Mortgage Loans as of such Distribution Date; provided, however,
that if on any Distribution Date a Trigger Event is in effect, the Extra
Principal Distribution Amount will not be reduced to the applicable percentage
of the then-current Pool Stated Principal Balance of the Mortgage Loans as of
the Due Date immediately prior to the Trigger Event until the next Distribution
Date on which the Trigger Event is not in effect.
Xxxxxx Mae: A federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Federal Funds Rate: The interest rate at which depository institutions
lend balances at the Federal Reserve to other depository institutions overnight.
Fitch: Fitch, Inc., or its successor in interest.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a Class of Offered Certificates
(other than the Class S Certificates) or a Class of the Class B Certificates is
based upon the Available Funds Cap or the Maximum Rate 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 or the Maximum Rate Cap, up to but
not exceeding the greater of (a) the Maximum Rate Cap or (b) (X) if One-
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Month LIBOR exceeds the Lower Collar, the lesser of (1) One-Month LIBOR and (2)
the Upper Collar or (Y) if One-Month LIBOR is less than or equal to the Lower
Collar, zero, over (y) the amount of interest distributable on such Class on
such Distribution Date based on the lesser of (i) the Available Funds Cap and
(ii) the Maximum Rate 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 December 24,
2004.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York corporation, or
its successor in interest.
Guaranteed Distributions: As defined in the Certificate Insurance Policy.
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 Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Notional Amount: With respect to the Class S
Certificates, the notional amount of such Certificates on the Closing Date as
set forth in Section 6.01 hereof.
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 Mortgage Loans: The Mortgage Loans included in the Trust Fund as
of the Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any insurance policies.
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Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, a 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 such 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 R Interest Carry Forward Amount, the Class S Interest Carry
Forward Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2
Interest Carry Forward Amount, the Class M-3 Interest Carry Forward Amount, the
Class B-1 Interest Carry Forward Amount, the Class B-2 Interest Carry Forward
Amount or the Class B-3 Interest Carry Forward Amount as the case may be.
Interest Determination Date: With respect to the Certificates (other than
the Class X 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, September 26, 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 each 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 each 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 each 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, or its successor in interest.
Last Scheduled Distribution Date: The Distribution Date in October 2035.
Latest Possible Maturity Date: The first Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled maturity date as of the Cut-off Date.
Lender: As defined in Section 5.02(a) hereof.
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
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agreements and as to which the related Servicer has certified (in accordance
with Section 3.12) in the related Prepayment Period that it has received all
amounts it expects to receive in connection with such liquidation including the
final disposition of the related REO Property (exclusive of any possibility of a
deficiency judgment).
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of Mortgage Loans, whether
through trustee's sale, foreclosure sale, sale by a 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 applicable Servicing Fees, the Backup Servicing Fees, if applicable,
Servicing Advances and any other expenses related to such Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (X) the Appraised Value of the related Mortgaged Property and (Y) the sales
price of the related Mortgaged Property at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Lower Collar: With respect to each Distribution Date, the applicable per
annum rate set forth under the heading "Lower Collar" in the One-Month LIBOR Cap
Table herein.
LPMI Insurer: The primary mortgage insurer insuring an LPMI Loan.
LPMI Loan: A Mortgage Loan covered by an LPMI Policy, as set forth in the
Mortgage Loan Schedule or otherwise identified to a Servicer in writing.
LPMI Policy: A policy of primary mortgage insurance issued by a LPMI
Insurer pursuant to which the related premium is to be paid by a Servicer from
payments of interest made by the Mortgagor.
Margin: Any of the Class A Margin, the Class M-1 Margin, the Class M-2
Margin, the Class M-3 Margin, the Class B-1 Margin, the Class B-2 Margin, the
Class B-3 Margin and the Class R 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, two (2) Business Days prior to the related Distribution Date.
Master Servicing Fee: With respect to any Mortgage Loan and any
Distribution Date, the monthly fee payable to the Master Servicer pursuant to
Section 3.08(b) equal to the product of (a) 1/12th of the Master Servicing Fee
Rate and (b) the Stated Principal Balance of such Mortgage Loan as of the
immediately preceding Distribution Date, subject to a minimum of $10,000 per
annum; provided that in no event may the Master Servicing Fee for a Distribution
Date exceed the aggregate scheduled interest on the Mortgage Loans for the
related Due Period, reduced by the Servicing Fees and the Credit Risk Manager
Fee. The Master Servicer is also entitled to receive, as additional
compensation, all investment income earned on funds in the Master Servicer
Collection Account. In addition, the Master Servicer will be entitled to
reimbursements for certain expenses of the Master Servicer. The Master Servicer
shall be responsible for paying the Securities Administrator Fee in accordance
with a separate agreement.
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Master Servicing Fee Rate: 0.010% per annum.
Master Servicer Withdrawals: As defined in Section 3.08(b) hereof.
Maximum Rate Cap: With respect to any of the Class A, Class R, Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates and any
Distribution Date, the product of (I) 12 times the quotient obtained by dividing
(x) the aggregate scheduled interest that would have been due on the Included
Mortgage Loans during the related Due Period had the Adjustable Rate Mortgage
Loans provided for interest at their respective maximum lifetime Mortgage Rates
and the Fixed Rate Mortgage Loans provided for interest at their respective
Mortgage Rates, less the Administration Fee and the Certificate Insurer Premium
for such Distribution Date, divided by (y) the Outstanding Principal Balances of
the Included Mortgage Loans for such Distribution Date and (II) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
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.
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
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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 Initial 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 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.
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.
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Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate,
the Master Servicing 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
sum of the Administration Fee and the Certificate Insurer Premium for such
Distribution Date by (y) the Outstanding Principal Balances of the Included
Mortgage Loans for such Distribution Date.
Non-Recoverable Advance: With respect to any Mortgage Loan, any portion of
an Advance previously made or proposed to be made by the related Servicer that,
in the good faith judgment of such Servicer, will not or, in the case of a
current delinquency, would not, be ultimately recoverable by such Servicer from
the related Mortgagor, related Liquidation Proceeds or other procreeds 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
related Servicer that, in the good faith judgment of such Servicer, will not or,
in the case of a current Servicing Advance, would not, be ultimately recoverable
by such 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 S, Class M-1, Class M-2, Class
M-3, Class B-1 and Class R Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Master Servicer, the Servicers, 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 Servicers, the
Backup Servicer, the Securities Administrator or the Trustee, as the case may
be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Securities Administrator on the related Interest Determination Date on
the basis of (a) the offered rates for one-month United States dollar deposits,
as such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on
such Interest Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as of 11:00 a.m. (London time), the offered rates of the Reference
Banks for one-month United States dollar deposits, as such rates appear on the
Reuters Screen LIBOR Page, as of 11:00 a.m. (London time) on such Interest
Determination Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
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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 Servicers, 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 Servicers, the
Backup Servicers or the Securities Administrator, (2) not have any direct
financial interest in the Depositor, the Master Servicer, each Servicer or the
Securities Administrator or in any affiliate of any, and (3) not be connected
with the Depositor, the Master Servicer, the Servicers, the Backup Servicer or
Securities Administrator as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Optional Termination: The termination of the trust hereunder pursuant to
clause (a) of Section 10.01 hereof.
Optional Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage Loans is equal to or less than 10% of
the sum of (i) the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and (ii) the Original Pre-Funded Amount.
Optional Termination Price: As of any Distribution Date on or after the
Optional Termination Date, an amount equal to the sum of (A) the Aggregate
Certificate Principal Balance, plus accrued interest on the Certificates and the
Class X Distributable Amount, (B) any unreimbursed out-of-pocket costs and
expenses owed to the Securities Administrator, the Trustee, the Servicers and
any unreimbursed Servicing Fees, Advances, Certificate Insurer Reimbursement
Amounts, 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 $67,497,911.
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.
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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 S Certificates, the Class S
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 M-3 Certificates, the Class M-3
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-3 Certificates, the Class B-3
Pass-Through Rate; and with respect to the Class R Certificate, the Class R
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 X 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, including the Cap
Contract and any credit enhancement and passive
derivative financial instruments that pertain to
beneficial interests issued or sold to parties other
than the Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets
of the Trust Fund;
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(iii) receiving collections on the Mortgage Loans and the Cap
Contract and making payments on such Certificates and
interests in accordance with the terms of this
Agreement; and
(iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which
activities cannot be contrary to the status of the Trust
Fund as a qualified special purpose entity under
existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith
and credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia
receiving the highest long-term debt rating of the
Rating Agency;
(iii) commercial or finance company paper, other than
commercial or finance company paper issued by the
Depositor, the Securities Administrator or any of its
Affiliates, which is then receiving the highest
commercial or finance company paper rating of the Rating
Agency;
(iv) certificates of deposit, demand or time deposits,
federal funds, or bankers' acceptances (other than
banker's acceptances issued by the Securities
Administrator or any of its Affiliates) issued by any
depository institution or trust company incorporated
under the laws of the United States or of any state
thereof and subject to supervision and examination by
federal and/or state banking authorities, provided that
the commercial paper and/or long term unsecured debt
obligations of such depository institution or trust
company are then rated one of the two highest long-term
and the highest short-term ratings of the Rating Agency
for such securities;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings
institution to the extent that such deposits are fully
insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two
highest long-term or the highest short-term ratings of
the Rating Agency containing, at the time of the
issuance of such agreements, such terms and conditions
as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any the
Rating Agency as evidenced by a letter from the Rating
Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case
entered into with a depository institution or trust
company (acting as principal) described in clause (v)
above;
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(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of
115% of the face amount thereof) bearing interest or
sold at a discount issued by any corporation, other than
the Securities Administrator or any of its Affiliates,
incorporated under the laws of the United States or any
state thereof which, at the time of such investment,
have one of the two highest long term ratings of the
Rating Agency;
(ix) interests in any money market fund (including those
managed or advised by the Securities Administrator, the
Trustee or their respective affiliates) which (A) at the
date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund
has the highest applicable long term rating by the
Rating Agency or (B) would not adversely affect the then
current rating by the Rating Agency of any of the
Certificates. Such investments in this subsection (ix)
may include money market mutual funds or common trust
funds, including, without limitation, the X.X. Xxxxxx
Prime Money Market Fund or any other fund for which
JPMorgan, the Securities Administrator or an affiliate
thereof serves as an investment advisor, administrator,
shareholder servicing agent and/or custodian or
subcustodian, notwithstanding that (i) JPMorgan or an
affiliate thereof charges and collects fees and expenses
from such funds for services rendered, (ii) JPMorgan or
an affiliate thereof charges and collects fees and
expenses for services rendered pursuant to this
Agreement, and (iii) services performed for such funds
and pursuant to this Agreement may converge at any time.
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 Servicers but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicers 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"
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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.
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.
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
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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, (a) the calendar month
preceding such Distribution Date for Mortgage Loans serviced by GreenPoint and
(b) the period commencing on the 12th day of the calendar month preceeding the
month in which such Distribution Date occurs and ending on the 11th day of the
month in which such Distribution Date occurs for Mortgage Loans serviced by SLS.
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 applicable 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 each 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 each Servicer in accordance with the terms of
the related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated September 27, 2004
relating to the public offering of the Offered Certificates.
PTCE 95-60: As defined in Section 6.02(a) hereof.
PUD: A Planned Unit Development.
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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 applicable 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, (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: 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 the 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 each 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, September 28, 2004).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, 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, Class S 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.
Regulation S Global Securities: The Book-Entry Regulation S Global
Securities and the Definitive Regulation S Global Securities.
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Related Certificates As to the REMIC 3 A Interest, the Class A
Certificates; as to the REMIC 3 B1 Interest, the Class B-1 Certificates; as to
the REMIC 3 B2 Interest, the Class B-2 Certificates; as to the REMIC 3 B3
Interest, the Class B-3 Certificates; as to the REMIC 3 M1 Interest, the Class
M-1 Certificates; as to the REMIC 3 M2 Interest, the Class M-2 Certificates; and
as to the REMIC 3 M3 Interest, the Class M-3 Certificates; as to the REMIC 3
Residual Interest, the Class R Certificates; as to the Class LT2-A Interest, the
Class A Certificates and the Class R Certificates; as to the Class LT2-B1
Interest, the Class B-1 Certificates; as to the Class LT2-B2 Interest, the Class
B-2 Certificates; as to the Class LT2-B3 Interest, the Class B-3 Certificates;
as to the Class LT2-M1 Interest, the Class M-1 Certificates; as to the Class
LT2-M2 Interest, the Class M-2 Certificates; and as to the Class LT2-M3
Interest, the Class M-3 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 1, REMIC 2 and REMIC 3.
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-B3 Interest, the Class LT1-M1
Interest, the Class LT1-M2 Interest, the Class LT1-M3 Interest, the Class LT1-X
Interest and the Class LT1-R Interest.
REMIC 1 Marker Interests: Each REMIC 1 Regular Interest other than the
Class LT1-X 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 Interests: Each of the Class LT2-A Interest, the Class LT2-B1
Interest, the Class LT2-B2 Interest, the Class LT2-B3 Interest, the Class LT2-M1
Interest, the Class LT2-M2 Interest, the Class LT2-M3 Interest, the Class LT2-X
Interest and the Class LT2-R Interest.
REMIC 2 Regular Interests: Each REMIC 2 Interest other than the Class
LT2-R Interest.
REMIC 3: As described in the Preliminary Statement and Section 2.07.
REMIC 3 A Interest: An uncertificated interest in REMIC 3 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 3 B1 Interest: An uncertificated interest in REMIC 3 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 3 B2 Interest: An uncertificated interest in REMIC 3 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-2 Margin and (ii) the Net
Rate.
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REMIC 3 B3 Interest: An uncertificated interest in REMIC 3 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-3 Margin and (ii) the Net
Rate.
REMIC 3 M1 Interest: An uncertificated interest in REMIC 3 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 3 M2 Interest: An uncertificated interest in REMIC 3 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 3 M3 Interest: An uncertificated interest in REMIC 3 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-3 Margin and (ii) the Net
Rate.
REMIC 3 Interests: Each of the REMIC 3 A Interest, the REMIC 3 B1
Interest, the REMIC 3 B2 Interest, the REMIC 3 B3 Interest, the REMIC 3 M1
Interest, the REMIC 3 M2 Interest, the REMIC 3 M3 Interest, the REMIC 3 X
Interest, each of the REMIC 3 S Components and the REMIC 3 Residual Interest.
REMIC 3 Regular Interests: Each of the REMIC 3 Interests other than the
REMIC 3 Residual Interest.
REMIC 3 Residual Interest: An interest in REMIC 3 that is entitled to all
distributions on the Class R Certificate other than (i) distributions in respect
of the Class LT1-R Interest, or the Class LT2-R Interest and (ii) interest
distributions on the Class R Certificate attributable to an interest rate in
excess of the Net Rate.
REMIC 3 S Components: Each of the REMIC 3 SA Component, the REMIC 3 SB1
Component, the REMIC 3 SB2 Component, the REMIC 3 SB3 Component, the REMIC 3 SM1
Component, the REMIC 3 SM2 Component and the REMIC 3 SM3 Component.
REMIC 3 SA Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-A Interest at a
rate in excess of One-Month LIBOR plus the Class A Margin. The REMIC 3 SA
Component is represented by the Class S Certificates.
REMIC 3 SB1 Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-B1 Interest at a
rate in excess of One-Month LIBOR plus the Class B-1 Margin. The REMIC 3 SB1
Component is represented by the Class S Certificates.
REMIC 3 SB2 Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-B2 Interest at a
rate in excess of One-Month LIBOR plus the Class B-2 Margin. The REMIC 3 SB2
Component is represented by the Class S Certificates.
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REMIC 3 SB3 Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-B3 Interest at a
rate in excess of One-Month LIBOR plus the Class B-3 Margin. The REMIC 3 SB3
Component is represented by the Class S Certificates.
REMIC 3 SM1 Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-M1 Interest at a
rate in excess of One-Month LIBOR plus the Class M-1 Margin. The REMIC 3 SM1
Component is represented by the Class S Certificates.
REMIC 3 SM2 Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-M2 Interest at a
rate in excess of One-Month LIBOR plus the Class M-2 Margin. The REMIC 3 SM2
Component is represented by the Class S Certificates.
REMIC 3 SM3 Component: An interest-only "regular interest" in REMIC 3
entitled to the interest, if any, that accrues on the Class LT2-M3 Interest at a
rate in excess of One-Month LIBOR plus the Class M-3 Margin. The REMIC 3 SM3
Component is represented by the Class S Certificates.
