EXHIBIT 99.1
------------
EXECUTION COPY
XXXXXX XXXXXXX CAPITAL I INC.
Depositor
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
---------------------------
XXXXXX XXXXXXX MORTGAGE LOAN TRUST 2005-1
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................3
Section 1.01 Definitions.....................................................................................3
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................42
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans...........................42
Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund....................45
Section 2.03 Representations and Warranties of the Depositor................................................46
Section 2.04 Representations and Warranties of the Depositor and the Seller as to the Mortgage
Loans..........................................................................................48
Section 2.05 Representations and Warranties of the Seller; Discovery of Breach; Repurchase or
Substitution of Mortgage Loans.................................................................48
Section 2.06 Grant Clause...................................................................................52
ARTICLE III THE CERTIFICATES.....................................................................................53
Section 3.01 The Certificates...............................................................................53
Section 3.02 Registration...................................................................................53
Section 3.03 Transfer and Exchange of Certificates..........................................................54
Section 3.04 Cancellation of Certificates...................................................................57
Section 3.05 Replacement of Certificates....................................................................57
Section 3.06 Persons Deemed Owners..........................................................................58
Section 3.07 Temporary Certificates.........................................................................58
Section 3.08 Appointment of Paying Agent....................................................................59
Section 3.09 Book-Entry Certificates........................................................................59
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................60
Section 4.01 Custodial Accounts; Distribution Account.......................................................60
Section 4.02 Permitted Withdrawals from the Custodial Accounts and the Distribution Account.................62
Section 4.03 [Reserved].....................................................................................63
Section 4.04 [Reserved].....................................................................................63
Section 4.05 Reports to Trustee and Certificateholders......................................................63
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................65
Section 5.01 Distributions Generally........................................................................65
Section 5.02 Priorities of Distribution.....................................................................66
Section 5.03 [Reserved].....................................................................................73
Section 5.04 Allocation of Losses...........................................................................73
i
Section 5.05 Advances by the Master Servicer................................................................75
Section 5.06 Compensating Interest Payments.................................................................75
Section 5.07 [Reserved].....................................................................................76
Section 5.08 Cross-Collateralization; Adjustments to Available Funds........................................76
Section 5.09 Determination of Pass-Through Rates for LIBOR Certificates.....................................77
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT............................79
Section 6.01 Duties of Trustee and the Securities Administrator.............................................79
Section 6.02 Certain Matters Affecting the Trustee and the Securities Administrator.........................82
Section 6.03 Trustee and Securities Administrator Not Liable for Certificates...............................83
Section 6.04 Trustee and the Securities Administrator May Own Certificates..................................84
Section 6.05 Eligibility Requirements for Trustee...........................................................84
Section 6.06 Resignation and Removal of Trustee and the Securities Administrator............................84
Section 6.07 Successor Trustee and Successor Securities Administrator.......................................84
Section 6.08 Merger or Consolidation of Trustee or the Securities Administrator.............................88
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.......................................88
Section 6.10 Authenticating Agents..........................................................................90
Section 6.11 Indemnification of the Trustee and the Securities Administrator................................90
Section 6.12 Fees and Expenses of Securities Administrator and the Trustee..................................91
Section 6.13 Collection of Monies...........................................................................92
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor....................................92
Section 6.15 Additional Remedies of Trustee Upon Event of Default...........................................96
Section 6.16 Waiver of Defaults.............................................................................96
Section 6.17 Notification to Holders........................................................................96
Section 6.18 Directions by Certificateholders and Duties of Trustee During Event of Default.................96
Section 6.19 Action Upon Certain Failures of the Master Servicer and Upon Event of Default..................97
Section 6.20 Preparation of Tax Returns and Other Reports...................................................97
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND.........................................99
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of
All Mortgage Loans.............................................................................99
Section 7.02 Procedure Upon Redemption Termination of Trust Fund............................................99
Section 7.03 Additional Trust Fund Termination Requirements................................................100
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................101
Section 8.01 Limitation on Rights of Holders...............................................................101
Section 8.02 Access to List of Holders.....................................................................102
