EXHIBIT 99.1
EXECUTION
SEQUOIA RESIDENTIAL FUNDING, INC.
Depositor
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2005
SEQUOIA MORTGAGE TRUST 2005-1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................................................... 7
Section 1.01. Definitions................................................................................ 7
Section 1.02. Calculations Respecting Mortgage Loans..................................................... 39
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES....................................................... 40
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans....................... 40
Section 2.02. Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund................ 43
Section 2.03. Representations and Warranties of the Depositor............................................ 44
Section 2.04. Discovery of Breach; Repurchase or Substitution of Mortgage Loans.......................... 46
Section 2.05. [Reserved]................................................................................. 48
Section 2.06. Grant Clause............................................................................... 48
ARTICLE III THE CERTIFICATES.................................................................................... 49
Section 3.01. The Certificates........................................................................... 49
Section 3.02. Registration............................................................................... 50
Section 3.03. Transfer and Exchange of Certificates...................................................... 50
Section 3.04. Cancellation of Certificates............................................................... 54
Section 3.05. Replacement of Certificates................................................................ 54
Section 3.06. Persons Deemed Owners...................................................................... 55
Section 3.07. Temporary Certificates..................................................................... 55
Section 3.08. Appointment of Paying Agent................................................................ 55
Section 3.09. Book-Entry Certificates.................................................................... 56
ARTICLE IV ADMINISTRATION OF THE TRUST FUND..................................................................... 57
Section 4.01. Custodial Accounts; Distribution Account................................................... 57
Section 4.02 [Reserved]................................................................................. 59
Section 4.03 [Reserved]................................................................................. 59
Section 4.04. Reports to Trustee and Certificateholders.................................................. 59
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES.............................................................. 61
Section 5.01. Distributions Generally.................................................................... 61
Section 5.02. Distributions from the Distribution Account................................................ 62
Section 5.03. Allocation of Losses....................................................................... 66
Section 5.04. Advances by Master Servicer................................................................ 66
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Section 5.05. Compensating Interest Payments.............................................................. 67
Section 5.06. Reserve Fund................................................................................ 67
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR; EVENTS OF DEFAULT........................................................................... 68
Section 6.01. Duties of Trustee and the Securities Administrator.......................................... 68
Section 6.02. Certain Matters Affecting the Trustee and the Securities Administrator...................... 71
Section 6.03. Trustee and Securities Administrator Not Liable for Certificates............................ 73
Section 6.04. Trustee and the Securities Administrator May Own Certificates............................... 73
Section 6.05. Eligibility Requirements for Trustee and Securities Administrator........................... 74
Section 6.06. Resignation and Removal of Trustee and the Securities Administrator......................... 74
Section 6.07. Successor Trustee and Successor Securities Administrator.................................... 75
Section 6.08. Merger or Consolidation of Trustee or the Securities Administrator.......................... 76
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.................................... 76
Section 6.10. Authenticating Agents....................................................................... 78
Section 6.11. Indemnification of the Trustee and the Securities Administrator............................. 79
Section 6.12. Fees and Expenses of Securities Administrator and the Trustee............................... 79
Section 6.13. Collection of Monies........................................................................ 80
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor................................. 80
Section 6.15. Additional Remedies of Trustee Upon Event of Default........................................ 83
Section 6.16. Waiver of Defaults.......................................................................... 84
Section 6.17. Notification to Holders..................................................................... 84
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default.............. 84
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default............... 85
Section 6.20. Preparation of Tax Returns and Other Reports................................................ 85
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND......................................... 87
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All
Mortgage Loans.............................................................................. 87
Section 7.02. Procedure Upon Termination of Trust Fund.................................................... 88
Section 7.03. Additional Trust Fund Termination Requirements.............................................. 88
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS........................................................................ 89
Section 8.01. Limitation on Rights of Holders............................................................. 89
Section 8.02. Access to List of Holders................................................................... 90
Section 8.03. Acts of Holders of Certificates............................................................. 91
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ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS BY THE MASTER SERVICER............................................................................... 92
Section 9.01. Duties of the Master Servicer; Enforcement of Servicer's and Master Servicer's Obligations.. 92
Section 9.02 Assumption of Master Servicing by Trustee................................................... 95
Section 9.03. Representations and Warranties of the Master Servicer....................................... 95
Section 9.04. Compensation to the Master Servicer......................................................... 97
Section 9.05. Merger or Consolidation..................................................................... 98
Section 9.06. Resignation of Master Servicer.............................................................. 98
Section 9.07. Assignment or Delegation of Duties by the Master Servicer................................... 98
Section 9.08. Limitation on Liability of the Master Servicer and Others................................... 99
Section 9.09. Indemnification; Third-Party Claims......................................................... 99
Section 9.10. Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance Policy..... 100
ARTICLE X REMIC ADMINISTRATION................................................................................... 100
Section 10.01. REMIC Administration........................................................................ 100
Section 10.02. Prohibited Transactions and Activities...................................................... 102
Section 10.03. Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status............. 103
Section 10.04. REO Property................................................................................ 103
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................. 104
Section 11.01. Binding Nature of Agreement; Assignment..................................................... 104
Section 11.02. Entire Agreement............................................................................ 104
Section 11.03. Amendment................................................................................... 104
Section 11.04. Voting Rights............................................................................... 105
Section 11.05. Provision of Information.................................................................... 106
Section 11.06. Governing Law............................................................................... 106
Section 11.07. Notices..................................................................................... 106
Section 11.08. Severability of Provisions.................................................................. 107
Section 11.09. Indulgences; No Waivers..................................................................... 107
Section 11.10. Headings Not To Affect Interpretation....................................................... 107
Section 11.11. Benefits of Agreement....................................................................... 107
Section 11.12. Special Notices to the Rating Agencies...................................................... 108
Section 11.13. Conflicts................................................................................... 109
Section 11.14. Counterparts................................................................................ 109
Section 11.15 No Petitions................................................................................ 109
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ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D Form of Custody Agreements
Exhibit E List of Servicing Agreements
Exhibit F List of Purchase Agreements
Exhibit G List of Limited Purpose Surety Bonds
Exhibit H Form of Rule 144A Transfer Certificate
Exhibit I Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit J Form of ERISA Transfer Affidavit
Exhibit K Form of Letter of Representations with the Depository Trust Company
Exhibit L [Reserved]
Exhibit M Form of Certification to be Provided to the Depositor by the
Securities Administrator
Schedule A Mortgage Loan Schedule
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This POOLING AND SERVICING AGREEMENT, dated as of January 1, 2005 (the
"Agreement"), by and among SEQUOIA RESIDENTIAL FUNDING, INC., a Delaware
corporation, as depositor (the "Depositor"), HSBC Bank USA, National
Association, a national banking association, as trustee (the "Trustee"), and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, in its dual capacities as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator") and acknowledged by RWT HOLDINGS, INC., a Delaware corporation,
as seller (the "Seller"), for purposes of Section 2.04.
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Seller and at the
Closing Date is the owner of the Mortgage Loans and the other property being
conveyed by the Depositor to the Trustee hereunder for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Trustee as consideration for the Depositor's transfer to the Trust Fund of the
Mortgage Loans, and the other property constituting the Trust Fund. The
Depositor has duly authorized the execution and delivery of this Agreement to
provide for the conveyance to the Trustee of the Mortgage Loans and the other
property constituting the Trust Fund. All covenants and agreements made by the
Seller in the Mortgage Loan Purchase and Sale Agreement and in this Agreement
and by the Depositor, the Master Servicer, the Securities Administrator and the
Trustee herein, with respect to the Mortgage Loans and the other property
constituting the Trust Fund, are for the benefit of the Holders from time to
time of the Certificates. The Depositor, the Trustee, the Master Servicer and
the Securities Administrator are entering into this Agreement, and the Trustee
is accepting the Trust Fund created hereby, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund (exclusive
of the Additional Collateral and the assets deposited in the Reserve Fund) be
treated for federal income tax purposes as comprising three real estate mortgage
investment conduits (each, a "REMIC" or, in the alternative, the "Lower-Tier
REMIC," the "Middle-Tier REMIC," and the "Upper-Tier REMIC," respectively). Each
Certificate, other than the Class A-R Certificate and the Class LT-R
Certificate, is hereby designated as a regular interest in the Upper-Tier REMIC,
as described herein. In addition, each of the LIBOR Certificates represents the
right to receive payments in respect of Net WAC Shortfalls from the related Sub
Account of the Reserve Fund as provided in Section 5.02 and Section 5.06. The
owners of the Interest-Only Certificates beneficially own the Sub Accounts that
compose the Reserve Fund. The Class A-R Certificate is hereby designated as the
sole class of residual interest in the Upper-Tier REMIC. The Class A-R
Certificate also evidences ownership of the sole class of residual interest in
the Middle-Tier REMIC (the "MT-R Interest").
The Class LT-R Certificate evidences ownership of the sole class of
residual interest in the Lower-Tier REMIC (the "LT-R Interest"). The Lower-Tier
REMIC shall hold as its assets all property of the Trust Fund other than the
Additional Collateral, the assets held in the Reserve Fund, and the interests in
any REMIC formed hereby. Each Lower-Tier Interest other than the LT-R Interest
is hereby designated as a regular interest in the Lower-Tier REMIC and the LT-R
Interest is hereby designated as the sole Class of residual interest in the
Lower-Tier REMIC. The Middle-Tier REMIC shall hold as its assets the Lower-Tier
Interests other than the LT-R Interest. Each Middle-Tier Interest other than the
MT-R Interest is hereby designated as a
regular interest in the Middle-Tier REMIC and the MT-R Interest is hereby
designated as the sole class of residual interest in the Middle-Tier REMIC. The
Upper-Tier REMIC shall hold as its assets the Middle-Tier Interests other than
the MT-R Interest.
THE LOWER-TIER REMIC INTERESTS
The following table sets forth (or describes) the Class designation,
interest rate, and initial Class Principal Amount for each Class of Lower-Tier
Interests:
Lower-Tier Corresponding Pool or
REMIC Interest Initial Class Corresponding Class of
Designation Interest Rate Principal Amount Certificates
----------- ------------- ---------------- ----------------------
LT-Pool 1 (1) $ 311,152,607.92 1
XX-Xxxx 0 XXX (1) $ 132,298.06 1
LT-Pool 2 (2) $ 104,394,350.67 2
XX-Xxxx 0 XXX (2) $ 44,387.38 2
LT-R (3) (3) Class LT-R
----------
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these Lower-Tier Interests will be a per annum
rate equal to the Pool 1 Net WAC.
(2) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these Lower-Tier Interests will be a per annum
rate equal to the Pool 2 Net WAC.
(3) The LT-R Interest is the sole class of residual interest in the Lower-Tier
REMIC. It does not have a principal balance and does not bear interest.
On each Distribution Date, the Available Distribution Amount distributable
as interest shall be distributed as interest with respect to the Lower-Tier
Interests based on the interest rates described above. On each Distribution
Date, Interest Shortfalls shall be allocated among the related Lower-Tier
Interests based on the relative amounts of interest otherwise accrued for the
related Accrual Period on each such Lower-Tier Interest.
On each Distribution Date, the remaining Available Distribution Amount
shall be distributed as principal on the Lower-Tier Interests as follows:
(1) first, from the remaining Available Distribution Amount for Pool 1,
to the LT-Pool 1 PSA Interest until its principal balance equals one
percent of the Pool Subordinate Amount for Pool 1 after such
Distribution Date;
(2) second, from the remaining Available Distribution Amount for Pool 2,
to the LT-Pool 2 PSA Interest until its principal balance equals one
percent of the Pool Subordinate Amount for Pool 2 after such
Distribution Date;
(3) third, to the LT-Pool 1 PSA or LT-Pool 2 PSA Interest, from the
remaining Available Distribution Amount, the minimum amount
necessary to cause the ratio of the principal balance of such
Lower-Tier REMIC Interest to the principal balances of the
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other such Lower-Tier REMIC Interest to equal the ratio of the Pool
Subordinate Amount related to such interest to the Pool Subordinate
Amount related to the other Lower-Tier REMIC Interest immediately
after such Distribution Date;
(4) fourth, from the remaining Available Distribution Amount for Pool 1,
to the LT-Pool 1 Interest, until its balance is reduced to zero;
(5) fifth, from the remaining Available Distribution Amount for Pool 2,
to the LT-Pool 2 Interest, until its balance is reduced to zero; and
(6) finally, to the Class LT-R Interest, any remaining amounts.
THE MIDDLE-TIER REMIC INTERESTS
The following table sets forth (or describes) the Class designation,
interest rate, and initial Class Principal Amount for each Class of Middle-Tier
Interests:
Middle-Tier
REMIC Interest Initial Class Corresponding Class of
Designation Interest Rate Principal Amount Certificate(s)
----------- ------------- ---------------- ----------------------
MT-A1 (1) $ 298,055,100.00 A-1, A-R, X-A
MT-A2 (2) $ 100,000,000.00 A-2, X-A
MT-B1 (3) $ 7,067,000.00 B-1, X-B
MT-B2 (3) $ 3,949,000.00 B-2, X-B
MT-B3 (3) $ 2,495,000.00 B-3, X-B
MT-B4 (3) $ 1,455,000.00 B-4
MT-B5 (3) $ 831,000.00 B-5
MT-B6 (3) $ 1,871,544.03 B-6
MT-R (4) (4) MT-R
----------
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this Middle-Tier Interest will be a per annum rate
equal to the Pool 1 Net WAC, which represents, for purposes of the REMIC
Provisions, the weighted average of the interest rates on the LT-Pool 1
Interest and LT-Pool 1 PSA Interest.
(2) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for this Middle-Tier Interest will be a per annum rate
equal to the Pool 2 Net WAC, which represents, for purposes of the REMIC
Provisions, the weighted average of the interest rates on the LT-Pool 2
Interest and LT-Pool 2 PSA Interest.
(3) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these Middle-Tier Interests will be a per
annum rate equal to the weighted average of the interest rates payable on
the LT-Pool 1 PSA and LT-Pool 2 PSA Lower-Tier Interests, weighted by the
respective Class Principal Amounts of each such Lower-Tier Interest.
(4) The MT-R Interest is the sole class of residual interest in the
Middle-Tier REMIC. It does not have a principal balance and does not bear
interest.
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On each Distribution Date, the Available Distribution Amount distributable
with respect to the Lower-Tier Interests as interest shall be distributed as
interest with respect to the Middle-Tier Interests based on the interest rates
described above. On each Distribution Date, Interest Shortfalls shall be
allocated among the related Middle-Tier Interests based on the relative amounts
of interest otherwise accrued for the related Accrual Period on each such
Middle-Tier Interest.
On each Distribution Date, the remaining Available Distribution Amount
distributable to the Lower-Tier Interests as principal shall be distributed to
the Middle-Tier Interests as follows:
(i) first, from the Available Distribution Amount related to
the LT-Pool 1 and LT-Pool 1 PSA Lower-Tier Interests, to
the MT-A Interest until its Class Principal Amount
equals the Class Principal Amount of the Class A-1
Certificates;
(ii) second, from the Available Distribution Amount related
to the LT-Pool 2 and LT-Pool 2 PSA Lower Tier Interests,
to the MT-A2 Middle Tier Interest until its Class
Principal Amount equals the Class Principal Amount of
the Class A-2 Certificates;
(iii) third, to the MT-B1 Interest until its Class Principal
Amount equals the Class Principal Amount of the Class
B-1 Certificate;
(iv) fourth, to the MT-B2 Interest until its Class Principal
Amount equals the Class Principal Amount of the Class
B-2 Certificate;
(v) fifth, to the MT-B3 Interest until its Class Principal
Amount equals the Class Principal Amount of the Class
B-3 Certificate;
(vi) sixth, to the MT-B4 Interest until its Class Principal
Amount equals the Class Principal Amount of the Class
B-4 Certificate;
(vii) seventh, to the MT-B5 Interest until its Class Principal
Amount equals the Class Principal Amount of the Class
B-5 Certificate;
(viii) eighth, to the MT-B6 Interest until its Class Principal
Amount equals the Class Principal Amount of the Class
B-6 Certificate; and
(ix) finally, to the MT-R Interest, any remaining amounts.
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THE CERTIFICATES AND THE UPPER-TIER REMIC
The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount (or initial Class
Notional Amount), and minimum denomination for each Class of Certificates
comprising interests in the Trust Fund created hereunder.
INITIAL CLASS
CLASS PRINCIPAL
AMOUNT MINIMUM
CERTIFICATE OR CLASS NOTIONAL DENOMINATIONS OR
CLASS DESIGNATION INTEREST RATE AMOUNT PERCENTAGE INTEREST
----------------- ------------- ---------------- -------------------
Class A-1 (1) $ 298,055,000.00 $ 25,000.00
Class A-2 (2) $ 100,000,000.00 $ 25,000.00
Class X-A (3) (4) 100%
Class X-B (5) (6) 100%
Class B-1 (7) $ 7,067,000.00 $ 25,000.00
Class B-2 (8) $ 3,949,000.00 $ 25,000.00
Class B-3 (9) $ 2,495,000.00 $ 25,000.00
Class B-4 (10) $ 1,455,000.00 $100,000.00
Class B-5 (10) $ 831,000.00 $100,000.00
Class B-6 (10) $ 1,871,544.03 $100,000.00
Class A-R (11) $ 100.00 100%
Class LT-R (12) (12) 100%
(1) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A-1 Certificates is the per
annum rate equal to the least of (i) One-Month LIBOR plus 0.230%, (ii) the
Pool 1 Net WAC and (iii) 11.500%; provided, however, if a Non-Redemption
Event occurs, then the per annum rate calculated pursuant to clause (i)
above with respect to the Class A-1 Certificates will be One-Month LIBOR
plus 0.460% for all Distribution Dates thereafter, commencing with the
Distribution Date immediately following such Non-Redemption Event.
(2) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A-2 Certificates is the per
annum rate equal to the least of (i) Six-Month LIBOR plus 0.250%, (ii) the
Pool 2 Net WAC and (iii) 11.500%; provided, however, if a Non-Redemption
Event occurs, then the per annum rate calculated pursuant to clause (i)
above with respect to the Class A-2 Certificates will be Six-Month LIBOR
plus 0.500% for all Distribution Dates thereafter, commencing with the
Distribution Date immediately following such Non-Redemption Event.
(3) The Class X-A Certificate consists of two Components: the Pool 1 Component
and the Pool 2 Component. The Pool 1 Component will bear interest at the
Pool 1 Component Interest Rate, and the Pool 2 Component will bear
interest at the Pool 2 Component Interest Rate. The Holder of the Class
X-A Certificate may not transfer the related Components separately. For
purposes of the REMIC Provisions, interest payable on the Class X-A
Certificates represents the sum of two specified portions, consisting of:
(i) the Pool 1 Component, which equals the excess, if any, of (A) interest
accrued on the MT-A1 Middle Tier Interest over (B) interest accrued on the
MT-A1 Middle Tier Interest computed by assuming the rate payable on such
Middle-Tier Interest is subject to a cap equal to the rate at which
interest accrues on the Class A-1 Certificates, and the Pool 2 Component,
which equals the excess, if any, of (A) interest (ii) accrued on the MT-A2
Middle Tier Interest over (B) interest accrued on the MT-A2 Middle Tier
Interest computed by assuming the rate payable on such Middle-Tier
Interest is subject to a cap equal to the rate at which interest accrues
on the Class A-2 Certificates, for the related Accrual Period (in each
case,
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multiplied by a fraction, the numerator of which is 23 and the denominator
of which is 30, for the first Distribution Date only).
(4) The Class X-A Certificate is an interest only Class and for any
Distribution Date shall have a Class Notional Amount equal to the sum of
(i) the Pool 1 Component Notional Amount and (ii) the Pool 2 Component
Notional Amount for such Distribution Date. The initial Class Notional
Amount of the Class X-A Certificates is $398,055,000. The Holder of the
Class X-A Certificate may not transfer the related Components separately.
(5) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class X-B Certificates will be equal
to the excess of the Subordinate Net WAC over the weighted average of the
Certificate Interest Rates on the Class B-1, Class B-2 and Class B-3
Certificates (multiplied by a fraction, the numerator of which is 23 and
the denominator of which is 30 for the first Distribution Date only). For
purposes of the REMIC Provisions, (i) Subordinate Net WAC represents a per
annum rate equal to the weighted average of the interest rates paid on the
MT-B1, MT-B2, MT-B3, MT-B4, MT-B5 and MT-B6 Middle-Tier Interests and (ii)
the weighted average of the Certificate Interest Rates on the Class B-1,
Class B-2 and Class B-3 Certificates for any Distribution Date is intended
to represent the weighted average of the interest rates payable on the
MT-B1, MT-B2 and MT-B3 Middle-Tier Interests, subject to a funds available
cap computed by subjecting the rate payable on the MT-B1 Middle-Tier
Interest to a cap equal to the rate payable on the Class B-1 Certificates,
the rate payable on the MT-B2 Middle-Tier Interest to a cap equal to the
rate payable on the Class B-2 Certificates, and the rate payable on the
MT-B3 Middle-Tier Interest to a cap equal to the rate payable on the Class
B-3 Certificates.
(6) The Class X-B Certificate is an interest only Certificate and for any
Distribution Date the Class Notional Amount of the Class X-B Certificates
is equal to the aggregate of the Class Principal Amounts of the Class B-1,
Class B-2 and Class B-3 Certificates immediately before such Distribution
Date. The initial Class Notional Amount of the Class X-B Certificates is
$13,511,000.
(7) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B-1 Certificates is the per
annum rate equal to the least of (i) One-Month LIBOR plus 0.420%, (ii) the
Subordinate Net WAC and (iii) 11.500%; provided, however, if a
Non-Redemption Event occurs, then the per annum rate calculated pursuant
to clause (i) above with respect to the Class B-1 Certificates will be
One-Month LIBOR plus 0.630% for all Distribution Dates thereafter,
commencing with the Distribution Date immediately following such
Non-Redemption Event.
(8) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B-2 Certificates is the per
annum rate equal to the least of (i) One-Month LIBOR plus 0.700%, (ii) the
Subordinate Net WAC and (iii) 11.500%; provided, however, if a
Non-Redemption Event occurs, then the per annum rate calculated pursuant
to clause (i) above with respect to the Class B-2 Certificates will be
One-Month LIBOR plus 1.050% for all Distribution Dates thereafter,
commencing with the Distribution Date immediately following such
Non-Redemption Event.
(9) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B-3 Certificates is the per
annum rate equal to the least of (i) One-Month LIBOR plus 1.250%, (ii) the
Subordinate Net WAC and (iii) 11.500%; provided, however, if a
Non-Redemption Event occurs, then the per annum rate calculated pursuant
to clause (i) above with respect to the Class B-3 Certificates will be
One-Month LIBOR plus 1.875% for all Distribution Dates thereafter,
commencing with the Distribution Date immediately following such
Non-Redemption Event.
(10) The Certificate Interest Rates with respect to any Distribution Date (and
the related Accrual Period) for the Class B-4, Class B-5 and Class B-6
Certificates will equal the Subordinate Net WAC, which is a per annum rate
equal to the weighted average of the interest rates paid on the MT-B1,
MT-B2, MT-B3, MT-B4, MT-B5 and MT-B6 Middle-Tier Interests.
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(11) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A-R Certificates will equal the
Pool 1 Net WAC.
(12) The Class LT-R Certificate does not have a Class Principal Amount or a
Certificate Interest Rate.
As of the Cut-off Date, the Mortgage Loans had an Aggregate Stated
Principal Balance of $415,723,644.03.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator and the Trustee hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accountant: A Person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accrual Period: With respect to any Distribution Date and any Class of
LIBOR Certificates, the period commencing on the 20th day of the month preceding
the month in which the Distribution Date occurs and ending on the 19th day of
the month in which the Distribution Date occurs; provided, however, that the
first Accrual Period with respect to the LIBOR Certificates shall be the period
beginning on the Closing Date and ending on January 19, 2005. The Accrual Period
applicable to the remaining Classes of Certificates and to each Lower-Tier
Interest and Middle-Tier Interest is the calendar month preceding the month in
which the Distribution Date occurs. Interest shall accrue on all Classes of
Certificates and on all Lower-Tier Interests on the basis of a 360-day year
consisting of twelve 30-day months, except that for the first Accrual Period
only, interest shall accrue on each Class of LIBOR Certificates on the basis of
a 23-day Accrual Period and a year assumed to consist of 360 days.
Acknowledgements: The Assignment, Assumption and Recognition Agreements,
each dated January 27, 2005, assigning rights under the Purchase Agreements and
the Servicing Agreements from the Seller to the Depositor and from the Depositor
to the Trustee, for the benefit of the Certificateholders.
Act: The Securities Act of 1933, as amended.
Additional Collateral: With respect to any Additional Collateral Mortgage
Loan, the marketable securities and other acceptable collateral pledged as
collateral pursuant to the related pledge agreements.
Additional Collateral Mortgage Loan: Each Mortgage Loan identified as such
in the Mortgage Loan Schedule.
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Adjustment Date: As to any Mortgage Loan, the date on which the related
Mortgage Rate adjusts in accordance with the terms of the related Mortgage Note.
Advance: With respect to a Mortgage Loan, the payments required to be made
by the Master Servicer or the applicable Servicer with respect to any
Distribution Date pursuant to this Agreement or the Servicing Agreements, as
applicable, the amount of any such payment being equal to the aggregate of the
payments of principal and interest (net of the Master Servicing Fee and/or the
applicable Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer or the
Servicers have determined would constitute Nonrecoverable Advances if advanced.
Adverse REMIC Event: Either (i) loss of status as a REMIC, within the
meaning of Section 860D of the Code, for any group of assets identified as a
REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of any
tax, including the tax imposed under Section 860F(a)(1) on prohibited
transactions, and the tax imposed under Section 860G(d) on certain contributions
to a REMIC, on any REMIC created hereunder to the extent such tax would be
payable from assets held as part of the Trust Fund.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of the
Master Servicing Fee Rate, the applicable Servicing Fee Rate and the rate of any
lender-paid Primary Mortgage Insurance Policy.
Aggregate Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the aggregate of the Class
Principal Amounts of the Class A-1, Class A-R and Class A-2 Certificates and the
denominator of which is the Aggregate Stated Principal Balance for such date,
but in no event greater than 100%.
Aggregate Subordinate Percentage: As to any Distribution Date, the
difference between 100% and the Aggregate Senior Percentage for such
Distribution Date, but in no event less than zero.
Aggregate Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances for all Mortgage Loans (and when such
term is used with respect to a particular Mortgage Pool, the aggregate of the
Stated Principal Balances of the Mortgage Loans in such Mortgage Pool) which
were outstanding on the Due Date in the month preceding the month of such
Distribution Date.
8
Aggregate Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
Agreement: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
Applicable Credit Support Percentage: As to any Class of Subordinate
Certificates and any Distribution Date, the sum of the Class Percentages of all
Classes of Certificates that rank lower in priority than such Class.
Apportioned Principal Balance: As to any Distribution and each Class of
Subordinate Certificates, the Class Principal Amount thereof multiplied by a
fraction, the numerator of which is the applicable Pool Subordinate Amount
(i.e., the Pool 1 Subordinate Amount or the Pool 2 Subordinate Amount, as the
case may require), and the denominator of which is the sum of the Pool
Subordinate Amounts, in each case, on such date.
Appraised Value: With respect to any Mortgage Loan, the Appraised Value of
the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made at the time of the origination of such Refinancing Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall not
be responsible for determining whether any such assignment is in recordable
form.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10 until any successor authenticating agent for the
Certificates is named, and thereafter "Authenticating Agent" shall mean any such
successor. The initial Authenticating Agent shall be the Securities
Administrator under this Agreement.
Authorized Officer: Any Person who may execute an Officer's Certificate on
behalf of the Depositor.
Available Distribution Amount: With respect to any Distribution Date and
each Mortgage Pool, the total amount of all cash, including the Clean-Up Call
Price (if applicable) received by the Master Servicer on the Mortgage Loans in
such Mortgage Pool from each Servicer or otherwise through the Distribution
Account Deposit Date for deposit into the Distribution Account in respect of
such Distribution Date, including (1) all scheduled installments of interest
(net of the related Servicing Fees and Master Servicing Fees) and
9
principal collected on the related Mortgage Loans and due during the Due Period
related to such Distribution Date, together with any Advances in respect
thereof, (2) all Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and the proceeds of any Additional Collateral from the related Mortgage Loans,
in each case for such Distribution Date, (3) all partial or full Principal
Prepayments, together with any accrued interest thereon, identified as having
been received from the related Mortgage Loans during the related Prepayment
Period, (4) any amounts paid by the Master Servicer and/or received from the
Servicers in respect of Prepayment Interest Shortfalls with respect to the
related Mortgage Loans; and (5) the aggregate Purchase Price of all Defective
Mortgage Loans in such Mortgage Pool purchased from the Trust Fund during the
related Prepayment Period, minus:
(A) an amount equal to the product of (a) the applicable Pool
Percentage and (b) the sum of (i) all related fees, charges and
other amounts (other than the Master Servicing Fees) payable or
reimbursable to the Master Servicer, the Securities Administrator
and the Trustee under this Agreement (subject to an aggregate
maximum amount of $300,000 annually to be paid to such parties
collectively, whether from collections from Pool 1 or Pool 2) and
(ii) all charges and other amounts payable to the Servicers under
the Servicing Agreements;
(B) in the case of (2), (3), (4) and (5) above, any related
unreimbursed expenses incurred by the related Servicers in
connection with a liquidation or foreclosure and any unreimbursed
Advances or Servicing Advances due to the Master Servicer or the
related Servicers;
(C) any related unreimbursed Nonrecoverable Advances due to the
Master Servicer or the Servicers; and
(D) in the case of (1) through (4) above, any related amounts
collected which are determined to be attributable to a subsequent
Due Period or Prepayment Period.