REMIC 3 X Interest: An uncertificated regular interest in REMIC 3 with an
initial principal balance equal to the excess of sum of (x) the principal
balance of the Mortgage Loans and (y) the initial amount on deposit in the
Pre-Funding Account over the Aggregate Certificate Principal Balance and bearing
interest on a notional amount equal to the aggregate principal balance of the
REMIC 1 Regular Interests at a rate equal to the REMIC 3 X Interest Rate (such
amount representing 100% of the interest payments on the Class LT2-X Interest).
The REMIC 3 X Interest will not include any obligation to make any payments in
respect of the deemed interest rate cap contracts described in Section 2.07 or
any right to receive Prepayment Penalties in respect of the Mortgage Loans
amounts paid by the Servicer, the Seller or any Transferor in respect of
Prepayment Penalties pursuant to this Agreement or a 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.
REMIC 3 X Interest Rate: For any Distribution Date, the excess, if any, of
(a) the weighted average of the interest rates on the REMIC 1 Regular Interests
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 on the
Corresponding REMIC 2 Regular Interest and treating the Class LT1-X 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 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 3 Regular Interest.
REO Property: A Mortgaged Property acquired by a Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
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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 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 a
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
------------------------------ ------------------------
October 2007 - September 2008 2.85% with respect to October
2007, plus an additional 1/12 of
0.95% for each month thereafter
October 2008 - September 2009 3.80% with respect to October
2008, plus an additional 1/12 of
0.70% for each month thereafter
October 2009 - September 2010 4.50% with respect to October
2009, plus an additional 1/12 of
0.25% for each month thereafter
October 2010 and thereafter 4.75%
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 any Distribution Date prior 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 would be prior to the Closing Date, the Original Pre-Funded Amount) and
(ii) the Net WAC for such Distribution Date.
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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 a Servicer, any officer of
such 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 September 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).
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: JPMorgan, a New York banking corporation, or its
successor in interest.
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Securities Administrator Fee: The fee to be paid to the Securities
Administrator by the Master Servicer pursuant to a separate agreement. In
addition, the Securities Administrator shall be entitled to reimbursement for
certain expenses incurred in connection with its duties as Securities
Administrator.
Seller: Terwin Advisors LLC, a Delaware limited liability company, or its
successor in interest.
Servicer: Each of SLS and GreenPoint, or in each case, its successor in
interest.
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 a 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 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).
Servicing Fee Rate: As to any Mortgage Loan, 0.50% per annum.
Servicing Officer: Any officer of a 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 applicable 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 assign.
Servicing Rights Pledgee: The entity designated by the Servicing Rights
Owner pursuant to Section 7.04.
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Servicing Transfer Costs: In the event that a 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 February 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 Serviced Mortgage Loans: Any Mortgage Loan for which SLS is acting as
servicer under this Agreement, as noted on the Mortgage Loan Schedule.
SLS Servicing Tape: As defined in Section 3.30 hereof.
SPV: As defined in Section 5.02(a) hereof.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date (or Subsequent Cut-off Date with respect to
Subsequent Mortgage Loans), the Cut-off Date Principal Balance thereof (or
Subsequent Cut-off Date Principal Balance thereof with respect to Subsequent
Mortgage Loans), and (2) as of any Distribution Date, such Cut-off Date
Principal Balance or Subsequent Cut-off Date Principal Balance (as the case may
be), minus the sum of (A) the principal portion of the Scheduled Payments (x)
due with respect to such Mortgage Loan during each Due Period ending prior to
such Distribution Date and (y) that were received by a 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 a 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 a Servicer as
recoveries of principal in accordance with
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Section 3.12 with respect to such Mortgage Loan, that were received by a
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 October
2007 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) 76.40% 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 Certificate Insurer and 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.
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) 0.80% and (ii)
the sum of (x) the Cut-off Date Principal Balance of the Initial Mortgage Loans
and (y) the Original Pre-Funded Amount.
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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) 67.00% 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; (v) the Cap Contract and Cap Contract Account; (vi) the Certificate
Insurance Policy; and (vii) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
Trustee: U.S. Bank National Association, a national banking association,
not in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in gross income for United States tax
purposes regardless of its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence on
August
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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 M-3 Unpaid Realized Loss Amount,
Class B-1 Unpaid Realized Loss Amount, Class B-2 Unpaid Realized Loss Amount and
Class B-3 Unpaid Realized Loss Amount, collectively.
Upper Collar: With respect to each Distribution Date on which amounts are
received on the Cap Contracts, a rate equal to the lesser of One-Month LIBOR and
9.610% per annum.
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 Offered Certificates (other than the Class S
Certificates) and the Class B-2 and Class B-3 Certificates and 1% to each Class
of the Class S and Class X Certificates, with the allocation among the Offered
Certificates and the Class B-2 and Class B-3 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.
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 each Servicers, 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 2004-11HE, Asset-Backed Certificates, Series 2004-11HE, without
recourse" together with all riders thereto. The Mortgage Note shall
include all intervening endorsements showing a complete chain of the title
from the originator to the Transferor.
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(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 2004-11HE, Asset-Backed
Certificates, Series 2004-11HE, 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.
In connection with the assignment of any MERS Mortgage Loan, the Seller
agrees that it will take (or shall cause the Master Servicer or a Serviceer 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.
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With respect to any Mortgage Loan, none of the Depositor, the Master
Servicer, the Servicers, the Securities Administrator or the Trustee shall be
obligated to cause to be recorded the Assignment of Mortgage referred to in this
Section 2.01. In the event an Assignment of Mortgage is not recorded, the Master
Servicer or each Servicer, as applicable, shall have no liability for its
failure to receive and act on notices related to such Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. None of the Depositor, the Master Servicer, the Servicers
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 Servicers and Securities Administrator shall respond to any
third party inquiries with respect to ownership of the Mortgage Loans by stating
that such ownership is held by the Trustee on behalf of the Certificateholders.
The Depositor agrees to take no action inconsistent with the Trustee's ownership
of the Mortgage Loans, to promptly indicate to all inquiring parties that the
Mortgage Loans have been sold and to claim no ownership interest in the Mortgage
Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreement described therein, and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Seller, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto.
It is agreed and understood by the Depositor, each 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
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the New Jersey Home Ownership Act effective November 27, 2003; or (ii) a
"High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans and the Cap
Contract.
Except as set forth as an exception in the exception report delivered with
the Initial Certification (the "Exception Report") or the Final Certification,
the Trustee accepts its appointment as Trustee hereunder and 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 and the
Certificate Insurer. The Depositor will cause the Seller to repurchase any
Mortgage Loan to which a material exception was taken in the Exception Report
unless such exception is cured to the satisfaction of the Trustee within 45
Business Days of the Closing Date (or the Subsequent Transfer Date with respect
to Subsequent Mortgage Loans).
The Trustee acknowledges receipt of the Cap Contract (a form of which is
attached hereto) and is hereby instructed to enter into the Cap Contract, not in
its individual capacity, but solely as Trustee for the Terwin Mortgage Trust,
Series XXXX 0000-00XX.
The Trustee agrees to cause the Custodian to deliver prior to the Closing
Date (or the Subsequent Transfer Date with respect to Subsequent Mortgage Loans)
to the Depositor, the Securities Administrator, the Certificate Insurer and each
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 70 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, the Certificate Insurer and each Servicer an Interim
Certification in the form annexed hereto as Exhibit B-2 to Exhibit Q, with any
applicable exceptions noted thereon.
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, the Certificate Insurer and each Servicer a Final Certification
in the form annexed hereto as Exhibit B-3 to Exhibit Q, with any applicable
exceptions noted thereon. Within 90 days after the end of the Pre-Funding
Period, based solely on the list of MERS Mortgage Loans provided to the Trustee
by the Custodian (such to be provided to the Trustee by the Custodian no later
than 45 days from the end of the Pre-Funding Period), the Trustee shall confirm,
on behalf of the Trust Fund, that the Trust Fund is shown as the beneficial
owner of any MERS Mortgage Loans on the MERS System. If the Trust Fund, or the
Trustee on behalf of the Trust Fund, is not shown as the beneficial owner of any
MERS Mortgage Loans on the MERS System, the Trustee shall promptly notify the
Seller and the Certificate Insurer of such fact. The Seller shall then either
cure such defect or repurchase such Mortgage Loan in accordance with Section
2.03(c).
If, in the course of such review, the Trustee is notified by the Custodian
that any document constituting a part of a Mortgage File does not meet the
requirements of Section 2.01, the Trustee shall cause the Custodian to list such
as an exception in the Final Certification; provided, however, that the Trustee
shall not make any determination as to whether (i) any endorsement is sufficient
to transfer all
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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
applicable Servicer and deposited by such Servicer in the Certificate Account,
promptly upon receipt, and, upon receipt by the Trustee of written notification
of such deposit signed by a Servicing Officer, the Trustee, upon receipt of a
Request for Release, shall promptly release to the Seller the related Mortgage
File and the Trustee shall execute and deliver such instruments of transfer or
assignment, without recourse, as shall be requested by the Seller and necessary
to vest in the Seller or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage Loan. It is understood and agreed that the
obligation of the Seller to purchase, cure or substitute any Mortgage Loan as to
which a material defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to the
Trustee on behalf of Certificateholders. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor,
Securities Administrator or the Trustee pursuant to the Sale Agreement and any
Transfer Agreement. The Trustee shall be under no duty or obligation to inspect,
review and examine such
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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. Each 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 each 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, such 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, and 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 , any 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 Servicers,
the Master Servicer, the Securities Administrator, the Certificate Insurer and
the Trustee as follows, as of the date hereof:
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(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 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
Servicers, 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 any
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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 applicable 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, each 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, each 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 Trustee 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 each 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 Servicers; 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 Servicers, the Securities Administrator, the Backup Servicer, the
Certificate Insurer 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) GreenPoint hereby represents and warrants to the Depositor, the
Master Servicer, the Securities Administrator, the Backup Servicer, the
Certificate Insurer and the Trustee as follows, as of the date hereof:
(i) GreenPoint is duly organized and is validly existing as a
corporation in good standing under the laws of the State of New York and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by GreenPoint 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) GreenPoint has the corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized, by all necessary corporate action on the part of GreenPoint, 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 GreenPoint,
enforceable against GreenPoint 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
GreenPoint, 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 GreenPoint and will not (A) result in a material breach of
any term or provision of the charter or by-laws of GreenPoint 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 GreenPoint is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation applicable
to GreenPoint of any court, regulatory body, administrative agency or
governmental body having jurisdiction over GreenPoint; and GreenPoint 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 GreenPoint's ability to
perform or meet any of its obligations under this Agreement.
(iv) GreenPoint is an approved servicer of mortgage loans for
Xxxxxx Xxx and is an approved servicer of all types of mortgage loans for
Xxxxxxx Mac.
(v) No litigation is pending or, to the best of GreenPoint's
knowledge, threatened, against GreenPoint that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of GreenPoint 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 GreenPoint of, or compliance by GreenPoint with, this Agreement
or the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, GreenPoint has obtained
the same.
(vii) GreenPoint has fully furnished and will fully furnish
(for the period it serviced the Mortgage Loans), in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
(c) SLS hereby represents and warrants to the Depositor, the Master
Servicer, the Securities Administrator, the Backup Servicer, the Certificate
Insurer and the Trustee as follows, as of the date hereof:
(i) SLS 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 SLS 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) SLS 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 SLS 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 SLS, enforceable against
SLS 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 SLS, 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
SLS and will not (A) result in a material breach of any term or provision of the
charter or by-laws of SLS 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 SLS is a party or
by which it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to SLS of any court, regulatory body,
administrative agency or governmental body having jurisdiction over SLS; and SLS
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 SLS's
ability to perform or meet any of its obligations under this Agreement.
(iv) SLS is an approved servicer of mortgage loans for HUD.
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(v) No litigation is pending or, to the best of SLS's
knowledge, threatened, against SLS that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or the ability of
SLS to service the Mortgage Loans or to perform any of its other obligations
under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by SLS of, or compliance by SLS with, this Agreement or the
consummation of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, SLS has obtained the same.
(vii) SLS 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
September 1, 2004.
(d) The Securities Administrator and Backup Servicer hereby
represents and warrants to the Depositor, the Master Servicer, the Certificate
Insurer, each 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 New York banking corporation 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.
(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.
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SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages".
Upon discovery by the Depositor, the Master Servicer, any 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, REMIC 2 and REMIC 3 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, REMIC 2 and REMIC 3 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, REMIC 2 and REMIC 3, (ii) the rights to
receive Prepayment Penalties, amounts paid by the Servicer, the Seller or any
Transferor in respect of Prepayment Penalties pursuant to this Agreement or a
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,
(iii) the grantor trusts described in Section 2.07 hereof, (iv) the Cap Contract
and Cap Contract Account, (v) the Pre-Funding Account and (vi) the Capitalized
Interest Account. REMIC 1 shall issue the REMIC 1 Regular Interests which shall
be designated as regular interests of such REMIC
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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 Class LT2-R 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.
The assets of REMIC 3 shall be the REMIC 2 Regular Interests. The REMIC 3
Regular Interests shall be designated as the regular interests in REMIC 3 and
the REMIC 3 Residual Interest shall be designated as the sole class of residual
interest in REMIC 3. Each of the REMIC 3 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 3 Regular Interest (other
than the REMIC 3 X Interest and the REMIC 3 S Components) and on the REMIC 3
Residual Interest shall be subject to a cap equal to the Net Rate.
The beneficial ownership of the Class LT1-R Interest, the Class LT2-R
Interest and the REMIC 3 Residual Interest shall be represented by the Class R
Certificate. None of the Class LT1-R Interest and the Class LT2-R 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 R Certificate, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
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 R Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3 Certificates by the holder of the Class X
Certificates, and such shall be accounted for as property held separate and
apart from the regular interests in REMIC 3 held by the holders of the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates and the residual interest in REMIC 3 held by the holder of the
Class R Certificate. For information reporting requirements, the rights of the
Class A, Class R, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class B-3 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, Class R
Certificate, M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class B-1 Certificates, Class B-2 Certificates and Class B-3 Certificates
receive payments of Excess Interest (other than from payments received in
respect of the Cap Contract), such amounts will be treated as distributed by
REMIC 3 with respect to the REMIC 3 X Interest and then paid to the relevant
Class of Certificates pursuant to the related interest rate cap contract.
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(e) The parties intend that the portion of the Trust Fund consisting
of the uncertificated REMIC 3 X Interest, the Cap Contract, the Cap Contract
Account, the rights to receive Prepayment Penalties, amounts paid by the
Servicer, the Seller or any Transferor in respect of Prepayment Penalties
pursuant to this Agreement or a Transfer Agreement, as applicable, 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 and the obligation of the holders of the Class X
Certificates to make payments in respect of Excess Interest to the holders of
the Class A, Class R, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class B-3 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 X Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A, Class R, Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class X Certificates
as may be applicable under the Code.
(f) All payments of principal and interest at the Net Mortgage Rate
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 REMIC 2 Interests) and will be accrued and added to
the principal balance of the Class LT1-X Interest. All payments of scheduled
principal and prepayments of principal on the Mortgage Loans shall be allocated
50% to the Class LT1-X 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
REMIC 2 Interests 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-X Interest. Realized Losses, other than Realized
Losses that are not applied against overcollateralization or the principal
amount of the Class M, Class X or Class B Certificates, shall be applied to the
REMIC 1 Marker Interests and the Class LT1-X 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 REMIC 2 Interests and (ii) the principal balance of the
Class LT1-X 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 REMIC 2 Interest in respect of unreimbursed
amounts of Realized Losses. The Class LT1-X 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 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
50% to the Class LT1-X Interest and 50% among the REMIC 1 Marker Interests so
that each REMIC 1 Marker Interest will have its principal amount increased by an
amount equal to 50% of the increase in the principal balance of its
Corresponding REMIC 2 Interest pursuant to the immediately following paragraph.
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(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 (treating the Class S Certificates as
Related Certificates with respect to each of the Class LT2-A Interest, Class
LT2-B1 Interest, Class LT2-B2 Interest, Class LT2-B3 Interest, Class LT2-M1
Interest, Class LT2-M2 Interest and Class LT2-M3 Interest in proportion to their
respective principal balances and treating the Class X Certificates as Related
Certificates with respect to the Class LT2-X Interest). 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 S Certificates as Related Certificates with respect to each
of the Class LT2-A Interest, Class LT2-B1 Interest, Class LT2-B2 Interest, Class
LT2-B3 Interest, Class LT2-M1 Interest, Class LT2-M2 Interest and Class LT2-M3
Interest in proportion to their respective principal balances and treating the
Class X Certificates as Related Certificates with respect to the Class LT2-X
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 3 Interests in the same manner as such payments or
Realized Losses or shortfalls are allocated to the Related Certificates
(treating the Class X Certificates as related to the REMIC 3 X Interest for this
purpose). Each REMIC 3 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 X Certificates as related to
the REMIC 3 X Interest for this purpose). The principal balance of the REMIC 3
Interests 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 a Servicer of its duties and
obligations set forth herein, such 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 such 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 such
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 such 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 such Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).