Section 8.03 Acts of Holders of Certificates...............................................................103
ii
ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER AND WMMSC......................104
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers' and Master Servicer's
Obligations...................................................................................104
Section 9.02 Assumption of Master Servicing by Master Servicer or Servicing by Trustee.....................105
Section 9.03 Representations and Warranties of the Master Servicer.........................................106
Section 9.04 Compensation to the Master Servicer...........................................................108
Section 9.05 Merger or Consolidation.......................................................................109
Section 9.06 Resignation of Master Servicer................................................................109
Section 9.07 Assignment or Delegation of Duties by the Master Servicer.....................................109
Section 9.08 Limitation on Liability of the Master Servicer and Others.....................................110
Section 9.09 Indemnification; Third-Party Claims...........................................................111
ARTICLE X REMIC ADMINISTRATION..................................................................................111
Section 10.01 REMIC Administration..........................................................................111
Section 10.02 Prohibited Transactions and Activities........................................................114
Section 10.03 Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status...............114
Section 10.04 REO Property..................................................................................115
Section 10.05 Fidelity......................................................................................115
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................116
Section 11.01 Binding Nature of Agreement; Assignment.......................................................116
Section 11.02 Entire Agreement..............................................................................116
Section 11.03 Amendment.....................................................................................116
Section 11.04 Voting Rights.................................................................................117
Section 11.05 Provision of Information......................................................................117
Section 11.06 Governing Law.................................................................................118
Section 11.07 Notices. 118
Section 11.08 Severability of Provisions....................................................................118
Section 11.09 Indulgences; No Waivers.......................................................................118
Section 11.10 Headings Not To Affect Interpretation.........................................................119
Section 11.11 Benefits of Agreement.........................................................................119
Section 11.12 Special Notices to the Rating Agencies........................................................119
Section 11.13 Conflicts.....................................................................................120
Section 11.14 Counterparts..................................................................................120
Section 11.15 No Petitions..................................................................................120
iii
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 [Reserved]
Exhibit E List of Purchase and Servicing Agreements
Exhibit F List of Custodial Agreements
Exhibit G [Reserved]
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 Form of Custodian Certification
Exhibit M Assignment and Notice of Transfer with respect to each
Additional Collateral Mortgage Loan
Schedule A Mortgage Loan Schedule
Schedule B Principal Balances Schedule
iv
This POOLING AND SERVICING AGREEMENT, dated as of February 1, 2005
(the "Agreement"), by and among XXXXXX XXXXXXX CAPITAL I INC., a Delaware
corporation, as depositor (the "Depositor"), DEUTSCHE BANK NATIONAL TRUST
COMPANY, 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 XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a
New York corporation, as seller (the "Seller"), for purposes of Section 2.05.
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. As provided herein,
the Trustee will make multiple elections to treat segregated pools of assets
subject to this Agreement for federal income tax purposes as the following
four separate real estate mortgage investment conduits (each, a "REMIC"):
REMIC 1, REMIC 2, REMIC 3 and the Master REMIC. REMIC 1 will consist of all of
the assets constituting the Trust Fund other than the regular interests issued
by the REMICs created hereunder and any rights of the Trust Fund in respect of
the Additional Collateral. REMIC 1 will issue uncertificated REMIC regular
interests (the "REMIC 1 Regular Interests"). The REMIC 1 Regular Interests
will represent the "regular interests" in REMIC 1 and the R-1 Interest will
represent the single Class of "residual interest" in REMIC 1.
The Trustee will hold the REMIC 1 Regular Interests for the
benefit of REMIC 2. REMIC 2 will consist of the REMIC 1 Interests and will
issue uncertificated REMIC 2 regular interests, which will constitute the
regular interests in REMIC 2 (the "REMIC 2 Regular Interests") and the Class
R-2 Interest, which will represent the single Class of "residual interest" in
REMIC 2.
The Trustee will hold the REMIC 2 Regular Interests for the
benefit of REMIC 3. REMIC 3 will consist of the REMIC 2 Interests and will
issue uncertificated REMIC 3 regular interests, which will constitute the
regular interests in REMIC 3 (the "REMIC 3 Regular Interests") and the Class
R-3 Interest, which will represent the single Class of "residual interest" in
REMIC 3.
The Trustee will hold the REMIC 3 Regular Interests for the
benefit of the Master REMIC. The Master REMIC will consist of the REMIC 3
Interests and will be evidenced by the Certificates, which (other than the
Class A-R Certificates) will constitute the regular interests in the Master
REMIC (the "Regular Certificates") and the Class R-4 Interest, which will
represent the single Class of "residual interest" in the Master REMIC. The
Class A-R Certificates will represent the beneficial ownership of each of the
Class R-1, Class R-2, Class R-3 and Class R-4 Interests. The "latest possible
maturity date" for federal income tax purposes of all regular and residual
interests created hereunder will be the Latest Possible Maturity Date.
v
REMIC 1
-------
REMIC 1 will issue a single regular interest corresponding
to each Mortgage Loan having a Net Mortgage Rate less than or equal to 5.25%
and greater than or equal to 7.5%, and two regular interests (referred to
collectively herein as the "Class 1-A Interests" and the "Class 1-B
Interests") for each Mortgage Loan having a Net Mortgage Rate greater than
5.25% and less than 7.5%.