Bankruptcy: As to any Person, the making of an assignment for the benefit
of creditors, the filing of a voluntary petition in bankruptcy, adjudication as
a bankrupt or insolvent, the entry of an order for relief in a bankruptcy or
insolvency proceeding, the seeking of reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief, or seeking, consenting
to or acquiescing in the appointment of a trustee, receiver or liquidator,
dissolution, or termination, as the case may be, of such Person pursuant to the
provisions of either the Bankruptcy Code or any other similar state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
BBA: The British Banker's Association.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Trustee
and Certificate Registrar to the effect that any proposed transfer will not (i)
cause the assets of the Trust Fund to
10
be regarded as plan assets for purposes of the Plan Asset Regulations or (ii)
give rise to any fiduciary duty on the part of the Depositor or the Trustee.
Book-Entry Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of which
shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a Book-Entry
Termination whereupon book-entry registration and transfer are no longer
permitted and Definitive Certificates are to be issued to Certificate Owners,
such Book-Entry Certificates shall no longer be "Book-Entry Certificates." As of
the Closing Date, the following Classes of Certificates constitute Book-Entry
Certificates: Class A-1, Class A-2, Class X-A, Class X-B, Class B-1, Class B-2
and Class B-3.
Book-Entry Termination: As defined in Section 3.09(c).
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in New York, New York or, if other than New York,
the city in which the Corporate Trust Office of the Trustee is located, or the
States of Maryland or Minnesota, are authorized or obligated by law or executive
order to be closed.
Certificate: Any one of the certificates signed by the Trustee and
authenticated by the Securities Administrator as Authenticating Agent in
substantially the forms attached hereto as Exhibit A.
Certificate Group: Each of the Group 1 Certificates and the Group 2
Certificates.
Certificate Interest Rate: With respect to each Class of Certificates and
any Distribution Date, the applicable per annum rate described in the
Preliminary Statement to this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate (other than
an Interest-Only Certificate), at the time of determination, the maximum
specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount set
forth on the face of such Certificate, less (i) the amount of all principal
distributions previously made with respect to such Certificate; (ii) all
Realized Losses allocated to such Certificate; provided, however, that on any
Distribution Date on which a Subsequent Recovery is distributed, the Certificate
Principal Amount of any Class of Certificates then outstanding to which a
Realized Loss amount has been applied will be increased, in order of seniority,
by an amount equal to the aggregate amount of any Subsequent Recovery
distributed on such date to Holders of the Certificates, after application (for
this purpose) to more senior Classes of Certificates pursuant to this Agreement
and (iii) in the case of a Subordinate Certificate, any Subordinate Certificate
Writedown Amount allocated to such Certificates. For purposes of Article V
hereof, unless specifically provided to the contrary, Certificate Principal
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Amounts shall be determined as of the close of business of the immediately
preceding Distribution Date, after giving effect to all distributions made on
such date. Interest-Only Certificates are issued without Certificate Principal
Amounts.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02. The Securities
Administrator will act as the initial Certificate Registrar.
Certificateholder: The meaning provided in the definition of "Holder."
Civil Relief Act: The Servicemembers Civil Relief Act, formerly known as
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
Class: Collectively, Certificates bearing the same class designation. In
the case of the Lower-Tier REMIC and the Middle-Tier REMIC, the term "Class"
refers to all Lower-Tier Interests or Middle-Tier Interests, as applicable,
having the same alphanumeric designation.
Class LT-R Certificate: The Class LT-R Certificate executed by the Trustee
and authenticated and delivered by the Authenticating Agent, substantially in
the form annexed as Exhibit A and evidencing ownership of the LT-R Interest.
Class Notional Amount: With respect to any Class of Interest-Only
Certificates, the applicable class notional amount calculated as provided in the
Preliminary Statement to this Agreement.
Class Principal Amount: With respect to each Class of Certificates (other
than an Interest-Only Certificate), the aggregate of the Certificate Principal
Amounts of all Certificates of such Class at the date of determination. With
respect to any Lower-Tier Interest or Middle-Tier Interest, the initial Class
Principal Amount as shown or described in the table set forth in the Preliminary
Statement to this Agreement for the issuing REMIC, as reduced by principal
distributed with respect to such Lower-Tier Interest or Middle-Tier Interest and
Realized Losses allocated to such Lower-Tier Interest or Middle-Tier Interest at
the date of determination.
Class Subordination Percentage: With respect to each Class of Subordinate
Certificates, for each Distribution Date, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such Distribution
Date by the aggregate of the Class Principal Amounts of all Classes of
Certificates immediately prior to such Distribution Date.
Class A-R Certificate: The Class A-R Certificate executed by the Trustee,
and authenticated and delivered by the Authenticating Agent, substantially in
the form annexed hereto as Exhibit A, and evidencing the ownership of the
residual interest in the Upper-Tier REMIC and the MT-R Interest.
Class LT-R Certificate: The Class LT-R Certificate executed by the Trustee
and authenticated and delivered by the Authenticating Agent, substantially in
the form annexed as Exhibit A and evidencing ownership of the LT-R Interest.
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Class X Certificates: The Class X-A and Class X-B Certificates.
Class X-A Pool 1 Component Required Reserve Fund Deposit: For any
Distribution Date, an amount equal to the lesser of (i) the Current Interest for
the Pool 1 Component for such Distribution Date and (ii) the amount required to
bring the balance credited to the Class X-A Pool 1 Component Sub Account up to
an amount equal to the sum of (a) Net WAC Shortfalls for such Distribution Date
with respect to the Class A-1 Certificates and (b) $4,500.
Class X-A Pool 2 Component Required Reserve Fund Deposit: For any
Distribution Date, an amount equal to the lesser of (i) the Current Interest for
the Pool 2 Component for such Distribution Date and (ii) the amount required to
bring the balance credited to the Class X-A Pool 2 Component Sub Account up to
an amount equal to the sum of (a) Net WAC Shortfalls for such Distribution Date
with respect to the Class A-2 Certificates and (b) $4,500.
Class X-B Required Reserve Fund Deposit: For any Distribution Date, an
amount equal to the lesser of (i) the Current Interest for the Class X-B
Certificates for such Distribution Date and (ii) the amount required to bring
the balance credited to the Class X-B Sub Account up to an amount equal to the
sum of (a) Net WAC Shortfalls for such Distribution Date with respect to the
Class B-1, Class B-2 and Class B-3 Certificates and (b) $1,000.
Class X-A Pool 1 Component Sub Account: As defined in Section 5.06(b).
Class X-A Pool 2 Component Sub Account: As defined in Section 5.06(b).
Class X-B Sub Account: As defined in Section 5.06(b).
Clean-Up Call Price: With respect to any Purchase Date pursuant to Section
7.01(c), an amount equal to the greater of (A) 100% of the aggregate outstanding
Class Principal Amounts of the Certificates, together with accrued and unpaid
interest on the Certificates through the related Accrual Period (as increased by
any Interest Shortfalls but excluding the amount of any unpaid Net WAC
Shortfalls), and including, the payment of all amounts (including, without
limitation, all previously unreimbursed Advances and Servicer Advances and
accrued and unpaid Servicing Fees) payable or reimbursable to the Trustee, the
Securities Administrator, the Master Servicer and the Servicers pursuant to this
Agreement and the Servicing Agreements, or to any Custodian under the related
Custody Agreement (to the extent such amounts are not paid to such Custodian by
the Seller), and (B) the sum of (x) the aggregate outstanding principal balance
of the Mortgage Loans (other than those described in clause (y) below),
including accrued interest thereon, as of such date and (y) in the case of any
REO Property and with respect to any Mortgage Loans for which foreclosure
proceedings have been initiated or with respect to any Mortgage Loans which are
otherwise 120 days or more Delinquent as of such date, the fair market value of
such REO Property and Mortgage Loans (disregarding accrued interest thereon).
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
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Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
Closing Date: January 27, 2005.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Compensating Interest Payment: As to any Distribution Date, the lesser of
(1) the Master Servicing Fee for such date and (2) any Prepayment Interest
Shortfall for such date.
Component: Any of the Pool 1 Component or the Pool 2 Component, as
applicable.
Component Interest Rate: Any of the Pool 1 Component Interest Rate or the
Pool 2 Component Interest Rate, as applicable.
Component Notional Amount: Any of the Pool 1 Component Notional Amount or
the Pool 2 Component Notional Amount, as applicable.
Cooperative Corporation: The entity that holds title (fee or an acceptable
leasehold estate) to the real property and improvements constituting the
Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Trustee Sequoia Mortgage Trust 2005-1, or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator or the principal corporate trust office of any successor Trustee.
With respect to the Certificate Registrar and presentment of Certificates for
registration of transfer, exchange or final payment, Xxxxx Fargo Bank, National
Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust, Sequoia Mortgage Trust 2005-1.
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Corresponding Class of Certificates: With respect to each Middle-Tier or
Lower-Tier Interest, the Class or Classes of Certificates appearing opposite
such Middle-Tier or Lower-Tier Interest, as described in the Preliminary
Statement to this Agreement.
Credit Support Depletion Date: The first Distribution Date, if any, on
which the aggregate Certificate Principal Amount of the Subordinate Certificates
have been reduced to zero.
Current Interest: With respect to each Class of Certificates (other than a
Class consisting of Components) and each Component of a Class, if applicable,
and any Distribution Date, the aggregate amount of interest accrued at the
applicable Certificate Interest Rate or Component Interest Rate during the
related Accrual Period on the Class Principal Amount (or related Class Notional
Amount or Component Notional Amount, as applicable) of such Class or Component
immediately prior to such Distribution Date. With respect to any Class of
Certificates consisting of Components and any Distribution Date, the sum of
Current Interest for such Components on such date.
Custodial Accounts: Each custodial account (other than an Escrow Account)
established and maintained by a Servicer pursuant to a Servicing Agreement.
Custodian: A Person who is at anytime appointed by the Trustee and the
Depositor as a custodian of all or a portion of the Mortgage Documents and the
related Trustee Mortgage Files and listed on the Mortgage Loan Schedule as the
Custodian of such Mortgage Documents and related Trustee Mortgage Files. The
initial Custodian is Xxxxx Fargo Bank, National Association.
Custody Agreement: The Custody Agreement, dated as of January 1, 2005,
among the Depositor, the Seller, the Trustee and Xxxxx Fargo Bank, National
Association, as Custodian. A copy of the Custody Agreement is attached hereto as
Exhibit D.
Cut-off Date: January 1, 2005.
Cut-off Date Balance: With respect to the Mortgage Loans in the Trust Fund
on the Closing Date, the Aggregate Stated Principal Balance as of the Cut-off
Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.
Defective Mortgage Loan: The meaning specified in Section 2.04.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of
15
principal, which valuation or reduction results from an order of such court
which is final and non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form.
Deleted Mortgage Loan: As defined in the applicable Purchase Agreement.
Delinquent: Any Mortgage Loan with respect to which the Scheduled Payment
due on a Due Date is not received.
Depositor: Sequoia Residential Funding, Inc., a Delaware corporation
having its principal place of business in California, or its successors in
interest.
Determination Date: With respect to each Distribution Date, the 18th day
of the month in which such Distribution Date occurs, or, if such 18th day is not
a Business Day, the next succeeding Business Day.
Disqualified Organization: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code.
Distribution Account: The separate Eligible Account created and maintained
by the Securities Administrator, on behalf of the Trustee, pursuant to Section
4.01. Funds in the Distribution Account (exclusive of any earnings on
investments made with funds deposited in the Distribution Account) shall be held
in trust for the Trustee and the Certificateholders for the uses and purposes
set forth in this Agreement.
Distribution Account Deposit Date: The 18th day of each calendar month
after the initial issuance of the Certificates or, if such 18th day is not a
Business Day, the immediately preceding Business Day, commencing in February
2005.
Distribution Date: The 20th day of each month or, if such 20th day is not
a Business Day, the next succeeding Business Day, commencing in February 2005.
Due Date: With respect to any Mortgage Loan, the date on which a Scheduled
Payment is due under the related Mortgage Note as indicated in the applicable
Servicing Agreement.
Due Period: As to any Distribution Date, the period beginning on the
second day of the month preceding the month of such Distribution Date, and
ending on the first day of the month of such Distribution Date.
Effective Loan-to-Value Ratio: A fraction, expressed as a percentage, the
numerator of which is the original Stated Principal Balance of the Mortgage
Loan, less the amount of Additional Collateral required to secure such Mortgage
Loan at the time of origination, if any, and the denominator of which is the
Appraised Value of the related Mortgage Property at such date.
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Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Certificateholders have
a claim with respect to the funds in such account or a perfected first priority
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 or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the trust department of a federal or state chartered depository institution or
trust company, acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee, the Paying Agent, the Securities Administrator or the Master
Servicer.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: The Class A-R, Class LT-R, Class B-4, Class
B-5 or Class B-6 Certificates, and any Certificate that does not satisfy the
applicable rating requirement under the Underwriter's Exemption.
Escrow Account: As defined in Section 1 of each Servicing Agreement.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 6.14.
Xxxxxx Xxx: The Federal National Mortgage Association, 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.
FHLMC: The Federal Home Loan Mortgage Corporation, 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.
Fitch Ratings: Fitch, Inc., or any successor in interest.
Global Securities: The global certificates representing the Book-Entry
Certificates.
17
GMAC: GMAC Mortgage Corporation, or any successor thereto.
GMAC Servicing Transfer Date: As defined in Section 9.01(d).
GreenPoint: GreenPoint Mortgage Funding, Inc, or any successor thereto.
Group 1: All of the Group 1 Certificates.
Group 1 Certificate: Any Class A-1 or Class A-R Certificate.
Group 2: All of the Group 2 Certificates.
Group 2 Certificate: Any Class A-2 Certificate.
Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the Master
Servicer, the Securities Administrator and any Servicer, or any Affiliate
thereof shall be deemed not to be outstanding in determining whether the
requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee shall be protected in relying
upon any such consent, only Certificates which a Responsible Officer of the
Trustee knows to be so owned shall be disregarded. The Trustee may request and
conclusively rely on certifications by the Depositor, the Master Servicer, the
Securities Administrator or any Servicer in determining whether any Certificates
are registered to an Affiliate of the Depositor, the Master Servicer, the
Securities Administrator or any Servicer.
HUD: The United States Department of Housing and Urban Development, or any
successor thereto.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
Index: As to each Mortgage Loan, the index from time to time in effect for
adjustment of the Mortgage Rate as set forth as such on the related Mortgage
Note.
Initial One-Month LIBOR Rate: 2.55000%.
Initial Six-Month LIBOR Rate: 2.91875%.
18
Initial Optional Purchase Date: The first Distribution Date following the
date on which the Aggregate Stated Principal Balance is equal to or less than
10.00% of the Cut-off Date Balance.
Initial Trust Receipt. With respect to any Mortgage Loan, as defined in
the related Custody Agreement.
Insurance Policy: With respect to any Mortgage Loan, any insurance policy,
including all names and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the restoration and repair of the related
Mortgaged Property or released to the Mortgagor), in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
(i) the proceeds from any Limited Purpose Surety Bond.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Distribution Amount: For each Class of Certificates and each
Component of a Class, on any Distribution Date, the Current Interest for such
Class or Component, as applicable, as reduced by such Class's or Component's
share of Net Prepayment Interest Shortfalls and Relief Act Shortfalls. Any such
shortfalls and reductions shall be allocated among the Class A-1 and Class A-R
Certificates and the Pool 1 Component and the Class A-2 Certificates and the
Pool 2 Component, to the Class X-B Certificates and all Classes of Subordinate
Certificates proportionately based on (i) in the case of the Class A-1, Class
A-R and Class A-2 Certificates and each of the Pool 1 Component and the Pool 2
Component, the amount of Net Prepayment Interest Shortfalls and Relief Act
Shortfalls experienced by the related Mortgage Pool and related Current Interest
otherwise distributable thereon on such Distribution Date, (ii) in the case of
the Class X-B Certificates, the amount of Net Prepayment Interest Shortfalls and
Relief Act Shortfalls experienced by all the Mortgage Loans and Current Interest
otherwise distributable thereon on such Distribution Date and (iii) in the case
of the Subordinate Certificates, the amount of Net Prepayment Interest
Shortfalls and Relief Act Shortfalls experienced by all the Mortgage Loans and
interest accrued on their Apportioned Principal Balances before taking into
account any reductions in such amounts from shortfalls for that Distribution
Date.
Interest-Only Certificates: Any of the Class X-A and Class X-B
Certificates.
Interest Shortfall: As to any Class of Certificates and any Component of a
Class and any Distribution Date, (i) the amount by which the Interest
Distribution Amount for such Class or Component, as applicable, on such
Distribution Date and all prior Distribution Dates exceeds (ii) amounts
distributed in respect thereof to such Class or Component, as applicable, on
prior Distribution Dates.
Interest Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, an amount equal to one month's interest on the
applicable Principal Transfer Amount at
19
the weighted average Certificate Interest Rate of the applicable
Undercollateralized Group, plus any interest accrued on such Undercollateralized
Group remaining unpaid from prior Distribution Dates.
Intervening Assignments: The original intervening assignments of the
Mortgage, notices of transfer or equivalent instrument.
Latest Possible Maturity Date: The Distribution Date occurring in January
2035.
LIBOR: As applicable, One-Month LIBOR or Six-Month LIBOR.
LIBOR Business Day: Any day on which banks in London, England and The City
of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Certificate: Any Class A-1, Class A-2, Class B-1, Class B-2 and
Class B-3 Certificate.
LIBOR Determination Date: For the Class A-1, Class B-1, Class B-2 and
Class B-3 Certificates, the second LIBOR Business Day immediately preceding the
commencement of each Accrual Period for such Certificates. For the Class A-2
Certificates, the second LIBOR Business Day immediately preceding the
commencement of the Accrual Period relating to the Distribution Date in February
and August (other than February 2005) of each year.
Limited Purpose Surety Bond: Any Limited Purpose Surety Bond listed in
Exhibit G.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
related Servicer has certified (in accordance with its Servicing Agreement) that
it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure sale 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.
Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Lower-Tier Interest: Any one of the interests in the Lower-Tier REMIC as
described in the Preliminary Statement to this Agreement.
Lower-Tier REMIC: As described in the Preliminary Statement to this
Agreement.
20
LT-R Interest: The residual interest in the Lower-Tier REMIC, as described
in the Preliminary Statement to this Agreement.
Margin: As to each Mortgage Loan, the percentage amount set forth on the
related Mortgage Note added to the Index in calculating the Mortgage Rate
thereon.
Master Servicer: Xxxxx Fargo Bank, National Association, a national
banking association organized under the laws of the United States in its
capacity as Master Servicer and any Person succeeding as Master Servicer
hereunder or any successor in interest, or if any successor master servicer
shall be appointed as herein provided, then such successor master servicer.
Master Servicing Fee: With respect to any Distribution Date, an amount
equal to the product of one-twelfth of the Master Servicing Fee Rate and the
Stated Principal Balance of each Mortgage Loan as of the first day of the
related Due Period.
Master Servicing Fee Rate: 0.0125% per annum.
Maximum Rate: As to any Mortgage Loan, the maximum rate set forth on the
related Mortgage Note at which interest can accrue on such Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., or its successors or
assigns.
MERS Designated Mortgage Loan: Each Mortgage Loan that has been originated
in the name of, or assigned to, MERS and registered under the MERS System.
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
Middle-Tier Interest: Any one of the interests in the Middle-Tier REMIC,
as described in the Preliminary Statement to this Agreement.
Middle-Tier REMIC: As described in the Preliminary Statement to this
Agreement.
Moody's: Xxxxx'x Investors Service, Inc., or any successor in interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to a Custodian pursuant to the related
Custody Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant to Section 2.01 (including any
Replacement Loan and REO Property), including without limitation, each Mortgage
Loan listed on the Mortgage Loan Schedule, as amended from time to time.
21
Mortgage Loan Purchase and Sale Agreement: The mortgage loan purchase and
sale agreement, dated as of January 1, 2005, between the Seller and the
Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A, which
shall identify each Mortgage Loan, as such schedule may be amended by the
Depositor or the Servicer from time to time to reflect the addition of
Replacement Mortgage Loans to, or the deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among other things (i) designate the
Servicer servicing such Mortgage Loan and the applicable Servicing Fee Rate (and
the rate of any subservicing fee, if applicable); (ii) identify the designated
Mortgage Pool in which such Mortgage Loan is included; (iii) separately identify
One-Month LIBOR Loans and Six-Month LIBOR Loans; (iv) separately identify
Additional Collateral Mortgage Loans; and (v) designate the rate of any
lender-paid Primary Mortgage Insurance Policy.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: Each of Pool 1 and Pool 2.
Mortgaged Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which, with respect to a Cooperative Loan,
is the related Cooperative Shares and Property Lease.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest borne
by the related Mortgage Notes.
Mortgagor: The obligor on a Mortgage Note.
MT-R Interest: The residual interest in the Middle-Tier REMIC, as
described in the Preliminary Statement to this Agreement.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property, the related Liquidation
Proceeds net of Advances, Servicer Advances, related Servicing Fees and/or
Master Servicing Fees and any other accrued and unpaid servicing fees received
and retained in connection with the liquidation of such Mortgage Loan or
Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan and any Distribution
Date, the related Mortgage Rate as of the Due Date in the month preceding the
month of such Distribution Date reduced by the Aggregate Expense Rate for such
Mortgage Loan.
Net Prepayment Interest Shortfall: With respect to any Mortgage Loan and
any Distribution Date, the amount by which any Prepayment Interest Shortfall for
such date exceeds the amount payable by the Master Servicer and/or the related
Servicers in respect of such shortfall.
22
Net WAC Shortfall: For any Class of LIBOR Certificates and any
Distribution Date, the sum of:
(i) the excess, if any, of the amount that would have been the Current
Interest for such Class if the Certificate Interest Rate for such
Class were calculated without regard to clause (ii) in the
definition thereof, over the actual Current Interest for such Class
for such Distribution Date;
(ii) any excess described in clause (i) above remaining unpaid from prior
Distribution Dates; and
(iii) interest for the applicable Accrual Period on the amount described
in clause (ii) above based on the applicable Certificate Interest
Rate (determined without regard to clause (ii) in the definition
thereof).
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-Redemption Event: Any failure by the Master Servicer to exercise the
option to purchase the Mortgage Loans and related property pursuant to Section
7.01(c) on the Initial Optional Purchase Date.
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Master Servicer and/or a Servicer
(as certified in an Officer's Certificate of the Servicer), which in the good
faith judgment of such party, shall not be ultimately recoverable by such party
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Non-Upper-Tier REMIC: As defined in Section 10.01(d).
Non-U.S. Person: Any person other than a "United States person" within the
meaning of Section 7701(a)(30) of the Code.
Notional Amount: With respect to any Interest-Only Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.
Offering Document: The Prospectus.
Officer's Certificate: A certificate signed by two Authorized Officers of
the Depositor or the Chairman of the Board, any Vice Chairman, the President,
any Vice President or any Assistant Vice President of the Master Servicer or the
Securities Administrator, and in each case delivered to the Trustee.
Officer's Certificate of the Servicer: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President
23
(however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the Assistant Treasurers or Assistant Secretaries of a
Servicer, or (ii) if provided for herein, signed by a Servicing Officer, as the
case may be, and delivered to the Trustee or the Master Servicer, as required
hereby.
One-Month LIBOR: With respect to the first Accrual Period, the Initial
One-Month LIBOR Rate. With respect to each subsequent Accrual Period, a per
annum rate determined on the LIBOR Determination Date for the Class A-1, Class
B-1, Class B-2 and Class B-3 Certificates in the following manner by the
Securities Administrator on the basis of the "Interest Settlement Rate" set by
the BBA for one-month United States dollar deposits, as such rates appear on the
Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination
Date.
(a) If on such a LIBOR Determination Date, the BBA's Interest Settlement
Ratedoes not appear on the Telerate Page 3750 as of 11:00 a.m. (London time), or
if the Telerate Page 3750 is not available on such date, the Securities
Administrator will obtain such rate from Reuters' "page LIBOR 01" or Bloomberg's
page "BBAM." If such rate is not published for such LIBOR Determination Date,
One-Month LIBOR for such date will be the most recently published Interest
Settlement Rate. In the event that the BBA no longer sets an Interest Settlement
Rate, the Securities Administrator will designate an alternative index that has
performed, or that the Securities Administrator expects to perform, in a manner
substantially similar to the BBA's Interest Settlement Rate. The Securities
Administrator will select a particular index as the alternative index only if it
receives an Opinion of Counsel, which opinion shall be an expense reimbursed
from the Distribution Account, that the selection of such index will not cause
any of the REMICs to lose their classification as REMICs for federal income tax
purposes.
(b) The establishment of One-Month LIBOR by the Securities Administrator
and the Securities Administrator's subsequent calculation of the Certificate
Interest Rate applicable to the Class A-1, Class B-1, Class B-2 and Class B-3
Certificates for the relevant Accrual Period, in the absence of manifest error,
will be final and binding.
One-Month LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for one-month U.S. dollar deposits.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable in
form and substance to the Trustee, the Securities Administrator or the Master
Servicer, as required hereby, and who may be in-house or outside counsel to the
Depositor, the Master Servicer, the Securities Administrator or the Trustee but
which must be Independent outside counsel with respect to any such opinion of
counsel concerning the transfer of any Residual Certificate or concerning
certain matters with respect to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the taxation, or the federal income tax status,
of each REMIC.
Original Applicable Credit Support Percentage: With respect to each Class
of Subordinate Certificates, the corresponding approximate percentage set forth
in the table below opposite its Class designation:
24
Class B-1................. 4.25%
Class B-2................. 2.55%
Class B-3................. 1.60%
Class B-4................. 1.00%
Class B-5................. 0.65%
Class B-6................. 0.45%
Original Subordinate Principal Amount: The aggregate of the initial Class
Principal Amounts of the Classes of Subordinated Certificates.
Overcollateralized Group: On any Distribution Date, the Certificate Group
which is not the Undercollateralized Group.
Paying Agent: Any paying agent appointed pursuant to Section 3.08. The
initial Paying Agent shall be the Securities Administrator under this Agreement.
Percentage Interest: With respect to any Certificate, its percentage
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than an Interest-Only Certificate or the Class
A-R and Class LT-R Certificates, the Percentage Interest evidenced thereby shall
equal the initial Certificate Principal Amount thereof divided by the initial
Class Principal Amount of all Certificates of the same Class. With respect to
each of the Class A-R and the Class LT-R Certificates, the Percentage Interest
evidenced thereby shall be as specified on the face thereof, or otherwise, be
equal to 100%. With respect to any Interest-Only Certificate, the Percentage
Interest evidenced thereby shall equal its initial Notional Amount as set forth
on the face thereof divided by the initial Class Notional Amount of such Class.
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
that such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as shall
not result in the downgrading or withdrawal of the ratings then assigned
to the Certificates by the Rating Agencies, as evidenced by a signed
writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating
Agency rating such paper, or such lower rating as shall not result in the
downgrading or withdrawal of the ratings then assigned to the Certificates
by the Rating Agencies, as evidenced by a signed writing delivered by each
Rating Agency;
25
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long-term unsecured
debt obligations of such depository institution or trust company (or in
the case of the principal depository institution in a holding company
system, the commercial paper or long-term unsecured debt obligations of
such holding company, but only if Xxxxx'x is not the applicable Rating
Agency) are then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or such
lower ratings as shall not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(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 acceptable to the Rating Agencies
at the time of the issuance of such agreements, as evidenced by a signed
writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal) described in
clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest
long-term ratings of each Rating Agency (except if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such series), or such lower rating as shall not result in
the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable rating by each
Rating Agency rating such fund or such lower rating as shall not result in
a change in the rating then assigned to the Certificates by each Rating
Agency as evidenced by a signed writing delivered by each Rating Agency,
including funds for which the Trustee, the Master Servicer, the Securities
Administrator or any of its Affiliates is investment manager or adviser;
(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
26
which on the date of acquisition has been rated by each applicable Rating
Agency in their respective highest applicable rating category or such
lower rating as shall not result in a change in the rating then specified
stated maturity and bearing interest or sold at a discount acceptable to
each Rating Agency as shall not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating Agencies as
evidenced by a signed writing delivered by each Rating Agency; and
(xi) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to the Rating Agencies
as shall not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies as evidenced by a
signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if (i) such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument, (ii) such instrument would require
the Depositor to register as an investment company under the Investment Company
Act of 1940, as amended or (iii) the rating of such instrument contains a "t" or
"r" notation therein.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Plan: An employee benefit plan or other retirement arrangement which is
subject to Section 406 of ERISA and/or Section 4975 of the Code or any entity
whose underlying assets include such plan's or arrangement's assets by reason of
their investment in the entity.