In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Securities
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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 applicable 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, any Servicer
or the Trustee, any affiliate of the Depositor, each 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 Servicers.
(a) Each Servicer hereby covenants to each of the other parties to
this Agreement as follows:
(i) Such 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 each Servicer
pursuant to this Agreement will be inaccurate in any material respect, provided,
however, that such 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 Cap Contract (a form of which is
attached hereto), the Certificate Insurance Policy, 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 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 Trustee 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 Servicers with a timely Addition Notice;
(ii) the Depositor shall have delivered to the Trustee (with
a copy to the Securities Administrator) a duly executed Subsequent Transfer
Instrument, which shall include a Mortgage Loan Schedule listing the Subsequent
Mortgage Loans, and the Depositor shall have delivered
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a computer file containing such Mortgage Loan Schedule to the Securities
Administrator, the Certificate Insurer, the Trustee and the related Servicer at
least three Business Days prior to the related Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the Depositor shall not be
insolvent nor shall it have been rendered insolvent by such transfer nor shall
it be aware of any pending insolvency;
(iv) the Funding Period shall not have terminated;
(v) the Depositor shall have delivered to the Trustee (with
a copy to the Securities Administrator and the Certificate Insurer) a Subsequent
Transfer Instrument confirming the satisfaction of the conditions precedent
specified in this Section 2.11 and, pursuant to the Subsequent Transfer
Instrument, assigned to the Trustee without recourse for the benefit of the
Certificateholders all the right, title and interest of the Depositor, in, to
and under the Subsequent Mortgage Loan Purchase Agreement, to the extent of the
Subsequent Mortgage Loans;
(vi) the Depositor shall have delivered to the Trustee a
letter (with copies provided to the Rating Agency, the Certificate Insurer, and
the Securities Administrator), which the Trustee may rely on, including for
purposes of paragraph (c) and (d) stating that the characteristics of the
Subsequent Mortgage Loans substantially conform to the characteristics set forth
in paragraphs (c) and (d) below and that such Subsequent Mortgage Loans were not
selected in a manner that the Depositor believes to be adverse to
Certificateholders;
(vii) the Depositor shall have delivered to the Trustee an
Opinion of Counsel addressed to the Trustee and the Rating Agency 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 Agency with respect
to the Subsequent Transfer Instrument substantially in the form of the Opinion
of Counsel delivered to the Depositor on the Closing Date regarding certain
corporate matters relating to the Trustee.
(c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the Subsequent Cut-off Date (or such other date
as is specified herein): (i) the Subsequent Mortgage Loan may not be 31 or more
days delinquent as of the related Subsequent Cut-off Date (except with respect
to not more than 1.5% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, which may be 31 or more days
delinquent but less than 60 days delinquent as of the related Subsequent Cut-off
Date); (ii) the stated term to maturity of the Subsequent Mortgage Loan will not
be less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) the Subsequent
Mortgage Loan will not have a Loan-to-Value Ratio greater than 100.00%; (v) the
Subsequent Mortgage Loans will have as of the Subsequent Cut-off Date, a term
since origination not in excess of 6 months; (vi) the Subsequent Mortgage Loan
must have a first Monthly Payment due on or before December 24, 2004; (vii) the
Subsequent Mortgage Loan will be underwritten in accordance with the criteria
set forth under the section "Underwriting Guidelines--The Winter Group
Underwriting Guidelines" in the Prospectus Supplement, (viii) the Subsequent
Mortgage Loan must provide for monthly interest payments due on the first day of
each calendar month, (ix) as of the Subsequent Transfer Date for such Subsequent
Mortgage
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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) 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 the 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. Servicers to Service Mortgage Loans.
For and on behalf of the Certificateholders, each Servicer shall service
and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, each 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 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, no
Servicer shall take any action that is inconsistent with or prejudices the
interests of the Trust Fund, the Certificateholders or the Certificate Insurer
in any Mortgage Loan serviced
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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. Each
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. Each 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, each
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 each Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Securities Administrator, the Certificate Insurer, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, subordinations and all other comparable
instruments, with respect to the Mortgage Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. Each
Servicer shall prepare and deliver to the Depositor, the Securities
Administrator, the Certificate Insurer and/or the Trustee such documents
requiring execution and delivery by either or both of them as are necessary or
appropriate to enable such Servicer to service and administer the Mortgage
Loans, to the extent that such 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, the Certificate Insurer
and/or the Trustee shall execute such documents and deliver them to the related
Servicer. For purposes of this Section 3.01, the Trustee hereby will provide to
each 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 each Servicer under this Section 3.01.
No Servicer shall be required to make any Servicing Advance with respect
to a Mortgage Loan that is 150 days or more delinquent.
Each Servicer shall deliver a list of Servicing Officers to the Securities
Administrator and the Trustee by the Closing Date (or the Subsequent Transfer
Date with respect to Subsequent Mortgage Loans).
Each 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.
Each 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, each 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.
Each Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders, the Certificate Insurer and the Trustee, in
its own name or in the name of the Subservicer, when the related Servicer or the
Subservicer, as the case may be, believes it is appropriate in its best judgment
to register any Mortgage Loan on the MERS System, or cause the removal from the
registration of any Mortgage Loan on the MERS System, to execute and deliver, on
behalf of the Trustee, the Certificate Insurer and the Certificateholders or any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and assigns. Any
reasonable expenses incurred in connection with the actions described in the
preceding sentence or as a result of
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MERS discontinuing or becoming unable to continue operations in connection with
the MERS System, shall be subject to withdrawal by the related Servicer from the
Collection Account.
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations
of the Servicers.
(a) Each Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer, which may be an affiliate (each, a "Subservicer")
pursuant to a subservicing agreement (each, a "Subservicing Agreement");
provided, however, that (i) such subservicing arrangement and the terms of the
related Subservicing Agreement must provide for the servicing of such Mortgage
Loans in a manner consistent with the servicing arrangements contemplated
hereunder, (ii) the Certificate Insurer shall have consented to the appointment
of such Subservicer and (iii) that such Subservicing Agreement would not result
in a withdrawal or downgrading by the Rating Agency of the ratings of any
Certificates evidenced by a letter to that effect delivered by the 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 related Servicer and a Subservicer or reference to actions taken
through a Subservicer or otherwise, the related Servicer shall remain obligated
and liable to the Depositor, the Securities Administrator, the Trustee, the
Certificate Insurer 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 related Servicer alone were servicing and administering the Mortgage Loans.
Every Subservicing Agreement entered into by each 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 related Servicer with the same force and effect as if performed
directly by such Servicer. The related 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.
(b) For purposes of this Agreement, each 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 each Servicer.
SECTION 3.03. Rights of the Depositor, the Securities Administrator, the
Backup Servicer and the Trustee in Respect of any 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 any Servicer, and none of them is obligated to supervise the
performance of each Servicer hereunder or otherwise.
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 a Servicer shall for
any reason no longer be a 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, within a
period of time not to exceed ninety (90) days from the date of notice of
termination or resignation, thereupon assume all of the rights and obligations
of such Servicer hereunder arising thereafter (except that the Securities
Administrator, the Master Servicer or Backup Servicer shall not be (i) liable
for losses of such Servicer pursuant to Section 3.10 hereof 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
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Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof, (iv)
responsible for any expenses of such Servicer pursuant to Section 2.03 or (v)
deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 7.02 hereof;
provided, however that the Securities Administrator, 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 applicable 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 a
Servicer shall for any reason no longer be a Servicer (including by reason of
any Event of Default), the Securities Administrator, the Master Servicer or the
Backup Servicer (or any other successor servicer) may, at its option, succeed to
any rights and obligations of such Servicer under any subservicing agreement in
accordance with the terms thereof; provided, however, that the Securities
Administrator, 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 applicable Servicer thereunder; and such 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 Securities Administrator, the Master Servicer or the
Backup Servicer in connection with this Section 3.04, are not paid by the
applicable Servicer pursuant to this Agreement within 30 days of the date of the
Securities Administrator's, 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
Securities Administrator, 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 applicable Servicer shall, upon request of the Securities
Administrator, the Master Servicer or the Backup Servicer, but at the expense of
such 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 any Servicer shall for any reason no longer be able to
be a 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 such Servicer whereby such Servicer shall resign as
Servicer under this Agreement, the Servicing Rights Pledgee or its designee
shall be appointed as successor Servicer (provided that at the time of such
appointment the Servicing Rights Pledgee or such designee meets the requirements
of a successor Servicer set forth above) and the Servicing Rights Pledgee agrees
to be subject to the terms of this Agreement.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Master Servicer Collection Account; Certificate Account.
(a) Each 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, each Servicer may in
its
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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, each 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 a Servicer, such default is reasonably foreseeable, such 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, each Servicer shall adhere to the standards of Section 3.01. A
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) Each 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 applicable
Servicer has not been provided with information sufficient to enable it to
collect the Prepayment Penalty, or (iv) in the applicable 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 any 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 a 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 such Servicer, other than as provided
above, such Servicer shall deposit the amount of such Prepayment Penalty (or
such portion thereof as had been waived for deposit) into the Collection Account
for distribution in accordance with the terms of this Agreement. In connection
with any waiver of a Prepayment Penalty by a Servicer, such Servicer shall
account for such waiver in its monthly reports as agreed upon by such Servicer
and the Credit Risk Manager.
(c) Each 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) Each 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 2004-11HE, Asset-Backed Certificates, Series XXXX 0000-00XX".
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Each 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 related Servicing Fee permitted under 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 each Servicer's normal servicing procedures;
(iv) all Subsequent Recoveries received by such Servicer;
(v) all Compensating Interest;
(vi) any amount required to be deposited by such Servicer
pursuant to Section 3.05(g) in connection with any losses on Permitted
Investments;
(vii) reserved;
(viii) all Advances made by each Servicer pursuant to Section
5.01;
(ix) all Prepayment Penalties collected by such Servicer; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by a 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 such Servicer. In
the event that a 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. Each
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
each Servicer.
Each Servicer shall give notice to the Securities Administrator, the
Master Servicer, the Backup Servicer, the Certificate Insurer and the Trustee of
the location of the Collection Account maintained by it when established and
prior to any change thereof. Not later than twenty days after each Distribution
Date, each 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
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Administrator as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by each
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 related 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 such 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 related Servicer shall remit to the Master Servicer
any amount not required to be remitted, such 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 related Servicer. The
Master Servicer shall give notice to the Securities Administrator, the Trustee,
the Backup Servicer, the Certificate Insurer and each Servicer of the location
of the Master Servicer Collection Account maintained by it when established and
prior to any change thereof.
(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:
(i) The aggregate amount remitted by the Master Servicer to
the Securities Administrator pursuant to Section 3.05(e); and;
(ii) the Purchase Price and any Substitution Adjustment
Amount;
(iii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iv) the Optional Termination Price paid by SLS pursuant to
Section 10.01.
Any amounts received by the Securities Administrator prior to 1:00 p.m.
New York City time (or such earlier deadline for investment in the Permitted
Investments designated by the Securities Administrator) which are required to be
deposited in the Certificate Account by each Servicer or Master Servicer shall
be invested in Permitted Investments on the Business Day on which they were
received. The foregoing requirements for remittance by each Servicer and Master
Servicer and deposit by each 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
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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, the Certificate Insurer and each Servicer of the location of
the Certificate Account maintained by it when established and prior to any
change thereof.
(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 a 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 each
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 a 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 related 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
related Servicer in the Collection Account out of such 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.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, each 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
each Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require each 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 each
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes and assessments and insurance premiums), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and terminate
the Escrow Account at the termination of this Agreement in accordance with
Section 10.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
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SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, each Servicer will provide to each Certificateholder and the
Certificate Insurer 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 each Servicer
shall be entitled to be reimbursed by each such Certificateholder for actual
expenses incurred by each Servicer in providing such reports and access.
SECTION 3.08. Withdrawals from a Collection Account, Master Servicer
Collection Account and Certificate Account.
(a) Each Servicer shall from time to time, make withdrawals from
the Collection Account for the following purposes:
(i) to pay to such Servicer (to the extent not previously
paid to or withheld by each Servicer), as servicing compensation in accordance
with Section 3.15, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest payment was
made, and, as additional servicing compensation, those other amounts set forth
in Section 3.15;
(ii) to reimburse such 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 such 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 such Servicer earnings on or investment income
with respect to funds in or credited to the Collection Account;
(v) to reimburse such Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(vi) [RESERVED];
(vii) to pay such Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, such Servicer's right to
reimbursement of Servicing Advances pursuant to this subclause (vi) with respect
to any Mortgage Loan being limited to amounts received on 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 such Servicer, as
applicable, with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section
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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 such 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 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;
(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 1:00 p.m. Eastern Time on each Servicer
Remittance Date, each Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds, the Principal Funds and the Administration Fee
(other than the related 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 such Servicer Withdrawals by 4:00 p.m. Eastern Time,
such Servicer Withdrawals shall be deposited by the Master Servicer in the
Master Servicer Collection Account by 1:00 p.m. Eastern Time on the next
Business Day. In the event such Servicer Withdrawals are not deposited by 1:00
p.m. Eastern Time, each 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.
Each 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.
Each 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 each 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:
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(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) (a) to pay itself the Master Servicing Fee with respect
such Distribution Date and (b) 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 Sections 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 1:00 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 Fees and the Master 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 1:00 p.m. Eastern
Time on the next Business Day. In the event such Master Servicer Withdrawals are
not deposited by 1:00 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 a 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) 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;
(ii) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be deposited therein;
(iii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 10.01 hereof;
(iv) to pay the Credit Risk Manager the Credit Risk Manager
Fee; and
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(v) to pay or reimburse itself, the Master Servicer or the
Trustee 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.
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 related 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 such Servicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of such Servicer, is not
enforceable under applicable law; provided, further, that such 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 related Servicer (which
expense shall constitute a Servicing Advance) delivered to the Securities
Administrator, the Trustee and the Depositor shall conclusively establish the
reasonableness of such Servicer's belief that any "due-on-sale" clause is not
enforceable under applicable law. In such event, a 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 related
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, a Servicer shall not be required to enforce any
"due-on-sale" clause if in the reasonable judgment of such 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. A 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. Each 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 a Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to
such Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, no Servicer shall 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 related Servicer may be
restricted by law from preventing, for any reason whatsoever.
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SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds.
(a) Each 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, a Servicer shall follow such practices and procedures as (i) such
Servicer shall deem necessary or advisable, (ii) shall be normal and usual in
such Servicer's general mortgage servicing activities, (iii) such Servicer shall
determine consistent with Accepted Servicing Practices to be in the best
interests of the Certificate Insurer and (iv) such Servicer shall determine to
be consistent with the requirements of the insurer under any Required Insurance
Policy; provided, however, that such Servicer shall not be required to expend
its own funds in connection with the restoration of any property that shall have
suffered damage due to an uninsured cause unless it shall determine (i) that
such restoration increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The related 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 a Servicer has knowledge that a Mortgaged Property that such 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 such Servicer, such Servicer will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
Accepted Servicing Practices. No Servicer shall 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 related Servicer shall either itself or through an agent
selected by such 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 such
Servicer deems to be in the best interest of such Servicer and the
Certificateholders for the period prior to the sale of such REO Property. A
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 related 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 such
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. Each 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 related 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
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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 related Servicer or the Depositor has agreed
to indemnify and hold harmless the Trust Fund with respect to the imposition of
any such taxes.
The decision of a Servicer to foreclose on a defaulted Mortgage Loan shall
be subject to a determination by such 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 such
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, 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 related 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 related 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 such 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, each Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) Each 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.
In the event that 5% or more of the Mortgage Loans have already been repurchased
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under this section, no Servicer may purchase any additional Mortgage Loan from
the Trust Fund if there is a Mortgage Loan serviced by such Servicer which is
more delinquent than the Mortgage Loan to be repurchased, without the consent of
the Certificate Insurer. 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 related Servicer in
the form of Exhibit I hereto, shall release or cause to be released to the
related Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by each Servicer, in each case
without recourse, as shall be necessary to vest in such Servicer any Mortgage
Loan released pursuant hereto and such 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. Such 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 a 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.