Each REMIC 1 Regular Interest corresponding to a Mortgage Loan having
a Net Mortgage Rate less than or equal to 5.25% will have a Pass Through Rate
of 5.25% and a principal balance, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, equal to the product
of: (i) the Non-A-P Percentage of the related Mortgage Loan and (ii) the
related Mortgage Loan's principal balance. For purposes of the calculating the
Calculation Rate, each of the foregoing REMIC 1 Regular Interest from Loan
Group 1 will be treated as part of Collateral Allocation Group 1 and each of
the foregoing REMIC 1 Regular Interest from Loan Group 2 will be treated as
part of Collateral Allocation Group 3.
Each REMIC 1 Regular Interest corresponding to a Mortgage Loan having
a Net Mortgage Rate greater than or equal to 7.5% will have a Pass Through
Rate of 7.5% and a principal balance, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, equal to the related
Mortgage Loan's principal balance. For purposes of the calculating the
Calculation Rate, each of the foregoing REMIC 1 Regular Interest from Loan
Group 1 will be treated as part of Collateral Allocation Group 2 and each of
the foregoing REMIC 1 Regular Interest from Loan Group 2 will be treated as
part of Collateral Allocation Group 4.
Each of the Class 1-A Interests will have a Pass Through Rate of
5.25% and a principal balance, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, equal to the product
of: (i) 7.50% minus the Net Mortgage Rate in respect of the related Mortgage
Loan, divided by 2.25%, and (ii) the related Mortgage Loan's principal
balance. For purposes of the calculating the Calculation Rate, each Class 1-A
Interest from Loan Group 1 will be treated as part of Collateral Allocation
Group 1 and each Class 1-A Interest from Loan Group 2 will be treated as part
of Collateral Allocation Group 3.
Each of the Class 1-B Interests will have a Pass Through Rate of 7.5%
and a principal balance, following the allocation of scheduled principal,
prepayments of principal and Realized Losses, equal to the product of: (i) the
Net Mortgage Rate in respect of the related Mortgage Loan minus 5.25%, divided
by 2.25%, and (ii) the related Mortgage Loan's principal balance. For purposes
of the calculating the Calculation Rate, each Class 1-B Interest from Loan
Group 1 will be treated as part of Collateral Allocation Group 2 and each
Class 1-B Interest from Loan Group 2 will be treated as part of Collateral
Allocation Group 4.
REMIC 1 also will issue the Class 1-A-P Interest, the Class 1-A-X
Interest, Class 1-P Interest and the Class R-1 Interest. The Class 1-A-P
Interest will have a principal balance, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, equal to the
principal balance in respect of the Class A-P Certificates and will not be
entitled to receive distributions of interest. The Class 1-A-X Interest will
have a notional principal balance,
vi
following the allocation of scheduled principal, prepayments of principal and
Realized Losses, equal to the Notional Amount in respect of the Class 4-A-X
Certificates. The Class 1-P Interest will not be entitled to any interest, but
will be entitled to 100% of any prepayment premiums paid on the Mortgage
Loans. The Class R-1 Interest is the residual interest and will not be
entitled to any distributions of interest or principal.
vii
REMIC 2
The REMIC 2 Interests, each of which (except for the Class
R-2 Interests) is hereby designated as a REMIC regular interest for federal
income tax purposes, will have the principal balances, pass-through rates and
Corresponding Loan Groups as set forth in the following table:
Corresponding
Subsidiary REMIC Interests Initial Balance Pass-Through Rate Loan Group
------------------------------------------------- --------------- ----------------- -------------
A-1 (0.9% of Subordinated Portion Group 1)...... (1) 5.25% 1
B-1 (0.1% of Subordinated Portion Group 1)...... (1) 5.25% 1
C-1 (Excess of Group 1)......................... (1) 5.25% 1
2-1-A-P.......................................... (2) 0% 1
A-2 (0.9% of Subordinated Portion Group 2)...... (1) 7.50% 2
B-2 (0.1% of Subordinated Portion Group 2)...... (1) 7.50% 2
C-2 (Excess of Group 2)......................... (1) 7.50% 2
A-3 (0.9% of Subordinated Portion Group 3)...... (1) 5.25% 3
B-3 (0.1% of Subordinated Portion Group 3)...... (1) 5.25% 3
C-3 (Excess of Group 3)......................... (1) 5.25% 3
2-3-A-P.......................................... (3) 0% 3
A-4 (0.9% of Subordinated Portion Group 4)...... (1) 7.50% 4
B-4 (0.1% of Subordinated Portion Group 4)...... (1) 7.50% 4
C-4 (Excess of Group 4)......................... (1) 7.50% 4
2-4-A-X.......................................... (4) (5) 4
2-$100........................................... $100 (6) N/A
2-P.............................................. $100 (7) N/A
R-2.............................................. $0 N/A N/A
---------------
(1) Each Class A Interest will have a principal balance initially equal
to 0.9% of the Subordinate Component Balance ("Subordinated Portion")
of its Corresponding Collateral Allocation Group. Each Class B
Interest will have a principal balance initially equal to 0.1% of the
Subordinate Component Balance of its Corresponding Collateral
Allocation Group. The initial principal balance of each Class C
Interest will equal the excess of: (i) the product of (A) the
weighted average of the Non-A-P Percentages of the Corresponding
Collateral Allocation Group and (B) the aggregate principal balance
of the Applicable Fractions of the Mortgage Loans in the
Corresponding Collateral Allocation Group over (ii) the initial
aggregate principal balances of the Class A and Class B Interests
corresponding to such Collateral Allocation Group.