Plan Asset Regulations: The Department of Labor regulations set forth in
29 C.F.R. 2510.3-101.
Pool 1: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 1.
Pool 1 Component: The Component of the Class X-A Certificates related to
the Pool 1 Mortgage Loans.
Pool 1 Component Interest Rate: For any Distribution Date, the excess, if
any, of (x) the Pool 1 Net WAC for such Distribution Date over (y) the
Certificate Interest Rate of the Class A-1 Certificates for such Distribution
Date (for the first Distribution Date only, adjusted to reflect the actual
number of days in the Accrual Period).
Pool 1 Component Notional Amount: For any Distribution Date, an amount
equal to the Class Principal Amount of the Class A-1 Certificates immediately
prior to such Distribution Date.
Pool 1 Mortgage Loan: Any Mortgage Loan in Pool 1.
27
Pool 1 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 1 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances.
Pool 1 Subordinate Amount: For any Distribution Date, the excess of the
Aggregate Stated Principal Balance of the Pool 1 Mortgage Loans over the
aggregate of the Class Principal Amounts of the Class A-1 and Class A-R
Certificates immediately before such Distribution Date.
Pool 2: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 2.
Pool 2 Component: The Component of the Class X-A Certificates related to
the Pool 2 Mortgage Loans.
Pool 2 Component Interest Rate: For any Distribution Date, the excess, if
any, of (x) the Pool 2 Net WAC for such Distribution Date over (y) the
Certificate Interest Rate of the Class A-2 Certificates for such Distribution
Date (for the first Distribution Date only, adjusted to reflect the actual
number of days in the Accrual Period).
Pool 2 Component Notional Amount: For any Distribution Date, an amount
equal to the Class Principal Amount of the Class A-2 Certificates immediately
prior to such Distribution Date.
Pool 2 Mortgage Loan: Any Mortgage Loan in Pool 2.
Pool 2 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 2 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances.
Pool 2 Subordinate Amount: For any Distribution Date, the excess of the
Aggregate Stated Principal Balance of the Pool 2 Mortgage Loans over the Class
Principal Amount of the Class A-2 Certificates immediately before such
Distribution Date.
Pool Percentage: With respect to each Mortgage Pool and any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
Aggregate Stated Principal Balance of such Mortgage Pool, and the denominator of
which is the Aggregate Stated Principal Balance as of such Due Date.
Pool Subordinate Amount: Either of the Pool 1 Subordinate Amount or the
Pool 2 Subordinate Amount.
Prepayment Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the excess, if any, of (i) one full
month's interest at the applicable Mortgage Rate on the Stated Principal Balance
of such Mortgage Loan immediately prior to such Principal
28
Prepayment over (ii) the amount of interest actually received with respect to
such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Period: With respect to each Distribution Date, the calendar
month immediately preceding the month in which the Distribution Date occurs.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Distribution Amount: With respect to any Mortgage Pool and any
Distribution Date, the sum of (a) each Scheduled Payment of principal collected
or advanced on the related Mortgage Loans (before taking into account any
Deficient Valuations or Debt Service Reductions) and due during the related Due
Period, (b) that portion of the Purchase Price representing principal of any
Mortgage Loans in such Mortgage Pool purchased in accordance with Section 2.04
hereof and received during the related Prepayment Period, (c) the principal
portion of any related Substitution Amount received during the related
Prepayment Period, (d) any Subsequent Recoveries and the principal portion of
all Insurance Proceeds received during the related Prepayment Period with
respect to Mortgage Loans in such Mortgage Pool that are not yet Liquidated
Mortgage Loans, (e) the principal portion of all Net Liquidation Proceeds
received during the related Prepayment Period with respect to Liquidated
Mortgage Loans in such Mortgage Pool, (f) the principal portion of the proceeds
of any Additional Collateral with respect to the Mortgage Loans in such Mortgage
Pool, (g) the principal portion of all partial and full principal prepayments of
Mortgage Loans in such Mortgage Pool applied by the Servicers during the related
Prepayment Period and (h) on the Distribution Date on which the Trust Fund is to
be terminated pursuant to Article X hereof, that portion of the Clean-Up Call
Price in respect of principal for such Mortgage Pool.
Principal Prepayment: Any Mortgagor payment of principal or other recovery
of principal on a Mortgage Loan that is recognized as having been received or
recovered in advance of its scheduled Due Date and applied to reduce the
principal balance of the Mortgage Loan in accordance with the terms of the
Mortgage Note or the Servicing Agreement.
Principal Prepayment In Full: Any Principal Prepayment of the entire
principal balance of the Mortgage Loans.
Principal Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, the excess, if any, of the aggregate Class Principal
Amount of such Undercollateralized Group immediately prior to such Distribution
Date, over the Aggregate Stated Principal Balance of the related Mortgage Pool
immediately prior to such Distribution Date.
Pro Rata Senior Percentage: With respect to each Distribution Date and
each Mortgage Pool, the percentage equivalent of a fraction, the numerator of
which is the aggregate Class Principal Amount of the Class or Classes of Senior
Certificates of the Related Certificate Group immediately prior to such
Distribution Date, and the denominator of which is the Aggregate of the Stated
Principal Balance of the related Mortgage Pool for such Distribution Date;
provided, however, that on any Distribution Date after a Senior Termination Date
has occurred with respect
29
to any Mortgage Pool, the Pro Rata Senior Percentage of the remaining Senior
Certificates is the percentage equivalent of a fraction, the numerator of which
is the aggregate of the Class Principal Amounts of the remaining Classes of
Senior Certificates immediately prior to such date, and the denominator of which
is the aggregate Class Principal Amount of all Classes of Certificates
immediately prior to such date.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Property, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated January 20, 2005, together
with the accompanying prospectus dated September 17, 2004, relating to the
Certificates.
Purchase Agreements: The mortgage purchase agreements listed in Exhibit F
hereto, as each such agreement may be amended or supplemented from time to time
as permitted hereunder.
Purchase Price: With respect to any Mortgage Loan required or permitted to
be purchased by the Seller or Depositor pursuant to this Agreement, by the
Servicers pursuant to the Servicing Agreements, or by the Seller pursuant to the
Purchase Agreements, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such purchase, (ii)
accrued interest thereon at the applicable Net Mortgage Rate from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Purchase Price is to be distributed to Certificateholders, or
such other amount as may be specified in the related Servicing Agreement or
Purchase Agreement and (iii) the amount of any costs and damages incurred by the
Trust Fund as a result of any violation of any applicable federal, state, or
local predatory or abusive lending law arising from or in connection with the
origination of such Mortgage Loan.
Rapid Prepayment Conditions: As to any Distribution Date, if (1) the
Aggregate Subordinate Percentage on such date is less than 200% of the Aggregate
Subordinate Percentage on the Closing Date; or (2) the outstanding Stated
Principal Balance of the Mortgage Loans in any Mortgage Pool delinquent 60 days
or more, as a percentage of such Mortgage Pool's Pool Subordinate Amount, is
greater than or equal to 50%.
Rating Agency: Each of Xxxxx'x, S&P and Fitch Ratings.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Net Mortgage Rate from the Due Date as to which interest
was last paid or advanced (and not reimbursed) to Certificateholders up to the
Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the
30
Liquidation Proceeds and the proceeds of any Additional Collateral, if any,
received during the month in which such liquidation occurred, to the extent
applied as recoveries of interest at the Net Mortgage Rate and to principal of
the Liquidated Mortgage Loan. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, if the principal amount due under
the related Mortgage Note has been reduced, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.
Record Date: As to any Distribution Date (i) with respect to the LIBOR
Certificates, the last Business Day preceding such Distribution Date (or the
Closing Date, in the case of the first Distribution Date) unless such
Certificates shall no longer be Book-Entry Certificates, in which case the
Record Date shall be the last Business Day of the month preceding the month of
such Distribution Date and (ii) in the case of all other Certificates (including
LIBOR Certificates that are subsequently reissued as Definitive Certificates),
the last Business Day of the month preceding the month of each Distribution Date
(or the Closing Date, in the case of the first Distribution Date).
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection with
the refinancing of an existing mortgage loan.
Related Certificate Group: The Certificate Group related to a particular
Mortgage Pool as indicated by the same numerical designation (i.e., Group 1
Certificates are related to Pool 1, and the Group 2 Certificates are related to
Pool 2). For purposes hereof, the Pool 1 Component is related to Pool 1, and the
Pool 2 Component is related to Pool 2.
Relief Act Shortfalls: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Civil Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended calendar
month is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement to this Agreement.
REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of the Code, and related provisions, and regulations, including proposed
regulations and rulings, and administrative pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.
31
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 attached to the applicable
Custody Agreement, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) have a Maximum Rate not less than (and not more
than two percentage points greater than) the Maximum Rate of the Deleted
Mortgage Loan; (iii) have a gross margin not less than that of the Deleted
Mortgage Loan and, if Mortgage Loans equal to 1% or more of the balance of the
related Mortgage Pool as of the Cut-off Date have become Deleted Mortgage Loans,
not more than two percentage points more than that of the Deleted Mortgage Loan;
(iv) have an Effective Loan-to-Value Ratio no higher than that of the Deleted
Mortgage Loan; (v) have Adjustment Dates that are no more or less frequent than
the Deleted Mortgage Loan; (vi) have a remaining term to maturity no greater
than (and not more than one year less than that of) the Deleted Mortgage Loan;
(vii) not permit conversion of the related Mortgage Rate to a permanent fixed
Mortgage Rate; (viii) not be a Cooperative Loan unless the Deleted Mortgage Loan
was a Cooperative Loan; (ix) have the same or better FICO credit score; (x) have
an initial interest adjustment date no earlier than five months before (and no
later than five months after) the initial adjustment date of the Deleted
Mortgage Loan, (xi) comply with each representation and warranty set forth in
Article III of each Purchase Agreement; and (xii) shall be accompanied by an
Opinion of Counsel that such Replacement Mortgage Loan would not adversely
affect the REMIC status of the Trust Fund or would not otherwise be prohibited
by this Agreement.
Required Reserve Fund Deposit: Each of the Class X-A Pool 1 Component
Required Reserve Fund Deposit, the Class X-A Pool 2 Component Required Reserve
Fund Deposit and the Class X-B Required Reserve Fund Deposit.
Reserve Fund: A fund created as part of the Trust Fund pursuant to Section
5.06 of this Agreement but which is not an asset of any of the REMICs consisting
of the Class X-A Pool 1 Component Sub Account, the Class X-A Pool 2 Component
Sub Account and the Class X-B Sub Account.
Residual Certificate: Each of the Class A-R and Class LT-R Certificates.
Responsible Officer: With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
Restricted Certificate: Any Class B-4, Class B-5, Class B-6 or Class LT-R
Certificate.
Restricted Global Security: As defined in Section 3.01(c).
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
32
SAIF: The Saving's Association Insurance Fund, or any successor thereto.
Schedule of Exceptions: With respect to any Mortgage Loan, as defined in
the related Custody Agreement.
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 which,
unless otherwise specified in the Servicing Agreements, shall give effect to any
related Debt Service Reduction and any Deficient Valuation that affects the
amount of the monthly payment due on such Mortgage Loan.
Securities Administrator: Xxxxx Fargo Bank, National Association, not in
its individual capacity but solely as Securities Administrator, or any successor
in interest, or if any successor Securities Administrator shall be appointed as
herein provided, then such successor Securities Administrator. Xxxxx Fargo Bank,
National Association shall act as Securities Administrator for so long as it is
Master Servicer under this Agreement.
Seller: RWT Holdings, Inc., a Delaware corporation.
Senior Certificate: Any one of the Class A-1, Class A-2, Class X-A, Class
X-B, Class A-R or Class LT-R Certificates, as applicable.
Senior Percentage: Except as provided in this definition, with respect to
any Distribution Date and Mortgage Pool before February 2015, 100%. The Senior
Percentage for any Distribution Date occurring (i) before the Distribution Date
in February 2015 but in or after February 2008 on which the Two Times Test is
satisfied, or (ii) in or after February 2015, is the related Pro Rata Senior
Percentage. If the Two Times Test is satisfied with respect to any Distribution
Date prior to the Distribution Date in February 2008, the Senior Percentage is
the related Pro Rata Senior Percentage plus 50% of an amount equal to 100% minus
the related Pro Rata Senior Percentage. With respect to any Distribution Date
after the Senior Termination Date, the Senior Percentage for such Mortgage Pool
will equal zero. If on any Distribution Date the allocation to the Senior
Certificates then entitled to distributions of principal of full and partial
principal prepayments and other amounts in the percentage required above would
reduce the aggregate of the Class Principal Amounts of those Certificates to
below zero, the Senior Percentage for such Distribution Date shall be limited to
the percentage necessary to reduce that Class Principal Amount to zero.
Senior Prepayment Percentage: With respect to any Distribution Date and
each Mortgage Pool, during the ten years beginning on the first Distribution
Date, 100%. Except as provided herein, the Senior Prepayment Percentage for each
Mortgage Pool and any Distribution Date occurring on or after the tenth
anniversary of the first Distribution Date shall be as follows: (i) from
February 2015 through January 2016, the related Senior Percentage plus 70% of
the related Subordinate Percentage for that Distribution Date; (ii) from
February 2016 through January 2017, the related Senior Percentage plus 60% of
the related Subordinate Percentage for that Distribution Date; (iii) from
February 2017 through January 2018, the related Senior Percentage plus 40% of
the related Subordinate Percentage for that Distribution Date; (iv) from
33
February 2018 through January 2019, the related Senior Percentage plus 20% of
the related Subordinate Percentage for that Distribution Date; and (v) from and
after February 2019, the related Senior Percentage for that Distribution Date;
provided, however, that there shall be no reduction in the Senior Prepayment
Percentage unless both Step Down Conditions are satisfied; and provided,
further, that if on any such Distribution Date the related Pro Rata Senior
Percentage for either Mortgage Pool exceeds the initial related Pro Rata Senior
Percentage, the related Senior Prepayment Percentage for both Mortgage Pools for
that Distribution Date shall again equal 100%.
Notwithstanding the above, if on any Distribution Date the Two Times Test
is satisfied, the Senior Prepayment Percentage with respect to any Mortgage Pool
shall equal the related Senior Percentage for such Distribution Date. In
addition, if on any Distribution Date the allocation to the Senior Certificates
then entitled to distributions of principal of full and partial principal
prepayments and other amounts in the percentage required above would reduce the
aggregate of the Class Principal Amounts of those Certificates to below zero,
the related Senior Prepayment Percentage for such Distribution Date shall be
limited to the percentage necessary to reduce that Class Principal Amount to
zero.
Senior Principal Distribution Amount: With respect to each Mortgage Pool
and any Distribution Date, the sum of:
(1) the related Senior Percentage of all amounts described in clause
(a) of the definition of "Principal Distribution Amount" for that
Distribution Date;
(2) with respect to each related Mortgage Loan which became a
Liquidated Mortgage Loan during the related Prepayment Period, the lesser
of
(x) the related Senior Prepayment Percentage of the Stated
Principal Balance of that Mortgage Loan and
(y) Net Liquidation Proceeds allocable to principal received
with respect to that Mortgage Loan.
(3) the related Senior Prepayment Percentage of the amounts
described in clauses (b), (c), (d) and (g) of the definition of "Principal
Distribution Amount" for that Mortgage Pool;
provided, however, that on any Distribution Date after a Senior Termination Date
has occurred with respect to a Mortgage Pool, the Senior Principal Distribution
Amount will be calculated pursuant to the above formula based on all Mortgage
Loans, rather than only on the Mortgage Loans in the related Mortgage Pool.
Senior Termination Date: With respect to each Mortgage Pool, the date on
which the aggregate Class Principal Amount of the Senior Certificates related to
such Mortgage Pool is reduced to zero.
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Servicers: Each Servicer under a Servicing Agreement.
Servicer Advance: A "Servicing Advance" as defined in the applicable
Servicing Agreement.
Servicing Agreement: The agreements listed in Exhibit E, as each such
agreement has been modified by the related Acknowledgement and as it may be
amended or supplemented from time to time as permitted thereby.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the Servicing Fee Rate and (b)
the Stated Principal Balance of such Mortgage Loan as of the first day of the
related Due Period.
Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, the rate specified in the related Servicing Agreement.
Servicing Officer: Any officer of the Servicers 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 Master Servicer by the Servicers on the Closing Date pursuant to the
Servicing Agreements, as such list may from time to time be amended.
Six-Month LIBOR: With respect to the first Accrual Period, the Initial
Six-Month LIBOR Rate. With respect to each subsequent Accrual Period, a per
annum rate determined on the immediately preceding LIBOR Determination Date for
the Class A-2 Certificates in the following manner by the Securities
Administrator on the basis of the "Interest Settlement Rate" set by the BBA for
six-month United States dollar deposits, as such rates appear on the Telerate
Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.
(a) If on such a LIBOR Determination Date, the BBA's Interest Settlement
Rate does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time),
or if the Telerate Page 3750 is not available on such date, the Securities
Administrator will obtain such rate from Reuters' "page LIBOR 01" or Bloomberg's
page "BBAM." If such rate is not published for such LIBOR Determination Date,
Six-Month LIBOR for such date will be the most recently published Interest
Settlement Rate. In the event that the BBA no longer sets an Interest Settlement
Rate, the Securities Administrator will designate an alternative index that has
performed, or that the Securities Administrator expects to perform, in a manner
substantially similar to the BBA's Interest Settlement Rate. The Securities
Administrator will select a particular index as the alternative index only if it
receives an Opinion of Counsel, which opinion shall be an expense reimbursed
from the Distribution Account, that the selection of such index will not cause
any of the REMICs to lose their classification as REMICs for federal income tax
purposes.
(b) The establishment of Six-Month LIBOR by the Securities Administrator
and the Securities Administrator's subsequent calculation of the Certificate
Interest Rate applicable to the Class A-2 Certificates for the relevant Accrual
Period, in the absence of manifest error, will be final and binding.
35
Six-Month LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for six-month U.S. dollar deposits.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.
Step Down Conditions: As of the first Distribution Date as to which any
decrease in any Senior Prepayment Percentage applies, (i) the outstanding Stated
Principal Balance of all Mortgage Loans 60 days or more Delinquent (including
Mortgage Loans in REO and foreclosure) (averaged over the preceding six month
period), as a percentage of the aggregate of the Class Principal Amounts of the
Classes of Subordinate Certificates on such Distribution Date, does not equal or
exceed 50% and (ii) cumulative Realized Losses with respect to the Mortgage
Loans do not exceed (a) with respect to each Distribution Date from February
2015 through January 2016, 30% of the Original Subordinate Principal Amount, (b)
with respect to each Distribution Date from February 2016 through January 2017,
35% of the Original Subordinate Principal Amount, (c) with respect to each
Distribution Date from February 2017 through January 2018, 40% of the Original
Subordinate Principal Amount, (d) with respect to each Distribution Date from
February 2018 through January 2019, 45% of the Original Subordinate Principal
Amount and (e) with respect to each Distribution Date from and after February
2019, 50% of the Original Subordinate Principal Amount.
Sub Account: Each of the Class X-A Pool 1 Component Sub Account, the Class
X-A Pool 2 Component Sub Account and the Class X-B Sub Account, constituting the
Reserve Fund.
Subordinate Certificate: Any of the Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 or Class B-6 Certificates.
Subordinate Certificate Writedown Amount: The amount described in Section
5.03(c).
Subordinate Class Percentage: As to any Distribution Date and any Class of
Subordinate Certificates, a fraction, expressed as a percentage, the numerator
of which is the Class Principal Amount of such Class on such date, and the
denominator of which is the aggregate Class Principal Amount of all Classes of
Subordinate Certificates on such date.
Subordinate Net WAC: For any Distribution Date, the weighted average of
the Pool 1 Net WAC and the Pool 2 Net WAC, in each case weighted on the basis of
the relative Pool Subordinate Amounts for Pool 1 and Pool 2, respectively,
immediately prior to such Distribution Date.
36
Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior Percentage
for such Mortgage Pool for such Distribution Date.
Subordinate Prepayment Percentage: With respect to any Distribution Date
and for each Mortgage Pool, the difference between 100% and the related Senior
Prepayment Percentage for such Mortgage Pool for that Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Mortgage Pool, an amount equal to the sum of:
(1) the related Subordinate Percentage of all amounts
described in clause (a) of the definition of "Principal Distribution
Amount" for that Distribution Date;
(2) with respect to each Mortgage Loan in the related Mortgage
Pool that became a Liquidated Mortgage Loan during the related
Prepayment Period the amount of the Net Liquidation Proceeds
allocated to principal received with respect thereto remaining after
application thereof pursuant to clause (2) of the definition of
"Senior Principal Distribution Amount" for that Distribution Date,
up to the Subordinate Percentage of the Stated Principal Balance of
such Mortgage Loan;
(3) the related Subordinate Prepayment Percentage of all
amounts described in clauses (b), (c), (d) and (g) of the definition
of "Principal Distribution Amount" for that Mortgage Pool and that
Distribution Date; and
(4) any amounts described in clauses (1) through (3) for any
previous Distribution Date that remain unpaid,
minus the sum of:
any Principal Transfer Amount paid from the Available
Distribution Amount of the Related Certificate Group to the
Undercollateralized Group; and
the amount of principal distributions made to the Senior
Certificates pursuant to Section 5.02(l).
provided, however, that on any Distribution Date after a Senior Termination Date
has occurred with respect to a Mortgage Pool, the Subordinate Principal
Distribution Amount will not be calculated with respect to a Mortgage Pool, but
instead will equal the amount calculated as above based on a Subordinate
Percentage or Subordinate Prepayment Percentage, as applicable, for the
Subordinate Certificates for such Distribution Date with respect to all of the
Mortgage Loans.
Subsequent Recovery: Any amount recovered by a Servicer with respect to a
Liquidated Mortgage Loan (after reimbursement of any unreimbursed Advances or
expenses of the Servicer)
37
with respect to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.
Substitution Amount: As defined in the second paragraph of Section
2.04(b).
Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions which shall initially be the Holder of the Class LT-R Certificate.
Telerate Page 3750: The display currently so designated as "Page 3750" on
the Bridge Telerate Service (or such other page selected by the Securities
Administrator as may replace Page 3750 on that service for the purpose of
displaying daily comparable rates on prices).
Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans and all interest and principal received thereon
on or after the Cut-off Date (other than Scheduled Payments due on or prior to
the Cut-off Date), the Depositor's rights assigned to the Trustee under the
Purchase Agreements and the Servicing Agreements, as modified by the
Acknowledgements and the Mortgage Loan Purchase and Sale Agreement, the
Insurance Policies relating to the Mortgage Loans, all cash, instruments or
property held or required to be held in the Custodial Accounts, the Distribution
Account, property that secured a Mortgage Loan, the pledge, control and guaranty
agreements and any Limited Purpose Surety Bond relating to the Additional
Collateral Mortgage Loans, and the Reserve Fund.
Trustee: HSBC Bank USA, National Association, a national banking
association organized and existing under the laws of the United States of
America and any Person succeeding the Trustee hereunder, or if any successor
trustee or any co-trustee shall be appointed as herein provided, then such
successor trustee and such co-trustee, as the case may be.
Trustee Mortgage Files: With respect to each Mortgage Loan, the Mortgage
Documents to be retained in the custody and possession of the Trustee or any
Custodian on behalf of the Trustee.
Two Times Test: As to any Distribution Date, (i) the Aggregate Subordinate
Percentage is at least two times the Aggregate Subordinate Percentage as of the
Closing Date; (ii) the aggregate of the Stated Principal Balances of all
Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in REO and
foreclosure) (averaged over the preceding six-month period), as a percentage of
the aggregate of the Class Principal Amount of the Subordinate Certificates on
such Distribution Date, does not equal or exceed 50%; and (iii) on or prior to
the Distribution Date in January 2008, cumulative Realized Losses with respect
to the Mortgage Loans do not exceed 20% of the Original Subordinate Principal
Amount, and thereafter, cumulative Realized Losses with respect to the Mortgage
Loans do not exceed 30% of the Original Subordinate Principal Amount.
UCC: The Uniform Commercial Code as enacted in the relevant jurisdiction.
Undercollateralized Group: With respect to any Distribution Date, any
Certificate Group with respect to which the aggregate Class Principal Amount of
such Certificate Group is greater
38
than the aggregate Stated Principal Balance of the Mortgage Loans in the related
Mortgage Pool immediately prior to such Distribution Date.
Underwriters: Xxxxxx Xxxxxxx & Co. Incorporated, Greenwich Capital
Markets, Inc., Banc of America Securities LLC and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated.
Underwriter's Exemption: Prohibited Transaction Exemption ("PTE") 90-24
(55 Fed. Reg. 20548 (1990)) and PTE 90-59 (55 Fed. Reg. 36724 (1990)),
respectively, as most recently amended and restated by PTE 2002-41, or any
substantially similar administrative exemption granted by the U.S. Department of
Labor to the Underwriters.
Underwriting Agreement: The Underwriting Agreement, dated January 20,
2005, among the Seller, the Depositor and the Underwriters.
Uniform Commercial Code: The Uniform Commercial Code as in effect in any
applicable jurisdiction from time to time.
Upper-Tier REMIC: As described in the Preliminary Statement to this
Agreement.
Voting Interests: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 97.00% of all
Voting Interests shall be allocated to the Class A-1, Class A-2, Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates. Voting
Interests shall be allocated among such Certificates based on the product of (i)
97% and (ii) the fraction, expressed as a percentage, the numerator of which is
the aggregate Class Principal Amounts for each Class then outstanding and the
denominator of which is the Aggregate Stated Principal Balance outstanding. At
all times during the term of this Agreement, 3.00% of all Voting Interests shall
be allocated to the Class A-R, Class X-A and Class X-B Certificates. Voting
Interests shall be allocated among such Certificates based on the product of (i)
3% and (ii) the fraction, expressed as a percentage, the numerator of which is
the aggregate Class Principal Amounts for each Class then outstanding and the
denominator of which is the Aggregate Stated Principal Balance outstanding.
Section 1.02 Calculations Respecting Mortgage Loans.
Calculations required to be made pursuant to this Agreement with respect
to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and payments to be made to
the Securities Administrator as supplied to the Securities Administrator by the
Master Servicer. The Securities Administrator shall not be required to
recompute, verify or recalculate the information supplied to it by the Master
Servicer or any Servicer.
ARTICLE II
39
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, subject to Sections 2.02 and 2.04, in
trust, all the right, title and interest of the Depositor in and to the Trust
Fund. Such conveyance includes, without limitation, (i) the Mortgage Loans,
including the right to all payments of principal and interest received on or
with respect to the Mortgage Loans on and after the Cut-off Date (other than
Scheduled Payments due on or before such date), and all such payments due after
such date but received prior to such date and intended by the related Mortgagors
to be applied after such date; (ii) all of the Depositor's right, title and
interest in and to all amounts from time to time credited to and the proceeds of
the Distribution Account, any Custodial Accounts or any Escrow Account
established with respect to the Mortgage Loans; (iii) all of the Depositor's
rights under the Purchase Agreements and the Servicing Agreements as modified by
the Acknowledgements and the Mortgage Loan Purchase and Sale Agreement; (iv) all
of the Depositor's right, title or interest in REO Property and the proceeds
thereof; (v) all of the Depositor's rights under any Insurance Policies related
to the Mortgage Loans; and (vi) the Depositor's security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties and any Additional Collateral relating to the Additional Collateral
Mortgage Loans, including, but not limited to, the pledge, control and guaranty
agreements and any related Limited Purpose Surety Bond to have and to hold, in
trust; and the Trustee declares that, subject to the review provided for in
Section 2.02, it has received and shall hold the Trust Fund, as trustee, in
trust, for the benefit and use of the Holders of the Certificates and for the
purposes and subject to the terms and conditions set forth in this Agreement,
and, concurrently with such receipt, has caused to be executed, authenticated
and delivered to or upon the order of the Depositor, in exchange for the Trust
Fund, Certificates in the authorized denominations evidencing the entire
ownership of the Trust Fund.
The foregoing sale, transfer, assignment, set-over, deposit and conveyance
does not and is not intended to result in the creation or assumption by the
Trustee of any obligation of the Depositor, the Seller or any other Person in
connection with the Mortgage Loans or any other agreement or instrument relating
thereto except as specifically set forth therein.
In connection with such transfer and assignment of the Mortgage Loans, the
Depositor does hereby deliver to, and deposit with, or cause to be delivered to
and deposited with, any Custodian acting on the Trustee's behalf, the following
documents or instruments with respect to each related Mortgage Loan (each, a
"Trustee Mortgage File") so transferred and assigned:
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of the Trustee, or
in blank (in each case, with all necessary intervening endorsements, as
applicable); provided that any such endorsement may be stamped or
generated electronically, if acceptable under all
40
applicable laws and regulations and the endorsing entity had adopted
appropriate authorizing resolutions prior to such stamped or electronic
endorsement.