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.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by a
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, such 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 related Servicer, and such 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 related Servicer's written
direction execute and deliver to the such 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 such 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 related Servicer. Subject to the further
limitations set forth below, the related Servicer shall cause the Mortgage File
or documents so released to be returned to the Custodian when the need therefor
by such 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 related 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
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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 related 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 related
Servicer indicating the reason for such delay. If the related 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 related Servicer fails
to do so. If requested by the Master Servicer, the Backup Servicer or a
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 a Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, such Servicer
shall deliver or cause to be delivered to the Trustee, for signature, as
appropriate, any court pleadings, requests for trustee's sale or other documents
necessary to effectuate such foreclosure or any legal action brought to obtain
judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain
a deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, a 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 related 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 related 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 Servicers
to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, each 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 such 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 such Servicer or which
otherwise are collected by that 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, a 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 such 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. Each 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,
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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 each Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to such
Servicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, each 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
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, 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 related Servicer to the extent not required to be deposited in the
Collection Account pursuant to Sections 3.05, or 3.12(a) hereof. Each Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided in Sections 3.08 and 3.12 hereof. The
Servicers shall not be entitled to any Prepayment Penalties. In no event shall
the Trustee, the Master Servicer, the Certificate Insurer or the Securities
Administrator be liable for any Servicing Fee or for any differential between
the Servicing Fee and the amount necessary to induce a successor servicer to act
as successor servicer under this Agreement.
SECTION 3.16. Access to Certain Documentation.
Each 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 related Servicer designated by it provided,
that each Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the related Servicer in
providing such reports and access. Nothing in this Section shall limit the
obligation of each Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of the related 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, each Servicer shall deliver to the Master
Servicer, the Backup Servicer and the Certificate Insurer on or before March
15th of each year beginning in 2005, (or such other date that the Depositor
gives each 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 each
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
related 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
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status thereof. The Master Servicer shall forward a copy of each such statement
received by it to the Rating Agency. 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 each
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, each
Servicer at its expense shall cause a nationally recognized firm of independent
public accountants (who may also render other services to such Servicer, any
Affiliate thereof or the Certificate Insurer) that is a member of the American
Institute of Certified Public Accountants to furnish a USAP Report to the
Securities Administrator, the Master Servicer, the Trustee, the Depositor and
the Certificate Insurer. 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 such
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
Agreement, and the Credit Risk Manager shall look solely to each 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 each 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 each Servicer pursuant to Section 3.17 relating to each
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 October 2004 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,
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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 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. Annual Certificate by GreenPoint.
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(a) Within 15 days prior to the date on which a Form 10-K is
required to be filed, GreenPoint shall execute and deliver an Officer's
Certificate, signed by the senior officer in charge of servicing of GreenPoint
or any officer to whom that officer reports, to the Master Servicer, SLS and the
Depositor for the benefit of the Master Servicer, SLS and the Depositor and
their respective officers, directors and affiliates, certifying as to matters
described in the Officer's Certificate attached hereto as Exhibit L.
(b) GreenPoint shall indemnify and hold harmless the Depositor,
SLS and the Master Servicer, 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 GreenPoint or any of its
respective officers, directors, agents or affiliates of its obligations under
this Section 3.22, any material misstatement or omission in the Officer's
Certificate required under this Section or the negligence, bad faith or willful
misconduct of GreenPoint in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
Depositor, SLS or the Master Servicer, then GreenPoint agrees that it shall
contribute to the amount paid or payable by the Depositor, SLS or the Master
Servicer, as applicable, as a result of the losses, claims, damages or
liabilities of the Depositor, SLS or the Master Servicer in such proportion as
is appropriate to reflect the relative fault of the Depositor, SLS or the Master
Servicer, as applicable, on the one hand and GreenPoint on the other in
connection with a breach of GreenPoint's obligations under this Section 3.22,
any material misstatement or omission in the Officer's Certificate required
under this Section or each Servicer's negligence, bad faith or willful
misconduct in connection therewith.
SECTION 3.23. Prepayment Penalty Reporting Requirements.
(a) Promptly after each Distribution Date, each 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, each 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 Servicers, the Master Servicer,
the Backup Servicer and the Securities Administrator may agree from time to
time) a servicer report with respect to the related Distribution Date, in a form
mutually acceptable to the Servicers, 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 each 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
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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 Servicers) 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 Servicers and the Master Servicer.
(b) The Depositor acknowledges that it authorizes each Servicer to
release and provide to the Credit Risk Manager the mortgage loan information
described in Section 2.01 and Section 2.02 of each Servicer's Credit Risk
Management Agreement.
SECTION 3.25. Indemnification.
(a) Each Servicer shall indemnify the Seller, the Trust Fund, the
Certificate Insurer, the Trustee, the Securities Administrator, the Master
Servicer, the other 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, judgements, and any other costs,
fees and expenses that any of such parties may sustain in any way related to the
failure of such Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. Each Servicer immediately shall
notify the Seller, the Trustee, the Securities Administrator, the Certificate
Insurer, the Master Servicer, the other 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 judgement or decree which may be entered against it or any of such
parties in respect of such claim. Each 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. Each Servicer shall provide the
Depositor, the Securities Administrator, the Backup Servicer, the Certificate
Insurer and the Master Servicer with a written report of all expenses and
advances incurred by such Servicer pursuant to this Section 3.25(a), and such
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
applicable Servicer pursuant to this Section 3.25(a). Such 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 such 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 such 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 a Servicer. Any payment hereunder made by a Servicer shall be
from such Servicer's own funds, without reimbursement from the Trust Fund
therefor.
(b) The Master Servicer shall indemnify the Seller, the Trust
Fund, the Trustee, the Securities Administrator, the Certificate Insurer, each
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,
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judgements, 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, each Servicer, the Securities Administrator, the Certificate Insurer,
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 judgement 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
each Servicer, the Securities Administrator, 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 each Servicer services the Mortgage Loans, each 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 each
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 December 2004, 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 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
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independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
SECTION 3.29. Maintenance of LPMI Policy.
Each Servicer shall take all such actions as are necessary to service,
maintain and administer the LPMI Loans in accordance with the LPMI Policy and to
perform and enforce the rights of the insured under such LPMI Policy. Except as
expressly set forth herein, a Servicer shall have full authority on behalf of
the Trust Fund to do anything it reasonably deems appropriate or desirable in
connection with the servicing, maintenance and administration of the LPMI
Policy. Such Servicer shall not modify or assume a Mortgage Loan covered by the
LPMI Policy or take any other action with respect to such Mortgage Loan which
would result in non-coverage under the LPMI Policy of any loss which, but for
the actions of such Servicer, would have been covered thereunder. If the LPMI
insurer fails to pay a claim under the LPMI Policy as a result of breach by such
Servicer of its obligations hereunder or under the LPMI Policy, such Servicer
shall be required to deposit in the related Collection Account on or prior to
the next succeeding Remittance Date an amount equal to such unpaid claim from
its own funds without any right to reimbursement from the Trust Fund. A Servicer
shall cooperate with the LPMI insurer and shall use its best efforts to furnish
all reasonable aid, evidence and information in the possession of such Servicer
to which such Servicer has access with respect to any LPMI Loan.
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 serviced by SLS 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 related Servicer according to the terms
of this Agreement.
The Trustee and the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the Certificate Insurer, the FDIC, and the supervisory
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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 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 a 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 December 24, 2004, 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,
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that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit any 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 Servicers to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
or any 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 Servicers and shall be indemnified by the Master Servicer or the
Servicers, 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 Servicers 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 Servicers 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
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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.
SECTION 4.07. Monitoring of the Servicers.
(a) The Master Servicer shall be responsible for monitoring the
compliance by the Servicers with their respective duties under this Agreement.
In the review of each Servicer's activities, the Master Servicer may rely upon
an Officer's Certificate of each Servicer with regard to such Servicer's
compliance with the terms of this Agreement. In the event that the Master
Servicer, in its judgment, determines that a 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 an 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, the Certificate Insurer and the Certificateholders,
shall enforce the obligations of the Servicers under this Agreement, and shall,
in the event that a 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 such 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 a Servicer, appointment of a successor
Servicer or the transfer and assumption of the servicing by the Master Servicer
(or in the case of SLS, 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 such 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 Servicers 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.
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SECTION 4.08. [RESERVED]
SECTION 4.09. [RESERVED].
SECTION 4.10. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall enforce each Servicer's obligations under this
Agreement to, prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the 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 Servicers 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 Servicers 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 Servicers 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 Servicers 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 Servicers
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 Servicers shall
have obtained, prior to the expiration of such three-year period, an
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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 Servicers
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 Servicers to deposit all
funds collected and received in connection with the operation of any REO
Property in the Collection Account.
SECTION 4.14. Annual Statement as to Compliance.
Pursuant to this Agreement, the 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 forward a copy of each such
statement received by it to each Rating Agency. Copies of such statement shall
be provided by the Securities Administrator to any Certificateholder upon
written request at the Certificateholder's expense, provided such statement has
been delivered by the Master Servicer to the Securities Administrator.
SECTION 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 each 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 each
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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 each Servicer's obligations
under this Section 4.16, any material misstatement or omission in the Officer's
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 a 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 each 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 Master Servicing 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 Servicers 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 Servicers, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
each 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 to the SLS Serviced Mortgage Loans
under this Agreement. If SLS 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 SLS, the Backup Servicer will assume all of SLS'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 the Rating Agency that such a termination
and appointment will not result in a downgrading of the rating of any of the
Certificates related to the applicable Mortgage Loans and the consent of the
Certificate Insurer has been received.
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ARTICLE V
DISTRIBUTIONS
SECTION 5.01. Advances by the Master Servicer and the Servicers.
Each 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 related Servicer will not be required to
advance the related balloon payment but will be required to continue to make
advances in accordance with this Section 5.01 with respect to such Balloon Loan
in an amount equal to an assumed scheduled payment of interest at the Mortgage
Rate less the Servicing Fee that would otherwise be due based on the original
amortization schedule for that Mortgage Loan. Each 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. No Servicer shall 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, each Servicer
shall be obligated to make Advances (and if such Servicer fails to make such
Advance, the Master Servicer in the case of the Mortgage Loans serviced by
GreenPoint and the Backup Servicer in the case of Mortgage Loans serviced by SLS
shall make such Advances) with respect to those Mortgage Loans serviced by it 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 a 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 a Servicer determines that any such Advances are
Nonrecoverable Advances, the Master Servicer or such Servicer shall provide the
Master Servicer (with a copy to the Certificate Insurer) with a certificate
signed by a Servicing Officer evidencing such determination.
By 2:00 p.m. New York time on the Servicer Remittance Date, each 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 such 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 such Servicer with respect to the
Mortgage Loans. In addition, a 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, a 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 such 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.
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(a) With the prior consent of the Certificate Insurer, each
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 related 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 such
Servicer pursuant to this Agreement. No consent of the Trustee, the Securities
Administrator, Certificateholders or any other party (other than the Certificate
Insurer) shall be required before a 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
such Servicer. Notwithstanding the existence of any Advance Facility under which
an Advance Financing Person agrees to fund Advances and/or Servicing Advances,
(A) the related Servicer (i) shall remain obligated pursuant to this Agreement
to make Advances and/or Servicing Advances pursuant to and as required by this
Agreement and (ii) shall not be relieved of such obligations by virtue of such
Advance Facility and (B) neither the Advance Financing Person nor any Servicer's
Assignee (as hereinafter defined) shall have any right to proceed against or
otherwise contact any Mortgagor for the purpose of collecting any payment that
may be due with respect to any related Mortgage Loan or enforcing any covenant
of such Mortgagor under the related Mortgage Loan documents.
(b) If a Servicer enters into an Advance Facility, such Servicer
and the related Advance Financing Person shall deliver to the Trustee at the
address set forth in Section 5.02 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
3.22(c) hereof, have the right to make withdrawals from the Collection Account
pursuant to Section 3.08 hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances ("Advance Reimbursement Amounts") and (c) that such
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 such Servicer's Assignee. Advance Reimbursement Amounts (i) shall
consist solely of amounts in respect of Advances and/or Servicing Advances for
which such Servicer would be permitted to reimburse itself in accordance with
Section 3.08 hereof, assuming such Servicer had made the related Advance(s)
and/or Servicing Advance(s) and (ii) shall not consist of amounts payable to a
successor Servicer in accordance with Section 3.08 hereof to the extent
permitted under Section 5.02(e) below.
(c) Notwithstanding the existence of an Advance Facility, a
Servicer, on behalf of the Advance Financing Person and the Servicer's Assignee,
shall be entitled to receive reimbursements of Advances and/or Servicing
Advances in accordance with Section 3.08 hereof, which entitlement may be
terminated by the Advance Financing Person pursuant to a written notice to the
Trustee and the Securities Administrator in the manner set forth in Section 5.02
hereof. Upon receipt of such written notice, such Servicer shall no longer be
entitled to receive reimbursement for any Advance Reimbursement Amounts and the
Servicer's Assignee shall immediately have the right to receive from the
Collection Account all Advance Reimbursement Amounts. Notwithstanding the
foregoing, and for the avoidance of doubt, (i) the related Servicer 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 3.06 hereof, and (ii) none of
the Trustee, the Securities Administrator or the Certificateholders shall have
any right to, or
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otherwise be entitled to, receive any Advance Reimbursement Amounts to which
such Servicer or Servicer's Assignee, as applicable, shall be entitled pursuant
to Section 3.08 hereof. Without limiting the foregoing, none of the Trustee, the
Securities Administrator, or the Certificate Insurers shall have any right of
set-off against Advance Reimbursement Amounts. An Advance Facility may be
terminated by the joint written direction of the related 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 5.02 hereof. None of the Depositor, the Securities
Administrator nor the Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor, the Securities
Administrator or the Trustee have any additional responsibility to track or
monitor the administration of the Advance Facility or the payment of Advance
Reimbursement Amounts to the Servicer's Assignee. Each Servicer shall indemnify
the Depositor, the Trustee, the Master Servicer, 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 Securities
Administrator or any successor Servicer, as the case may be, or a breach of any
obligation under this Agreement, by the successor Servicer. Each 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.
(d) 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 Sub-Servicer.
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
Advances and/or Servicing Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person in error, then such
Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing, a
Servicer shall remain entitled to be reimbursed by the Advance Financing Person
for all Advances and/or Servicing Advances funded by such Servicer to the extent
the related Advance Reimbursement Amounts have not been assigned or pledged to
such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any certification of a Servicing Officer of a
Servicer made pursuant to Section 3.22 any Nonrecoverable Advance referred to
therein may have been made by such Servicer or any predecessor Servicer. In
making its determination that any Advance theretofore made has become a
Nonrecoverable Advance, such Servicer shall apply the same criteria in making
such determination regardless of whether such Advance shall have been made by
such Servicer or any predecessor Servicer.
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(g) 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 Securities Administrator, the Backup
Servicer and the Servicers without the consent of any Certificateholder,
provided such amendment complies with Section 11.01 hereof. All reasonable costs
and expenses (including attorneys' fees) of each party hereto of any such
amendment shall be borne solely by the Servicer requesting such amendment. 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 a Servicer payable only from
the cash flows and proceeds received under this Agreement for reimbursement of
Advances and/or Servicing Advances only to the extent provided herein, and the
Trustee 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) such 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 such 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, each Servicer shall, from amounts in respect of its
Servicing Fee for such Distribution Date, deposit into the Collection Account,
as a reduction of the Servicing Fee for such Distribution Date, no later than
each Servicer Advance Date immediately preceding such Distribution Date, an
amount up to the Prepayment Interest Shortfall. In case of such deposit, such
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, REMIC 2 and REMIC 3 in an amount sufficient to make
the distributions on the respective Certificates on such Distribution Date in
accordance with the provisions of Section 5.05.
SECTION 5.05. Distributions.
(a) [RESERVED].