viii
(2) For each Distribution Date, the principal balance in respect of the
Class 1-A-P Component.
(3) For each Distribution Date, the principal balance in respect of the
Class 3-A-P Component.
(4) For each Distribution Date, a notional balance equal to the aggregate
principal balance of the Loan Group 4 Non-Discount Mortgage Loans.
(5) The excess of the weighted average of the Net Mortgage Rates for
the Collateral Allocation Group 4 Non-Discount Mortgage Loans over
7.50%.
(6) For each Distribution Date, the Pass Through Rate in respect of the
Class A-R Certificates.
(7) The Class 2-P Interest will not be entitled to any interest,
but will be entitled to 100% of any prepayment premiums paid on the
Mortgage Loans.
On any Distribution Date:
(1) If no Cross-Over Situation exists with respect to any Class of
Interests, then the Non-A-P Percentage of Principal Reductions arising with
respect to each Collateral Allocation Group will be allocated first to cause
the Collateral Allocation Group's corresponding Class A and Class B Interests
to equal, respectively, 0.9% of the Subordinated Portion, 0.1% of the
Subordinated Portion as of such Distribution Date, and second to the
Collateral Allocation Group's corresponding Class C Interest;
(2) If a Cross-Over Situation exists then:
(a) if the Calculation Rate in respect of the outstanding Class A
and Class B Interests is less than the Pass Through Rate in respect of the
Subordinate Certificates (the "Subordinate Pass Through Rate"), Principal
Relocation Payments will be made proportionately to the outstanding Class A
Interests prior to any other Principal Distributions from each such Collateral
Allocation Group; and
(b) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is greater than the Subordinate Pass Through Rate, Principal
Relocation Payments will be made proportionately to the outstanding Class B
Interests prior to any other Principal Distributions from each such Collateral
Allocation Group.
In each case, Principal Relocation Payments will be made so as to
cause the Calculation Rate in respect of the outstanding Class A and Class B
Interests to equal the Subordinate Pass Through Rate. With respect to each
Collateral Allocation Group, if (and to the extent that) the sum of (a) the
principal payments comprising the Principal Remittance Amount received during
the Due Period and (b) the Realized Losses, are insufficient to make the
necessary reductions of principal on the Class A and Class B Interests, then
interest will be added to the Collateral Allocation Group's other Interests
that are not receiving Principal Relocation Payments, in proportion to their
principal balances.
ix
(c) The outstanding aggregate Class A and Class B Interests will not
be reduced below 1 percent of the excess of (i) the product of (A) the
weighted average of the Non-A-P Percentages and (ii) the aggregate outstanding
Principal Balances of the Mortgage Loans as of the end of any Due Period over
(ii) the Certificate Balance of the Senior Certificates as of the related
Distribution Date (after taking into account distributions of principal on
such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents
the distribution of principal to any of the Class A and Class B Interests, and
if the Collateral Allocation Group's Class C Interest has already been reduced
to zero, then the excess principal from that Collateral Allocation Group will
be paid to the Class C Interests of the other Collateral Allocation Group if
the aggregate Class A and Class B Interests of such Collateral Allocation
Group are less than one percent of the Subordinated Portion. If the Class C-1
Interest receives such a payment, then the payment will be treated by
Subsidiary REMIC as a Realized Loss. Conversely, if the Class C-2 Interest
receives such a payment, then the payment will be treated by Subsidiary REMIC
as a reimbursement for prior Realized Losses.
The Class 2-1-A-P and Class 2-3-A-P Interests will be allocated the
Class A-P Percentage of principal and Realized Losses in respect of their
corresponding Collateral Allocation Groups.