(ii) with respect to each Mortgage Loan (other than a Cooperative
Loan), the original mortgage, deed of trust or other instrument creating a
first lien on the underlying property securing the Mortgage Loan and
bearing evidence that such instrument has been recorded in the appropriate
jurisdiction where the Mortgaged Property is located (or, in lieu of the
original of the Mortgage, a true copy of the Mortgage certified by the
originator, or a duplicate or conformed copy of the Mortgage, together
with a certificate of either the closing attorney or an officer of the
title insurer that issued the related title insurance policy, certifying
that such copy represents a true and correct copy of the original and that
such original has been or is currently submitted to be recorded in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located);
(iii) with respect to each Mortgage Loan (other than a Cooperative
Loan), the Assignment of Mortgage in form and substance acceptable for
recording in the relevant jurisdiction, such assignment being either (A)
in blank, without recourse, or (B) or endorsed to "HSBC Bank USA, National
Association, as Trustee of the Sequoia Mortgage Trust 2005-1, Mortgage
Pass-Through Certificates, without recourse;" provided, that if the
Mortgage Loan is a MERS Designated Mortgage Loan, no Assignment of
Mortgage shall be required;
(iv) with respect to each Mortgage Loan (other than a Cooperative
Loan), the originals or certified copies of all Intervening Assignments of
the Mortgage, if any, with evidence of recording thereon, showing a
complete chain of title to the last endorsee, including any warehousing
assignment;
(v) with respect to each Mortgage Loan (other than a Cooperative
Loan), any assumption, modification, written assurance, substitution,
consolidation, extension or guaranty agreement, if applicable;
(vi) with respect to each Mortgage Loan (other than a Cooperative
Loan), the original policy of title insurance (or a true copy thereof)
with respect to any such Mortgage Loan, or, if such policy has not yet
been delivered by the insurer, the title commitment or title binder to
issue same;
(vii) if the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by a
person on behalf of the Mortgagor, the original power of attorney or other
instrument that authorized and empowered such person to sign bearing
evidence that such instrument has been recorded, if so required, in the
appropriate jurisdiction where the Mortgaged Property is located (or, in
lieu thereof, a duplicate or conformed copy of such instrument, together
with a certificate of receipt from the recording office, certifying that
such copy represents a true and complete copy of the original and that
such original has been or is currently
41
submitted to be recorded in the appropriate governmental recording office
of the jurisdiction where the Mortgaged Property is located); and
(viii) with respect to each Mortgage Loan which constitutes a
Cooperative Mortgage Loan:
(a) the original loan and security agreement;
(b) the original Cooperative Shares;
(c) a stock power executed in blank by the person in whose
name the Cooperative Shares are issued;
(d) the Proprietary Lease or occupancy agreement accompanied
by an assignment in blank of such proprietary lease;
(e) the recognition agreement executed by the Cooperative
Corporation, which requires the Cooperative Corporation to recognize
the rights of the lender and its successors in interest and assigns,
under the cooperative;
(f) UCC1 financing statements with recording information
thereon from the appropriate governmental recording offices if
necessary to perfect the security interest of the Cooperative
Mortgage Loan under the Uniform Commercial Code in the jurisdiction
in which the cooperative project is located, accompanied by UCC3
financing statements executed in blank for recordation of the change
in the secured party thereunder;
(g) the original policy of title insurance or with respect to
any such Cooperative Mortgage Loan, if such policy has not yet been
delivered by the insurer, the title commitment or title binder to
issue same; and
(h) Any guarantees, if applicable.
(b) The Depositor shall cause Assignments of Mortgage with respect to each
Mortgage Loan other than a Cooperative Mortgage Loan to be completed in the form
specified in Section 2.01(a)(iii) above within 30 days of the Closing Date for
purpose of their recording; provided, however, that such Assignments of Mortgage
need not be recorded if, on or prior to the Closing Date, the Depositor
delivers, at its own expense, an Opinion of Counsel (which must be Independent
counsel) acceptable to the Trustee, and the Rating Agencies, to the effect that
recording in such states is not required to protect the Trustee's interest in
the related Mortgage Loans. Subject to the preceding sentence, as soon as
practicable after the Closing Date (but in no event more than 270 days
thereafter except to the extent delays are caused by the applicable recording
office), the Depositor at its own expense and with the cooperation of the
applicable Servicer, shall cause to be properly recorded by each Servicer in
each public recording office where the related Mortgages are recorded each
Assignment of Mortgage endorsed in the form described in Section 2.01(a)(iii)
above with respect to each such Mortgage Loan.
42
(c) In instances where a title insurance policy is required to be
delivered to the Trustee or the applicable Custodian on behalf of the Trustee
under Sections 2.01(a)(vi) or 2.01(a)(viii)(g) above and is not so delivered,
the Depositor will provide a copy of such title insurance policy to the Trustee,
or to a Custodian on behalf of the Trustee, as promptly as practicable after the
execution and delivery hereof, but in any case within 180 days of the Closing
Date.
(d) For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, herewith delivers to the Trustee, or to the related
Custodian on behalf of the Trustee, an Officer's Certificate which shall include
a statement to the effect that all amounts received in connection with such
prepayment that are required to be deposited in the Distribution Account
pursuant to Section 4.01 have been so deposited. All original documents that are
not delivered to the Trustee or the applicable Custodian on behalf of the
Trustee shall be held by the Master Servicer or the applicable Servicer in trust
for the benefit of the Trustee and the Certificateholders.
Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation
for Trust Fund.
(a) The Trustee, by execution and delivery hereof, acknowledges receipt by
it or by the applicable Custodian on its behalf of the Trustee Mortgage Files
pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule, subject
to review thereof by the applicable Custodian on behalf of the Trustee in
accordance with Section 4(a) of each Custody Agreement (forms of which are
attached hereto as Exhibit D). Each Custodian on behalf of the Trustee, will
execute and deliver to the Trustee and the Depositor an Initial Trust Receipt
and Schedule of Exceptions, on the Closing Date in the forms required by the
related Custody Agreement.
(b) Within 270 days after the Closing Date, each Custodian on behalf of
the Trustee, will, for the benefit of Holders of the Certificates, review each
related Trustee Mortgage File to ascertain that all required documents set forth
in Section 2.01 have been received and appear on their face to conform with the
requirements set forth in Section 4A and 4B of the related Custody Agreement.
(c) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, any Custodian or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.
(d) Each of the parties hereto acknowledges that each Custodian shall
perform the applicable review of the related Mortgage Loans and respective
certifications as provided in the related Custody Agreement.
(e) Upon execution of this Agreement, the Depositor hereby delivers to the
Trustee and the Trustee acknowledges receipt of the Acknowledgements, together
with the related Purchase Agreements, Servicing Agreements and the Mortgage Loan
Purchase and Sale Agreement.
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Section 2.03 Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee, for the
benefit of the Certificateholders, and to the Master Servicer and the Securities
Administrator as of the Closing Date or such other date as is specified, that:
(i) the Depositor is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence
and has full corporate power and authority to own its property, to carry
on its business as presently conducted, to enter into and perform its
obligations under this Agreement, and to create the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of,
or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the certificate of incorporation or bylaws
of the Depositor;
(iii) the execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect of,
any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee, the Master Servicer and the Securities Administrator, constitutes
a valid and binding obligation of the Depositor enforceable against it in
accordance with its terms except as such enforceability may be subject to
(A) applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally and (B)
general principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened or likely to be asserted against or
affecting the Depositor, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Depositor will be determined
adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect it or its business, assets,
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement;
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(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of record
and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens of
current real property taxes and assessments not yet due and payable and,
if the related Mortgaged Property is a condominium unit, any lien for
common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of the date of recording of such Mortgage acceptable to mortgage
lending institutions in the area in which the related Mortgaged Property
is located and specifically referred to in the lender's title insurance
policy or attorney's opinion of title and abstract of title delivered to
the originator of such Mortgage Loan, and (3) such other matters to which
like properties are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security intended
to be provided by the Mortgage, of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and had full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement;
(vii) This Agreement creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the
"UCC"), in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such against
creditors of and purchasers from the Depositor;
(viii) The Mortgage Loans constitute "instruments" within the
meaning of the applicable UCC;
(ix) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Mortgage
Loans. The Depositor has not authorized the filing of and is not aware of
any financing statement against the Depositor that includes a description
of the collateral covering the Mortgage Loans other than a financing
statement relating to the security interest granted to the Trustee
hereunder or that has been terminated. The Depositor is not aware of any
judgment or tax lien filings against the Depositor;
(x) None of the Mortgage Loans have any marks or notations
indicating that such Mortgage Loans have been pledged, assigned or
otherwise conveyed to any Person other than the Trustee; and
(xi) The Depositor has received all consents and approvals required
by the terms of the Mortgage Loans to convey the Mortgage Loans hereunder
to the Trustee.
The foregoing representations made in this Section 2.03 shall survive the
termination of this Agreement and shall not be waived by any party hereto.
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Section 2.04 Discovery of Breach; Repurchase or Substitution of Mortgage
Loans.
(a) Pursuant to Sections 2(b) and 2(d) of the Mortgage Loan Purchase and
Sale Agreement, the Seller has made certain representations and warranties as to
the characteristics of the Mortgage Loans as of the Closing Date, including
representations and warranties that no Mortgage Loan is a "high-cost home loan"
as defined under any local, state, or federal laws, and each of the Depositor
and the Trustee intend that the Mortgage Loans (including any Replacement
Mortgage Loans) included in the Trust Fund satisfy such representations and
warranties. The Depositor, for the benefit of the Trustee and the
Certificateholders hereby assigns any such rights against the Seller to the
Trustee and the Seller acknowledges that it has agreed to comply with the
provisions of this Section 2.04 in respect of a breach of any of such
representations and warranties.
It is understood and agreed that such representations and warranties set
forth in Section 2(b) and 2(d) of the Mortgage Loan Purchase and Sale Agreement
shall survive delivery of the Trustee Mortgage Files and the Assignment of
Mortgage of each Mortgage Loan to the Trustee and shall continue throughout the
term of this Agreement. Upon (i) discovery or receipt by the Depositor of
written notice of any materially defective document in a related Trustee
Mortgage File or, following the date of delivery to the Trustee of a Custodian's
Final Trust Receipt as required under any Custody Agreement, that a document is
missing from a related Trustee Mortgage File, or (ii) discovery by the Depositor
or the Seller of the breach by the Seller of any representation or warranty
under the Mortgage Loan Purchase and Sale Agreement in respect of any Mortgage
Loan, which materially adversely affects the value of that Mortgage Loan or the
interest therein of the Certificateholders (a "Defective Mortgage Loan") (each
of such parties hereby agreeing to give written notice thereof to the Trustee
and the other of such parties), the Trustee, or its designee, shall promptly
notify the Depositor in writing of such defective or missing document or breach
and request that the Depositor deliver such missing document or cure or cause
the cure of such defect or breach within 90 days from the date that the
Depositor discovered or was notified of such missing document, defect or breach,
and if the Depositor does not deliver such missing document or cure such defect
or breach in all material respects during such period, the Trustee shall enforce
the Seller's obligation under the Mortgage Loan Purchase and Sale Agreement and
cause the Seller to repurchase that Mortgage Loan from the Trust Fund at the
Purchase Price on or prior to the Determination Date following the expiration of
such 90-day period (subject to Section 2.04(b) below); provided, however, that,
in connection with any such breach that could not reasonably have been cured
within such 90-day period, if the Seller shall have commenced to cure such
breach within such 90-day period, the Seller shall be permitted to proceed
thereafter diligently and expeditiously to cure the same within an additional
90-day period. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the related Distribution Account, and the Trustee, or its designee,
upon receipt of written certification from the Securities Administrator of such
deposit, shall release to the Seller, the related Trustee Mortgage File and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranties, as either party shall
furnish to it and as shall be necessary to vest in such party any Mortgage Loan
released pursuant hereto and the Trustee, or its designee, shall have no further
responsibility with regard to such Trustee Mortgage File (it being understood
that the Trustee shall have no responsibility for
46
determining the sufficiency of such assignment for its intended purpose). In
lieu of repurchasing any such Mortgage Loan as provided above, either party may
cause such Mortgage Loan to be removed from the Trust Fund (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Replacement
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.04(b) below. It is understood and agreed that the obligation of the Seller to
cure or to repurchase (or to substitute for) any Mortgage Loan as to which a
document is missing, a material defect in a constituent document exists or as to
which such a breach has occurred and is continuing shall constitute the sole
remedy against the such party respecting such omission, defect or breach
available to the Trustee on behalf of the Certificateholders.
(b) Any substitution of Replacement Mortgage Loans for Deleted Mortgage
Loans made pursuant to Section 2.04(a) above must be effected prior to the last
Business Day that is within two years after the Closing Date. As to any Deleted
Mortgage Loan for which the Seller substitutes a Replacement Mortgage Loan or
Loans, such substitution shall be effected by delivering to the applicable
Custodian, on behalf of the Trustee, for such Replacement Mortgage Loan or
Loans, the related Mortgage Note, the related Mortgage, the related Assignment
of Mortgage to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, together with an Officers' Certificate stating
that each such Replacement Mortgage Loan satisfies the definition thereof and
specifying the Substitution Amount (as described below), if any, in connection
with such substitution. The applicable Custodian shall acknowledge receipt for
such Replacement Mortgage Loan and, within 45 days thereafter, shall review such
Mortgage Documents as specified in the related Custody Agreement and deliver to
the Trustee and the Depositor, with respect to such Replacement Mortgage Loans,
a certification substantially in the form of a revised Trust Receipt, with any
exceptions noted thereon. Within one year of the date of substitution, each
applicable Custodian shall deliver to the Trustee and the Depositor a
certification substantially in the form of a revised Final Trust Receipt, with
respect to such Replacement Mortgage Loans for which it acts as Custodian, with
any exceptions noted thereon. Monthly Payments due with respect to Replacement
Mortgage Loans in the month of substitution shall not be included as part of the
Trust Fund and shall be retained by the Seller. For the month of substitution,
distributions to the Certificateholders shall reflect the collections and
recoveries in respect of such Deleted Mortgage in the Due Period preceding the
month of substitution and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. Upon
such substitution, such Replacement Mortgage Loan shall constitute part of the
Trust Fund and shall be subject in all respects to the terms of this Agreement
and the Mortgage Loan Purchase and Sale Agreement, including all representations
and warranties thereof included in the Mortgage Loan Purchase and Sale
Agreement, in each case as of the date of substitution.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the related Servicer
shall determine the excess (each, a "Substitution Amount"), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate Stated Principal Balance of the Replacement Mortgage Loans replacing
such Deleted Mortgage Loans, together with one month's interest on such excess
amount at the applicable Net Mortgage Rate. On the date of such substitution,
the Seller, as applicable, shall deliver or cause to be delivered to the
Servicer for deposit in the Custodial
47
Account an amount equal to the related Substitution Amount, if any, and the
applicable Custodian, on behalf of the Trustee, upon receipt of the related
Replacement Mortgage Loan or Loans and certification by the Servicer of such
deposit, shall release to the Seller the related Trustee Mortgage File or Files
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as the Seller shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to the
Trustee and the Securities Administrator an Opinion of Counsel to the effect
that such substitution (either specifically or as a class of transactions) shall
not cause an Adverse REMIC Event. If such Opinion of Counsel can not be
delivered, then such substitution may only be effected at such time as the
required Opinion of Counsel can be given.
(c) Upon discovery by the Seller, the Depositor 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 within two
Business Days give written notice thereof to the other parties. In connection
therewith, the applicable party shall repurchase or, subject to the limitations
set forth in Section 2.04(b), substitute one or more Replacement Mortgage Loans
for the affected Mortgage Loan within 90 days of the earlier of discovery or
receipt of such notice with respect to such affected Mortgage Loan. Any such
repurchase or substitution shall be made in the same manner as set forth in
Section 2.04(a) above. The Trustee shall re-convey to the Seller 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.
(d) The Seller indemnifies and holds the Trust Fund, the Master Servicer,
the Securities Administrator, the Trustee, the Depositor 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 Master
Servicer, the Securities Administrator, the Depositor and any Certificateholder
may sustain in connection with any actions of such party relating to a
repurchase of a Mortgage Loan other than in compliance with the terms of this
Section 2.04 and the Mortgage Loan Purchase and Sale Agreement, to the extent
that any such action causes an Adverse REMIC Event.
Section 2.05 [Reserved.]
Section 2.06 Grant Clause.
(a) It is intended that the conveyance of the Depositor's right, title and
interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (1) the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement; (2) the Depositor hereby grants to the Trustee for the
benefit of the Holders of the Certificates a first priority security interest in
all of the Depositor's right, title and interest in, to and under, whether now
owned or hereafter acquired, the Trust Fund and all proceeds of any and all
48
property constituting the Trust Fund to secure payment of the Certificates; and
(3) this Agreement shall constitute a security agreement under applicable law.
If such conveyance is deemed to be in respect of a loan and the trust created by
this Agreement terminates prior to the satisfaction of the claims of any Person
holding any Certificate, 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, and all proceeds shall be distributed as herein
provided.
(b) The Depositor shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property described above, 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 this Agreement. The Depositor will, at
its own expense, make all initial filings on or about the Closing Date and shall
forward a copy of such filing or filings to the Trustee. Without limiting the
generality of the foregoing, the Depositor shall prepare and forward for filing,
or shall cause to be forwarded for filing, at the expense of the Depositor, all
filings necessary to maintain the effectiveness of any original filings
necessary under the relevant UCC to perfect the Trustee's security interest in
or lien on the Mortgage Loans, including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by (1) any change
of name of the Seller, the Depositor or the Trustee, (2) any change of location
of the place of business or the chief executive office of the Seller or the
Depositor, (3) any transfer of any interest of the Seller or the Depositor in
any Mortgage Loan or (4) any change under the relevant UCC or other applicable
laws. Neither of the Seller nor the Depositor shall organize under the law of
any jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice of
such action to its immediate and intermediate transferee, including the Trustee.
Before effecting such change, the Seller or the Depositor proposing to change
its jurisdiction of organization shall prepare and file in the appropriate
filing office any financing statements or other statements necessary to continue
the perfection of the interests of its immediate and mediate transferees,
including the Trustee, in the Mortgage Loans. In connection with the
transactions contemplated by this Agreement, each of the Seller and the
Depositor authorizes its immediate or mediate transferee to file in any filing
office any initial financing statements, any amendments to financing statements,
any continuation statements, or any other statements or filings described in
this paragraph (b).
ARTICLE III
THE CERTIFICATES
Section 3.01 The Certificates.
(a) The Certificates shall be issuable in registered form only and shall
be securities governed by Article 8 of the New York Uniform Commercial Code. The
Certificates will be evidenced by one or more certificates, beneficial ownership
of which will be held in the minimum denominations in Certificate Principal
Amount or Notional Amount specified in the
49
Preliminary Statement to this Agreement and in integral multiples of $1 in
excess thereof, or in the Percentage Interests specified in the Preliminary
Statement to this Agreement, as applicable. The Class X-A Certificate consist of
two Components: the Pool 1 Component and the Pool 2 Component. The Holder of the
Class X-A Certificate may not transfer the related Components separately.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Each Certificate shall, on
original issue, be authenticated by the Authenticating Agent upon the order of
the Depositor upon receipt by the Trustee of the Trustee Mortgage Files
described in Section 2.01. 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 provided
for herein, executed by an authorized officer of the Authenticating Agent, by
manual signature, and such certification 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. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Trustee to the Authenticating Agent for authentication and the
Authenticating Agent shall authenticate and deliver such Certificates as in this
Agreement provided and not otherwise.
(c) The Class B-4, Class B-5, Class B-6, Class A-R and Class LT-R
Certificates offered and sold in reliance on the exemption from registration
under Rule 144A under the Act shall be issued initially in definitive, fully
registered form without interest coupons with the applicable legends set forth
in Exhibit A added to the forms of such Certificates (each, a "Restricted Global
Security").
Section 3.02 Registration.
The Securities Administrator is hereby appointed, and the Securities
Administrator hereby accepts its appointment as, initial Certificate Registrar
in respect of the Certificates and shall maintain books for the registration and
for the transfer of Certificates (the "Certificate Register"). The Trustee may
appoint a bank or trust company to act as successor Certificate Registrar. A
registration book shall be maintained for the Certificates collectively. The
Certificate Registrar may resign or be discharged or removed and a new successor
may be appointed in accordance with the procedures and requirements set forth in
Sections 6.06 and 6.07 hereof with respect to the resignation, discharge or
removal of the Securities Administrator and the appointment of a successor
Securities Administrator. The Certificate Registrar may appoint, by a written
instrument delivered to the Holders and the Master Servicer, any bank or trust
company to act as co-registrar under such conditions as the Certificate
Registrar may prescribe; provided, however, that the Certificate Registrar shall
not be relieved of any of its duties or responsibilities hereunder by reason of
such appointment.
Section 3.03 Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and
50
surrender of such Certificate at the office of the Certificate Registrar duly
endorsed or accompanied by an assignment duly executed by such Holder or his
duly authorized attorney in such form as shall be satisfactory to the
Certificate Registrar. Upon the transfer of any Certificate in accordance with
the preceding sentence, the Trustee shall execute, and the Authenticating Agent
shall authenticate and deliver to the transferee, one or more new Certificates
of the same Class and evidencing, in the aggregate, the same aggregate
Certificate Principal Amount (or Notional Amount) as the Certificate being
transferred. No service charge shall be made to a Certificateholder for any
registration of transfer of Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any registration of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations, representing
in the aggregate the same Certificate Principal Amount (or Notional Amount) as
the Certificate surrendered, upon surrender of the Certificate to be exchanged
at the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and the
Authenticating Agent shall authenticate, date and deliver the Certificates which
the Certificateholder making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, 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 transfer such a Certificate only as provided herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor
or an affiliate (as defined in Rule 405 under the 0000 Xxx) of the
Depositor or (y) being made to a "qualified institutional buyer" (a "QIB")
as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Act") by a transferor that has provided the Certificate Registrar with a
certificate in the form of Exhibit H hereto; and
(ii) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the Act,
or to any Person all of the equity owners in
51
which are such accredited investors, by a transferor who furnishes to the
Certificate Registrar a letter of the transferee substantially in the form
of Exhibit I hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person or shall be effective unless
the Certificate Registrar, on behalf of the Trustee, has received (A) a
certificate substantially in the form of Exhibit J hereto (or Exhibit B, in the
case of a Residual Certificate) from such transferee or (B) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that the
purchase and holding of such a Certificate will not constitute or result in
prohibited transactions under Title I of ERISA or Section 4975 of the Code and
will not subject the Certificate Registrar, the Trustee, the Master Servicer,
the Depositor or the Securities Administrator to any obligation in addition to
those undertaken in this Agreement; provided, however, that the Certificate
Registrar will not require such certificate or opinion in the event that, as a
result of a change of law or otherwise, counsel satisfactory to the Certificate
Registrar has rendered an opinion to the effect that the purchase and holding of
an ERISA-Restricted Certificate by a Plan or a Person that is purchasing or
holding such a Certificate with the assets of a Plan will not constitute or
result in a prohibited transaction under Title I of ERISA or Section 4975 of the
Code. Each Transferee of an ERISA-Restricted Certificate that is a Book-Entry
Certificate shall be deemed to have made the representations set forth in
Exhibit J. The preparation and delivery of the certificate and opinions referred
to above shall not be an expense of the Trust Fund, the Certificate Registrar,
the Trustee, the Master Servicer, the Depositor or the Securities Administrator.
Notwithstanding the foregoing, no opinion or certificate shall be required
for the initial issuance of the ERISA-Restricted Certificates. The Certificate
Registrar shall have no obligation to monitor transfers of Book-Entry
Certificates that are ERISA-Restricted Certificates and shall have no liability
for transfers of such Certificates in violation of the transfer restrictions.
The Certificate Registrar shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact not
permitted by this Section 3.03(d) and none of the Securities Administrator, the
Trustee or the Paying Agent shall have 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 Certificate Registrar in accordance with the
foregoing requirements. The Securities Administrator, on behalf of the Trustee,
shall be entitled, but not obligated, to recover from any Holder of any
ERISA-Restricted Certificate that was in fact a Plan or a Person acting on
behalf of a Plan any payments made on such ERISA-Restricted Certificate at and
after either such time. Any such payments so recovered by the Securities
Administrator, on behalf of the Trustee, shall be paid and delivered by the
Securities Administrator, on behalf of the Trustee, to the last preceding Holder
of such Certificate that is not such a Plan or Person acting on behalf of a
Plan.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be
52
applicable. No service charge shall be made to the Certificateholder for any
registration, transfer or exchange of a Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person is (A) not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate in
connection with the conduct of a trade or business within the United States and
has furnished the transferor and the Certificate Registrar with an effective
Internal Revenue Service Form W-8ECI or successor form at the time and in the
manner required by the Code (any such person who is not covered by clause (A) or
(B) above is referred to herein as a "Non-permitted Foreign Holder").
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee and the Certificate Registrar an affidavit in
substantially the form attached hereto as Exhibit B representing and warranting,
among other things, that such transferee is neither a Disqualified Organization,
an agent or nominee acting on behalf of a Disqualified Organization, nor a
Non-permitted Foreign Holder (any such transferee, a "Permitted Transferee"),
and the proposed transferor shall deliver to the Trustee and the Certificate
Registrar an affidavit in substantially the form attached hereto as Exhibit C.
In addition, the Trustee or the Certificate Registrar may (but shall have no
obligation to) require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Trustee and the Certificate Registrar, that such proposed transferee or, if the
proposed transferee is an agent or nominee, the proposed beneficial owner, is
not a Disqualified Organization, agent or nominee thereof, or a Non-permitted
Foreign Holder. Notwithstanding the registration in the Certificate Register of
any transfer, sale, or other disposition of a Residual Certificate to a
Disqualified Organization, an agent or nominee thereof, or Non-permitted Foreign
Holder, such registration shall be deemed to be of no legal force or effect
whatsoever and such Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder shall not be deemed to be a Certificateholder for
any purpose hereunder, including, but not limited to, the receipt of
distributions on such Residual Certificate. The Depositor, the Certificate
Registrar and the Trustee shall be under no liability to any Person for any
registration or transfer of a Residual Certificate to a Disqualified
Organization, agent or nominee thereof or Non-permitted Foreign Holder or for
the Paying Agent making any payments due on such Residual Certificate to the
Holder thereof or for taking any other action with respect to such Holder under
the provisions of this Agreement, so long as the transfer was effected in
accordance with this Section 3.03(f), unless the Certificate Registrar shall
have actual knowledge at the time of such transfer or the time of such payment
or other action that the transferee is a Disqualified Organization, or an agent
or nominee thereof, or Non-permitted Foreign Holder. The Certificate Registrar
shall be entitled to recover from any Holder of a Residual Certificate that was
a Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder at the time it became a Holder or any subsequent time it became a
Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder, all payments made on such Residual Certificate at and after either such
times (and all costs and expenses, including but not limited to attorneys' fees,
incurred in connection therewith). Any
53
payment (not including any such costs and expenses) so recovered by the
Certificate Registrar shall be paid and delivered to the last preceding Holder
of such Residual Certificate.
If any purported transferee shall become a registered Holder of a Residual
Certificate in violation of the provisions of this Section 3.03(f), then upon
receipt of written notice to the Trustee that the registration of transfer of
such Residual Certificate was not in fact permitted by this Section 3.03(f), the
last preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of such registration of transfer of such
Residual Certificate. The Depositor, the Certificate Registrar and the Trustee
shall be under no liability to any Person for any registration of transfer of a
Residual Certificate that is in fact not permitted by this Section 3.03(f), or
for the Paying Agent making any payment due on such Certificate to the
registered Holder thereof or for taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer was
registered upon receipt of the affidavit described in the preceding paragraph of
this Section 3.03(f).
(g) Each Holder or Certificate Owner of a Restricted Certificate,
ERISA-Restricted Certificate or Residual Certificate, or an interest therein, by
such Holder's or Owner's acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this section.
Section 3.04 Cancellation of Certificates.
Any Certificate surrendered for registration of transfer or exchange shall
be cancelled and retained in accordance with normal retention policies with
respect to cancelled certificates maintained by the Trustee or the Certificate
Registrar.
Section 3.05 Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee or
the Certificate Registrar or (ii) the Trustee or the Certificate Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee and the Certificate Registrar
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Depositor, the Trustee or the
Certificate Registrar that such destroyed, lost or stolen Certificate has been
acquired by a protected purchaser, the Trustee shall execute and the
Authenticating Agent shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and Certificate Principal Amount. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee, the Depositor or the
Certificate Registrar 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 Trustee, the Depositor or
the Certificate Registrar) connected therewith. Any replacement Certificate
issued pursuant to this Section 3.05 shall constitute complete and indefeasible
evidence of ownership in the applicable Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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If after the delivery of such new Certificate, a protected purchaser of
the original Certificate in lieu of which such new Certificate was issued
presents for payment such original Certificate, the Depositor, the Certificate
Registrar and the Trustee or any agent shall be entitled to recover such new
Certificate from the Person to whom it was delivered or any Person taking
therefrom, except a protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Depositor, the Certificate Registrar, the
Trustee or any agent in connection therewith.