(b) On each Distribution Date, the Securities Administrator shall
make the following distributions from the Certificate Account of an amount equal
to the Interest Funds, in the following order of priority:
(i) to the Certificate Insurer, accrued and unpaid
Certificate Insurer Premiums for such Distribution Date;
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(ii) to each Class of Class R Certificate, Class A
Certificate and Class S Certificates, concurrently, the Current Interest and any
Interest Carry Forward Amount with respect to such Class; provided, however, if
such amount is not sufficient to make a full distribution of the Current
Interest and any Interest Carry Forward Amount with respect to all of the Class
R Certificate, Class A Certificates, and Class S Certificates, such amount will
be distributed pro rata among each Class R Certificate, Class A Certificates and
Class S Certificates based on the ratio of (x) the Current Interest and Interest
Carry Forward Amount for each Class of Class R Certificate, Class A
Certificates, and Class S Certificates to (y) the total amount of Current
Interest and any Interest Carry Forward Amount for the Class of Class R
Certificate, Class A Certificates, and Class S Certificates;
(iii) to the Certificate Insurer, any Certificate Insurer
Reimbursement Amounts;
(iv) to the Class M-1 Certificates, the Class M-1 Current
Interest and any Class M-1 Interest Carry Forward Amount;
(v) to the Class M-2 Certificates, the Class M-2 Current
Interest and any Class M-2 Interest Carry Forward Amount;
(vi) to the Class M-3 Certificates, the Class M-3 Current
Interest and any Class M-3 Interest Carry Forward Amount;
(vii) to the Class B-1 Certificates, the Class B-1 Current
Interest and any Class B-1 Interest Carry Forward Amount;
(viii) to the Class B-2 Certificates, the Class B-2 Current
Interest and any Class B-2 Interest Carry Forward Amount;
(ix) to the Class B-3 Certificates, the Class B-3 Current
Interest and any Class B-3 Interest Carry Forward Amount;
(x) to the Trustee and the Securities Administrator, pro
rata based on amounts due, any amounts reimburseable under Section 9.05 and
Section 9.18, respectively, remaining unreimbursed after their rights to
reimbursement pursuant to Section 9.05 and Section 9.18, respectively hereunder,
have been exhausted; and
(xi) 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)(xi)) shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Certificate Insurer, any Certificate Insurer
Reimbursement Amounts, to the extent not otherwise paid pursuant to Section
5.05(b)(iii);
(ii) to the Class R and Class A Certificates, sequentially
until the Certificate Principal Balances thereof have been reduced to zero, the
Class A Principal Distribution Amount;
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(iii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
(iv) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
(v) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount;
(vi) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;
(vii) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;
(viii) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount;
(ix) to the Trustee and the Securities Administrator, pro
rata based on amounts due, any amounts remaining unreimbursed after their rights
to reimbursement pursuant to Section 9.05 and Section 9.18, respectively
hereunder, have been exhausted; and
(x) 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)(xi) and
Section 5.05(d)(x) hereof and, to the extent required to make the distributions
set forth below in clauses (i) through (ix) of this Section 5.05(f), 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)(xi) and Section
5.05(d)(x)) shall have been made until such remainders shall have been fully
distributed for such Distribution Date:
(i) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the Class M-1 Unpaid
Realized Loss Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Unpaid
Realized Loss Amount;
(iv) to the Class M-3 Certificates, the Class M-3 Unpaid
Realized Loss Amount;
(v) to the Class B-1 Certificates, the Class B-1 Unpaid
Realized Loss Amount;
(vi) to the Class B-2 Certificates, the Class B-2 Unpaid
Realized Loss Amount;
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(vii) to the Class B-3 Certificates, the Class B-3 Unpaid
Realized Loss Amount;
(viii) to the extent required to make the allocations set
forth below, on a pro rata basis:
(A) to the Class R and Class A Certificates, the
Floating Rate Certificate Carryover for such Class,
(B) to the Class M-1 Certificates, the Floating Rate
Certificate Carryover for such Class;
(C) to the Class M-2 Certificates, the Floating Rate
Certificate Carryover for such Class;
(D) to the Class M-3 Certificates, the Floating Rate
Certificate Carryover for such Class;
(E) to the Class B-1 Certificates, the Floating Rate
Certificate Carryover for such Class;
(F) to the Class B-2 Certificates, the Floating Rate
Certificate Carryover for such Class;
(G) to the Class B-3 Certificates, the Floating Rate
Certificate Carryover for such Class;
(ix) 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)(ix) as follows:
(i) to the Holders of the Class X Certificates, the Class X
Distributable Amount; and
(ii) the remainder pursuant to Section 5.05(h) hereof.
(h) On each Distribution Date, the Securities Administrator shall
allocate the remainder pursuant to Section 5.05(g)(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 X Certificates.
(j) On each Distribution Date, after giving effect to
distributions on such Distribution Date, the Securities Administrator shall
allocate the Applied Realized Loss Amount for the Certificates to reduce the
Certificate Principal Balances of the Subordinated Certificates in the following
order of priority:
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(i) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;
(ii) to the Class B-2 Certificate until the Class B-2
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-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(v) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
(vi) 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, each 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.
(l) Any payments received under the terms of the Cap Contract will
be available to pay the holders of the Offered Certificates (other than the
Class S Certificates) and the Class B-2 and Class B-3 Certificates up to the
amount of any Floating Rate Certificate Carryover remaining after the
application of Section 5.05(f)(viii) on such Distribution Date (other than any
Floating Rate Certificate Carryover attributable to the fact that Applied
Realized Loss Amounts are not allocated to the Class A and Class R
Certificates). Any amounts in the Cap Contract Account on any Distribution Date
in excess of amounts required to pay such outstanding Floating Rate Certificate
Carryovers on such Distribution Date will be distributed to the holders of the
Class X Certificates in accordance with the provisions of Section 5.05(i) hereof
(after all other distributions have been made thereunder on such Distribution
Date). Payments from the Cap Contract Account in respect of such Floating Rate
Certificate Carryovers shall be paid to the Offered Certificates (other than the
Class S Certificates) and Class B-2 and Class B-3 Certificates in accordance
with the provisions of Section 5.05(f)(viii) hereof (and taking into account
only Floating Rate Certificate Carryovers other than Floating Rate Certificate
Carryover attributable to the fact that Applied Realized Loss Amounts are not
allocated to the Class A and Class R Certificates).
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For any Distribution Date on which there is a payment under the Cap Contract
based on a notional balance in excess of the aggregate Certificate Principal
Balance of the Offered Certificates and the Class B-2 and Class B-3
Certificates, the amount representing such excess payment, to the extent not
otherwise used to pay Floating Rate Certificate Carryovers, shall not be an
asset of the Trust Fund and, instead, shall be paid into and distributed out of
a separate trust created by this Agreement for the benefit of the Class X
Certificates and shall be distributed to the Class X Certificates pursuant to
Section 5.05(g).
(i) On or prior to the Cap Contract Termination Date,
amounts, if any, received by the Trustee for the benefit of the Trust Fund in
respect of the Cap Contract shall be deposited by the Trustee into the Cap
Contract Account. With respect to any Distribution Date on or prior to the Cap
Contract Termination Date, the amount, if any, payable by the Cap Contract
Counterparty under the Cap Contract will equal the product of (i) the excess of
(x) One-Month LIBOR (as determined by the Cap Contract Counterparty and subject
to a cap equal to the rate with respect to such Distribution Date as shown under
the heading "Upper Collar" in the Cap Table), over (y) the rate with respect to
such Distribution Date as shown under the heading "Lower Collar" in the Cap
Table, (ii) an amount equal to the Cap Contract Notional Balances and (iii) the
number of days in such Accrual Period, divided by 360. If a payment is made to
the Trust Fund under the Cap Contract and the Trustee intends to distribute
excess amounts to the holders of the Class X Certificates as described above,
the Trustee shall send a notice on the Business Day prior to the related
Distribution Date stating the amount received on the Cap Contract, the amount
paid with respect to Floating Rate Certificate Carryovers (other than any
Floating Rate Certificate Carryover attributable to the fact that Applied
Realized Loss Amounts are not allocated to the Class A and Class R Certificates)
and the amount due to the holders of the Class X Certificates. Such notice shall
be sent by the Trustee via facsimile to the holders of the Class X Certificates.
(ii) Amounts on deposit in the Cap Contract Account will
remain uninvested pending distribution to Certificateholders.
The Cap Contract is scheduled to remain in effect until the Cap Contract
Termination Date and will be subject to early termination only in limited
circumstances. Such circumstances include certain insolvency or bankruptcy
events in relation to the Cap Contract Counterparty (after a grace period of
three Local Business Days, as defined in the Cap Contract, after notice of such
failure is received by the Cap Contract Counterparty) to make a payment due
under the Cap Contract, the failure by the Cap Contract Counterparty or the
Trustee (after a cure period of 20 days after notice of such failure is
received) to perform any other agreement made by it under the Cap Contract, the
termination of the Trust Fund and the Cap Contract becoming illegal or subject
to certain kinds of taxation.
SECTION 5.06. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on
information provided by the Master Servicer or a 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, each
Servicer, the Certificate Insurer, 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, (C) the Extra Principal
Distribution Amount, if any, and (D) the aggregate amount of prepayment
penalties, 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;
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(iii) any Interest Carry Forward Amount for each Class of the
Certificates;
(iv) the Certificate Principal Balance or Class S Notional
Amount of each Class after giving effect (i) to all distributions allocable to
principal on such Distribution Date and (ii) the allocation of any Applied
Realized Loss Amounts for such Distribution Date;
(v) the Pool Stated Principal Balance for such Distribution
Date and the amount on deposit in the Pre-Funding Account on such Distribution
Date;
(vi) the related amount of the Servicing Fee, the Master
Servicing Fee, the Credit Risk Manager Fee and the Certificate Insurer Premium
paid to or retained by the Servicers, the Master Servicer, the Credit Risk
Manager or the Certificate Insurer;
(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 related
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 and (B)
Applied Realized Loss Amounts to date;
(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 (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30 days,
(2) 60 days, (3) 90 days, (4) 120 days and (5) 150 or more days, and (B) in
foreclosure or bankruptcy and Delinquent (1) 30 days, (2) 60 days, (3) 9 days
and (4) 120 or more days;
(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) the aggregate Stated Principal Balance of all
Liquidated Loans as of the immediately preceding Distribution Date;
(xix) whether a Trigger Event has occurred;
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(xx) amount on deposit in the Pre-Funding Account and the
Capitalized Interest Account;
(xxi) with respect to each Class of Certificates, any Interest
Carry Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;
(xxii) with respect to each Class of Offered Certificates
(other than the Class S Certificates) and the Class B-2 and Class B-3
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;
(xxiii) the number and Stated Principal Balance (as of the
immediately preceding Distribution Date) of any Mortgage Loans which were
purchased or repurchased during the preceding Due Period and since the Cut-off
Date;
(xxiv) the number and aggregate Stated Principal Balance of
Mortgage Loans for which prepayment penalties were received during the related
Prepayment Period and, for each such Mortgage Loan, the amount of prepayment
penalties received during the related Prepayment Period and in the aggregate of
such amounts for all such Mortgage Loans since the Cut-off Date;
(xxv) the current and cumulative number and amount of
prepayment penalties and the current and cumulative amount of late payment fees
received during the related Prepayment Period;
(xxvi) the total number and principal balance of any Mortgage
Loans that were repurchased during the calendar month preceding such
Distribution Date and the total number and principal balance of any Mortgage
Loans that were repurchased from the Closing Date to such Distribution Date;
(xxvii) the aggregate amount of Subsequent Recoveries for such
Distribution Date and the aggregate amount of Subsequent Recoveries collected
after the Closing Date to such Distribution Date;
(xxviii) the weighted average remaining term to maturity of
the Mortgage Loans as of the first day of the calendar month preceding such
Distribution Date;
(xxix) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(v);
(xxx) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC Regular Interest
(or, in the case of the Class R Certificate, in respect of the "residual
interest" in any of the REMICs) and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
Regular Interest (or, in the case of the Class R Certificate, in respect of the
"residual interest" in any of the REMICs);
(xxxi) as of each Distribution Date, the amount, if any, to be
deposited in the Certificate Account pursuant to the Cap Contract as described
in Section 5.05(l) and the amount thereof to be paid to the Offered Certificates
as described in Section 5.05(l) hereof; and
(xxxii) as of each Distribution Date, the Floating Rate
Certificate Carryover for each Class of Certificates (other than the Class S and
Class X Certificates) and the portion of such
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Floating Rate Certificate Carryover that is attributable to the fact that
Applied Realized Loss Amounts are not allocated to the Class A and Class R
Certificates.
(b) [RESERVED];
(c) If so requested in writing or as required by applicable law,
within a reasonable period of time after the end of each calendar year, the
Securities Administrator shall make available on its website or cause to be
furnished to each Person who at any time during the calendar year was a
Certificateholder of record (and to the Certificate Insurer), a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.06 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect. Within a reasonable period of time after the end of each calendar year
if requested in writing or required by applicable law, the Securities
Administrator will prepare and deliver to each certificateholder of record
during the previous calendar year, a statement containing information necessary
to enable certificateholders to prepare their tax returns. The Securities
Administrator will not be responsible for any errors, omissions or misstatements
that may be incorporated in such statement.
(d) 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.
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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 2004-11HE, Asset-Backed
Certificates, TMTS Series 2004-11HE" (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 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 2004-11HE, Asset-Backed Certificates, Series TMTS
2004-11HE" (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
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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 each Distribution Date prior 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.
(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.
SECTION 5.09. Certificate Insurance Policy Matters
(a) As soon as possible, and in no event later than 11:00 a.m.,
New York time, on the second Business Day immediately preceding each
Distribution Date, the Securities Administrator, on behalf of the Trustee, shall
determine the amount of funds available for such Distribution Date minus the
amount of any Certificate Insurer Premium on such Distribution Date.
(b) If for any Distribution Date, the Securities Administrator
determines that the funds that will be available for such Distribution Date
distributable to the Holders of the Class A Certificates pursuant to Section
5.05 will be insufficient to pay the related Guaranteed Distributions on such
Distribution Date, the Securities Administrator, on behalf of the Trustee, shall
determine the amount of any such deficiency and shall give notice to the
Certificate Insurer and the Fiscal Agent (as defined in the Certificate
Insurance Policy), if any, by telephone or telecopy of the amount of such
deficiency, confirmed in writing by notice substantially in the form of Exhibit
A to the Certificate Insurance Policy by 12:00 noon, New York City time, on such
second Business Day. The notice shall constitute a claim for payment pursuant to
the Certificate Insurance Policy.
(c) The Trustee designates, appoints, authorizes and directs the
Securities Administrator to deliver on behalf of the Trustee the notice in the
form of Exhibit A to the Certificate Insurance Policy in accordance with Section
5.09 and to make, on behalf of and with full power to bind the Trustee, any of
the agreements, assignments or covenants of the Trustee contained therein. To
the extent necessary, this Agreement shall constitute an irrevocable limited
power of attorney, coupled with an interest, from the Trustee to the Securities
Administrator, to accomplish the foregoing;
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(d) The Securities Administrator, on behalf of the Trustee, shall
receive as attorney-in-fact of each Holder of a Class A Certificate, any
Guaranteed Distributions from the Certificate Insurer and disburse the same to
each Holder of a Class A Certificate as applicable, in accordance with the
provisions of this Article V. Guaranteed Distributions disbursed by the
Securities Administrator, on behalf of the Trustee, from proceeds of the
Certificate Insurance Policy shall not (other than for purposes of the REMIC
Provisions) be considered payment by the Trust Fund nor shall such payments
discharge the obligation of the Trust Fund with respect to such Class A
Certificate, and the Certificate Insurer shall become the owner of such unpaid
amounts due from the Trust Fund in respect of such Guaranteed Distributions as
the deemed assignee of such Holder and shall be entitled to receive the
Certificate Insurer Reimbursement Amount pursuant to Section 5.05. The
Securities Administrator and the Trustee hereby agrees on behalf of each Holder
of a Class A Certificate for the benefit of the Certificate Insurer that it
recognizes that to the extent that the Certificate Insurer makes Guaranteed
Distributions, either directly or indirectly (as by paying through the
Securities Administrator), to the Class A Certificateholders, the Certificate
Insurer will be entitled to receive the Certificate Insurer Reimbursement Amount
pursuant to Section 5.05.
(e) It is understood and agreed that the intention of the parties
is that the Certificate Insurer shall not be entitled to reimbursement on any
Distribution Date for amounts previously paid by it unless on such Distribution
Date the Holders of the Class A Certificates, as applicable, shall also have
received the full amount of the Guaranteed Distributions for such Distribution
Date.
(f) In the event the Securities Administrator receives, on behalf
of the Trustee, a certified copy of an order of the appropriate court that any
payment of principal or interest on a Class A Certificate has been voided in
whole or in part as a preference payment under applicable bankruptcy law, the
Securities Administrator shall, on behalf of the Trustee, (i) promptly notify
the Certificate Insurer and the Fiscal Agent, if any, and (ii) comply with the
provisions of the Certificate Insurance Policy to obtain payment by the
Certificate Insurer of such voided payment. In addition, the Securities
Administrator shall, on behalf of the Trustee, mail notice to all Holders of the
Class A Certificates so affected that, in the event that any such Holder's
scheduled payment is so recovered, such Holder will be entitled to payment
pursuant to the terms of the Certificate Insurance Policy a copy of which shall
be made available to such Holders by the Securities Administrator. The
Securities Administrator shall, on behalf of the Trustee, furnish to the
Certificate Insurer and the Fiscal Agent, if any, its records listing the
payments on the affected Class A Certificates, if any, that have been made by
the Securities Administrator and subsequently recovered from the affected
Holders, and the dates on which such payments were made by the Securities
Administrator.