REMIC 3
The REMIC 3 Interests, each of which (except for the Class
R-3 Interests) is hereby designated as a REMIC regular interest for federal
income tax purposes, will have the principal balances, pass-through rates and
Corresponding Collateral Allocation Groups as set forth in the following
table:
--------------------------------------------------------------------------------------------------------------------------
Pass-Through
Initial Class Principal Rate Allocation of
Class Designation Balance (1) (per annum) Allocation of Interest Principal
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-1 $30,000,000 5.25% Class 1-A-1 Class 1-A-1
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-2 $69,197,000 5.25% Class 1-A-2 Class 1-A-2
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-3 $13,060,000 5.25% Class 1-A-3 Class 1-A-3
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-4 $2,240,000 5.25% Class 1-A-4 Class 1-A-4
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-5 $10,000,000 5.25% Class 1-A-5 Class 1-A-5
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-6 $10,500,000 5.25% Class 1-A-6 Class 1-A-6
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-1-A-P $98,781.73 N/A N/A Class A-P
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-2-A-1 $31,808,000 7.50% Class 2-A-1, Class 2-A-1
Class 2-A-2
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-3-A-1 $90,000,000 5.00% Class 3-A-1 Class 3-A-1
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-3-A-2 $60,231,000 5.25% Class 3-A-2 Class 3-A-2
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-3-A-3 $20,675,000 5.25% Class 3-A-3 Class 3-A-3
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-3-A-4 $1,325,000 5.25% Class 3-A-4 Class 3-A-4
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-3-A-5 $10,000,000 7.50% Class 3-A-5, Class 3-A-5
Class 3-A-6
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-3-A-7 $11,000,000 5.25% Class 3-A-7 Class 3-A-7
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
x
Class 3-3-A-P $125,548.23 N/A N/A Class A-P
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-4-A-1 $63,240,000 7.50% Class 4-A-1, Class 4-A-1
Class 4-A-2
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-$100 $100 (2) Class A-R Class A-R
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-B-1 $8,822,000 (3) Class B-1 Class B-1
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-B-2 $3,088,000 (3) Class B-2 Class B-2
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-B-3 $1,765,000 (3) Class B-3 Class B-3
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-B-4 $1,765,000 (3) Class B-4 Class B-4
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-B-5 $1,323,000 (3) Class B-5 Class B-5
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-B-6 $882,883.99 (3) Class B-6 Class B-6
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-P $100.00 (4) Class P Class P
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class 3-4-A-X (5) (5) N/A N/A
-------------------------- -------------------------- ------------------ ----------------------------- -------------------
Class R-2 $0.00 N/A N/A N/A
--------------------------------------------------------------------------------------------------------------------------
------------------------------------------
(1) On each Distribution Date, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, each Class will
have the principal balance in respect of its corresponding Class
designated under the column titled "Allocation of Principal".
(2) A per annum rate equal to the Weighted Average Net Mortgage Rate on the
Collateral Allocation Group 1 Mortgage Loans.
(3) The Calculation Rate.
(4) The Class 3-P Interest will not be entitled to any interest, but will be
entitled to 100% of the Class SR-P Interest cash flow.
(5) For each Distribution Date, the Class 3-4-A-X will be entitled to 100% of
the interest distributed in respect of the Class 2-4-A-X.
The Master REMIC
The following table sets forth characteristics of the Master REMIC
Certificates, together with the minimum denominations and integral multiples
in excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
----------------------------------------------------------------------------------------------------------------------
Pass-Through
Initial Class Rate Integral Multiples
Class Designation Principal Balance (per annum) Minimum Denomination in Excess of Minimum
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 1-A-1 $30,000,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 1-A-2 $69,197,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 1-A-3 $13,060,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 1-A-4 $2,240,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 1-A-5 $10,000,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 1-A-6 $10,500,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 2-A-1 $31,808,000 (2) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
xi
Class 2-A-2 Notional(4) (3) $100,000.00(1) $1,000.00(1)
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-1 $90,000,000 5.00% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-2 $60,231,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-3 $20,675,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-4 $1,325,000 5.25% $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-5 $10,000,000 (2) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-6 Notional(4) (3) $100,000.00(1) $1,000.00(1)
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 3-A-7 $11,000,000 5.25% $1,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 4-A-1 $63,240,000 (2) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 4-A-2 Notional(4) (3) $100,000.00(1) $1,000.00(1)
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class 4-A-X Notional(4) 5.00% $100,000.00(1) $1,000.00(1)
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class A-P $224,327 (5) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class A-R(6) $100.00 5.25% (7) (7)
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class B-1 $8,822,000 (8) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class B-2 $3,088,000 (8) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class B-3 $1,765,000 (8) $25,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class B-4 $1,765,000 (8) $100,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class B-5 $1,323,000 (8) $100,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class B-6 $882,884 (8) $100,000.00 $1,000.00
------------------------- ------------------------ --------------------- ---------------------- ----------------------
Class P $100.00 (9) $100.00 N/A
----------------------------------------------------------------------------------------------------------------------
------------------------------------------
(1) Minimum denomination is based on the Notional Amount of such Class.