Section 3.06 Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar, the Paying Agent and any agent of any of them shall treat the Person
in whose name any Certificate is registered upon the books of the Certificate
Registrar as the owner of such Certificate for the purpose of receiving
distributions pursuant to Sections 5.01 and 5.02 and for all other purposes
whatsoever, and neither the Depositor, the Master Servicer, the Trustee, the
Certificate Registrar, the Paying Agent nor any agent of any of them shall be
affected by notice to the contrary.
Section 3.07 Temporary Certificates.
(a) Pending the preparation of definitive Certificates, upon the order
of the Depositor, the Trustee shall execute and the Authenticating Agent shall
authenticate and deliver temporary Certificates that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such variations as the authorized officers executing such
Certificates may determine, as evidenced by their execution of such
Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Certificate Registrar without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and the Authenticating Agent shall
authenticate and deliver in exchange therefor a like aggregate Certificate
Principal Amount of definitive Certificates of the same Class in the authorized
denominations. Until so exchanged, the temporary Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Certificates of the same Class.
Section 3.08 Appointment of Paying Agent.
The Trustee may appoint a Paying Agent (which may be the Trustee) for the
purpose of making distributions to the Certificateholders hereunder. The Trustee
hereby appoints the Securities Administrator as the initial Paying Agent. The
Trustee shall cause any Paying Agent, other than the Securities Administrator,
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for the payment to the Certificateholders in an Eligible Account (which shall
be the
55
Distribution Account) in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to the Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to the Certificateholders on each Distribution Date
and any amounts not so paid shall be returned on such Distribution Date to the
Trustee. If the Paying Agent is not the Trustee, the Trustee shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in immediately available funds, the funds to
be distributed on such Distribution Date. Any Paying Agent shall be either a
bank or trust company or otherwise authorized under law to exercise corporate
trust powers.
Section 3.09 Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance, shall
be issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Book-Entry Certificates,
except as provided in Section 3.09(c). Unless Definitive Certificates have been
issued to Certificate Owners of Book-Entry Certificates pursuant to Section
3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Certificate Registrar, the Paying Agent and the Trustee
shall deal with the Clearing Agency for all purposes (including the making
of distributions on the Book-Entry Certificates) as the authorized
representatives of the Certificate Owners and the Clearing Agency and
shall be responsible for crediting the amount of such distributions to the
accounts of such Persons entitled thereto, in accordance with the Clearing
Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and shall
be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued pursuant
to Section 3.09(c), the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal of and interest on the Book-Entry Certificates
to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the
Securities Administrator shall give all such notices and communications
specified herein to be given to Holders of the Book-Entry Certificates to the
Clearing Agency.
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(c) If (i) (A) the Clearing Agency or the Depositor advises the Paying
Agent in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities with respect to the Book-Entry
Certificates, and (B) the Depositor is unable to locate a qualified successor
satisfactory to the Depositor and the Paying Agent or (ii) after the occurrence
of an Event of Default, Certificate Owners representing beneficial interests
aggregating not less than 50% of the Class Principal Amount of a Class of
Book-Entry Certificates advise the Paying Agent and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners of a Class of Book-Entry Certificates (each such
event, a "Book-Entry Termination"), the Certificate Registrar shall notify the
Clearing Agency to effect notification to all Certificate Owners, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Certificate Registrar shall issue the Definitive
Certificates. Neither the Depositor, the Certificate Registrar nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Certificate Registrar, to the
extent applicable, with respect to such Definitive Certificates and the
Certificate Registrar shall recognize the holders of the Definitive Certificates
as Certificateholders hereunder. Notwithstanding the foregoing, the Certificate
Registrar, upon the instruction of the Depositor, shall have the right to issue
Definitive Certificates on the Closing Date in connection with credit
enhancement programs.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01 Custodial Accounts; Distribution Account.
(a) On or prior to the Closing Date, the Master Servicer shall have
caused the Servicers to establish and maintain one or more Custodial Accounts,
as provided in the related Servicing Agreements, into which all Scheduled
Payments and unscheduled payments with respect to the Mortgage Loans, net of any
deductions or reimbursements permitted under the related Servicing Agreement,
shall be deposited. On each Distribution Account Deposit Date, the Servicers
shall remit to the Securities Administrator for deposit into the Distribution
Account, all amounts so required to be deposited into such account in accordance
with the terms of the related Servicing Agreement.
(b) The Securities Administrator, as Paying Agent for the Trustee, shall
establish and maintain an Eligible Account entitled "Distribution Account of
HSBC Bank, USA, National Association, as Trustee for the benefit of Sequoia
Mortgage Trust 2005-1 Holders of Mortgage Pass-Through Certificates." The
Securities Administrator shall, promptly upon receipt from the
57
Servicers on each Distribution Account Deposit Date, deposit into the
Distribution Account and retain on deposit until the related Distribution Date
the following amounts:
(i) the aggregate of collections with respect to the Mortgage
Loans remitted by the Servicers from the related Custodial Accounts in
accordance with the Servicing Agreements;
(ii) any amounts required to be deposited by the Master Servicer
with respect to the Mortgage Loans for the related Due Period pursuant to
this Agreement, including the amount of any Advances or Compensation
Interest Payments with respect to the Mortgage Loans not paid by the
Servicers; and
(iii) any other amounts so required to be deposited in the
Distribution Account in the related Due Period pursuant to this Agreement.
(c) In the event the Master Servicer or a Servicer has remitted in error
to the Distribution Account any amount not required to be remitted in accordance
with the definition of Available Distribution Amount, it may at any time direct
the Securities Administrator to withdraw such amount from the Distribution
Account for repayment to the Master Servicer or Servicer, as applicable, by
delivery of an Officer's Certificate to the Securities Administrator and the
Trustee which describes the amount deposited in error.
(d) On each Distribution Date and final Distribution Date of the
Certificates in accordance with Section 7.01, the Securities Administrator, as
Paying Agent, shall distribute the Available Distribution Amount to the
Certificateholders and any other parties entitled thereto in the amounts and
priorities set forth in Section 5.02. The Securities Administrator may from time
to time withdraw from the Distribution Account and pay the Master Servicer, the
Trustee, the Securities Administrator or any Servicer any amounts permitted to
be paid or reimbursed to such Person from funds in the Distribution Account
pursuant to the clauses (A) through (D) of the definition of Available
Distribution Amount.
(e) Funds in the Distribution Account may be invested in Permitted
Investments selected by and at the written direction of the Securities
Administrator, which shall mature not later than one Business Day prior to the
Distribution Date (except that if such Permitted Investment is an obligation of
the Securities Administrator, then such Permitted Investment shall mature not
later than such applicable Distribution Date) and any such Permitted Investment
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee (in its capacity as such)
or its nominee. All income and gain realized from any Permitted Investment shall
be for the benefit of the Securities Administrator, as additional compensation
for its duties hereunder, and shall be subject to its withdrawal or order from
time to time, and shall not be part of the Trust Fund. The amount of any losses
incurred in respect of any such investments shall be deposited in such
Distribution Account by the Securities Administrator out of its own funds,
without any right of reimbursement therefor, immediately as realized.
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Section 4.02 [Reserved].
Section 4.03 [Reserved].
Section 4.04 Reports to Trustee and Certificateholders.
On each Distribution Date, the Securities Administrator shall have
prepared and shall make available to the Trustee and each Certificateholder a
written report setting forth the following information (on the basis of Mortgage
Loan level information obtained from the Master Servicer and the Servicers):
(a) the amount of the distributions, separately identified, with respect
to each Class of Certificates;
(b) the amount of the distributions set forth in the clause (a)
allocable to principal, separately identifying the aggregate amount of any
Principal Prepayments or other unscheduled recoveries of principal included in
that amount;
(c) the amount of the distributions set forth in the clause (a)
allocable to interest and how it was calculated;
(d) the amount of any unpaid Interest Shortfall, Net WAC Shortfall or
unpaid Net WAC Shortfall (if applicable) and the related accrued interest
thereon, with respect to each Class of Certificates;
(e) the Class Principal Amount of each Class of Certificates after
giving effect to the distribution of principal on that Distribution Date;
(f) the Aggregate Stated Principal Balance of the Mortgage Loans in each
Mortgage Pool and the Pool 1 Net WAC or the Pool 2 Net WAC, as applicable, at
the end of the related Prepayment Period;
(g) the Stated Principal Balance of the Mortgage Loans in each Mortgage
Pool whose Mortgage Rates adjust on the basis of the One-Month LIBOR index and
the Six-Month LIBOR index at the end of the related Prepayment Period;
(h) the Pro Rata Senior Percentage, Senior Percentage and the
Subordinate Percentage for each Mortgage Pool for the following Distribution
Date;
(i) the Senior Prepayment Percentage and Subordinate Prepayment
Percentage for each Mortgage Pool for the following Distribution Date;
(j) in the aggregate and with respect to each Mortgage Pool, the amount
of the Master Servicing Fee and the Servicing Fee paid to or retained by the
Master Servicer and by each Servicer, respectively;
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(k) in the aggregate and with respect to each Mortgage Pool, the amount
of Advances for the related Due Period;
(l) in the aggregate and with respect to each Mortgage Pool, the number
and Stated Principal Balance of the Mortgage Loans that were (A) Delinquent
(exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days, (2) 60 to 89
days and (3) 90 or more days, (B) in foreclosure and Delinquent (1) 30 to 59
days, (2) 60 to 89 days and (3) 90 or more days and (C) in bankruptcy as of the
close of business on the last day of the calendar month preceding that
Distribution Date;
(m) [Reserved];
(n) in the aggregate and with respect to each Mortgage Pool, for any
Mortgage Loan as to which the related Mortgaged Property was an REO Property
during the preceding calendar month, the principal balance of that Mortgage Loan
as of the close of business on the last day of the related Due Period;
(o) in the aggregate and with respect to each Mortgage Pool, the
aggregate number and principal balance of any REO Properties as of the close of
business on the last day of the preceding Due Period;
(p) in the aggregate and with respect to each Mortgage Pool, the amount
of Realized Losses incurred during the preceding calendar month;
(q) in the aggregate and with respect to each Mortgage Pool, the
cumulative amount of Realized Losses incurred since the Closing Date;
(r) the Realized Losses, if any, allocated to each Class of Certificates
on that Distribution Date;
(s) the Certificate Interest Rate for each Class of Certificates for
that Distribution Date; and
(t) the amount of any Principal Transfer Amounts or Interest Transfer
Amounts paid to an Undercollateralized Group or Principal Transfers between
Groups in the event of Rapid Prepayment Conditions.
The Securities Administrator shall make such reports available each month
via the Master Servicer's website at xxxx://xxx.xxxxxxx.xxx. Assistance in using
the website may be obtained by calling the Master Servicer's customer service
desk at (000) 000-0000. Certificateholders and other parties that are unable to
use the website are entitled to have a paper copy mailed to them via first class
mail by contacting the Securities Administrator and indicating such. In
preparing or furnishing the foregoing information to the Trustee, the Securities
Administrator shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Properties
that has been provided to the Securities Administrator by
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the Master Servicer and the Servicers, and the Securities Administrator shall
not be obligated to verify, recompute, reconcile or recalculate any such
information or data.
Upon the reasonable advance written request of any Certificateholder that
is a savings and loan, bank or insurance company, which request, if received by
the Trustee or any agent thereof, shall be promptly forwarded to the Securities
Administrator, the Securities Administrator shall provide, or cause to be
provided, (or, to the extent that such information or documentation is not
required to be provided by a Servicer under the applicable Servicing Agreement,
shall use reasonable efforts to obtain such information and documentation from
such Servicer, and provide) to such Certificateholders such reports and access
to information and documentation regarding the Mortgage Loans as such
Certificateholders may reasonably deem necessary to comply with applicable
regulations of the Office of Thrift Supervision or its successor or other
regulatory authorities with respect to an investment in the Certificates;
provided, however, that the Securities Administrator shall be entitled to be
reimbursed by such Certificateholders for the Securities Administrator's actual
expenses incurred in providing such reports and access.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01 Distributions Generally.
(a) Subject to Section 7.01 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee or the Paying Agent shall
make distributions in accordance with this Article V. Such distributions shall
be made by check mailed to each Certificateholder's address as it appears on the
Certificate Register of the Certificate Registrar or, upon written request made
to the Securities Administrator at least five Business Days prior to the related
Record Date by any Certificateholder owning an aggregate initial Certificate
Principal Amount of at least $1,000,000, or in the case of a Class of
Interest-Only Certificates or Residual Certificate, a Percentage Interest of not
less than 100%, by wire transfer in immediately available funds to an account
specified in the request and at the expense of such Certificateholder; provided,
however, that the final distribution in respect of any Certificate shall be made
only upon presentation and surrender of such Certificate at the Certificate
Registrar's Corporate Trust Office; provided, further, that the foregoing
provisions shall not apply to any Class of Certificates as long as such
Certificate remains a Book-Entry Certificate in which case all payments made
shall be made through the Clearing Agency and its Clearing Agency Participants.
Wire transfers will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution.
Notwithstanding such final payment of principal of any of the Certificates, each
Residual Certificate will remain outstanding until the termination of each REMIC
and the payment in full of all other amounts due with respect to the Residual
Certificates and at such time such final payment in retirement of any Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Certificate Registrar's Corporate Trust Office. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made
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on the next succeeding Business Day.
(b) All distributions or allocations made with respect to the
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Class Principal Amounts or initial Class Notional
Amounts (or Percentage Interests).
Section 5.02 Distributions from the Distribution Account.
(a) Subject to Sections 5.02(b), (c), (l) and (m), on each Distribution
Date, the Available Distribution Amount for the related Mortgage Pool (in the
case of the Components of the Class X-A Certificates and the Senior Certificates
other than the Class X-B Certificates) and the Mortgage Pools in the aggregate
(in the case of the Subordinate Certificates and the Class X-B Certificates)
shall be withdrawn by the Securities Administrator from the Distribution Account
allocated among the Classes of Senior Certificates, Components related to such
Classes and Subordinate Certificates in the following order of priority:
(i) Concurrently, from the related Available Distribution Amount,
to the payment of the Interest Distribution Amount and any accrued but
unpaid Interest Shortfalls on each Class of Senior Certificates, and each
Component thereof, of the Related Certificate Group; provided, however,
that on each Distribution Date, the amount of interest that would
otherwise be distributable to the Pool 1 Component, the Pool 2 Component
and the Class X-B Certificates, will be deposited in the Reserve Fund and
credited to the Class X-A Pool 1 Component Sub Account, the Class X-A Pool
2 Component Sub Account or the Class X-B Sub Account of the Reserve Fund,
as applicable, to the extent of the related Required Reserve Fund Deposit
for such Distribution Date;
(ii) Concurrently, to the Senior Certificates of the Related
Certificate Group, from the Available Distribution Amount remaining in the
related Mortgage Pool after application of amounts pursuant to clause (i)
above, as follows:
(A) sequentially, to the Class A-R Certificates and the
Class A-1 Certificates, in that order, the Senior Principal Distribution
Amount for Pool 1, until their respective Class Principal Amounts have
been reduced to zero; and
(B) to the Class A-2 Certificates, the Senior Principal
Distribution Amount for Pool 2, until the Class Principal Amount of such
Class has been reduced to zero;
(iii) From the Available Distribution Amount from the Mortgage Pools
in the aggregate remaining after the application of amounts pursuant to
clauses (i) and (ii) above, to the Class B-1 Certificates, the Interest
Distribution Amount and any Interest Shortfalls, in each case, for such
Class on such date;
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(iv) From the Available Distribution Amount from the Mortgage Pools
in the aggregate remaining after application of amounts pursuant to
clauses (i) through (iii) above, to the Class B-1 Certificates, such
Class' Subordinate Class Percentage of the aggregate Subordinate Principal
Distribution Amount for each Mortgage Pool, until its Class Principal
Amount has been reduced to zero;
(v) From the Available Distribution Amount from the Mortgage Pools
in the aggregate remaining after the application of amounts pursuant to
clauses (i) through (iv) above, to the Class B-2 Certificates, the
Interest Distribution Amount and any Interest Shortfalls, in each case,
for such Class on such date;
(vi) From the Available Distribution Amount from the Mortgage Pools
in the aggregate remaining after application of amounts pursuant to
clauses (i) through (v) above, to the Class B-2 Certificates, such Class'
Subordinate Class Percentage of the aggregate Subordinate Principal
Distribution Amount for each Mortgage Pool, until its Class Principal
Amount has been reduced to zero;
(vii) From the Available Distribution Amount from the Mortgage Pools
in the aggregate remaining after the application of amounts pursuant to
clauses (i) through (vi) above, to the Class B-3 Certificates, the
Interest Distribution Amount and any Interest Shortfalls, in each case,
for such Class on such date;
(viii) From the Available Distribution Amount from the Mortgage
Pools in the aggregate remaining after application of amounts pursuant to
clauses (i) through (vii) above, to the Class B-3 Certificates, such
Class' Subordinate Class Percentage of the aggregate Subordinate Principal
Distribution Amount for each Mortgage Pool, until its Class Principal
Amount has been reduced to zero;
(ix) Concurrently, (A) from the Class X-A Pool 1 Component Sub
Account, to the Class A-1 Certificates, (B) from the Class X-A Pool 2
Component Sub Account, to the Class A-2 Certificates and (C) from the
Class X-B Sub Account, sequentially, to the Class B-1, Class B-2 and Class
B-3 Certificates, in that order, any related Net WAC Shortfalls or related
unpaid Net WAC Shortfalls for such date;
(x) From the remaining Available Distribution Amount from the
Mortgage Pools in the aggregate remaining after application of amounts
pursuant to clauses (i) through (viii) in the following order of priority:
(A) to the Class B-4 Certificates, the Interest Distribution
Amount and any Interest Shortfalls, in each case, for such Class and
date;
(B) to the Class B-4 Certificates, such Class' Subordinate
Class Percentage of the aggregate Subordinate Principal Distribution
Amount for each Mortgage Pool, until its Class Principal Amount has
been reduced to zero;
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(C) to the Class B-5 Certificates, the Interest Distribution
Amount and any Interest Shortfalls, in each case, for such Class and
date;
(D) to the Class B-5 Certificates, such Class' Subordinate
Class Percentage of the aggregate Subordinate Principal Distribution
Amount for each Mortgage Pool, until its Class Principal Amount has
been reduced to zero;
(E) to the Class B-6 Certificates, the Interest Distribution
Amount and any Interest Shortfalls, in each case, for such Class and
date; and
(F) to the Class B-6 Certificates, such Class' Subordinate
Class Percentage of the aggregate Subordinate Principal Distribution
Amount for each Mortgage Pool, until its Class Principal Amount has
been reduced to zero; and
(xi) To the Class A-R Certificate and the Class LT-R Certificate,
any remaining amount of the Available Distribution Amount from the
Mortgage Pools in the aggregate allocated as provided in Section 5.02(d).
(b) On each Distribution Date on and after the Credit Support Depletion
Date, the Available Distribution Amount for the Mortgage Pools shall be combined
and distributed to the remaining Classes of Certificates, first, to pay the
Interest Distribution Amount and any accrued but unpaid Interest Shortfalls;
second, to pay principal on a pro rata basis; third, to pay any Net WAC
Shortfall or any unpaid Net WAC Shortfall; and fourth, to the Class A-R and
Class LT-R Certificates, any remaining Available Distribution Amount from such
Mortgage Pool.
(c) Notwithstanding the priority and allocation set forth in Section
5.02(a), if with respect to any Class of Subordinate Certificates on any
Distribution Date the aggregate of the related Class Subordination Percentages
of such Class and of all other Classes of Subordinate Certificates which have a
higher numerical Class designation than such Class is less than the Original
Applicable Credit Support Percentage for such Class, no distribution of
Principal Prepayments shall be made to any such Classes and the amount of such
Principal Prepayment otherwise distributable to such Classes shall be
distributed to any Classes of Subordinate Certificates having lower numerical
Class designations than such Class, pro rata, based on the Class Principal
Amounts of the respective Classes immediately prior to such Distribution Date
and shall be distributed in the sequential order provided in Section 5.02(a)
above.
(d) Amounts distributed to the Residual Certificates pursuant to
subparagraph (a)(x) of this Section 5.02 on any Distribution Date shall be
allocated among the REMIC residual interests represented thereby such that each
such interest is allocated the excess of funds available to the related REMIC
over required distributions to the regular interests in such REMIC on such
Distribution Date.
(e) For purposes of distributions provided in paragraph (a), each
Mortgage Pool shall "relate" to the Senior Class or Classes of the applicable
Related Certificate Group.
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(f) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class A-1 Certificates, the Securities Administrator shall
withdraw from the Reserve Fund (and debit to the Class X-A Pool 1 Component Sub
Account), the amount for distribution to such Class equal to the lesser of (1)
the amount of such Net WAC Shortfall and (2) the amounts credited to the related
Sub Account as provided in Section 5.02(a)(ix).
(g) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class A-2 Certificates, the Securities Administrator will
withdraw from the Reserve Fund (and debit to the Class X-A Pool 2 Component Sub
Account), the amount for distribution to such Class equal to the lesser of (1)
the amount of such Net WAC Shortfall and (2) the amounts credited to the related
Sub Account as provided in Section 5.02(a)(ix).
(h) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class B-1, Class B-2 or Class B-3 Certificates, the Securities
Administrator will withdraw from the Reserve Fund (and debit to the Class X-B
Sub Account), the lesser of (1) the amount of such Net WAC Shortfall and (2) the
amounts credited to the related Sub Account as provided in Section 5.02(a)(ix).
(i) [Reserved].
(j) For purposes of distributions of interest in paragraph (a) such
distributions to a Class of Certificates on any Distribution Date shall be made
first, in respect of Current Interest; and second, in respect of Interest
Shortfalls.
(k) If, immediately after any Distribution Date, the amount credited to
any Sub Account of the Reserve Fund exceeds the initial credit thereto, the
Securities Administrator will distribute from the Reserve Fund (and debit to
such Sub Account) such excess to the Holders of the Certificates in respect of
which amounts were credited to the relevant Sub Account.
(l) Notwithstanding the priority of distributions set forth in paragraph
(a) above, if on any Distribution Date prior to the Credit Support Depletion (1)
either one of the Rapid Prepayment Conditions is satisfied on such date and (2)
the aggregate Class Principal Amount of the Senior Certificates relating to one
of the Mortgage Pools has been reduced to zero, then that portion of the
Available Distribution Amount for each Mortgage Pool described in Section
5.02(a)(ii) that represents principal collections on the Mortgage Loans shall be
applied as an additional distribution to the remaining Classes of Senior
Certificates in the other Certificate Group, in reduction of, and in proportion
to, the Class Principal Amounts thereof; provided, however, that any such
amounts distributable to the Class A-R and Class A-1 Certificates shall be
distributed first, to the Class A-R Certificates and, second, to the Class A-1
Certificates.
(m) If, on any Distribution Date, either Certificate Group would
constitute an Undercollateralized Group and the other Certificate Group
constitutes an Overcollateralized Group, then notwithstanding Section
5.02(a)(ii), the Available Distribution Amount for the Overcollateralized Group,
to the extent remaining following distributions of interest and principal to the
related Senior Certificates of that Certificate Group shall be distributed, up
to the sum of the Interest Transfer Amount and the Principal Transfer Amount for
the
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Undercollateralized Group, to the Senior Certificates related to the
Undercollateralized Group in payment of accrued but unpaid interest, if any, and
then to such Senior Certificates as principal, in the same order and priority as
such Certificates would receive other distributions of principal.
Section 5.03 Allocation of Losses.
(a) On or prior to each Distribution Date, the Master Servicer shall
aggregate the information provided by each Servicer with respect to the total
amount of Realized Losses experienced on the Mortgage Loans for the related
Distribution Date.
(b) On each Distribution Date, the principal portion of Realized Losses
shall be allocated as follows:
first, to the Classes of Subordinate Certificates in reverse order
of their respective numerical Class designations (beginning with the Class
of Subordinate Certificates with the highest numerical Class designation)
until the Class Principal Amount of each such Class is reduced to zero;
and
second, to each Class of Senior Certificates relating to the
Mortgage Pool which sustained such loss (allocated among the related
Senior Classes on a pro rata basis), in each case, until the Class
Principal Amount of such Class of Senior Certificates is reduced to zero.
(c) On each Distribution Date, the Class Principal Amount of the Class
of Subordinate Certificates then outstanding with the highest numerical Class
designation shall be reduced on each Distribution Date by the amount, if any, by
which the aggregate of the Class Principal Amounts of all outstanding Classes of
Certificates (after giving effect to the distribution of principal on such
Distribution Date) exceeds the Aggregate Stated Principal Balance for the
following Distribution Date.
(d) Any allocation of a loss pursuant to this section to a Class of
Certificates shall be achieved by reducing the Class Principal Amount thereof by
the amount of such loss.
(e) Subsequent Recoveries in respect of the Mortgage Loans shall be
distributed to the Certificates still outstanding, in accordance with Section
5.02, and the Class Principal Amount of each Class of Certificates then
outstanding that has been reduced due to application of a Realized Loss will be
increased, in order of seniority, by the amount of such Subsequent Recovery.
Section 5.04 Advances by Master Servicer.
If any Servicer fails to remit any Advance required to be made under thess
applicable Servicing Agreement, the Master Servicer shall itself make, or shall
cause the successor Servicer to make, such Advance. If the Master Servicer
determines that an Advance is required, it shall on the Business Day preceding
the related Distribution Date immediately following such Determination Date
remit to the Securities Administrator from its own funds (or funds advanced
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by the applicable Servicer) for deposit in the Distribution Account immediately
available funds in an amount equal to such Advance. The Master Servicer and each
Servicer shall be entitled to be reimbursed for all Advances made by it.
Notwithstanding anything to the contrary herein, in the event the Master
Servicer determines in its reasonable judgment that an Advance is
non-recoverable, the Master Servicer shall be under no obligation to make such
Advance. If the Master Servicer determines that an Advance is non-recoverable,
it shall, on or prior to the related Distribution Date, deliver an Officer's
Certificate to the Trustee to such effect.
Section 5.05 Compensating Interest Payments.
The amount of the aggregate Master Servicing Fees payable to the Master
Servicer in respect of any Distribution Date shall be reduced (but not below
zero) by the amount of any Compensating Interest Payment for such Distribution
Date, but only to the extent that Prepayment Interest Shortfalls relating to
such Distribution Date are required to be paid but not actually paid by the
Servicers. Such amount shall not be treated as an Advance and shall not be
reimbursable to the Master Servicer.
Section 5.06 Reserve Fund.
(a) On the Closing Date, the Securities Administrator shall establish
and maintain in the Trustee's name, in trust for the benefit of the holders of
the LIBOR Certificates and the Interest-Only Certificates, a Reserve Fund, into
which the Depositor shall, on such date, deposit $10,000.00. The Reserve Fund
shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including, without limitation, other moneys of the Trustee held pursuant to this
Agreement. The Reserve Fund shall not be an asset of any REMIC established
hereby.
(b) The Reserve Fund will be comprised of three Sub Accounts: "Class X-A
Pool 1 Component Sub Account", "Class X-A Pool 2 Component Sub Account," and
"Class X-B Sub Account". On each Distribution Date, (i) Current Interest that
would otherwise be distributable with respect to the Pool 1 Component of the
Class X-A Certificates will be credited instead to the Class X-A Pool 1
Component Sub Account, (ii) Current Interest that would otherwise be
distributable with respect to the Pool 2 Component of the Class X-A Certificates
will be credited instead to the Class X-A Pool 2 Component Sub Account and (iii)
Current Interest that would otherwise be distributable with respect to the Class
X-B Certificates will be credited instead to the Class X-B Sub Account, in each
case, to the extent of the applicable Required Reserve Fund Deposit for such
Class or Component.
(c) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class A-1 Certificates, the Securities Administrator shall
withdraw from the Reserve Fund, to the extent of funds credited to the Class X-A
Pool 1 Component Sub Account, the amount of such Net WAC Shortfall for
distribution on such Distribution Date pursuant to Section 5.02(f).
(d) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class A-2 Certificates, the Securities Administrator shall
withdraw from the Reserve Fund, to
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the extent of funds credited to the Class X-A Pool 2 Component Sub Account, the
amount of such Net WAC Shortfall for distribution on such Distribution Date
pursuant to Section 5.02(g).
(e) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class B-1, Class B-2 or Class B-3 Certificates, the Securities
Administrator shall withdraw from the Reserve Fund, to the extent of available
funds credited to the Class X-B Sub Account the amount of such Net WAC Shortfall
for distribution on such Distribution Date pursuant to Section 5.02(h).