(g) At the time of the execution hereof, and for the purposes
hereof, the Securities Administrator, on behalf of the Trustee, shall establish
a separate special purpose trust account in the name of the Trustee for the
benefit of Holders of the Class A Certificates (the "Certificate Insurer
Account") over which the Securities Administrator, on behalf of the Trustee,
shall have exclusive control and sole right of withdrawal. The Certificate
Insurer Account shall be an Eligible Account. The Securities Administrator, on
behalf of the Trustee, shall deposit any amount paid under the Certificate
Insurance Policy into the Certificate Insurer Account and distribute such amount
only for the purposes of making the payments to Holders of the Class A
Certificates in respect of the Guaranteed Distributions for which the related
claim was made under the Certificate Insurance Policy. Such amounts shall be
allocated by the Securities Administrator to Holders of Class A Certificates
affected by such shortfalls in the same manner as principal and interest
payments are to be allocated with respect to such Certificates pursuant to
Section 5.05. It shall not be necessary for such payments to be made by checks
or wire transfers separated from the checks or wire transfers used to make
regular payments hereunder with funds withdrawn from the Certificate Account.
However, any payments made on the Class A Certificates from
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funds in the Certificate Insurer Account shall be noted as provided in
subsection (h) below. Funds held in the Certificate Insurer Account shall not be
invested by the Securities Administrator.
(h) Any funds received from the Certificate Insurer for deposit
into the Certificate Insurer Account pursuant to the Certificate Insurance
Policy in respect of a Distribution Date or otherwise as a result of any claim
under the Certificate Insurance Policy shall be applied by the Securities
Administrator, on behalf of the Trustee, directly to the payment in full (i) of
the Guaranteed Distributions due on such Distribution Date on the Class A
Certificates, or (ii) of other amounts payable under the Certificate Insurance
Policy. Funds received by the Securities Administrator on behalf of the Trustee,
as a result of any claim under the Certificate Insurance Policy shall be used
solely for payment to the Holders of the Class A Certificates and may not be
applied for any other purpose, including, without limitation, satisfaction of
any costs, expenses or liabilities of the Securities Administrator, the Trustee,
any Servicer or the Trust Fund. Any funds (other than funds deposited therein in
respect of a Preference Amount (as defined in the Certificate Insurance Policy)
payable under the Certificate Insurance Policy) remaining in the Certificate
Insurer Account on the first Business Day after each Distribution Date shall be
remitted promptly to the Certificate Insurer pursuant to the written instruction
of the Certificate Insurer.
(i) The Securities Administrator, on behalf of the Trustee, shall
keep complete and accurate records in respect of (i) all funds remitted to it by
the Certificate Insurer and deposited into the Certificate Insurer Account and
(ii) the allocation of such funds to payments of interest on and principal in
respect of any Class A Certificates. The Certificate Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon three Business Days' prior notice to the Securities Administrator.
(j) The Securities Administrator and the Trustee acknowledge, and
each Holder of a Class A Certificate by its acceptance of the Class A
Certificate agrees, that, without the need for any further action on the part of
the Certificate Insurer, the Securities Administrator or the Trustee, to the
extent the Certificate Insurer makes payments, directly or indirectly, on
account of principal of or interest on any Class A Certificates, the Certificate
Insurer will be fully subrogated to the rights of the Holders of such Class A
Certificates to receive such principal and interest from the Trust Fund. The
Holders of the Class A Certificates, by acceptance of the Class A Certificates,
assign their rights as Holders of the Class A Certificates, as applicable, to
the extent of the Certificate Insurer's interest with respect to amounts paid
under the Certificate Insurance Policy. Anything herein to the contrary
notwithstanding, solely for purposes of determining the Certificate Insurer's
rights, as applicable, as subrogee for payments distributable pursuant to
Section 5.05, any payment with respect to distributions to the Class A
Certificates which is made with funds received pursuant to the terms of the
Certificate Insurance Policy, shall not be considered payment of the Class A
Certificates, as applicable, from the Trust Fund and shall not result in the
distribution or the provision for the distribution in reduction of the
Certificate Principal Balance of the Class A Certificates, as applicable, except
to the extent such payment has been reimbursed to the Certificate Insurer
pursuant to the terms hereof.
(k) Upon a Responsible Officer of the Securities Administrator
becoming aware of the occurrence of an Event of Default, the Securities
Administrator, on behalf of the Trustee, shall promptly notify the Certificate
Insurer of such Event of Default.
(l) The Securities Administrator, on behalf of the Trustee, shall
promptly notify the Certificate Insurer of either of the following as to which a
Responsible Officer of the Securities Administrator has actual knowledge: (A)
the commencement of any proceeding by or against the Depositor commenced under
the United States bankruptcy code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding") and (B) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential
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transfer (a "Preference Claim") of any distribution made with respect to a Class
A Certificate as to which it has actual knowledge. Each Holder of a Class A
Certificate, by its purchase of Class A Certificates, the Securities
Administrator and the Trustee hereby agree that the Certificate Insurer (so long
as no Certificate Insurer Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to any Preference Claim and (ii)
the posting of any surety, supersedes or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Certificate
Insurer shall be subrogated to the rights of the Securities Administrator, on
behalf of the Trustee and each Holder of a Class A Certificate, as applicable,
in the conduct of any Preference Claim, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any court
order issued in connection with any such Preference Claim.
(m) Each Servicer shall designate at least one Certificate Insurer
Contact Person who shall be available to the Certificate Insurer to provide
reasonable access to information regarding the Mortgage Loans. The initial
Certificate Insurer Contact Persons are the Servicing Officers.
(n) The Securities Administrator, on behalf of the Trustee, shall
surrender the Certificate Insurance Policy to the Certificate Insurer for
cancellation upon the reduction of the Class Principal Balances of the Class A
Certificates to zero.
(o) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to the Trustee, the Securities
Administrator, the Rating Agencies or the Holders of the Class A Certificates
(including without limitation the reports prepared pursuant to Sections 3.17 and
3.18 and the statements prepared pursuant to Section 5.06) shall also be sent,
at the same time such reports are otherwise sent, by overnight delivery,
telecopy or email to the Certificate Insurer at Financial Security Assurance
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, xxxxxxxxxx@xxx.xxx.
(p) With respect to this Section 5.09, (i) the terms "Receipt" and
"Received" shall mean actual delivery to the Certificate Insurer and its Fiscal
Agent, if any, prior to 12:00 noon, New York City time, on a Business Day;
delivery either on a day that is not a Business Day or after 12:00 noon, New
York City time, shall be deemed to be Receipt on the next succeeding Business
Day and (ii) "Business Day" means any day other than (A) a Saturday or Sunday or
(B) a day on which the Certificate Insurer or banking institutions in the City
of New York, New York, or the city in which the Corporate Trust Office of the
Trustee is located, are authorized or obligated by law or executive order to be
closed. If any notice or certificate given under the Certificate Insurance
Policy by the Securities Administrator, on behalf of the Trustee, is not in
proper form or is not properly completed, executed or delivered, it shall be
deemed not to have been Received. The Certificate Insurer or its Fiscal Agent,
if any, shall promptly so advise the Securities Administrator and the Securities
Administrator, on behalf of the Trustee, may submit an amended notice.
(q) The Certificate Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions hereof
to the extent of the Certificate Insurer's rights explicitly specified herein as
if a party hereto.
(r) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Certificate Insurance Policy.
(s) The Securities Administrator, the Trustee and the Servicers
shall cooperate with any reasonable request by the Certificate Insurer to
preserve or enforce the rights granted to the Certificate Insurer hereunder.
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(t) For so long as there is no continuing Certificate Insurer
Default, each Holder of a Class A Certificate agrees that the Certificate
Insurer shall be treated by the Depositor, the Seller, each Servicer, the Master
Servicer, the Securities Administrator and the Trustee as if the Certificate
Insurer were the Holder of all of the Class A Certificates for the purpose (and
solely for the purpose) of the giving of any consent, the making of any
direction or the exercise of any voting or other control rights otherwise given
to the Holders of the Class A Certificates hereunder and the holders of the
Class A Certificates shall only exercise such rights with the prior written
consent of the Certificate Insurer.
(u) Guaranteed Distributions shall not include, nor shall coverage
be provided under the Certificate Insurance Policy in respect of, any Floating
Rate Certificate Carryovers, taxes, withholding or other charge imposed by any
government authority due in connection with any payment of any Guaranteed
Distribution to a Class A Certificateholder.
SECTION 5.10. Effect of Payments by the Certificate Insurer
Anything herein to the contrary notwithstanding, any payment with respect
to principal of or interest on the Class A Certificates which is made with
moneys received pursuant to the terms of the Certificate Insurance Policy shall
not (other than for purposes of the REMIC Provisions) be considered payment of
the Class A Certificates from the Trust Fund. The Custodian, the Servicers, the
Master Servicer, the Securities Administrator and the Trustee acknowledge, and
each Holder by its acceptance of a Class A Certificate agrees, that without the
need for any further action on the part of the Certificate Insurer, the
Custodian, the Servicers, the Master Servicer, the Securities Administrator or
the Trustee (a) to the extent the Certificate Insurer makes payments, directly
or indirectly, on account of principal of or interest on the Class A
Certificates to the Holders of such Class A Certificates, the Certificate
Insurer will be fully subrogated to, and each Class A Certificateholder, the
Servicer and the Trustee hereby delegate and assign to the Certificate Insurer,
to the fullest extent permitted by law, the rights of such Holders to receive
such principal and interest from the Trust Fund, including, without limitation,
any amounts due to the Class A Certificateholders in respect of securities law
violations arising from the offer and sale of the Class A Certificates, and (b)
the Certificate Insurer shall be paid such amounts from the sources and in the
manner provided herein for the payment of such amounts and as provided in the
Certificate Insurance Policy and the Commitment Letter between the Certificate
Insurer, the Depositor and the Seller dated as of September 27, 2004. The
Trustee, the Securities Administrator, the Master Servicer and the Servicer
shall cooperate in all respects with any reasonable request by the Certificate
Insurer for action to preserve or enforce the Certificate Insurer's rights or
interests under this Agreement without limiting the rights or affecting the
interests of the Holders as otherwise set forth herein.
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:
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Original Certificate
Minimum Integral Multiples in Principal Balance or
Class Denomination Excess of Minimum Notional Amount
----- ------------ ----------------- ---------------
A $ 25,000.00 $ 1.00 $ 238,271,000.00
S $ 100,000.00 $ 1.00 $ 267,985,100.00
M-1 $ 25,000.00 $ 1.00 $ 12,960,000.00
M-2 $ 25,000.00 $ 1.00 $ 5,130,000.00
M-3 $ 25,000.00 $ 1.00 $ 3,780,000.00
B-1 $ 25,000.00 $ 1.00 $ 2,700,000.00
B-2 $ 100,000.00 $ 1.00 $ 2,700,000.00
B-3 $ 100,000.00 $ 1.00 $ 2,444,000.00
X N/A N/A $ 2,164,437.54*
R $ 100.00 N/A $ 100.00
* The Initial Certificate Principal Balance of the Class X Certificates is
equal to the initial Overcollateralization Amount.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the 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-2 and Class B-3 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 X 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.
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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 in accordance with the provisions of Section 6.09
hereof, a Certificate Register for the Trust Fund in which, subject to the
provisions of subsections (b) and (c) below and to such reasonable regulations
as it may prescribe, the Securities Administrator shall provide for the
registration of Certificates and of Transfers and exchanges of Certificates as
herein provided. Upon surrender for registration of Transfer of any Certificate,
the Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute and the Authenticating Agent shall authenticate and deliver the
Certificates that the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of Transfer
or exchange shall be accompanied by a written instrument of Transfer in form
satisfactory to the Securities Administrator duly executed by the holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
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 X Certificate shall be made unless such Transfer is
made pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws or is exempt from the registration
requirements under the Securities Act and such state securities laws. In the
event that a Transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such Transfer and
such Certificateholder's prospective transferee shall (except with respect to
the initial transfer of a Class X Certificate by Xxxxxxx Xxxxx & Co.) 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 X Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information in the possession of the Securities Administrator
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Class X Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Depositor,
the Securities Administrator and the Trustee against any
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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 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 X 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
X Certificate through such non-United States Person either directly, through an
intermediary or through an entity that is treated as a partnership or other
look-through entity for non-United States federal tax purposes), a properly
completed Internal Revenue Service Form W-8IMY, W-8BEN or W-8ECI (or any
successor form) from such non-United States Person.
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 that is a Class X
Certificate shall be made unless the transferee provides 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 Securities Administrator, and upon which 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
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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.
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 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 Securities Administrator shall not be under any liability to any
Person for any registration or transfer of any ERISA Restricted Certificate that
is in fact not permitted by this Section 6.02(a) nor shall the Trustee and the
Securities Administrator be under any liability for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the 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
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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 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, the Class LT2-R Interest and the REMIC 3 Residual
Interest may be severed and represented by separate certificates (with the
separate certificate that represents the REMIC 3 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, the Class LT2-R Interest and the REMIC 3 Residual
Interest shall be severed and represented by separate certificates (with the
separate certificate that represents the REMIC 3 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
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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 the
ownership thereof and (b) there is delivered to the Securities Administrator,
the Trustee and the Certificate Insurer such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Securities Administrator that such Certificate has been acquired by a
bona fide purchaser, the Securities Administrator shall execute, authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 6.03, the Securities Administrator may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Securities Administrator, the Trustee and the Certificate Insurer 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, the Certificate Insurer and any
agent of the Trustee or the Securities Administrator may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Trustee, the Securities Administrator
nor the Certificate Insurer, 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
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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 X Certificates shall be definitive
certificates. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 6.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Securities Administrator and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the
Book-Entry Certificates shall be exercised only through the Depository and the
Depository Participants and shall be limited to those established by law and
agreements between the Owners of the Book-Entry Certificates and the Depository
and/or the Depository Participants. Pursuant to the Depository Agreement, unless
and until Definitive Certificates are issued pursuant to Section 6.08, the
Depository will make book-entry 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.
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SECTION 6.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Securities
Administrator and the Trustee that the Depository is no longer willing,
qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor, at its sole option, advises the Securities Administrator and the
Trustee that it elects to terminate the book-entry system with respect to such
Certificates through the Depository or (c) after the occurrence and continuation
of an Event of Default, Certificate Owners of such Book-Entry Certificates
having not less than 51% of the Voting Rights evidenced by any Class of
Book-Entry Certificates advise the Securities Administrator, the Trustee and the
Depository in writing through the Depository Participants that the continuation
of a book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Securities Administrator shall notify
all Certificate Owners of such Book-Entry Certificates, through the Depository,
of the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners of such Class requesting the same. The
Depositor shall provide the Securities Administrator with an adequate inventory
of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Securities Administrator of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Authenticating Agent shall authenticate and
the Securities Administrator shall deliver such Definitive Certificates. Neither
the Depositor nor the Securities Administrator shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Securities Administrator, to the extent applicable with respect to such
Definitive 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 2004-11HE 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
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Authenticating Agent. The Trustee shall be the Authenticating Agent during any
such time as no other Authenticating Agent has been appointed and has not
resigned.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance within the provisions of this Section
6.10, the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 6.10. No Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any Authenticating Agent (except the Securities Administrator) shall be entitled
to reasonable compensation for its services and any such compensation shall be
payable solely by the Trust Fund, without any right of reimbursement from the
Depositor, each 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.
SECTION 6.11. Trustee To Act with Consent of the Certificate Insurer.
(a) Unless a Certificate Insurer Default exists, the Trustee shall
not, without the Certificate Insurer's consent or unless directed by the
Certificate Insurer (a) terminate the rights and obligations of a Servicer as
Servicer pursuant to Section 8.01, (b) agree to any amendment pursuant to
Section 11.01 or (c) undertake any litigation.
(b) The Certificate Insurer may, in writing and in its sole
discretion renounce all or any of its rights under this Agreement or any
requirement for the Certificate Insurer's consent for any period of time.
SECTION 6.12. Mortgage Loans, Trust Fund Held for Benefit of Certificate
Insurer and Holders of Certificates.