(2) The Pass-Through Rate for each of the Class 2-A-1, Class 3-A-5 and Class
4-A-1 Certificates for any Distribution Date will be a per annum rate
equal to the sum of one-month LIBOR plus 0.30%, subject to a maximum per
annum rate of 7.20% and a minimum rate of 0.30%. The Pass-Through Rate
for the Class 2-A-1, Class 3-A-5 and Class 4-A-1 Certificates for the
first Interest Accrual Period will be a per annum rate of 2.890%.
(3) The Pass-Through Rate for each of the Class 2-A-2, Class 3-A-6 and 4-A-2
Certificates for any Distribution Date will be a per annum rate equal to
7.20% minus one-month LIBOR, subject to a maximum per annum rate of 7.20%
and a minimum rate of 0.00%. The Pass-Through Rate for the Class 2-A-2,
Class 3-A-6 and 4-A-2 Certificates for the first Interest Accrual Period
will be a per annum rate of 4.610%.
(4) The Class 2-A-2, Class 3-A-6, Class 4-A-2 and Class 4-A-X Certificates
will be Notional Amount Certificates, will have no Class Principal
Balance and will bear interest on their respective initial Notional
Amounts (initially, $31,808,000, $10,000,000, $63,240,000 and $234,943,
respectively).
(5) The Class A-P Certificates are principal only certificates and are not
entitled to receive any distributions of interest.
(6) The Class A-R Certificates represent the sole Class of residual interest
in each REMIC.
(7) The Class A-R Certificate shall be issued as two separate certificates,
one with an initial Certificate Balance of $99.99 and the Tax Matters
Person Certificate with an initial Certificate Balance of $0.01.
xii
(8) The Pass-Through Rate for each class of Subordinated Certificates for any
Distribution Date will be a per annum rate equal to the sum of: (1) 5.25%
multiplied by the excess of the aggregate Stated Principal Balance of the
Group 1 Mortgage Loans as of the Due Date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date) over
the aggregate of the Class Principal Balances of the Group 1 Senior
Certificates immediately prior to that Distribution Date, (2) 7.50%
multiplied by the excess of the aggregate Stated Principal Balance of the
Group 2 Mortgage Loans as of the Due Date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date) over
the aggregate of the Class Principal Balances of the Group 2 Senior
Certificates immediately prior to that Distribution Date, (3) 5.25%
multiplied by the excess of the aggregate Stated Principal Balance of the
Group 3 Mortgage Loans as of the Due Date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date) over
the aggregate of the Class Principal Balances of the Group 3 Senior
Certificates immediately prior to that Distribution Date and (4) 7.50%
multiplied by the excess of the aggregate Stated Principal Balance of the
Group 4 Mortgage Loans as of the Due Date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date) over
the aggregate of the Class Principal Balances of the Group 4 Senior
Certificates immediately prior to that Distribution Date; divided by the
aggregate Class Principal Balance of the Subordinated Certificates
immediately prior to that Distribution Date. The Pass-Through Rate for
each class of Subordinated Certificates for the first Interest Accrual
Period will be a per annum rate of 5.755%.
(9) The Class P Certificates will receive all payments in respect of
prepayment penalties on all of the mortgage loans in each loan group and
are not entitled to receive any distributions of interest.
The foregoing provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Mortgage Loans
to be distributed from the Subsidiary REMIC to the Master REMIC and from the
Master REMIC to each Class of Certificates. The Preliminary Statement will be
interpreted and applied consistently with such intent.
For any purpose for which the pass-through rates is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the pass-through rates for
each of the interests issued by the Subsidiary REMIC and the Master REMIC such
rates shall be adjusted to equal a monthly day count convention based on a 30
day month for each Due Period and a 360-day year so that the Mortgage Loans
and all regular interests will be using the same monthly day count convention.
xiii
Set forth below are designations of Classes or Components of Certificates and
other defined terms to the categories used herein:
Accretion Directed Certificates........... Class 1-A-1, Class 1-A-2 and Class
1-A-5 Certificates.
Accretion Directed Components............. None.
Accrual Certificates...................... Class 1-A-6 Certificates.
Accrual Components........................ None.
Book-Entry Certificates................... All Classes of Certificates other
than the Definitive Certificates.
Combined Certificates..................... None.
Component Certificates.................... Class A-P Certificates.