(f) Funds on deposit in the Reserve Fund shall be invested in Permitted
Investments. Any earnings on amounts credited to the Class X-A Pool 1 Component
Sub Account and the Class X-A Pool 2 Component Sub Account shall be for the
benefit of the Class X-A Certificateholders; and any earnings on amounts
credited to the Class X-B Sub Account shall be for the benefit of the Class X-B
Certificateholders. The Interest-Only Certificates shall evidence ownership of
the Reserve Fund (and Sub Accounts thereof) for federal income tax purposes and
the Holders thereof shall direct the Securities Administrator, in writing, as to
investment of amounts on deposit therein. The applicable Interest-Only
Certificateholder(s) shall be liable for any losses incurred on such
investments. In the absence of written instructions from the applicable
Interest-Only Certificateholder as to investment of funds on deposit in the
Reserve Fund (and credited to the related Sub Account), such funds shall be
invested in money market funds as described in paragraph (ix) of the definition
of Permitted Investments in Article I. For all Federal income tax purposes,
amounts transferred by the Upper-Tier REMIC to the Reserve Fund shall be treated
as amounts distributed by the Upper-Tier REMIC to the applicable Interest-Only
Certificateholders.
(g) If, immediately after any Distribution Date, the amount credited to
any Sub Account of the Reserve Fund exceeds the initial credit thereto, the
Securities Administrator will debit such excess from such Sub Account and
distribute such excess from the Reserve Fund to the Holders of the Certificates
for which such amounts were credited to the relevant Sub Account pursuant to
Section 5.02(m).
(h) Upon termination of the Trust Fund any amounts on deposit in the
Reserve Fund and credited to a Sub Account shall be distributed to the
applicable Interest-Only Certificateholders.
ARTICLE VI
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF
DEFAULT
Section 6.01 Duties of Trustee and the Securities Administrator.
(a) The Trustee, except during the continuance of an Event of Default
and the Securities Administrator undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement. Any permissive right of
the Trustee or the Securities Administrator provided for in this Agreement shall
not be construed as a duty of the Trustee or the Securities Administrator. If an
Event of Default has occurred and has not otherwise been
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cured or waived, the Trustee or the Securities Administrator shall exercise such
of the rights and powers vested in it by this Agreement and use the same degree
of care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own affairs, unless the
Trustee is acting as Master Servicer, in which case it shall use the same degree
of care and skill as the Master Servicer hereunder.
(b) Each of the Trustee and the Securities Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee or the Securities
Administrator which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Master Servicer or any
Servicer to the Trustee or the Securities Administrator pursuant to this
Agreement, and shall not be required to recalculate or verify any numerical
information furnished to the Trustee or the Securities Administrator pursuant to
this Agreement. Subject to the immediately preceding sentence, if any such
resolution, certificate, statement, opinion, report, document, order or other
instrument is found not to conform to the form required by this Agreement in a
material manner the Trustee shall take such action as it deems appropriate to
cause the instrument to be corrected, and if the instrument is not corrected to
the Trustee's satisfaction, the Trustee will provide notice thereof to the
Certificateholders and will, at the expense of the Trust Fund, which expense
shall be reasonable given the scope and nature of the required action, take such
further action as directed by the Certificateholders.
(c) Neither the Trustee nor the Securities Administrator shall have any
liability arising out of or in connection with this Agreement, except for its
negligence or willful misconduct. Notwithstanding anything in this Agreement to
the contrary, neither the Trustee nor the Securities Administrator shall be
liable for special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits). No provision of this
Agreement shall be construed to relieve the Trustee or the Securities
Administrator from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) Neither the Trustee nor the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to
be taken by it in good faith in accordance with the direction of Holders
of Certificates as provided in Section 6.18 hereof;
(ii) For all purposes under this Agreement, the Trustee shall not
be deemed to have notice of any Event of Default (other than resulting
from a failure by the Master Servicer to furnish information to the
Trustee when required to do so) 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
Holders of the Certificates and this Agreement;
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(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of
Default (other than resulting from a failure by the Master Servicer
to furnish information to the Securities Administrator when required
to do so) 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 address provided in Section 11.07,
and such notice references the Holders of the Certificates and this
Agreement;
(iv) No provision of this Agreement shall require the Trustee
or the Securities Administrator to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; and none of the
provisions contained in this Agreement shall in any event require
the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations
of the Master Servicer under this Agreement;
(v) Neither the Trustee nor the Securities Administrator
shall be responsible for any act or omission of the Master Servicer,
the Depositor, the Seller or any Custodian.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which
may be alleged to have been delivered to or served upon it by the parties
as a consequence of the assignment of any Mortgage Loan hereunder;
provided, however, that the Trustee shall promptly remit to the applicable
Servicer upon receipt any such complaint, claim, demand, notice or other
document (i) which is delivered to the Corporate Trust Office of the
Trustee, (ii) of which a Responsible Officer has actual knowledge, and
(iii) which contains information sufficient to permit the Trustee to make
a determination that the real property to which such document relates is a
Mortgaged Property.
(e) Neither the Trustee nor the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to
be taken by it in good faith in accordance with the direction of the
Certificateholders of any Class holding Certificates which evidence, as to
such Class, Percentage Interests aggregating not less than 25% as to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee or the Securities Administrator or exercising any
trust or power conferred upon the Trustee or the Securities Administrator,
as applicable, under this Agreement.
(f) Neither the Trustee nor the Securities Administrator shall be
required to perform services under this Agreement, or to expend or risk
its own funds or otherwise incur financial liability for the performance
of any of its duties hereunder or the exercise of any of its rights or
powers if there is reasonable ground for believing that the timely payment
of its fees and expenses or the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Trustee or the Securities Administrator, as applicable, to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer or
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any Servicer under this Agreement or any Servicing 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.
(g) The Trustee shall not be held liable by reason of any
insufficiency in the Distribution Account or the Reserve Fund resulting
from any investment loss on any Permitted Investment included therein
(except to the extent that the Trustee is the obligor and has defaulted
thereon).
(h) Except as otherwise provided herein, neither the Trustee nor
the Securities Administrator shall 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 or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to
the payment or discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with respect to,
assessed or levied against, any part of the Trust Fund other than from
funds available in the Distribution Account, or (D) to confirm or verify
the contents of any reports or certificates of the Master Servicer or any
Servicer delivered to the Trustee or the Securities Administrator pursuant
to this Agreement believed by the Trustee or the Securities Administrator,
as applicable, to be genuine and to have been signed or presented by the
proper party or parties.
(i) Neither the Securities Administrator nor the Trustee shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or other officers of the Trustee or the
Securities Administrator, as applicable, unless it shall be proved that
the Trustee or the Securities Administrator, as applicable, was negligent
in ascertaining the pertinent facts.
(j) Notwithstanding anything in this Agreement to the contrary,
neither the Securities Administrator nor the Trustee shall be liable for
special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits), even if the
Trustee or the Securities Administrator, as applicable, has been advised
of the likelihood of such loss or damage and regardless of the form of
action.
(k) Neither the Securities Administrator nor the Trustee shall be
responsible for the acts or omissions of the other, it being understood
that this Agreement shall not be construed to render them agents of one
another.
Section 6.02 Certain Matters Affecting the Trustee and the
Securities Administrator.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be 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, approval, bond or
other paper or
71
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) Each of the Trustee and the Securities Administrator may
consult with counsel and any advice of its counsel or Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of
Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be personally liable for any action taken, suffered or omitted
by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by
this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, neither the Trustee nor the Securities Administrator
shall 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 (provided the same appears regular on its
face), unless requested in writing to do so by the Holders of at
least a majority in Class Principal Amount (or Percentage Interest)
of each Class of Certificates; provided, however, that, if the
payment within a reasonable time to the Trustee or the Securities
Administrator, as applicable, 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 or the Securities Administrator, as
applicable, not reasonably assured to the Trustee or the Securities
Administrator by the security afforded to it by the terms of this
Agreement, the Trustee or the Securities Administrator, as
applicable, may require reasonable indemnity against such expense or
liability or payment of such estimated expenses from the
Certificateholders as a condition to proceeding. The reasonable
expense thereof shall be paid by the party requesting such
investigation and if not reimbursed by the requesting party shall be
reimbursed by the Trust Fund to the Trustee or the Securities
Administrator, as applicable;
(v) Each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians or
attorneys, which agents, custodians or attorneys shall have any and
all of the rights, powers, duties and obligations of the Trustee and
the Securities Administrator conferred on them by such appointment,
provided that each of the Trustee and the Securities Administrator
shall continue to be responsible for its duties and obligations
hereunder to the extent provided herein, and provided further that
neither the Trustee nor the Securities Administrator shall be
responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by the Trustee or the
Securities Administrator, as applicable;
(vi) Neither the Trustee nor the Securities Administrator
shall 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, in each case
at
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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 or the Securities Administrator, as
applicable, reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
(vii) The right of the Trustee and the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or willful
misconduct in the performance of such act; and
(viii) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety in respect of the execution of the
Trust Fund created hereby or the powers granted hereunder.
Section 6.03 Trustee and Securities Administrator Not Liable for
Certificates.
The Trustee and the Securities Administrator make no representations as to
the validity or sufficiency of this Agreement or of the Certificates (other than
the certificate of authentication on the Certificates) or of any Mortgage Loan,
or related document save that the Trustee and the Securities Administrator
represent that, assuming due execution and delivery by the other parties hereto,
this Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms except that such enforceability may be subject to (A)
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally, and (B) general principles of
equity regardless of whether such enforcement is considered in a proceeding in
equity or at law. The Trustee and the Securities Administrator shall not be
accountable for the use or application by the Depositor of funds paid to the
Depositor in consideration of the assignment of the Mortgage Loans to the Trust
Fund by the Depositor or for the use or application of any funds deposited into
the Distribution Account or any other fund or account maintained with respect to
the Certificates. The Trustee and the Securities Administrator shall not be
responsible for the legality or validity of this Agreement or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder. Except as otherwise provided herein, the
Trustee and the Securities Administrator shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement.
Section 6.04 Trustee and the Securities Administrator May Own
Certificates.
The Trustee and the Securities Administrator and any Affiliate or agent of
either of them in its individual or any other capacity may become the owner or
pledgee of Certificates and may transact banking and trust business with the
other parties hereto and their Affiliates with the same rights it would have if
it were not Trustee, Securities Administrator or such agent.
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Section 6.05 Eligibility Requirements for Trustee and Securities
Administrator.
The Trustee hereunder shall at all times (i) be an institution insured by
the FDIC, (ii) be a corporation or national banking association, organized and
doing business under the laws of any State or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) not be an Affiliate of the
Master Servicer or any Servicer. If such corporation or national banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
corporation or national banking association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with provisions of this Section, the Trustee shall resign immediately
in the manner and with the effect specified in Section 6.06.
The Securities Administrator hereunder shall at all times (i) be an
institution authorized to exercise corporate trust powers under the laws of its
jurisdiction of organization, (ii) be rated at least "A/F1" by Fitch, or if not
rated by Fitch, the equivalent rating by S&P or Xxxxx'x and (iii) not be an
originator of Mortgage Loans, the Master Servicer, a Servicer, the Depositor, or
an Affiliate of the Depositor unless the Securities Administrator is in an
institutional trust department of the Securities Administrator.
Section 6.06 Resignation and Removal of Trustee and the Securities
Administrator.
(a) Each of the Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Trustee or the Securities Administrator, as applicable, the
Depositor and the Master Servicer. Upon receiving such notice of resignation,
the Depositor will promptly appoint a successor trustee or a successor
securities administrator, as applicable, by written instrument, one copy of
which instrument shall be delivered to the resigning Trustee or resigning
Securities Administrator, as applicable, one copy to the successor trustee or
successor securities administrator, as applicable, and one copy to the Master
Servicer. If no successor trustee or successor securities administrator shall
have been so appointed and shall have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee or resigning
Securities Administrator, as applicable, may petition any court of competent
jurisdiction for the appointment of a successor trustee or successor securities
administrator, as applicable. In the case of any such resignation by the
Securities Administrator, if no successor Securities Administrator shall have
been appointed and shall have accepted appointment within 60 days after the
Securities Administrator ceases to be the Securities Administrator pursuant to
this Section 6.06, then the Trustee shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator.
(b) If at any time (i) the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 6.05 and shall
fail to resign after written request therefor by the Depositor, (ii) the
Securities Administrator shall fail to perform its
74
obligations pursuant to Section 5.02 to make distributions to
Certificateholders, which failure continues unremedied for a period of one
Business Day after the date upon which written notice of such failure shall have
been given to the Securities Administrator by the Trustee or the Depositor,
(iii) the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or the Securities Administrator of its property shall be appointed, or
any public officer shall take charge or control of the Trustee or the Securities
Administrator or of either of their property or affairs for the purpose of
rehabilitation, conservation or liquidation, (iv) a tax is imposed or threatened
with respect to the Trust Fund by any state in which the Trustee or the Trust
Fund held by the Trustee is located, or (v) the continued use of the Trustee or
Securities Administrator would result in a downgrading of the rating by any
Rating Agency of any Class of Certificates with a rating, then the Depositor
shall remove the Trustee or the Securities Administrator, as applicable, and the
Depositor shall appoint a successor trustee or successor securities
administrator, as applicable, acceptable to the Depositor or the Trustee by
written instrument, one copy of which instrument shall be delivered to the
Trustee or Securities Administrator so removed, one copy each to the successor
trustee or successor securities administrator, as applicable, and one copy to
the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Percentage Interest) of each Class of Certificates may at any time upon 30 days'
written notice to the Trustee or the Securities Administrator, as applicable,
and to the Depositor remove the Trustee or the Securities Administrator, as
applicable, by such written instrument, signed by such Holders or their
attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor, one copy to the Trustee or Securities Administrator,
as applicable and one copy to the Master Servicer; the Depositor shall thereupon
appoint a successor trustee or successor securities administrator, as
applicable, in accordance with this Section.
(d) Any resignation or removal of the Trustee or the Securities
Administrator, as applicable, and appointment of a successor trustee or
successor securities administrator pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee or the successor securities administrator, as applicable, as provided in
Section 6.07.
Section 6.07 Successor Trustee and Successor Securities Administrator.
(a) Any successor trustee or successor securities administrator appointed
as provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
or predecessor securities administrator, as applicable, shall become effective
and such successor trustee or successor securities administrator, as applicable,
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 or securities administrator, as
applicable, herein. The predecessor trustee or predecessor securities
administrator, as applicable, shall deliver to the successor trustee (or assign
to the Trustee its
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interest under each Custody Agreement, to the extent permitted thereunder) or
successor securities administrator, as applicable, all Trustee Mortgage Files
and documents and statements related to each Trustee Mortgage File held by it
hereunder, and shall duly assign, transfer, deliver and pay over to the
successor trustee the entire Trust Fund, together with all necessary instruments
of transfer and assignment or other documents properly executed necessary to
effect such transfer and such of the records or copies thereof maintained by the
predecessor trustee in the administration hereof as may be requested by the
successor trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor trustee or predecessor securities administrator, as applicable,
shall execute and deliver such other instruments and do such other things as may
reasonably be required to more fully and certainly vest and confirm in the
successor trustee or successor securities administrator, as applicable, all such
rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee or successor
securities administrator, as applicable, as provided in this Section, the
predecessor trustee or predecessor securities administrator, as applicable,
shall mail notice of the succession of such trustee or securities administrator,
as applicable, hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to any Rating Agency. The expenses of such
mailing shall be borne by the Master Servicer.
Section 6.08 Merger or Consolidation of Trustee or the Securities
Administrator.
Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons succeeding to the business of the
Trustee or Securities Administrator, shall be the successor to the Trustee or
Securities Administrator 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, provided that, in the case of the Trustee, such
Person shall be eligible under the provisions of Section 6.05.
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the Trustee,
the Depositor or the Certificateholders evidencing more than 50% of the Class
Principal Amount (or Percentage Interest) of every Class of Certificates shall
have the power from time to time to appoint one or more Persons, approved by the
Trustee, to act either as co-trustees jointly with the Trustee, or as separate
trustees, or as custodians, for the purpose of holding title to, foreclosing or
otherwise taking action with respect to any Mortgage Loan outside the state
where the Trustee has its principal place of business where such separate
trustee or co-trustee is necessary or advisable (or the Trustee has been advised
by the Master Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a property securing a
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Mortgage Loan is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a property securing
a Mortgage Loan is located or in any state in which any portion of the Trust
Fund is located. The separate Trustees, co-trustees, or custodians so appointed
shall be trustees or custodians for the benefit of all the Certificateholders
and shall have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee. The
obligation of the Master Servicer to make Advances pursuant to Section 5.04
hereof shall not be affected or assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed 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 by such separate trustee,
co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable
by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee may at any time, by an instrument in writing
executed by it, with the concurrence of the Depositor, accept the
resignation of or remove any separate trustee, co-trustee or custodian, so
appointed by it or them, if such resignation or removal does not violate
the other terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee, co-trustee or custodian shall refer to this Agreement and the
conditions of this Article VI. 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 given
to the Master Servicer.
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(d) Any separate trustee, co-trustee or custodian 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, co-trustee or custodian 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.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to the Certificateholders of the appointment shall
be required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the extent
necessary to fulfill the Trustee's obligations hereunder.
(g) The Trust shall pay the reasonable compensation of the co-trustees
(which compensation shall not reduce any compensation payable to the Trustee
under such Section).
Section 6.10 Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which shall
be authorized to act on behalf of the Trustee in authenticating Certificates.
The Trustee hereby appoints the Securities Administrator as initial
Authenticating Agent, and the Securities Administrator accepts such appointment.
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 a
national banking association or a corporation 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.
(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 with 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
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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.
Section 6.11 Indemnification of the Trustee and the Securities
Administrator.
The Trustee and the Securities Administrator and their respective
directors, officers, employees and agents shall be entitled to indemnification
from the Depositor and the Trust Fund (provided that the Trust Fund's
indemnification under this Section 6.11 is limited by Section 4.01(d) for any
loss, liability or expense (including, without limitation, reasonable attorneys'
fees and disbursements (and, in the case of the Trustee, in connection with each
Custody Agreement, including the reasonable compensation and the expenses and
disbursements of its agents or counsel), incurred without negligence or willful
misconduct on their part, arising out of, or in connection with, the acceptance
or administration of the trusts created hereunder or in connection with the
performance of their duties hereunder including the costs and expenses of
defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee or the Securities
Administrator, as applicable, shall have given the Depositor written
notice thereof promptly after the Trustee, the Securities Administrator,
as applicable, shall have knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee or
the Securities Administrator, as applicable, shall cooperate and consult
fully with the Depositor in preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section 6.11,
the Trust Fund shall not be liable for settlement of any such claim by the
Trustee or the Securities Administrator, as applicable, entered into
without the prior consent of the Depositor, which consent shall not be
unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee or the Securities
Administrator, as applicable, and shall be construed to include, but not be
limited to any loss, liability or expense under any environmental law.
Section 6.12 Fees and Expenses of Securities Administrator and the
Trustee.
(a) Compensation for the services of the Securities Administrator
hereunder shall be paid from the Master Servicing Fee. The Securities
Administrator shall be entitled to all disbursements and advancements incurred
or made by the Securities Administrator in accordance with this Agreement
(including fees and expenses of its counsel and all persons not regularly in its
employment), except any such expenses arising from its negligence, bad faith or
willful
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misconduct. Xxxxx Fargo Bank, National Association shall act as Securities
Administrator for so long as it is Master Servicer under this Agreement.
(b) As compensation for its services hereunder, the Trustee shall be
entitled to receive a Trustee fee equal to $3,500 per annum, which shall be paid
by the Master Servicer pursuant to a separate agreement between the Trustee and
the Master Servicer. Any expenses incurred by the Trustee shall be reimbursed in
accordance with Section 6.11.
Section 6.13 Collection of Monies.
Except as otherwise expressly provided in this Agreement, the Trustee may
demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement. The Trustee shall hold all such money and property received by it as
part of the Trust Fund and shall distribute it as provided in this Agreement.
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default":
(i) Any failure by the Master Servicer to furnish the Securities
Administrator the Mortgage Loan data sufficient to prepare the reports
described in Section 4.04 which continues unremedied for a period of one
Business Day after the date upon which written notice of such failure
shall have been given to such Master Servicer by the Trustee or the
Securities Administrator or to such Master Servicer, the Securities
Administrator and the Trustee by the Holders of not less than 25% of the
Class Principal Amount (or Class Notional Amount) of each Class of
Certificates affected thereby; or
(ii) Any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements (other than those referred to in (viii) and (ix) below) on the
part of the Master Servicer contained in this Agreement which continues
unremedied for a period of 30 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or the Securities Administrator, or
to the Master Servicer, the Securities Administrator and the Trustee by
the Holders of more than 50% of the Aggregate Voting Interests of the
Certificates; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days or any Rating Agency
reduces or withdraws or threatens to reduce or withdraw the rating of the
Certificates because of the financial condition or loan servicing
capability of such Master Servicer; or
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(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets, or consolidate with or merge into
another entity or shall permit another entity to consolidate or merge into
it, such that the resulting entity does not meet the criteria for a
successor servicer as specified in Section 9.05 hereof; or
(vii) If a representation or warranty set forth in Section 9.03
hereof shall prove to be incorrect as of the time made in any respect that
materially and adversely affects the interests of the Certificateholders,
and the circumstance or condition in respect of which such representation
or warranty was incorrect shall not have been eliminated or cured within
30 days after the date on which written notice of such incorrect
representation or warranty shall have been given to the Master Servicer by
the Trustee or the Securities Administrator, or to the Master Servicer,
the Securities Administrator and the Trustee by the Holders of more than
50% of the Aggregate Voting Interests of the Certificates; or
(viii) A sale or pledge of any of the rights of the Master Servicer
hereunder or an assignment of this Agreement by the Master Servicer or a
delegation of the rights or duties of the Master Servicer hereunder shall
have occurred in any manner not otherwise permitted hereunder and without
the prior written consent of the Trustee and Certificateholders holding
more than 50% of the Aggregate Voting Interests of the Certificates; or
(ix) After receipt of notice from the Trustee, any failure of the
Master Servicer to make any Advances when such Advances are due, as
required to be made hereunder.
If an Event of Default described in clauses (i) through (viii) of this
Section shall occur, then, in each and every case, subject to applicable law, so
long as any such Event of Default shall not have been remedied within any period
of time prescribed by this Section, the Trustee, by notice in writing to the
Master Servicer may, and, if so directed by Certificateholders evidencing more
than 50% of the Class Principal Amount (or Class Notional Amount) of each Class
of Certificates, or upon the occurrence of an Event of Default described in
clause (ix) of this Section, shall, terminate all of the rights and obligations
of the Master Servicer hereunder and in and to the Mortgage Loans and the
proceeds thereof. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer, and only in its capacity
as Master Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee; and the Trustee
is hereby authorized and empowered to execute and deliver, on behalf of the
defaulting Master Servicer as attorney-in-fact
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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. The defaulting Master Servicer agrees to cooperate with the Trustee
and the Securities Administrator in effecting the termination of the defaulting
Master Servicer's responsibilities and rights hereunder as Master Servicer
including, without limitation, notifying Servicers of the assignment of the
master servicing function and providing the Trustee or its designee all
documents and records in electronic or other form reasonably requested by it to
enable the Trustee or its designee to assume the defaulting Master Servicer's
functions hereunder and the transfer to the Trustee for administration by it of
all amounts which shall at the time be or should have been deposited by the
defaulting Master Servicer in the Distribution Account and any other account or
fund maintained with respect to the Certificates or thereafter received with
respect to the Mortgage Loans. The Master Servicer being terminated shall bear
all costs of a master servicing transfer, including but not limited to those of
the Trustee or Securities Administrator reasonably allocable to specific
employees and overhead, legal fees and expenses, accounting and financial
consulting fees and expenses, and costs of amending this Agreement, if
necessary.
Notwithstanding the termination of its activities as Master Servicer, each
terminated Master Servicer shall continue to be entitled to reimbursement under
this Agreement to the extent such reimbursement relates to the period prior to
such Master Servicer's termination.
If any Event of Default shall occur, the Trustee, upon becoming aware of
the occurrence thereof, shall promptly notify the Securities Administrator and
each Rating Agency of the nature and extent of such Event of Default. The
Trustee or the Securities Administrator shall immediately give written notice to
the Master Servicer upon the Master Servicer's failure to make Advances as
required under this Agreement.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee receives
the resignation of the Master Servicer evidenced by an Opinion of Counsel
pursuant to Section 9.06, the Trustee, unless another master servicer shall have
been appointed, shall be the successor in all respects to the Master Servicer in
its capacity as such under this Agreement and the transactions set forth or
provided for herein and shall have all the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto and arising
thereafter placed on the Master Servicer hereunder, including the obligation to
make Advances in accordance with Section 5.04; provided, however, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In addition, the Trustee shall
have no responsibility for any act or omission of the Master Servicer prior to
the issuance of any notice of termination. The Trustee shall have no liability
relating to the representations and warranties of the Master Servicer set forth
in Section 9.03. In the Trustee's capacity as such successor, the Trustee shall
have the same limitations on liability herein granted to the Master Servicer. As
compensation therefor, the Trustee shall be entitled to receive all compensation
payable to the Master Servicer under this Agreement, including the Master
Servicing Fee.
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(c) Notwithstanding the above, the Trustee may, if it shall be unwilling
to continue to so act, or shall, if it is unable to so act, petition a court of
competent jurisdiction to appoint, or appoint on its own behalf any established
housing and home finance institution servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than $15,000,000
and meeting such other standards for a successor master servicer as are set
forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer, like the Master Servicer. Any entity designated by the Trustee as a
successor master servicer may be an Affiliate of the Trustee; provided, however,
that, unless such Affiliate meets the net worth requirements and other standards
set forth herein for a successor master servicer, the Trustee, in its individual
capacity shall agree, at the time of such designation, to be and remain liable
to the Trust Fund for such Affiliate's actions and omissions in performing its
duties hereunder. In connection with such appointment and assumption, the
Trustee 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 to the
Master Servicer hereunder. The Trustee and such successor shall take such
actions, consistent with this Agreement, as shall be necessary to effectuate any
such succession and may make other arrangements with respect to the servicing to
be conducted hereunder which are not inconsistent herewith. The Master Servicer
shall cooperate with the Trustee and any successor master servicer in effecting
the termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying Mortgagors of the assignment of the
master servicing functions and providing the Trustee and successor master
servicer, as applicable, all documents and records in electronic or other form
reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and the transfer to the Trustee or such successor master
servicer, as applicable, all amounts which shall at the time be or should have
been deposited by the Master Servicer in the Distribution Account and any other
account or fund maintained with respect to the Certificates or thereafter be
received with respect to the Mortgage Loans. Neither the Trustee nor any other
successor master servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (i) the failure of the Master Servicer to deliver,
or any delay in delivering, cash, documents or records to it, (ii) the failure
of the Master Servicer to cooperate as required by this Agreement, (iii) the
failure of the Master Servicer to deliver the Mortgage Loan data to the Trustee
as required by this Agreement or (iv) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer. No successor master
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
caused by (i) the failure of the Trustee to deliver, or any delay in delivering
cash, documents or records to it related to such distribution, or (ii) the
failure of Trustee to cooperate as required by this Agreement.
Section 6.15 Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as trustee
of the Trust Fund, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
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interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 6.16 Waiver of Defaults.
More than 50% of the Aggregate Voting Interests of the Certificateholders
may waive any default or Event of Default by the Master Servicer in the
performance of its obligations hereunder, except that a default in the making of
any required deposit to the Distribution Account that would result in a failure
of the Trustee to make any required payment of principal of or interest on the
Certificates may only be waived with the consent of 100% of the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
Section 6.17 Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor to
the Master Servicer, in each case as provided herein, the Trustee shall promptly
mail notice thereof by first class mail to the Securities Administrator, and the
Certificateholders at their respective addresses appearing on the Certificate
Register. The Trustee shall also, within 45 days after the occurrence of any
Event of Default known to the Trustee, give written notice thereof to the
Securities Administrator and the Certificateholders, unless such Event of
Default shall have been cured or waived prior to the issuance of such notice and
within such 45-day period.
Section 6.18 Directions by Certificateholders and Duties of Trustee During
Event of Default.
Subject to the provisions of Section 8.01 hereof, during the continuance
of any Event of Default, Holders of Certificates evidencing not less than 25% of
the Class Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby may direct 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; provided,
however, that the Trustee shall be under no obligation to pursue any such
remedy, or to exercise any of the trusts or powers vested in it by this
Agreement (including, without limitation, (i) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto and (ii) the
terminating of the Master Servicer or any successor master servicer from its
rights and duties as master servicer hereunder) at the request, order or
direction of any of the Certificateholders, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the cost,
expenses and liabilities which may be incurred therein or thereby; and, provided
further, that, subject to the provisions of Section 8.01, the Trustee shall have
the right to decline
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to follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability for which it is
not indemnified to its satisfaction or be unjustly prejudicial to the
non-assenting Certificateholders.
Section 6.19 Action Upon Certain Failures of the Master Servicer and Upon
Event of Default.
In the event that the Trustee shall have actual knowledge of any action or
inaction of the Master Servicer that would become an Event of Default upon the
Master Servicer's failure to remedy the same after notice, the Trustee shall
give notice thereof to the Master Servicer.
Section 6.20 Preparation of Tax Returns and Other Reports.