(a) The Trustee shall hold the Trust Fund and, through the
Custodian, the Custodial Files for the benefit of the Certificateholders and the
Certificate Insurer and all references in this Agreement and in the Certificates
to the benefit of Holders of the Certificates shall be deemed to include the
Certificate Insurer. The Trustee shall follow all reasonable instructions and
requests of the Certificate Insurer to assist it to take action to preserve or
enforce the Certificate Insurer's rights or interests under this Agreement
unless a Certificate Insurer Default exists.
(b) Each Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders and for the
benefit of the Certificate Insurer, and all references in this Agreement to the
benefit of or actions on behalf of the Certificateholders shall be deemed to
include the Certificate Insurer.
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ARTICLE VII
THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE SECURITIES
ADMINISTRATOR
SECTION 7.01. Respective Liabilities of the Depositor, the Master
Servicer, each Servicer and the Securities Administrator.
The Depositor, the Master Servicer, each 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, each Servicer or the Securities Administrator.
Except as provided in the next paragraph, the Depositor, the Master
Servicer, each 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, each 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, each Servicer or the Securities Administrator shall be a party, or any
Person succeeding to the business of the Depositor, the Master Servicer, each
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 each 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,
each Servicer, the Backup Servicer, the Trustee, the Securities Administrator
and Others.
None of the Depositor, the Master Servicer, each Servicer, the Backup
Servicer, the Trustee, the Securities Administrator nor any of the directors,
officers, employees or agents of the Depositor, the Master Servicer, each
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, each
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, each 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, each Servicer, the Backup Servicer, the Trustee or the Securities
Administrator and any director, officer, employee or agent of the Depositor, the
Master Servicer, each Servicer, the Backup Servicer, the Trustee or the
Securities Administrator may rely in good faith on any
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document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer,
each Servicer, the Backup Servicer, the Trustee, the Securities Administrator
and any director, officer, employee or agent of the Depositor, the Master
Servicer, each 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, each 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, each
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, each 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 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.
SECTION 7.04. Limitation on Resignation of the Servicers.
A 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 a 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 Securities Administrator or a
successor servicer reasonably acceptable to the Securities Administrator (with
the consent of the Certificate Insurer) is appointed and has assumed such
Servicer's responsibilities, duties, liabilities and obligations hereunder. Any
such resignation shall not relieve each Servicer of any of the obligations
specified in Sections 7.01 and 7.02 as obligations that survive the resignation
or termination of each Servicer.
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The Securities Administrator and the Depositor hereby specifically (i)
consent to the pledge and assignment by each Servicer of all of each 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
each Servicer whereby each 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 each
Servicer are transferred to a successor Servicer, the entire amount of the
Servicing Fee and other compensation payable to each Servicer pursuant hereto
shall thereafter be payable to such successor Servicer.
Notwithstanding the foregoing, at the Servicing Rights Owner's request, a
Servicer shall resign upon the selection and appointment of a successor Servicer
(the "Servicing Rights Pledgee") by the Servicing Rights Owner; provided that
(a) the Certificate Insurer consents to such resignation and appointment, (b)
the Servicing Rights Owner delivers to the Trustee and the Securities
Administrator the letter required pursuant to the paragraph above and (c) the
Servicing Rights Pledgee designated by the Servicing Rights Owner meets the
eligibility requirements for a successor Servicer. Upon such appointment, such
Servicing Rights Pledgee will become a Servicer pursuant to the terms of this
Agreement. JPMorgan Chase Bank will not act as Backup Servicer with respect to
such successor servicer.
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds.
Each Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). Any such Fidelity
Bond and Errors and Omissions Insurance Policy shall protect and insure the
related 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
related 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 related 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. Each
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 and the Certificate Insurer 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
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7.02 as obligations that survive the resignation or termination of the Master
Servicer or the Backup Servicer.
SECTION 7.07. Assignment of Master Servicing.
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, prior to the end of the Funding Period: (i) any
purchaser or transferee must accept in writing such assignment and delegation
and assume the obligations of the Master Servicer hereunder shall (a) 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 qualified; (b) have a net
worth of not less than $15,000,000 (unless otherwise approved by the Rating
Agency pursuant to clause (ii) below); (c) be reasonably satisfactory to the
Trustee, the Depositor and the Certificate Insurer; and (d) execute and deliver
to the Trustee and the Certificate Insurer an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) the Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and the 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 each 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 each
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:
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(i) any failure by a 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 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 such Servicer or the Master Servicer, as
applicable, by the Securities Administrator or the Depositor, or to the
Securities Administrator and such Servicer or the Master Servicer, as
applicable, by the Holders of Certificates evidencing not less than 50% of the
Voting Rights evidenced by the Certificates and the Certificate Insurer; or
(ii) any failure by a 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 such 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 60 days after the date on which written notice of such failure shall
have been given to such 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 and the Certificate Insurer; 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 a Servicer or the Master Servicer, as applicable, and
such decree or order shall have remained in force undischarged or unstayed for a
period of 60 consecutive days; or
(iv) consent by a 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 such Servicer or the Master Servicer, as
applicable or all or substantially all of the property of such Servicer or the
Master Servicer; or
(v) admission by a 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) with respect to SLS only, an SLS Event of Termination
shall have occurred.
If an Event of Default shall occur with respect to any 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 the Certificate Insurer, or
at the direction of the Certificate Insurer or Holders of Certificates
evidencing not less than 50% of the Voting Rights evidenced by the Certificates,
shall, by notice in writing to such Servicer or the Master Servicer, as
applicable, (with a copy to the Rating Agency), terminate all of the rights and
obligations of such 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 such
Servicer or the Master Servicer, as applicable of such written notice, all
authority and power of such 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 such Servicer or the Master Servicer, as
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applicable, and the Depositor, terminate all of the rights and obligations of
the Master Servicer or such 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 each
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 such Servicer or the Master Servicer, as
applicable, to pay amounts owed pursuant to Article VIII. Each Servicer or the
Master Servicer, as applicable, agrees to cooperate with the Securities
Administrator in effecting the termination of such 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. Each Servicer and the
Master Servicer and the Securities Administrator hereby agree that it shall
promptly notify the Rating Agency 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 any Servicer or the
Master Servicer, as applicable, hereunder, such 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 such 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 such 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 such 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 such Servicer or the Master Servicer, as applicable,
hereunder, any liabilities of such 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 a 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 Agency has 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 any Servicer
receives a notice of termination, the Securities Administrator (in the case of
the Master Servicer), the Master Servicer (in the case of GreenPoint) or the
Backup Servicer (in the case of SLS) shall be the successor in all respects to
the Master Servicer or such 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
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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 Servicers' 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 any
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 any
Servicer hereunder. As compensation therefor, or the Backup Servicer (in the
case of SLS) shall be entitled to the Servicing Fee and all other compensation
to which the related 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 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 any Servicer was not required to make such an advance.
(b) No appointment of a successor to the Master Servicer or any
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 any 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 a 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 Certificate Insurer, 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, the Master Servicer (in the case of
GreenPoint) or the Backup Servicer (in the case of SLS) shall be the successor
in all respects to the related Servicer in its capacity as 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 Master Servicer or the Backup Servicer (except for any
representations and warranties of SLS contained in Section 2.03) by the terms
and provisions hereof including, without limitation, the Servicer's obligations
to make Advances pursuant to Section 3.21.
(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 Master Servicer or a successor servicer and not to exceed 30
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
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caused by the Master Servicer's or any 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), the Master
Servicer (in the case of GreenPoint) or the Backup Servicer (in the case of SLS)
as successor to the Master Servicer or any 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 Agency and the Certificate Insurer and having a net worth of not less
than $15,000,000, as the successor to the related Servicer under this Agreement
in the assumption of all or any part of the responsibilities, duties or
liabilities of the related 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
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 related
Servicer shall give notice to the Mortgagors of such change of Servicer and
shall, during the term of its service as a Servicer, maintain in force the
policy or policies that each Servicer is required to maintain pursuant to this
Agreement.
(d) In connection with the termination or resignation of any
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 any
Servicer, the Securities Administrator shall give prompt written notice thereof
to Certificateholders, the Trustee and the Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default of
which a Responsible Officer of the Securities Administrator has actual
knowledge, the Securities Administrator shall transmit by mail to all
Certificateholders and the Trustee notice of each such Event of Default
hereunder known to the Securities Administrator, 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, with the consent of the Certificate Insurer may waive such SLS Event
of Termination; provided, however, that a SLS Event of Termination
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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 Default.
(a) "SLS Event of Termination," wherever used herein, means any one
of the following events:
(i) any failure by SLS to provide the monthly data tape to the
Backup Servicer, which failure continues for three Business Days after the date
such action is required hereunder;
(ii) SLS fails to make the Advance required pursuant to
Section 5.01 of this Agreement and such failure continues for two Business Days
after the date such action is required hereunder;
(iii) an SLS Financial Trigger Event occurs and is continuing;
(iv) as of any Determination Date, the Rolling Three Month
Delinquency Rate exceeds 16% ;
(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 1-36 3.25% with respect to September 2004 and 1/36th of
1.75% for each month thereafter
Months 37-48 5.00% with respect to September 2007 and 1/12th of
1.25% for each month thereafter
Months 49-60 6.25% with respect to September 2008 and 1/12th of
0.25% for each month thereafter
Month 61 and thereafter 6.50%
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
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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 any Servicer, and the Trustee may fully rely upon and shall have
no liability with respect to information provided by any Servicer.
(c) The Trustee shall promptly remit to the related Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to 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 any Servicer under this
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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, 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
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(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 any Servicer nor shall the Trustee be
obligated to supervise or monitor the performance of the Master Servicer, Backup
Servicer or any Servicer hereunder or otherwise;
(ix) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, each agent, custodian
and other Person employed to act hereunder;
(x) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act; 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 each Servicer, the Trustee may appoint
each 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 each Servicer. The Trustee shall have no liability
for any action or inaction of each Servicer in connection with such power of
attorney and the Trustee shall be indemnified by each Servicer for all
liabilities, costs and expenses incurred by the Trustee in connection with each
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 any 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
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respect of the Mortgage Loans or deposited in or withdrawn from the Collection
Account by any 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.
SECTION 9.04. The Trustee May Own Certificates.
The Trustee, in its individual capacity, or in any capacity other than as
Trustee, may become the owner or pledgee of any Certificates with the same
rights as it would have if it was not the Trustee, and may otherwise deal with
the parties hereto.
SECTION 9.05. Trustee's Fees and Expenses.
The Trustee shall be paid by the Securities Administrator from the fee
paid to the Securities Administrator by the Master Servicer 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, and shall be indemnified from the Trust
Fund for, all reasonable out-of-pocket expenses, disbursements and advances
discussed in this Section 9.05, in an amount not to exceed $500,000 per year,
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
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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 Certificate Insurer, each 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.
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 each Servicer.
The Certificate Insurer or the Holders of Certificates entitled to at
least 51% of the Voting Rights with the consent of the Certificate Insurer may
at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee so removed and
one complete set to the successor so appointed. A copy of such instrument shall
be delivered to the Certificateholders, the Trustee and the Master Servicer, the
Backup Servicer, the Certificate Insurer and each 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, each Servicer,
the Backup Servicer, the Master Servicer, the Certificate Insurer 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, each Servicer, the Backup Servicer,
the Master Servicer, the Certificate Insurer 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.
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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 Agency, as evidenced by a letter from the
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 Agency.
SECTION 9.11. Merger or Consolidation of the Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee shall be the successor of the Trustee hereunder, provided such
corporation or association shall be eligible under the provisions of Section
9.07, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 9.12. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Certificate Insurer, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 9.12, such powers, duties, obligations, rights
and trusts as the Depositor and the Trustee may consider necessary or desirable.
If the Depositor shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
9.07 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 9.10.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 9.12, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee in its capacity as
successor servicer under this Agreement to advance funds on behalf of a
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 any other 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;
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(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such separate
trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for
the payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 9.13. Tax Matters.
(a) It is intended that each of the REMICs provided for herein 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
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provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions or other applicable tax
law or with respect to the grantor trusts provided for herein, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Class R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Person that is not a Permitted Transferee, or a pass-through entity in which a
Person that is not a Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of each of the REMICs and grantor trusts provided
for herein at all times that any Certificates are outstanding so as to maintain
the status of each of the REMICs provided for herein as a REMIC under the REMIC
Provisions and the status of each of the grantor trusts provided for herein as a
grantor trust under Subpart E, Part I of subchapter J of the Code; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of tax upon any such REMIC; (h) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter J
of the Code of any of the grantor trusts provided to herein or result in the
imposition of tax upon any such grantor trusts; (i) pay, from the sources
specified in the last paragraph of this Section 9.13(a), the amount of any
federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the REMICs or grantor trusts provided for
herein prior to the termination of the Trust Fund when and as the same shall be
due and payable (but such obligation shall not prevent the Trustee or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings); (j) sign or
cause to be signed by the required person federal, state or local income tax or
information returns; (k) maintain records relating to each of the REMICs and
grantor trusts provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs and grantor trusts
provided for herein, and the fair market value and adjusted basis of the Trust
Fund property determined at such intervals as may be required by the Code, as
may be necessary to prepare the foregoing returns, schedules, statements or
information, in each instance, to the extent provided by each 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
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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 amounts otherwise to be
distributed to the Class R Certificateholder pursuant to Section 5.05, and
second with amounts (other than amounts derived by the Trust Fund from a payment
on the Cap Contract) otherwise to be distributed to all other Certificateholders
in the following order of priority: first, to the Class X Certificates (pro
rata), second, to the Class B-3 Certificates (pro rata), third, to the Class B-2
Certificates (pro rata), fourth, to the Class B-1 Certificates (pro rata),
fifth, to the Class M-3 Certificates (pro rata), sixth, to the Class M-2
Certificates (pro rata), seventh, to the Class M-1 Certificates (pro rata) and
eighth 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 Servicers, 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
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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 any Servicer, and the Securities Administrator may
fully rely upon and shall have no liability with respect to information provided
by any Servicer.
(c) On each Distribution Date, the Securities Administrator, as
paying agent, shall make monthly distributions and the final distribution to the
Certificateholders from funds in the Certificate Account as provided in Sections
6.01 and 10.02 herein.
(d) No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Securities Administrator
shall be determined solely by the express provisions of this Agreement; the
Securities Administrator shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement; no
implied covenants or obligations shall be read into this Agreement against the
Securities Administrator and, in the absence of bad faith on the part of the
Securities Administrator, the Securities Administrator may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Securities
Administrator that conform to the requirements of this Agreement;
(ii) The Securities Administrator shall not be liable for an
error of judgment made in good faith by a Responsible Officer of the Securities
Administrator unless it shall be proved that the Securities Administrator was
negligent in ascertaining or investigating the facts related thereto;
(iii) The Securities Administrator shall not be personally
liable with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the consent or at the direction of Holders of
Certificates as provided herein relating to the time, method and place of
conducting any remedy pursuant to this Agreement, or exercising or omitting to
exercise any trust or power conferred upon the Securities Administrator under
this Agreement; and
(iv) The Securities Administrator shall not be required to
expend or risk its own funds or otherwise incur financial or other liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or indemnity satisfactory to it against such risk or liability is
not assured to it, and none of the provisions contained in this Agreement shall
in any event require the Securities Administrator to perform, or be responsible
for the manner of performance of, any of the obligations of any 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
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evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Securities Administrator
may prescribe;
(ii) The Securities Administrator may consult with counsel of
its selection and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) The Securities Administrator shall not be under any
obligation to exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Securities Administrator reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
(iv) The Securities Administrator shall not be personally
liable for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Holders of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable time to the
Securities Administrator of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Securities Administrator not reasonably assured to the Securities Administrator
by such Certificateholders, the Securities Administrator may require reasonable
indemnity satisfactory to it against such expense, or liability from such
Certificateholders as a condition to taking any such action;
(vi) The Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, attorneys or a custodian, and shall not be
responsible for any misconduct or negligence on the part of any agent, nominee,
attorney or custodian appointed by the Securities Administrator in good faith;
(vii) The Securities Administrator shall not be liable for any
loss on any investment of funds pursuant to this Agreement (other than as issuer
of the investment security);
(viii) The Securities Administrator shall not be deemed to
have notice of any Event of Default unless a Responsible Officer of the
Securities Administrator has actual knowledge thereof or unless written notice
of any event which is in fact such a default is received by the 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 any Servicer nor shall
the Securities Administrator be obligated to supervise or monitor the
performance of the Master Servicer, Backup Servicer or any 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;
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(x) The right of the Securities Administrator to perform any
discretionary act enumerated in this Agreement shall not be construed as a duty,
and the Securities Administrator shall not be answerable for other than its
negligence or willful misconduct in the performance of such act; and
(xi) The Depositor and the Seller hereby approve of the
appointment of Deutsche Bank National Trust Company to act as custodian pursuant
to the Custodial Agreement and each further agrees that the Custodian was
appointed to act as custodian with due care.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Securities Administrator, may be enforced by it
without the possession of any of the Certificates, or the production thereof at
the trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Securities Administrator shall be brought in its
name for the benefit of all the Holders of such Certificates, subject to the
provisions of this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, in
no event shall the Securities Administrator be liable to any Person for any act
or omission of the Master Servicer, the Backup Servicer, any 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 any 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 paid by the Master Servicer pursuant to a separate agreement.