Components................................ For purposes of calculating
distributions of principal and/or
interest, the Component
Certificates, if any, will be
comprised of multiple payment
components having the
designations, Initial Component
Balances or Component Notional
Amounts, as applicable, and
Pass-Through Rates set forth
below:
Initial
Designation Component Balance Pass-Through Rate
-------------------------- ----------------- -----------------
Class 1-A-P Component $98,781.73 N/A
Class 3-A-P Component $125,548.23 N/A
Delay Certificates........................ All interest-bearing Classes of
Certificates other than the
Non-Delay Certificates, if any.
ERISA-Restricted Certificates............. The Residual Certificates and
Private Certificates; and any
Certificate of a Class that ceases
to satisfy the applicable rating
requirement under the
Underwriter's Exemption.
Floating Rate Certificates................ Class 2-A-1, Class 3-A-5 and Class
4-A-1 Certificates.
Group 1 Certificates...................... Group 1 Senior Certificates and the
portions of the Subordinated
Certificates related to Collateral
Allocation Group 1.
Group 1 Senior Certificates............... Class 1-A-1, Class 1-A-2, Class
1-A-3, Class 1-A-4, Class 1-A-5,
Class 1-A-6 and Class A-R
Certificates and the Class 1-A-P
Component.
Group 2 Certificates...................... Group 2 Senior Certificates and the
portions of the Subordinated
Certificates related to Collateral
Allocation Group 2.
Group 2 Senior Certificates............... Class 2-A-1 and Class 2-A-2
Certificates.
1
Group 3 Certificates...................... Group 3 Senior Certificates and the
portions of the Subordinated
Certificates related to Collateral
Allocation Group 3.
Group 3 Senior Certificates............... Class 3-A-1, Class 3-A-2, Class
3-A-3, Class 3-A-4, Class 3-A-5,
Class 3-A-6 and Class 3-A-7
Certificates and the Class 3-A-P
Component.
Group 4 Certificates...................... Group 4 Senior Certificates and the
portions of the Subordinated
Certificates related to Collateral
Allocation Group 4.
Group 4 Senior Certificates............... Class 4-A-1, Class 4-A-2 and Class
4-A-X Certificates.
Inverse Floating Rate Certificates........ Class 2-A-2, Class 3-A-6 and Class
4-A-2 Certificates.
LIBOR Certificates........................ Floating Rate and Inverse Floating
Rate Certificates.
Non-Delay Certificates.................... LIBOR Certificates.
Notional Amount Certificates.............. Class 2-A-2, Class 3-A-6, Class
4-A-2 and Class 4-A-X
Certificates.
Notional Amount Components................ None.
Offered Certificates...................... All Classes of Certificates other
than the Private Certificates.
Definitive Certificates................... Private Certificates and the
Residual Certificates.
Planned Principal Classes................. None.
Principal Only Certificates............... Class A-P Certificates.
Principal Only Components................. Class 1-A-P and Class 3-A-P
Components.
Private Certificates...................... Class B-4, Class B-5, Class B-6 and
Class P Certificates.
Rating Agencies........................... S&P and Fitch.
Regular Certificates...................... All Classes of Certificates, other
than the Residual Certificates.
Residual Certificates..................... Class A-R Certificates.
Scheduled Principal Classes............... None.
Senior Certificate Group.................. The Group 1 Senior Certificates,
Group 2 Senior Certificates, Group
3 Senior Certificates and Group 4
Senior Certificates, as
applicable.
Senior Certificates....................... Group 1 Senior Certificates,
Group 2 Senior Certificates, Group
3 Senior Certificates and Group 4
Senior Certificates.
Subordinated Certificates................. Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6
Certificates.
2
Targeted Principal Classes................ None.
Underwriter............................... Xxxxxx Xxxxxxx & Co. Incorporated.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The following words and phrases, unless the context otherwise
requires, shall have the following meanings:
A-P Formula Principal Amount: As to any Distribution Date and any
Collateral Allocation Group the sum of (i) the sum of the applicable A-P
Percentage of (a) the principal portion of each Scheduled Payment (without
giving effect, prior to the Bankruptcy Coverage Termination Date, to any
reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on the Applicable Fraction of each Mortgage Loan in the
related Collateral Allocation Group on the related Due Date, (b) the Stated
Principal Balance of the Applicable Fraction of each Mortgage Loan in the
related Collateral Allocation Group that was repurchased by the Seller or the
related Originator or purchased by the Master Servicer pursuant to this
Agreement as of such Distribution Date, (c) the Substitution Adjustment Amount
in connection with any the Applicable Fraction of Deleted Mortgage Loan in the
related Collateral Allocation Group received with respect to such Distribution
Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to
recoveries of principal of the Applicable Fraction of Mortgage Loans in the
related Collateral Allocation Group that are not yet Liquidated Mortgage Loans
received during the calendar month preceding the month of such Distribution
Date, (e) with respect to the Applicable Fraction of each Mortgage Loan in the
related Collateral Allocation Group that became a Liquidated Mortgage Loan
during the calendar month preceding the month of such Distribution Date, the
amount of Liquidation Proceeds allocable to principal received with respect to
such Mortgage Loan allocable to that Collateral Allocation Group during the
calendar month preceding the month of such Distribution Date with respect to
such Mortgage Loan and, if such Liquidated Mortgage Loan is an Additional
Collateral Mortgage Loan, the principal portion of the proceeds of any
Additional Collateral allocated to the Collateral Allocation Group and (f) the
Applicable Fraction of all Principal Prepayments with respect to the Mortgage
Loans in the related Collateral Allocation Group received during the related
Prepayment Period, and (ii) with respect to Subsequent Recoveries attributable
to the Applicable Fraction of a Discount Mortgage Loan in the related
Collateral Allocation Group which incurred (1) an Excess Loss or (2) a
Realized Loss after the Senior Credit Support Depletion Date, the A-P
Percentage of the Applicable Fraction of any Subsequent Recoveries on the
Mortgage Loans related to such
3
Collateral Allocation Group received during the calendar month preceding the
month of such Distribution Date.