(a) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, and the
Securities Administrator shall file federal tax returns, all in accordance with
Article X hereof. If the Trustee notifies the Securities Administrator in
writing that a state tax return or other return is required, then, at the sole
expense of the Trust Fund, the Securities Administrator shall prepare and file
such state income tax returns and such other returns as may be required by
applicable law relating to the Trust Fund, and, if required by state law, and
shall file any other documents to the extent required by applicable state tax
law (to the extent such documents are in the Securities Administrator's
possession). The Securities Administrator shall forward copies to the Depositor
of all such returns and Form 1099 supplemental tax information and such other
information within the control of the Securities Administrator as the Depositor
may reasonably request in writing, and shall forward to the Trustee for
distribution to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished to them, and will prepare and
disseminate to the Trustee for distribution to Certificateholders Form 1099
(supplemental tax information) (or otherwise furnish information within the
control of the Securities Administrator and the Trustee) to the extent required
by applicable law. The Master Servicer will indemnify the Securities
Administrator and the Trustee for any liability of or assessment against the
Securities Administrator and the Trustee, as applicable, resulting from any
error in any of such tax or information returns directly resulting from errors
in the information provided by such Master Servicer.
(b) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of the Trust Fund and each REMIC created
hereunder, an application for an employer identification number on IRS Form SS-4
or by any other acceptable method. The Securities Administrator shall also file
a Form 8811 as required. The Securities Administrator, upon receipt from the IRS
of the Notice of Taxpayer Identification Number Assigned, shall upon request
promptly forward a copy of such notice to the Trustee and the Depositor. The
Securities Administrator shall furnish any other information that is required by
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the Code and regulations thereunder to be made available to the
Certificateholders. The Master Servicer shall cause each Servicer to provide the
Securities Administrator with such information as is necessary for the
Securities Administrator to prepare such reports.
(c) Within 10 days after each Distribution Date or, if shorter, within the
period of time required under the rules of the Securities and Exchange
Commission (the "Commission"), the Depositor shall, on behalf of the Trust and
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System (XXXXX), a Form 8-K (or such
other form prescribed by the Commission) with a copy of the report to the
Certificateholders for such Distribution Date and such other information as is
required by the rules of the Commission, as exhibits thereto. Prior to Xxxxx 00,
0000 (xxx, if applicable, prior to March 30 of each year), the Depositor shall,
on behalf of the Trust and in accordance with industry standards, file with the
Commission via XXXXX a Form 10-K with respect to the Trust Fund. In addition,
the Depositor will cause its senior officer in charge of securitization to
execute the certification (the "Form 10-K Certification") required pursuant to
Rule 13a-14 under the Securities Exchange Act of 1934, as amended, and to file
the same with the Commission prior to Xxxxx 00, 0000 (xxx, if applicable, prior
to March 30 of each year). To the extent any information or exhibits required to
be included in the Form 10-K are not available by March 30, the Depositor shall,
on behalf of the Trust, file one or more amended Form 10-Ks to include such
missing information or exhibits promptly after receipt thereof by the Depositor.
Promptly following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Depositor shall, on
behalf of the Trust and in accordance with industry standards, file with the
Commission via XXXXX a Form 15 Suspension Notification with respect to the Trust
Fund, if applicable. Each of the Securities Administrator, the Master Servicer
and the Trustee agree to furnish to the Depositor promptly, from time to time
upon request, such further information, reports and financial statements within
its control related to this Agreement and the Mortgage Loans as the Depositor
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Depositor shall have no responsibility to file any items other
than those specified in this section.
(d) On or before January 31 of each year, the Depositor, on behalf of the
Trust, shall provide the Securities Administrator with a written notice listing
all Distribution Date reports to the Certificateholders with respect to
Distribution Dates occurring in the prior calendar year that were included in a
filing on Form 8-K (or other prescribed form) pursuant to Section 6.20(c);
provided that, if no Form 10-K is required to be filed for such prior calendar
year, no written notice shall be required. No later than March 15 of each year
in which such written notice is provided by the Depositor to the Securities
Administrator, the Securities Administrator shall sign a certification (in the
form attached hereto as Exhibit M), for the benefit of the Person(s) signing the
Form 10-K Certification, regarding certain aspects of the Form 10-K
Certification.
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ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon
Purchase or Liquidation of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee, the
Securities Administrator and the Master Servicer created hereby (other than the
obligation of the Securities Administrator to make payments to the
Certificateholders as set forth in Section 7.02), shall terminate on the
earliest of (i) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property, (ii) the
sale of the property held by the Trust Fund in accordance with Section 7.01(c)
and (iii) the Distribution Date immediately following the Latest Possible
Maturity Date; provided, however, that in no event shall the Trust Fund created
hereby continue beyond 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. Any
termination of the Trust Fund shall be carried out in such a manner so that the
termination of each REMIC included therein shall qualify as a "qualified
liquidation" under the REMIC Provisions.
(b) [Reserved].
(c) On any Distribution Date occurring on or after the Initial Optional
Purchase Date, the Depositor has (I) the right to direct the Master Servicer to
cause the Trust Fund to adopt a plan of complete liquidation pursuant to
Sections 7.02 and 7.03 hereof to sell all of its property and (II) the
obligation to purchase such property from the Master Servicer at the Clean-Up
Call Price. If the Depositor elects to so direct the Master Servicer, the Master
Servicer shall no later than 30 days prior to the Distribution Date selected for
purchase of the assets of the Trust Fund (the "Purchase Date") deliver written
notice to the Trustee and the Securities Administrator and either (a) deposit in
the Distribution Account the Clean-Up Call Price or (b) state in such notice
that the Clean-Up Call Price shall be deposited in the Distribution Account not
later than 10:00 a.m., New York City time, on the applicable Purchase Date. Upon
exercise of such option, the property of the Trust Fund shall be sold to the
Master Servicer at a price equal to the Clean-Up Call Price whereupon the Master
Servicer shall immediately sell such property to the Depositor at a price equal
to the Clean-Up Call Price. Notwithstanding anything in this Agreement to the
contrary, the Master Servicer shall not be obligated to purchase the assets of
the Trust Fund unless and until the Master Servicer shall have received funds
from the Depositor in an amount equal to the Clean-Up Call Price. Notice of any
optional redemption shall be mailed by the Trustee to the Certificateholders not
later than the first day of the month in which the Purchase Date occurs, and the
Certificates shall be redeemed in accordance with Section 7.03.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator and each Custodian shall be reimbursed from the Clean-Up Call
Price, for any Advances, Servicer Advances, accrued and unpaid Servicing Fees
and Master Servicing Fees or other
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amounts with respect to the related Mortgage Loans that are reimbursable to such
parties under this Agreement, the related Servicing Agreement or the related
Custody Agreement.
Section 7.02 Procedure Upon Redemption Termination of Trust Fund.
(a) If on any Determination Date the Master Servicer determines that there
are no outstanding Mortgage Loans, and no other funds or assets in the Trust
Fund other than the funds in the Distribution Account, the Master Servicer shall
direct the Securities Administrator promptly to send a final distribution notice
to each Certificateholder. Such notice shall specify (A) the Distribution Date
upon which final distribution on the Certificates of all amounts required to be
distributed to Certificateholders pursuant to Section 5.02 will be made upon
presentation and surrender of the Certificates at the Certificate Registrar's
Corporate Trust Office, and (B) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distribution being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Securities
Administrator, the Master Servicer and the Certificate Registrar at the time
such notice is given to Holders of the Certificates. Upon any such termination,
the duties of the Certificate Registrar with respect to the Certificates shall
terminate.
Upon termination of the Trust Fund, the Trustee shall terminate, or
request the Master Servicer to terminate, the Distribution Account and any other
account or fund maintained with respect to the Certificates, subject to the
Trustee's obligation hereunder to hold all amounts payable to Certificateholders
in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the termination notice, the Trustee 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 one year
after the second notice any Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps to contact the remaining
Certificateholders concerning surrender of such Certificates, and the cost
thereof shall be paid out of the amounts distributable to such Holders. If
within two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall, subject to applicable state law
relating to escheatment, hold all amounts distributable to such Holders for the
benefit of such Holders. No interest shall accrue on any amount held by the
Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section.
(c) Any reasonable expenses incurred by the Trustee in connection with any
redemption or termination or liquidation of the Trust Fund shall be reimbursed
from proceeds received from the liquidation of the Trust Fund.
Section 7.03 Additional Trust Fund Termination Requirements.
(a) Any termination of the Trust Fund shall be effected in accordance with
the following additional requirements, unless the Trustee seeks (at the request
of the Master Servicer
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pursuant to Section 7.01(c)), and subsequently receives, an Opinion of Counsel
(at the expense of the Depositor), addressed to the Trustee to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
7.03 will not result in an Adverse REMIC Event:
(i) Within 89 days prior to the time of the making of the final
payment on the Certificates, upon notification by the Master Servicer that
it intends to exercise its option to cause the termination of the Trust
Fund, the Trustee shall adopt a plan of complete liquidation of the Trust
Fund on behalf of each REMIC, meeting the requirements of a qualified
liquidation under the REMIC Provisions;
(ii) Any sale of the assets of the Trust Fund pursuant to Section
7.02 shall be a sale for cash and shall occur at or after the time of
adoption of such a plan of complete liquidation and prior to the time of
making of the final payment on the Certificates;
(iii) On the date specified for final payment of the Certificates,
the Securities Administrator shall make final distributions of principal
and interest on the Certificates in accordance with Section 5.02 and,
after payment of, or provision for any outstanding expenses, distribute or
credit, or cause to be distributed or credited, to the Holders of the
Residual Certificates all cash on hand after such final payment (other
than cash retained to meet claims), and the Trust Fund (and each REMIC)
shall terminate at that time; and
(iv) In no event may the final payment on the Certificates or the
final distribution or credit to the Holders of the Residual Certificates
be made after the 89th day from the date on which the plan of complete
liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby agrees to accept the plan of complete liquidation adopted by the Trustee
under this Section and to take such other action in connection therewith as may
be reasonably requested by the Securities Administrator or any Servicer.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01 Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer or
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
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any third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision 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, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class affected thereby shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty 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 and no direction inconsistent
with such written request has been given such Trustee during such sixty-day
period by such Certificateholders; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder, the Securities Administrator and the Trustee, that no one or
more Holders of Certificates shall have any right in any manner whatever by
virtue or by availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such 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 benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 8.02 Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the Certificate
Registrar will furnish or cause to be furnished to the Trustee, within fifteen
days after receipt by the Certificate Registrar of a request by the Trustee in
writing, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Certificateholders of each Class as of the most
recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter referred
to as "Applicants") apply in writing to the Trustee, and such application states
that the Applicants desire to communicate with other Holders with respect to
their rights under this Agreement or under the Certificates and is accompanied
by a copy of the communication which such Applicants propose to transmit, then
the Trustee shall, within five Business Days after the receipt of such
application, afford such Applicants reasonable access during the normal business
hours of the Trustee to the most recent list of Certificateholders held by the
Trustee or shall, as an alternative, send, at the Applicants' expense, the
written communication proffered by the Applicants to all Certificateholders at
their addresses as they appear in the Certificate Register.
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(c) Every Holder or Certificate Owner, if the Holder is a Clearing Agency,
by receiving and holding a Certificate, agrees with the Depositor, the Master
Servicer, the Securities Administrator, the Certificate Registrar and the
Trustee that neither the Depositor, the Master Servicer, the Securities
Administrator, the Certificate Registrar nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
Section 8.03 Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders or
Certificate Owners, if the Holder is a Clearing Agency, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Securities
Administrator and, where expressly required herein, to the Master Servicer. Such
instrument or instruments (as the action embodies therein and evidenced thereby)
are herein sometimes referred to as an "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Securities Administrator
and the Master Servicer, if made in the manner provided in this Section. Each of
the Trustee, the Securities Administrator and the Master Servicer shall promptly
notify the others of receipt of any such instrument by it, and shall promptly
forward a copy of such instrument to the others.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Securities Administrator, the
Master Servicer, nor the Depositor shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Certificate shall bind every future Holder
of the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange
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therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Master Servicer in reliance thereon, whether or
not notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's and
Master Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Depositor and the
Certificateholders shall, from and after the Closing Date, monitor the
performance of the Servicers under the Servicing Agreements, and shall use its
reasonable good faith efforts to cause the Servicers duly and punctually to
perform all of their duties and obligations thereunder. Upon the occurrence of a
default of which an Authorized Officer of the Master Servicer has actual
knowledge under a Servicing Agreement, the Master Servicer shall promptly notify
the Trustee thereof, and shall specify in such notice the action, if any, the
Master Servicer is taking in respect of such default. So long as any such
default shall be continuing, the Master Servicer may, and shall if it determines
such action to be in the best interests of Certificateholders, (i) terminate all
of the rights and powers of such Servicer pursuant to the applicable provisions
of the Servicing Agreement; (ii) exercise any rights it may have to enforce the
Servicing Agreement against such Servicer; and/or (iii) waive any such default
under the Servicing Agreement or take any other action with respect to such
default as is permitted thereunder. Notwithstanding any provision of this
Agreement or any Servicing Agreement to the contrary, the Master Servicer shall
have no duty or obligation to supervise, monitor or oversee the activities of,
or to enforce the obligations of, (i) any Servicer under its Servicing Agreement
with respect to any Additional Collateral or any Limited Purpose Surety Bond
relating thereto, including, without limitation, the collection of any amounts
owing to the Trust Fund in respect thereof (unless and until the Master Servicer
shall have assumed the obligations of such Servicer as successor servicer under
the related Servicing Agreement pursuant to this Section 9.01, in which case, as
successor servicer, it shall be bound to serve and administer the Additional
Collateral and any related Limited Purpose Surety Bond in accordance with the
provisions of such Servicing Agreement) or (ii) any Servicer under its Servicing
Agreement with respect to the servicing or administration of defaulted or
delinquent Mortgage Loans and the management and disposition of any REO
Properties or for any actions of the Trustee or the Seller in connection
therewith.
(b) Upon any termination by the Master Servicer of a Servicer's rights and
powers pursuant to its Servicing Agreement, the rights and powers of the
Servicer with respect to the Mortgage Loans shall vest in the Master Servicer
and the Master Servicer shall be the successor in all respects to such Servicer
in its capacity as Servicer with respect to such Mortgage Loans under the
related Servicing Agreement, unless or until the Master Servicer shall have
appointed, with the consent of the Trustee and the Rating Agencies, such consent
not to be unreasonably withheld, and in accordance with the applicable
provisions of the Servicing Agreement, a new
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Xxxxxx Xxx- or FHLMC-approved Person that is a member in good standing of MERS
to serve as successor to the Servicer; provided, however, that no Trustee
consent or Rating Agency approval shall be required if the successor servicer is
GMAC or a Person that was a Servicer on the Closing Date; provided, further,
that it is understood and agreed by the parties hereto that there will be a
period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to a successor servicer (including the Master
Servicer). With such consent, the Master Servicer may elect to continue to serve
as successor servicer under the Servicing Agreement. Upon appointment of a
successor servicer, as authorized under this Section 9.01(b), unless the
successor servicer shall have assumed the obligation of the terminated Servicer
under such Servicing Agreement, the Trustee and such successor servicer shall
enter into a servicing agreement in a form substantially similar to the affected
Servicing Agreement. In connection with any such appointment, the Master
Servicer may make such arrangements for the compensation of such successor as it
and such successor shall agree, but in no event shall such compensation of any
successor servicer (including the Master Servicer) be in excess of that payable
to the Servicer under the affected Servicing Agreement.
The Master Servicer shall pay the costs of such enforcement (including the
termination of any Servicer, the appointment of a successor servicer or the
transfer and assumption of the servicing by the Master Servicer) at its own
expense and shall be reimbursed therefor initially (i) by the terminated
Servicer, (ii) from a general recovery resulting from such enforcement only to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, (iii) from a specific recovery of costs, expenses or
attorney's fees against the party against whom such enforcement is directed, or
(iv) to the extent that such amounts described in (i)-(iii) above are
insufficient to reimburse the Master Servicer for such costs of enforcement,
from the Trust Fund, as provided in Section 9.04.
If the Master Servicer assumes the servicing with respect to any of the
Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for the errors or omissions of such
Servicer.
(c) Upon any termination of a Servicer's rights and powers pursuant to its
Servicing Agreement, the Master Servicer shall promptly notify the Trustee and
the Rating Agencies, specifying in such notice that the Master Servicer or any
successor servicer, as the case may be, has succeeded the Servicer under the
Servicing Agreement, which notice shall also specify the name and address of any
such successor servicer.
(d) Unless otherwise specified herein, the provisions of Section 9.01(b)
(relating to the Xxxxxx Xxx- and Xxxxxxx Mac- approval and MERS membership of
any successor servicer, the form of any servicing agreement to be entered into
by such successor servicer and the amount of compensation payable thereunder)
and the provisions of Section 9.01(c) (relating to notices to the Trustee and
the Rating Agencies) shall apply to any proposed transfer or assignment by the
Seller of its rights under any Servicing Agreement or of the servicing
thereunder or delegation of its rights or duties thereunder or any portion
thereof to any other Person other than GMAC or the initial Servicer under such
Servicing Agreement; provided that the Seller shall not be required to provide
prior notice to anyone other than the Master Servicer of any transfer of
servicing that
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occurs within four months following the Closing Date to GMAC or to an entity
that is a Servicer on the Closing Date. In addition, neither the Depositor nor
the Trustee shall consent to the assignment by any Servicer of such Servicer's
rights and obligations under the Servicing Agreement to a successor servicer
other than GMAC or a Person that was a Servicer on the Closing Date without the
prior written consent of the Master Servicer, which consent shall not be
unreasonably withheld.
The Seller has advised the Depositor, the Trustee and the Master Servicer
that it will transfer the servicing of the Mortgage Loans purchased under the
Seller's Purchase, Warranties and Interim Servicing Agreement, dated as of
January 1, 2004 between GreenPoint and GMAC and currently serviced by GreenPoint
to GMAC on or about April 1, 2005 (the "GMAC Servicing Transfer Date") pursuant
to a servicing agreement that will contain provisions for scheduled/scheduled
servicing of such Mortgage Loans in accordance with customary securitization
standards (including express provisions that prohibit GMAC from taking actions
with respect to Mortgage Loans it is servicing that could cause an Adverse REMIC
Event) and that are consistent with the provisions of this Agreement and
providing for a Servicing Fee that is not greater than the Servicing Fee payable
to GreenPoint. Not less than 10 Business Days prior to the GMAC Servicing
Transfer Date, the Seller shall furnish the Depositor, the Trustee and the
Master Servicer with an executed copy of such servicing agreement together with
(i) one or more assignment agreements assigning the rights of the Seller
thereunder to the Depositor, and from the Depositor to the Trustee, if
applicable, and (ii) either (x) Rating Agency approval of such servicing
transfer and servicing agreement or (y) a certificate of an authorized officer
of the Seller to the effect that the servicing agreement satisfies the
requirements of this Agreement. Neither the Trustee nor the Master Servicer
shall have any responsibility for determining whether such servicing agreement
complies with the provisions of this Agreement, and each of them may, in
executing any such assignment agreement rely fully on the Rating Agency approval
or Seller certification.
In connection with any transfer of servicing (whether to GMAC, another
initial Servicer, or otherwise), the Seller shall, at its cost and expense, take
such steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to such successor servicer, including, but not
limited to, the following: (A) to the extent required by the terms of the
Mortgage Loans and by applicable federal and state laws and regulations, the
Seller shall cause the prior Servicer to timely mail to each obligor under a
Mortgage Loan any required notices or disclosures describing the transfer of
servicing of the Mortgage Loans to the successor servicer; (B) prior to the
effective date of such transfer of servicing, the Seller shall cause the prior
Servicer to transmit to any related insurer notification of such transfer of
servicing; (C) on or prior to the effective date of such transfer of servicing,
the Seller shall cause the prior Servicer to deliver to the successor servicer
all Mortgage Documents and any related records or materials; (D) on or prior to
the effective date of such transfer of servicing, the Seller shall cause the
prior Servicer to transfer to the successor servicer all funds held by the prior
Servicer in respect of the Mortgage Loans; (E) on or prior to the effective date
of such transfer of servicing, the Seller shall cause the prior Servicer to,
after the effective date of the transfer of servicing to the successor servicer,
continue to forward to such successor servicer, within one Business Day of
receipt, the amount
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of any payments or other recoveries received by the prior Servicer, and to
notify the successor servicer of the source and proper application of each such
payment or recovery; and (F) the Seller shall cause the prior Servicer to, after
the effective date of transfer of servicing to the successor servicer, continue
to cooperate with the successor servicer to facilitate such transfer in such
manner and to such extent as the successor servicer may reasonably request.
Notwithstanding the foregoing, the prior Servicer shall be obligated to perform
the items listed above to the extent provided in the Servicing Agreement.
Section 9.02 Assumption of Master Servicing by Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default under this
Agreement), the Trustee shall thereupon assume all of the rights and obligations
of such Master Servicer hereunder and under each Servicing Agreement entered
into with respect to the Mortgage Loans or shall appoint as successor master
servicer a Xxxxxx-Xxx or FHLMC-approved servicer that is acceptable to the
Depositor and the Rating Agencies. The Trustee, its designee or any successor
master servicer appointed by the Trustee shall be deemed to have assumed all of
the Master Servicer's interest herein and therein to the same extent as if such
Servicing Agreement had been assigned to the assuming party, except that the
Master Servicer shall not thereby be relieved of any liability or obligations of
the Master Servicer under such Servicing Agreement accruing prior to its
replacement as Master Servicer, and shall be liable to the Trustee, and hereby
agrees to indemnify and hold harmless the Trustee from and against all costs,
damages, expenses and liabilities (including reasonable attorneys' fees)
incurred by the Trustee as a result of such liability or obligations of the
Master Servicer and in connection with the Trustee's assumption (but not its
performance, except to the extent that costs or liability of the Trustee are
created or increased as a result of negligent or wrongful acts or omissions of
the Master Servicer prior to its replacement as Master Servicer) of the Master
Servicer's obligations, duties or responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the assuming
party all documents and records relating to each Servicing Agreement and the
related Mortgage Loans and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
each Servicing Agreement to the assuming party.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor,
the Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is validly existing and in good standing under the laws of
the United States of America as a national banking association, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the
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execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is a Xxxxxx Mae- or FHLMC-approved seller/servicer;
(viii) 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
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consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations and orders (if any) as have
been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer;
(b) It is understood and agreed that the representations and warranties
set forth in this Section shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor, the Securities
Administrator and the Trustee and hold them harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a material breach of the Master
Servicer's representations and warranties contained in Section 9.03(a). It is
understood and agreed that the enforcement of the obligation of the Master
Servicer set forth in this Section to indemnify the Depositor, the Securities
Administrator and the Trustee as provided in this Section constitutes the sole
remedy (other than as set forth in Section 6.14) of the Depositor, the
Securities Administrator and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising out
of the breach of any representations and warranties made in this Section shall
accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
Section 9.04 Compensation to the Master Servicer.
The Master Servicer shall be entitled to be paid by the Trust Fund, and
either retain or withdraw from the Distribution Account, (i) its Master
Servicing Fee with respect to each Distribution Date, (ii) amounts necessary to
reimburse itself for any previously unreimbursed Advances, Servicer Advances and
Nonrecoverable Advances in accordance with the definition of "Available
Distribution Amount" and (iii) amounts representing assumption fees, late
payment charges or other ancillary income not included in the definition of
"Available Distribution Amount" and which are not required to be remitted by the
Servicers to the Securities Administrator or deposited by the Securities
Administrator into the Distribution Account. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as provided
in this Agreement.
In addition, Depositor agrees, except as otherwise expressly provided
herein, to reimburse the Master Servicer, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Master Servicer in
connection with the performance of its duties hereunder (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), to the extent not otherwise reimbursed pursuant to this Agreement,
except any such expense, disbursement or advance as may be attributable to its
willful misfeasance, bad faith or negligence.
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Section 9.05 Merger or Consolidation.
Any Person into which the Master Servicer may be merged or consolidated,
or any Person resulting from any merger, conversion, other change in form or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor to the
Master Servicer 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; provided, however, that the successor or resulting
Person to the Master Servicer or its Affiliate whose primary business is the
servicing of conventional residential mortgage loans shall be a Person that
shall be qualified and approved to service mortgage loans for Xxxxxx Xxx or
FHLMC and shall have a net worth of not less than $15,000,000.
Section 9.06 Resignation of Master Servicer.
Except as otherwise provided in Sections 9.05 and 9.07 hereof, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
unless the Master Servicer's duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel that shall be Independent to such effect delivered to the
Trustee. No such resignation shall become effective until the Trustee shall have
assumed, or a successor master servicer shall have been appointed by the Trustee
and until such successor shall have assumed, the Master Servicer's
responsibilities and obligations under this Agreement. Notice of such
resignation shall be given promptly by the Master Servicer and the Depositor to
the Trustee.
If, at any time, the Master Servicer resigns under this Section 9.06, or
transfers or assigns its rights and obligations under Section 9.07, or is
removed as Master Servicer pursuant to Section 6.14, then at such time as Xxxxx
Fargo Bank, National Association also shall resign (and shall be entitled to
resign) as Securities Administrator, Paying Agent, Authenticating Agent and
Certificate Registrar under this Agreement. In such event, the obligations of
each such party shall be assumed by the Trustee or such successor master
servicer appointed by the Trustee (subject to the provisions of Section
9.02(a)).
Section 9.07 Assignment or Delegation of Duties by the Master Servicer.
Except as expressly provided herein, the Master Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer hereunder; provided, however, that the Master Servicer shall
have the right with the prior written consent of the Trustee and the Depositor
(which consent shall not be unreasonably withheld), and upon delivery to the
Trustee and the Depositor of a letter from each Rating Agency to the effect that
such action shall not result in a downgrading of the Certificates, to delegate
or assign to or subcontract with or authorize or appoint any qualified Person to
perform and carry out any duties, covenants or obligations to be performed and
carried out by the Master Servicer hereunder. Notice of such permitted
assignment shall be given promptly by the Master Servicer to the Depositor and
the
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Trustee. If, pursuant to any provision hereof, the duties of the Master Servicer
are transferred to a successor master servicer, the entire amount of the Master
Servicing Fees and other compensation payable to the Master Servicer pursuant
hereto shall thereafter be payable to such successor master servicer. Such
successor Master Servicer shall also pay the fees of the Trustee and the
Securities Administrator, as provided herein.
Section 9.08 Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors, officers, employees
or agents of the Master Servicer shall be under any liability to the Trustee 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 Master Servicer or
any such person against any liability that would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence in its performance of its duties
or by reason of reckless disregard for its obligations and duties under this
Agreement. The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer shall be under no obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
master service the Mortgage Loans in accordance with this Agreement and that in
its opinion may involve it in any expenses or liability; provided, however, that
the Master Servicer may in its sole discretion undertake any such action that it
may deem necessary or desirable in respect to this Agreement and the rights and
duties of the parties hereto and the interests of 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 Master Servicer shall be entitled to be reimbursed therefor
out of the Distribution Account.
The Master Servicer shall not be liable for any acts or omissions of any
Servicer except to the extent that damages or expenses are incurred as a result
of such act or omissions and such damages and expenses would not have been
incurred but for the negligence, willful misfeasance, bad faith or recklessness
of the Master Servicer in supervising, monitoring and overseeing the obligations
of the Servicers in this Agreement.
Section 9.09 Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor, the Securities
Administrator and the Trustee, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the Depositor,
the Securities Administrator or the Trustee may sustain as a result of the
Master Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement. The Depositor, the Securities
Administrator and the Trustee shall immediately notify the Master Servicer if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans entitling the Depositor, the Securities Administrator or the Trustee to
indemnification under this Section 9.09, whereupon the Master Servicer shall
assume the defense
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of any such claim and pay all expenses in connection therewith, including
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or them in respect of such claim.
Section 9.10 Master Servicer Fidelity Bond and Master Servicer Errors and
Omissions Insurance Policy.
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.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01 REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement to this
Agreement shall be made on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement to
this Agreement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 86OG(a)(9) of the Code. The "latest possible
maturity date" for purposes of Treasury Regulation 1.86OG-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by Section 6.20 and
this Section.
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(d) The Securities Administrator shall prepare, and the Trustee shall
sign and file, as instructed by the Securities Administrator, all of each
REMIC's federal and appropriate state tax and information returns as such
REMIC's direct representative. The expenses of preparing and filing such returns
shall be borne by the Securities Administrator. In preparing such returns, the
Securities Administrator shall, with respect to each REMIC created hereunder
other than the Upper-Tier REMIC (each such REMIC, a "Non-Upper-Tier REMIC"): (i)
treat the accrual period for interests in such Non-Upper-Tier REMIC as the
calendar month; (ii) account for distributions made from such Non-Upper-Tier
REMIC as made on the first day of each succeeding calendar month; (iii) account
for income under the all-OID method at the Net WAC; (iv) use the aggregation
method provided in Treasury Regulation section 1.1275-2(c); and (v) account for
income and expenses related to such Non-Upper-Tier REMIC in the manner resulting
in the lowest amount of excess inclusion income possible accruing to the Holder
of the residual interest in such Non-Upper-Tier REMIC.