In addition, the Securities Administrator and its officers, directors, employees
and agents will be entitled to recover from the Certificate Account, and shall
be indemnified from the Trust Fund for, all reasonable out-of-pocket expenses,
disbursements and advances discussed in this Section 9.18, in an amount not to
exceed $500,000 per year, 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
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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 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 9.19, 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, each Servicer
and the 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
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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 each Servicer.
The Certificate Insurer or Holders of Certificates entitled to at least
51% of the Voting Rights with the consent of the Certificate Insurer may at any
time remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, one complete set to the
Securities Administrator so removed and one complete set to the successor so
appointed. A copy of such instrument shall be delivered to the
Certificateholders, the Securities Administrator and the Master Servicer, the
Backup Servicer and each Servicer by the Depositor.
Any resignation or removal of the Securities Administrator and appointment
of a successor Securities Administrator pursuant to any of the provisions of
this Section 9.20 shall not become effective until acceptance of appointment by
the successor Securities Administrator, as provided in Section 9.21 hereof.
SECTION 9.21. Successor Securities Administrator.
Any successor Securities Administrator appointed as provided in Section
9.20 hereof shall execute, acknowledge and deliver to the Depositor, the Seller,
each Servicer, the Backup Servicer, the Master Servicer, the Certificate Insurer
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, each 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 the Rating
Agency, as evidenced by a letter from the 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 Agency.
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.
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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, each 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 Latest Possible Maturity Date.
Any termination pursuant to clause (a) above shall be effected by SLS
purchasing all Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. Notwithstanding anything to the contrary herein, the
Optional Termination Price paid by SLS shall be deposited by the Securities
Administrator directly into the Certificate Account immediately upon Optional
Termination.
The right of SLS to effect an Optional Termination pursuant to clause (a)
above shall be conditioned upon (i) the consent of the holders of the majority
interest in the Class X Certificates and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans, at the time of any such repurchase, aggregating
ten (10) percent or less of 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. Notwithstanding the foregoing, no termination under this
section will be permitted without the consent of the Certificate Insurer if a
draw on the Certificate Insurance Policy will be made or if any amounts due to
the Certificate Insurer would remain unreimbursed on the final Distribution
Date.
SECTION 10.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Collection Account, the Securities
Administrator shall send a final distribution notice promptly to each
Certificateholder or (ii) the Securities Administrator determines that a Class
of Certificates shall be retired 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 each 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
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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 to be deposited in the Certificate
Account on the Business Day prior to the applicable Distribution Date in an
amount equal to the final distribution in respect of the Certificates. Upon such
final deposit with respect to the Trust Fund, certification to the Trustee that
such required amount has been deposited in the Trust Fund and the receipt by the
Trustee of a Request for Release therefor, the Trustee shall promptly release to
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
and the Certificate Insurer the amounts allocable to such Certificates held in
the Certificate Account in the order and priority set forth in Section 5.05
hereof on the final Distribution Date and in proportion to their respective
Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto. Upon
payment to the Class R Certificateholders of such funds and assets, neither the
Securities Administrator nor the Trustee shall have any further duties or
obligations with respect thereto.
SECTION 10.03. Additional Termination Requirements.
(a) In the event SLS exercises its option to effect an Optional
Termination as provided in Section 10.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee and
the Certificate Insurer have been supplied with an Opinion of Counsel, at the
expense of SLS to the effect that the failure of the Trust Fund to comply with
the requirements of this Section 10.03 will not (i) result in the imposition of
taxes on "prohibited transactions" of any of the REMICs provided for herein as
defined in section 860F of the Code, or (ii) cause any of the REMICs provided
for herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) The Depositor shall establish a 90-day liquidation period
and notify the Trustee and the Securities Administrator thereof, which shall in
turn specify the first day of such period in a statement attached to the final
tax returns of each of the REMICs provided for herein pursuant to Treasury
Regulation Section 1.860F-1. The Depositor shall satisfy all the requirements of
a qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at the expense of
each Servicer;
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(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or cause
to be distributed or credited, to the Class R Certificateholders all cash on
hand (other than cash retained to meet outstanding claims), and the Trust Fund
shall terminate at that time, whereupon neither the Securities Administrator nor
the Trustee shall have any further duties or obligations with respect to sums
distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) 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.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, each Servicer, the Securities Administrator and the Trustee,
without the consent of any of the Certificateholders but with the consent of the
Certificate Insurer to:
(i) cure any ambiguity or correct any mistake,
(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 the 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, each 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
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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,
each Servicer, the Securities Administrator, the Trustee, the Certificate
Insurer and the Holders of the Certificates affected thereby evidencing not less
than 66 2/3% of the Voting Rights for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment without the consent of
the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee or upon the written request of
the Trustee to the Securities Administrator, the Securities Administrator shall
furnish written notification of the substance of such amendment to each
Certificateholder and the Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Securities Administrator may prescribe.
Nothing in this Agreement shall require the Trustee or the Securities
Administrator to enter into an amendment without receiving an Opinion of
Counsel, satisfactory to the Trustee or the Securities Administrator that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
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.
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This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 11.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 11.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
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 Agency 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 each 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
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(vi) Any change in the location of the Certificate Account.
The Securities Administrator shall promptly furnish or make available to
the Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxxx Xxxxx Mortgage Investors, Inc. 000 Xxxxx Xxxxxx, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the 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 hereafter be furnished to the Depositor, the
Master Servicer, the Backup Servicer, the Servicers 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 2004-4HE (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 Servicers 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 Xxxxxxxx
Xxxxxx, 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, any other Servicer and the Trustee in
writing by CMMC; (f) in the case of SLS, 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
SLS; (g) in the case of GreenPoint, GreenPoint Mortgage Funding Inc, 000 Xxxx
Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, 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 GreenPoint;
(h) 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, any Servicer and
the Trustee in writing by the Securities Administrator or the Backup Servicer,
as applicable; (i) 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
Servicers and the Trustee in writing by the Credit Risk Manager; 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 Servicers 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.
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If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Securities Administrator without the prior written consent of the Depositor.
SECTION 11.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
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 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.09. Inspection and Audit Rights.
The Master Servicer and Servicer each agree that, on reasonable prior
notice, it will permit any representative of the Depositor or the Trustee during
the Master Servicer's or Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer or
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be
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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 or 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 10.09 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 each 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, each 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,
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:__________________________________________
GREENPOINT MORTGAGE FUNDING, INC,
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 TRUSTEE CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Financial Security Assurance, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
GreenPoint Mortgage Funding, Inc.
000 Xxxx XxxxxxXxxxx
Xxxxxx, Xxxxxxxxxx 00000
Specialized Loan Servicing, LLC
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx and Xxxxx Xxxxx
JPMorgan Chase Bank
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 September 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"), GreenPoint Mortgage Funding, Inc.,
as servicer ("GreenPoint" or a "Servicer"), Specialized Loan Servicing,
LLC, as servicer ("SLS" or a "Servicer," and together with GreenPoint, the
"Servicers") 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 Trustee, 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;
D-1
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan.
The Trustee 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 Trustee
makes no representations or warranties as to the validity, legality,
recordability, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage Loan or the collectibility, insurability,
effectiveness or suitability of any such Mortgage Loan.
Within 90 days after the end of the Pre-Funding Period, based solely on
the list of MERS Mortgage Loans provided to the Trustee by the Custodian (such
to be provided to the Trustee by the Custodian no later than 45 days from the
end of the Pre-Funding Period), the Trustee shall confirm, on behalf of the
Trust Fund, that the Trust Fund is shown as the beneficial owner of any MERS
Mortgage Loans on the MERS System. If the Trust Fund, or the Trustee on behalf
of the Trust Fund, is not shown as the beneficial owner of any MERS Mortgage
Loans on the MERS System, the Trustee shall promptly notify the Seller and the
Certificate Insurer of such fact
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
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
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
September 27, 2004, and Prospectus, dated June 18, 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
XXXXXXX X-0
FORM OF TRANSFEROR'S AFFIDAVIT
TERWIN MORTGAGE TRUST,
ASSET-BACKED CERTIFICATES, SERIES XXXX 0000-00XX
[DATE]
JPMorgan Chase Bank
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 X CERTIFICATES
[DATE]
JPMorgan Chase Bank
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 X 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 September 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, as securities administrator and backup servicer,
GreenPoint Mortgage Funding, Inc., as 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
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 TMTS
2004-11HE, Class [____] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement dated as of September 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"),
GreenPoint Mortgage Funding, Inc., as servicer ("GreenPoint" or a "Servicer"),
Specialized Loan Servicing, LLC, as servicer ("SLS" or a "Servicer," and
together with GreenPoint, the "Servicers") 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 TO REGISTRATION UNDER THE ACT,
THE 1940 ACT AND ANY APPLICABLE STATE
G-1
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 X CERTIFICATES ONLY]
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRANSFEREE
PROVIDES 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 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
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 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 SECURITIES ADMINISTRATOR WITH A REPRESENTATION THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") OR A PLAN SUBJECT TO ANY PROVISIONS UNDER
ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN.
G-2
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 X 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
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 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.
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, each 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
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 TMTS
2004-11HE, Class [_____] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement dated as of September 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"),
GreenPoint Mortgage Funding, Inc., as servicer ("GreenPoint" or a "Servicer"),
Specialized Loan Servicing, LLC, as servicer ("SLS" or a "Servicer," and
together with GreenPoint, the "Servicers") 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) we (i) (in the case of a
Class X or Class R Certificate) 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
Certificate for, on behalf of or with any assets of any such Plan, (ii)
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(in the case of a Class X Certificate) if the Certificate has been the subject
of an ERISA-Qualifying Underwriting, are an insurance company that is acquiring
the Certificate with assets of an "insurance company general account" as defined
in Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60 and the
acquisition and holding of the Certificate is covered and exempt under Sections
I and III of PTCE 95-60, or (iii) (in the case of a Class X Certificate) solely
in the case of a Definitive Certificate, shall deliver herewith an Opinion of
Counsel satisfactory to 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 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 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, each Servicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:______________________________
Name:
Title:
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ANNEX 1
QUALIFIED INSTITUTIONAL 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:____________________________
H-5
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
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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: U.S. Bank National Association
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement dated as of September 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"), GreenPoint Mortgage Funding, Inc.,
as servicer ("GreenPoint" or a "Servicer"), Specialized Loan Servicing, LLC,
as servicer ("SLS" or a "Servicer," and together with GreenPoint, the
"Servicers") and U.S. Bank National Association, as trustee (the "Trustee"),
relating to Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS
2004-11HE
In connection with the administration of the Mortgage Loans held by you,
as Custodian, pursuant to the above-captioned Pooling and Servicing Agreement,
we request the release, and hereby acknowledge receipt, of the Mortgage File for
the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation
_______ 6. Other Reason: __________________________
Address to which the Trustee should deliver the Mortgage File:
By:_______________________________
(authorized signer)
Address:__________________________
I-1
Date:_____________________________
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
U.S. Bank National Association, as Trustee
By:_________________________________ _________________________________
Signature Date
Documents returned to Trustee:
By:_________________________________ _________________________________
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement dated as of September 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"), GreenPoint Mortgage Funding, Inc.,
as servicer ("GreenPoint" or a "Servicer"), Specialized Loan Servicing, LLC,
as servicer ("SLS" or a "Servicer," and together with GreenPoint, the
"Servicers") 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,
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
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 September 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"), GreenPoint Mortgage Funding, Inc.,
as servicer ("GreenPoint" or a "Servicer"), Specialized Loan Servicing, LLC,
as servicer ("SLS" or a "Servicer," and together with GreenPoint, the
"Servicers") 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 applicable 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 applicable 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 applicable 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
applicable 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 applicable Servicer], [Name of the applicable 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 APPLICABLE 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 September 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,
as securities administrator and backup servicer, GreenPoint Mortgage Funding,
Inc., as 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.
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(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the [Servicer]
at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. Governing Law.
This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. Counterparts.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
Section 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
M-2
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.
By:
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee for Terwin Mortgage Trust,
Asset-Backed Certificates, Series TMTS
2004-11HE
By:
Name:
Title:
Acknowledged and Agreed:
FINANCIAL SECURITY ASSURANCE, INC.
By:
Name:
Title:
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Attachments
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
M-4
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: ___________ 1, 2004
2. Subsequent Transfer Date: ____________, 2004
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 December 24, 2004; (vii) the
Subsequent Mortgage Loan shall be underwritten in accordance with the criteria
set forth under the section "Underwriting Guidelines--The Winter Group
Underwriting Guidelines" in the Prospectus Supplement, (viii) as of both the
Subsequent Cut-off Date and Subsequent Transfer Date for such Subsequent
Mortgage Loan, the Subsequent Mortgage Loan must provide for monthly interest
payments which are due on the first day of each calendar month, (ix) as of the
Subsequent Transfer Date for such Subsequent Mortgage Loan, the Subsequent
Mortgage Loan must be a "qualified mortgage" within the meaning of Section 860G
of the Code and Treasury Regulations Section 1.860G-2 (as determined without
regard to Treasury Regulations Section 1.860G-2(a)(3) or any similar provision
that treats a defective obligation as a qualified mortgage for a temporary
period), (x) as of the Subsequent Transfer Date for such Subsequent Mortgage
Loan, the Subsequent Mortgage Loan does not provide for interest other than at
either (a) a single fixed rate in effect throughout the term of the Subsequent
Mortgage Loan or (b) a "variable rate" (within the meaning of Treasury
Regulations Section 1.860G-1(a)(3)) in effect throughout the term of the
Subsequent Mortgage Loan, (xi) as of the Subsequent Transfer Date for such
Subsequent Mortgage Loan, the Depositor would not, based on the delinquency
status of such Subsequent Mortgage Loan, institute foreclosure proceedings prior
to the next scheduled payment date for such Subsequent Mortgage Loan and (xii)
as of the Subsequent Transfer Date for such Subsequent Mortgage Loan, the
Subsequent Mortgage Loan was not the subject of pending or final foreclosure
proceedings.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the related Subsequent Mortgage Loans) will
as of the Subsequent Cut-off Date not be materially inconsistent with the
Initial Mortgage Loans. Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by either Rating Agency if the inclusion of such Subsequent
Mortgage Loan would adversely affect the ratings on any class of Offered
Certificates.
M-5
Very truly yours,
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.
By:
Name:
Title:
Acknowledged and Agreed:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as Trustee
By:
Name:
Title:
FINANCIAL SECURITY ASSURANCES, INC.
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
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Specialized Loan Servicing, LLC
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: [______________]
JPMorgan Chase Bank
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 September 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"), GreenPoint Mortgage Funding, Inc.,
as servicer ("GreenPoint" or a "Servicer"), Specialized Loan Servicing, LLC,
as servicer ("SLS" or a "Servicer," and together with GreenPoint, the
"Servicers") and U.S. Bank National Association, as trustee (the "Trustee")
relating to Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS
2004-11HE
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 the 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
FORM OF CAP CONTRACT
[INTENTIONALLY OMITTED]
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EXHIBIT P
OFFICER'S CERTIFICATE OF MASTER SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank
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 September 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"), GreenPoint Mortgage Funding, Inc.,
as servicer ("GreenPoint" or a "Servicer"), Specialized Loan Servicing, LLC,
as servicer ("SLS" or a "Servicer," and together with GreenPoint, the
"Servicers") 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
5. In compiling the information and making the foregoing certifications, the
Master Servicer has relied upon information furnished to it by the servicers
under the Agreements. The Master Servicer shall
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have no responsibility or liability for any inaccuracy in such reports
resulting from information so provided by the servicers.
Date:
Chase Manhattan Mortgage Corporation,
as Master Servicer
_____________________________________
Authorized Signature
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EXHIBIT Q
FORM OF CUSTODIAL AGREEMENT
[INTENTIONALLY OMITTED]
Q-1
EXHIBIT R
FORM OF SERVICER REPORT
[INTENTIONALLY OMITTED]
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