(e) The Securities Administrator or its designee shall perform on behalf
of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code and (ii) to the Trustee such
information as is necessary for the Trustee to provide to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Securities Administrator, the Master Servicer and
the Holders of Certificates shall take any action or cause any REMIC to take any
action necessary to create or maintain the status of any REMIC as a REMIC under
the REMIC Provisions and shall assist each other as necessary to create or
maintain such status. Neither the Trustee, the Securities Administrator, the
Master Servicer nor the Holder of any Residual Certificate shall knowingly take
any action, cause any REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could result in an Adverse REMIC Event unless the Trustee,
the Securities Administrator and the Master Servicer have received an Opinion of
Counsel (at the expense of the party seeking to take such action or failing to
take such action) to the effect that the contemplated action (or inaction, as
the case may be) will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC or
the assets therein, or causing any REMIC to take any action, which is not
expressly permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Trustee, the Securities Administrator, the
Master Servicer or their respective designees, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any REMIC, and no such Person shall take any such action or cause any REMIC to
take any such action as to which the Trustee, the Securities Administrator or
the Master Servicer has advised it in writing that an Adverse REMIC Event could
occur; provided, however, that if no Adverse REMIC Event
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would occur but such action could result in the imposition of additional taxes
on the Residual Certificateholders, no such Person shall take any such action,
or cause any REMIC to take any such action without the written consent of the
Residual Certificateholders.
(g) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental authorities.
To the extent that such taxes are not paid by a Residual Certificateholder, the
Trustee or the Paying Agent shall pay any remaining REMIC taxes out of current
or future amounts otherwise distributable to the Holder of the Residual
Certificate in any such REMIC or, if no such amounts are available, out of other
amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to holders of regular interests in any such REMIC, as the case may be.
(h) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and on
an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(j) Neither the Securities Administrator nor the Master Servicer shall
enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
(k) The Trustee and the Securities Administrator shall treat the Reserve
Fund as an outside reserve fund within the meaning of Treasury Regulation
Section 1.860G-2(h) that is owned by the holders of the Interest-Only
Certificates and that is not an asset of any REMIC. The Trustee and the
Securities Administrator shall treat the rights of the Holders of the LIBOR
Certificates to receive distributions from the Reserve Fund to cover Net WAC
Shortfalls as payments under a cap contract written by the Holders of the Class
X-A and Class X-B Certificates in favor of the Holders of the LIBOR
Certificates. Thus, each Class A-1, Class A-2, Class B-1, Class B-2 and Class
B-3 Certificate shall be treated as representing not only ownership of regular
interests in a REMIC, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue prices of the Certificates, the
interest rate cap contracts shall be assumed to have a zero value unless and
until required otherwise by an applicable taxing authority.
(l) The Holder of the Class LT-R Certificate shall act as "tax matters
person" with respect to the Lower-Tier REMIC and shall act as agent for the
Holder of the Class A-R Certificate as "tax matters person" with respect to the
Middle-Tier REMIC and the Upper-Tier REMIC and the Securities Administrator
shall act as agent for the Holder of the Class LT-R Certificate in such roles,
unless and until another party is so designated by the Holder of the Class LT-R
Certificate.
Section 10.02 Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of each REMIC
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pursuant to Article VII of this Agreement, (iv) a substitution pursuant to
Article II of this Agreement or (v) a repurchase of Mortgage Loans pursuant to
Article II of this Agreement, nor acquire any assets for any REMIC, nor sell or
dispose of any investments in the Distribution Account for gain, nor accept any
contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale, disposition,
or substitution) that such disposition, acquisition, substitution, or acceptance
will not result in an Adverse REMIC Event, (b) affect the distribution of
interest or principal on the Certificates or (c) result in the encumbrance of
the assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement).
Section 10.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status.
Upon the occurrence of an Adverse REMIC Event due to the negligent
performance by the Securities Administrator of its duties and obligations set
forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("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
Depositor, the Trustee or the Holder of the Residual Certificate, nor for any
such Losses resulting from misinformation provided by any of the foregoing
parties on which the Securities Administrator has relied. 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 or under any Servicing Agreement or under any
Acknowledgement, (2) for any Losses other than arising out of malfeasance,
willful misconduct or negligent performance by the Securities Administrator of
its duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders of the related Residual Certificate
(in addition to payment of principal and interest on the Certificates).
Section 10.04 REO Property.
(a) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not, except to the
extent provided in the applicable Servicing Agreement, knowingly permit any
Servicer to, rent, lease, or otherwise earn income on behalf of any REMIC with
respect to any REO Property which might cause an Adverse REMIC Event unless the
applicable Servicer has provided to the Trustee an Opinion of Counsel concluding
that, under the REMIC Provisions, such action would not adversely affect the
status of any REMIC as a REMIC and any income generated for any REMIC by the REO
Property would not result in an Adverse REMIC Event.
(b) The Depositor shall cause the applicable Servicer (to the extent
provided in its Servicing Agreement) to make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Depositor shall,
or shall cause the applicable Servicer (to the extent provided in its Servicing
Agreement) to, dispose of any REO Property within three years
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of its acquisition by the Trust Fund unless the Depositor or the applicable
Servicer (on behalf of the Trust Fund) has received a grant of extension from
the Internal Revenue Service to the effect that, under the REMIC Provisions and
any relevant proposed legislation and under applicable state law, the REMIC may
hold REO Property for a longer period without causing an Adverse REMIC Event. If
such an extension has been received, then the Depositor, acting on behalf of the
Trustee hereunder, shall, or shall cause the applicable Servicer to, continue to
attempt to sell the REO Property for its fair market value for such period
longer than three years as such extension permits (the "Extended Period"). If
such an extension has not been received and the Depositor or the applicable
Servicer, acting on behalf of the Trust Fund hereunder, is unable to sell the
REO Property within 33 months after its acquisition by the Trust Fund or if such
an extension, has been received and the Depositor or the applicable Servicer is
unable to sell the REO Property within the period ending three months before the
close of the Extended Period, the Depositor shall cause the applicable Servicer,
before the end of the three year period or the Extended Period, as applicable,
to (i) purchase such REO Property at a price equal to the REO Property's fair
market value or (ii) auction the REO Property to the highest bidder (which may
be the applicable Servicer) in an auction reasonably designed to produce a fair
price prior to the expiration of the three-year period or the Extended Period,
as the case may be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02 Entire Agreement.
This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.
Section 11.03 Amendment.
(a) This Agreement may be amended from time to time by the Depositor,
the Master Servicer, the Securities Administrator, and the Trustee, without
notice to or the consent of any of the Holders, (i) to cure any ambiguity or
mistake, (ii) to cause the provisions herein to conform to or be consistent with
or in furtherance of the statements made with respect to the Certificates, the
Trust Fund or this Agreement in any Offering Document, or to correct or
supplement any provision herein which may be inconsistent with any other
provisions herein or with the provisions of any Servicing Agreement, (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or (iv) to add, delete, or amend any provisions to the
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extent necessary or desirable to comply with any requirements imposed by the
Code and the REMIC Provisions. No such amendment effected pursuant to the
preceding sentence shall, as evidenced by an Opinion of Counsel, result in an
Adverse REMIC Event, nor shall such amendment effected pursuant to clause (iii)
of such sentence adversely affect in any material respect the interests of any
Holder. Prior to entering into any amendment without the consent of Holders
pursuant to this paragraph, the Trustee shall be provided with an Opinion of
Counsel (at the expense of the party requesting such amendment) to the effect
that such amendment is permitted under this Section. Any such amendment shall be
deemed not to adversely affect in any material respect any Holder, if the
Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce the then current rating
assigned to the Certificates.
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
with the consent of the Holders of not less than 66-2/3% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected thereby
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; provided, however, that no such amendment
shall be made unless the Trustee receives an Opinion of Counsel, at the expense
of the party requesting the change, that such change will not cause an Adverse
REMIC Event; and provided further, that no such amendment may (i) reduce in any
manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Certificate, without the
consent of the Holder of such Certificate or (ii) reduce the aforesaid
percentages of Class Principal Amount or Class Notional Amount (or Percentage
Interest) of Certificates of each Class, the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of the
Class Principal Amount or Class Notional Amount (or Percentage Interest) of each
Class of Certificates affected thereby. For purposes of this paragraph,
references to "Holder" or "Holders" shall be deemed to include, in the case of
any Class of Book-Entry Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder, the Depositor and the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing Agreement,
the Trustee shall not consent to any amendment of any Servicing Agreement except
pursuant to the standards provided in this Section with respect to amendment of
this Agreement.
Section 11.04 Voting Rights.
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Except to the extent that the consent of all affected Certificateholders
is required pursuant to this Agreement, with respect to any provision of this
Agreement requiring the consent of Certificateholders representing specified
percentages of aggregate outstanding Certificate Principal Amount or Class
Notional Amount (or Percentage Interest), Certificates owned by the Depositor,
the Master Servicer, the Securities Administrator, the Trustee, any Servicer or
any Affiliates thereof are not to be counted so long as such Certificates are
owned by the Depositor, the Master Servicer, the Securities Administrator, the
Trustee, any Servicer or any Affiliate thereof.
Section 11.05 Provision of Information.
(a) For so long as any of the Certificates of any Series or Class are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act, each
of the Depositor, the Master Servicer and the Trustee agree to cooperate with
each other to provide to any Certificateholders and to any prospective purchaser
of Certificates designated by such holder, upon the request of such holder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee,
the Master Servicer or the Securities Administrator in providing such
information shall be reimbursed by the Depositor.
(b) The Securities Administrator shall provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, (i) a copy (excluding exhibits) of any report
on Form 8-K (or other prescribed form) or Form 10-K filed with the Securities
and Exchange Commission pursuant to Section 9.23(b) and (ii) a copy of any other
document incorporated by reference in the Prospectus. Any reasonable
out-of-pocket expenses incurred by the Securities Administrator in providing
copies of such documents shall be reimbursed by the Depositor.
(c) On each Distribution Date, the Securities Administrator shall
deliver or cause to be delivered by first class mail or make available on its
website to the Depositor, Attention: Contract Finance, a copy of the report
delivered to Certificateholders pursuant to Section 4.02.
Section 11.06 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices.
All requests, demands, notices, authorizations, directions, consents,
waivers and communications hereunder shall be in writing and shall be deemed to
have been duly given when received by (a) in the case of the Depositor, Sequoia
Residential Funding, Inc., Xxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, XX
00000, telecopy number (000) 000-0000, Attention: Sequoia
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Mortgage Trust 2005-1, (b) in the case of the Seller, RWT Holdings, Inc., Xxx
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000 telecopy number (415)
381-1773, Attention: Sequoia Mortgage Trust 2005-1, (c) in the case of the
Master Servicer or the Securities Administrator, Xxxxx Fargo Bank, National
Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or, for overnight
deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000), telecopy number
(000) 000-0000, Attention: Sequoia Mortgage Trust 2005-1, and (d) with respect
to the Trustee or the Certificate Registrar, its respective Corporate Trust
Office, or as to each party such other address as may hereafter be furnished by
such party to the other parties in writing. All demands, notices and
communications to a party hereunder shall be in writing and shall be deemed to
have been duly given when delivered to such party at the relevant address,
facsimile number or electronic mail address set forth above or at such other
address, facsimile number or electronic mail address as such party may designate
from time to time by written notice in accordance with this Section 11.07.
Section 11.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.09 Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
Section 11.10 Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of reference
only, and they shall not be used in the interpretation hereof.
Section 11.11 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except to
the extent specified in Section 11.15.
107
Section 11.12 Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies of the
occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) any assignment by the Master Servicer of its rights hereunder
or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in Section
6.14;
(iv) any notice of termination given to the Master Servicer
pursuant to Section 6.14 and any resignation of the Master Servicer
hereunder;
(v) the appointment of any successor to any Master Servicer
pursuant to Section 6.14;
(vi) the making of a final payment pursuant to Section 7.02; and
(vii) any termination of the rights and obligations of any Servicer
under the applicable Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section shall
be in writing and sent by first class mail, telecopy or overnight courier, as
follows:
If to Moody's, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
108
If to S&P, to:
Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
If to Fitch Ratings, to:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
(c) The Securities Administrator shall provide or make available to the
Rating Agencies reports prepared pursuant to Section 4.02. In addition, the
Securities Administrator shall, at the expense of the Trust Fund, make available
to each Rating Agency such information as such Rating Agency may reasonably
request regarding the Certificates or the Trust Fund, to the extent that such
information is reasonably available to the Securities Administrator.
(d) The Depositor hereby represents to S&P that, to the Depositor's
knowledge, the information provided to such Rating Agency, including the loan
level detail, is true and correct according to such Rating Agency's
requirements.
Section 11.13 Conflicts.
To the extent that the terms of this Agreement conflict with the terms of
any Servicing Agreement, the related Servicing Agreement shall govern.
Section 11.14 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same instrument.
Section 11.15 No Petitions.
The Trustee and the Master Servicer, by entering into this Agreement,
hereby covenant and agree that they shall not at any time institute against the
Depositor, or join in any institution against the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to this Agreement or any of the
documents entered into by the Depositor in connection with the transactions
contemplated by this Agreement.
109
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
SEQUOIA RESIDENTIAL FUNDING, INC.,
as Depositor
By: _________________________________
Name: Xxxx X. Xxxxxxxxxxx
Title: Vice President
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By: _________________________________
Name:
Title:
XXXXX FARGO BANK,
NATIONAL ASSOCIATION,
as Master Servicer
By: _________________________________
Name:
Title:
XXXXX FARGO BANK,
NATIONAL ASSOCIATION,
as Securities Administrator
By: _________________________________
Name:
Title:
Solely for purposes of Section 2.04 and 9.01(d) accepted and agreed to by:
RWT HOLDINGS, INC.
By: ____________________________
Xxxx X. Xxxxxxxxxxx
Authorized Signatory
EXHIBIT A
FORMS OF CERTIFICATES
[See Tab # ]
A-1
EXHIBIT B
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes and
says:
1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the
"Purchaser"), a _______________________ [description of type of
entity] duly organized and existing under the laws of the [State of
__________] [United States], on behalf of which he [she] makes this
affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986,
as amended (the "Code") and will not be a "disqualified
organization" as of [date of transfer], and that the Purchaser is
not acquiring a Residual Certificate (as defined in the Agreement)
for the account of, or as agent (including a broker, nominee, or
other middleman) for, any person or entity from which it has not
received an affidavit substantially in the form of this affidavit.
For these purposes, a "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 (other than an
instrumentality if all of its activities are subject to tax and a
majority of its board of directors is not selected by such
governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), any "electing
large partnership" within the meaning of Section 775 of the Code, or
any organization (other than a farmers' cooperative described in
Code Section 521) that is exempt from federal income tax unless such
organization is subject to the tax on unrelated business income
imposed by Code Section 511.
4. That the Purchaser either (x) is not, and on __________________
[date of transfer] will not be, an employee benefit plan or other
retirement arrangement subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code ("Code"), (collectively, a "Plan") or a
person acting on behalf of any such Plan or investing the assets of
any such Plan to acquire a Residual Certificate; (y) if the Residual
Certificate has been subject to an ERISA-Qualifying Underwriting, is
an insurance company that
B-1
is purchasing the Certificate with funds contained in an "insurance
company general account" as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60 and the purchase and
holding of the Certificate are covered under Sections I and III of
PTCE 95-60; or (z) herewith delivers to the Certificate Registrar an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the
Certificate Registrar, and upon which the Certificate Registrar, the
Trustee, the Master Servicer, the Depositor and Securities
Administrator shall be entitled to rely, to the effect that the
purchase or holding of such Residual Certificate by the Investor
will not result in any non-exempt prohibited transactions under
Title I of ERISA or Section 4975 of the Code and will not subject
the Certificate Registrar, the Trustee, the Depositor, the Master
Servicer or the Securities Administrator to any obligation in
addition to those undertaken by such entities in the Agreement,
which opinion of counsel shall not be an expense of the Trust Fund
or any of the above parties.
5. That the Purchaser hereby acknowledges that under the terms of the
Pooling and Servicing Agreement, dated as of January 1, 2005 (the
"Agreement"), by and among Sequoia Residential Funding, Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as Master
Servicer and as Securities Administrator, and HSBC Bank USA,
National Association, as Trustee with respect to Sequoia Mortgage
Trust 2005-1 Mortgage Pass-Through Certificates, no transfer of the
Residual Certificates shall be permitted to be made to any person
unless the Certificate Registrar and Trustee have received a
certificate from such transferee containing the representations in
paragraphs 3 and 4 hereof.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such
securities through electronic book-entry changes in accounts of
participating organizations (such entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes
legally required to be paid with respect to such Residual
Certificate.
8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge
that the requirements set forth in paragraph 3, paragraph 6 or
paragraph 10 hereof are not satisfied or that the Purchaser has
reason to believe does not satisfy the requirements set forth in
paragraph 7 hereof, and (ii) without obtaining from the prospective
Purchaser an affidavit substantially in this form and providing to
the Trustee and the Certificate Registrar a written statement
substantially in the form of Exhibit C to the Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of
any cash flows generated by the
B-2
interest and that the Purchaser has and expects to have sufficient
net worth and/or liquidity to pay in full any tax liabilities
attributable to ownership of a Residual Certificate and intends to
pay taxes associated with holding such Residual Certificate as they
become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds a Residual Certificate in connection with
the conduct of a trade or business within the United States and has
furnished the transferor, the Trustee and the Certificate Registrar
with an effective Internal Revenue Service Form W-8ECI (Certificate
of Foreign Person's Claim for Exemption From Withholding on Income
Effectively Connected With the Conduct of a Trade or Business in the
United States) or successor form at the time and in the manner
required by the Code or (iii) is a Non-U.S. Person that has
delivered to the transferor, the Trustee and the Certificate
Registrar an opinion of a nationally recognized tax counsel to the
effect that the transfer of such Residual Certificate to it is in
accordance with the requirements of the Code and the regulations
promulgated thereunder and that such transfer of a Residual
Certificate will not be disregarded for federal income tax purposes.
"Non-U.S. Person" means an individual, corporation, partnership or
other person other than (i) a citizen or resident of the United
States; (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any state
thereof, including for this purpose, the District of Columbia; (iii)
an estate that is subject to U.S. federal income tax regardless of
the source of its income; (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 trustees
have authority to control all substantial decisions of the trust;
and, (v) to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996 that are treated as United
States persons prior to such date and elect to continue to be
treated as United States persons.
11. The Purchaser will not cause income from the Residual Certificate to
be attributable to a foreign permanent establishment or fixed base
of the Purchaser or another U.S. taxpayer.
12. That the Purchaser agrees to such amendments of the Agreement as may
be required to further effectuate the restrictions on transfer of
any Residual Certificate to such a "disqualified organization," an
agent thereof, a Book-Entry Nominee, or a person that does not
satisfy the requirements of paragraph 7 and paragraph 10 hereof.
13. That the Purchaser consents to the designation of the Securities
Administrator to act as agent for the "tax matters person" of each
REMIC created by the Trust Fund pursuant to the Agreement.
B-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________ 20__.
_________________________________
[name of Purchaser]
By:______________________________
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
______________________________
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________ 20__.
B-4
EXHIBIT C
RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
____________________________
Date
Re: Sequoia Mortgage Trust 2005-1
Mortgage Pass-Through Certificates
_______________________ (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
information contained in paragraph 7 thereof 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 a Residual Certificate. 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:
C-1
EXHIBIT D
FORM OF CUSTODY AGREEMENTS
D-1
EXHIBIT E
LIST OF SERVICING AGREEMENTS
1. Master Servicing Agreement between RWT Holdings, Inc. ("RWT") and Xxxxxx
Xxxxxxx Xxxx Xxxxxx Credit Corporation, dated August 1, 2002, as modified
by the related Acknowledgements.
2. Mortgage Loan Flow Purchase, Sale & Servicing Agreement among RWT, Cendant
Mortgage Corporation ("Cendant") and Xxxxxx'x Gate Residential Mortgage
Trust (formerly known as Cendant Residential Mortgage Trust), as Sellers,
and Cendant, as Servicer, dated August 1, 2002, and the Additional
Collateral Servicing Agreement between RWT and Cendant, dated August 1,
2002, each as modified by the related Acknowledgements.
3. Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as of
August 1, 2002, between RWT and GreenPoint Mortgage Funding, Inc., as
modified by the related Acknowledgements.
4. Flow Mortgage Loan Sale and Servicing Agreement, dated as of April 1,
2003, between RWT and Bank of America, N.A., as modified by the related
Acknowledgements.
5. Loan Servicing Agreement, dated as of February 1, 2004, between RWT and
GMAC Mortgage Corporation, as modified by the related Acknowledgements.
E-1
EXHIBIT F
LIST OF PURCHASE AGREEMENTS
1. Master Mortgage Loan Purchase Agreement between RWT Holdings, Inc. ("RWT")
and Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, dated August 1, 2002,
as modified by the related Acknowledgements.
2. Mortgage Loan Flow Purchase, Sale & Servicing Agreement among RWT, Cendant
Mortgage Corporation ("Cendant") and Xxxxxx'x Gate Residential Mortgage
Trust (formerly known as Cendant Residential Mortgage Trust), as Sellers,
and Cendant, as Servicer, dated August 1, 2002, as modified by the related
Acknowledgements.
3. Flow Mortgage Loan Sale and Servicing Agreement, dated as of April 1,
2003, between RWT and Bank of America, N.A., as modified by the related
Acknowledgements.
4. Seller's Purchase Warranties and Interim Servicing Agreement, dated as of
January 1, 2004, between GreenPoint and GMAC Mortgage Corporation
("GMAC"), as modified by the related Acknowledgements.
5. Seller's Purchase, Warranties and Interim Servicing Agreement, dated as of
March 1, 2004 between RBC Mortgage Company and GMAC, as modified by the
related Acknowledgements.
6. Mortgage Loan Flow Purchase and Sale Agreement, dated as of May 1, 2004
between E*Trade Mortgage Corporation and GMAC, as modified by the related
Acknowledgements.
7. Mortgage Loan Purchase and Sale Agreement, dated as of April 1, 2004,
between GMAC and American Mortgage Network, Inc., as modified by the
related Acknowledgements.
8. Seller's Purchase, Warranties and Interim Servicing Agreement, dated as of
June 1, 2004, between GMAC and First Magnus Financial Corporation, as
modified by the related Acknowledgements.
9. Seller's Purchase, Warranties and Interim Servicing Agreement, dated as of
November 1, 2004 between Metrocities Mortgage, LLC and GMAC, as modified
by the related Acknowledgements.
10. Seller's Purchase, Warranties and Interim Servicing Agreement, dated as of
December 1, 2004 between Quicken Loans Inc. and GMAC, as modified by the
related Acknowledgements.
F-1
EXHIBIT G
LIST OF LIMITED PURPOSE SURETY BONDS
1. Ambac Assurance Corporation Surety Bond No. AB0240BE, issued March 17,
1999, for Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation loans.
2. Ambac Assurance Corporation Surety Bond No. AB0039BE, issued February 26,
1996, for Xxxxxxx Xxxxx Credit Corporation loans.
G-1
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Sequoia Mortgage Trust 2005-1 Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement, dated as
of January 1, 2005 (the "Pooling and Servicing Agreement"), by and among Sequoia
Residential Funding, Inc., as Depositor, Xxxxx Fargo Bank, National Association,
as Master Servicer and as Securities Administrator, and HSBC Bank USA, National
Association, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Pooling and Servicing Agreement.
This letter relates to $__________ initial Certificate Balance of Class
_____ Certificates which are held in the form of Definitive Certificates
registered in the name of ______________ (the "Transferor"). The Transferor has
requested a transfer of such Definitive Certificates for Definitive Certificates
of such Class registered in the name of [insert name of transferee].
In connection with such request, and in respect of such Certificates, the
Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Pooling and
Servicing Agreement and the Certificates and (ii) Rule 144A under the Securities
Act to a purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer," which purchaser
is aware that the sale to it is being made in reliance upon Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Underwriters and the Depositor.
____________________________
[Name of Transferor]
By:_________________________
Name:
Title:
Dated: ___________, ____
H-1
EXHIBIT I
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Sequoia Mortgage Trust 2005-1 Mortgage Pass-Through Certificates (the
"Privately Offered Certificates") of Sequoia Residential Funding, Inc. (the
"Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should
sell any Privately Offered Certificates within two years of the later of
the date of original issuance of the Privately Offered Certificates or the
last day on which such Privately Offered Certificates are owned by the
Depositor or any affiliate of the Depositor we will do so only (A) to the
Depositor, (B) to "qualified institutional buyers" (within the meaning of
Rule 144A under the Securities Act) in accordance with Rule 144A under the
Securities Act ("QIBs"), (C) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act, or (D) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Certificate Registrar under the Pooling and Servicing
Agreement, dated as of January 1, 2005 (the "Agreement"), by and among
Sequoia Residential Funding, Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Master Servicer and as Securities Administrator,
and HSBC Bank USA, National Association, as Trustee, a signed letter in
the form of this letter; and we further agree, in the capacities stated
above, to provide to any person purchasing any of the Privately Offered
Certificates from us a notice advising such purchaser that resales of the
Privately Offered Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor, we
will be required to furnish to the Certificate Registrar a certification
from such transferee in the form hereof to confirm that the proposed sale
is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. We
further understand that the Privately Offered Certificates purchased by us
will bear a legend to the foregoing effect.
I-1
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or for
one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that in
accordance with ERISA, the Code and the Exemption, no Plan and no person
acting on behalf of such a Plan may acquire such Certificate except in
accordance with Section 3.03(d) of the Agreement.
Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Agreement.
I-2
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
___________________________________
[Purchaser]
By: _______________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of ______________
(the "Investor"), a [corporation duly organized] and existing under the
laws of __________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of
transfer] will not be, an employee benefit plan or other retirement
arrangement subject to Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), (collectively, a
"Plan") or a person acting on behalf of any such Plan or investing the
assets of any such Plan; (y) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is purchasing
the Certificate with funds contained in an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class
Exemption ("PTCE") 95-60 and the purchase and holding of the Certificate
are covered under Sections I and III of PTCE 95-60; or (z) herewith
delivers to the Certificate Registrar an opinion of counsel (a "Benefit
Plan Opinion") satisfactory to the Certificate Registrar, and upon which
the Certificate Registrar, the Trustee, the Master Servicer, the Depositor
and the Securities Administrator shall be entitled to rely, to the effect
that the purchase or holding of such Certificate by the Investor will not
constitute or result in any non-exempt prohibited transactions under Title
I of ERISA or Section 4975 of the Code and will not subject the
Certificate Registrar, the Trustee, the Master Servicer, the Depositor or
the Securities Administrator to any obligation in addition to those
undertaken by such entities in the Pooling and Servicing Agreement, dated
as of January 1, 2005 (the "Agreement"), by and among Sequoia Residential
Funding, Inc., as Depositor, Xxxxx Fargo Bank, National Association, as
Master Servicer and as Securities Administrator, and HSBC Bank USA,
National Association, as Trustee, by which opinion of counsel shall not be
an expense of the Trust Fund or the above parties.
3. The Investor hereby acknowledges that under the terms of the
Agreement, no transfer of the ERISA-Restricted Certificates shall be
permitted to be made to any person unless the Certificate Registrar has
received a certificate from such transferee in the form hereof.
J-1
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to proper authority, by its duly authorized officer,
duly attested, this ____ day of _______________ 20___.
_________________________________
[Investor]
By:______________________________
Name:
Title:
ATTEST:
___________________________
STATE OF )
) ss.:
COUNTY OF )
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 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 _________ 20___.
_________________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________ 20___.
J-2
EXHIBIT K
FORM OF LETTER OF REPRESENTATIONS
WITH THE DEPOSITORY TRUST COMPANY
K-1
EXHIBIT L
[RESERVED]
L-1
EXHIBIT M
FORM OF CERTIFICATION TO BE PROVIDED TO
DEPOSITOR BY THE SECURITIES ADMINISTRATOR
Sequoia Mortgage Trust 2005-1 (the "Trust")
Mortgage Pass-Through Certificates
I, ____________________, a ______________ of Xxxxx Fargo Bank, National
Association ("Xxxxx Fargo"), as Securities Administrator of the Trust,
hereby certify to Sequoia Residential Funding, Inc. (the "Depositor") and
its officers, directions and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
1. The Depositor has provided to the Securities Administrator a written
notice listing all of the monthly distribution reports that were prepared by the
Securities Administrator and that will be included in the Depositor's Form 10-K
for the Trust's fiscal year ending on _____________. I have reviewed each of
such distribution reports.
2. Based on my knowledge, the information in these distribution reports
prepared by the Securities Administrator, 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
that annual report.
3. Based on my knowledge, the distribution information required to be
provided by the Securities Administrator under the Pooling and Servicing
Agreement, dated as of January 1, 2005, among the Depositor, Xxxxx Fargo, as
Master Servicer and Securities Administrator, and HSBC Bank USA, National
Association, as Trustee creating the Trust is included in these reports.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
M-1
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
as Securities Administrator
Dated: _________________ By: _____________________________
Name:
Title:
M-2
SCHEDULE A
MORTGAGE LOAN SCHEDULE