A-P Percentage: As to any Discount Mortgage Loan or Applicable
Fraction thereof in Collateral Allocation Group 1 or Collateral Allocation
Group 3, a fraction (expressed as a percentage) the numerator of which is the
excess of the Required Coupon for such Collateral Allocation Group over the
Net Mortgage Rate of such Discount Mortgage Loan and the denominator of which
is such Required Coupon. As to any Non-Discount Mortgage Loan or Applicable
Fraction thereof in Collateral Allocation Group 1 or Collateral Allocation
Group 3 and as to any Mortgage Loan or Applicable Fraction thereof in
Collateral Allocation Group 2 or Collateral Allocation Group 4, 0%.
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.
Acknowledgements: The Assignment, Assumption and Recognition
Agreements, each dated as of February 1, 2005, assigning rights under the
Purchase and Servicing Agreements from the Seller to the Depositor and from
the Depositor to the Trustee, for the benefit of the Certificateholders.
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: With respect to the Class 1-A-6
Certificates, the Class 1-A-6 Accretion Direction Rule.
Accrual Amount: With respect to any Class of Accrual Certificates or
any Accrual Component and any Distribution Date, the amount allocable to
interest on such Class of Accrual Certificates with respect to such
Distribution Date pursuant to Section 5.02(a)(1)(iii), Section
5.02(a)(2)(iii), Section 5.02(a)(3)(iii) and Section 5.02(a)(4)(iii), as
applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: The Senior Credit Support Depletion Date.
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.
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
4
Agreement or the applicable Purchase and Servicing Agreement, as applicable,
the amount of any such payment being equal to the aggregate of the payments of
principal and interest (net of 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 applicable Servicer has 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
applicable Servicing Fee Rate and, with respect to any LPMI Mortgage Loan, the
interest premium charged by the mortgagee to obtain or maintain any Primary
Insurance Policy.
Aggregate Planned Balance: With respect to any group of Planned
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
Aggregate Targeted Balance: With respect to any group of Targeted
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
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
or supplements hereto.
Allocable Share: As to any Distribution Date and any Mortgage Loan
(i) with respect to Principal Only Certificates, zero, (ii) with respect to
the Class 4-A-X Certificates, (a) the ratio that the excess, if any, of the
Net Mortgage Rate with respect to such Mortgage Loan or the Applicable
Fraction thereof, over the related Required Coupon bears to such Net Mortgage
Rate or (b) if the Net Mortgage Rate with respect to such Mortgage Loan or the
Applicable Fraction thereof does not exceed the related Required Coupon, zero,
and (iii) with respect to each other Class of Certificates the product of (a)
the lesser of (I) the ratio that the related Required Coupon bears to the Net
Mortgage Rate of such Mortgage Loan or the Applicable Fraction thereof and
5
(II) one, multiplied by (b) the ratio that the amount calculated with respect
to such Distribution Date (A) with respect to the Senior Certificates of the
related Senior Certificate Group, pursuant to clause (i) of the definition of
Class Optimal Interest Distribution Amount (without giving effect to any
reduction of such amount pursuant to Section 5.02 (d)) and (B) with respect to
the Subordinated Certificates, pursuant to the definition of Assumed Interest
Amount or after the third Senior Termination Date, pursuant to clause (i) of
the definition of Class Optimal Interest Distribution Amount (without giving
effect to any reduction of such amount pursuant to Section 5.02(d)) bears to
the amount calculated with respect to such Distribution Date for each Class of
Certificates pursuant to clause (i) of the definition of Class Optimal
Interest Distribution Amount (without giving effect to any reduction of such
amount pursuant to Section 5.02(d)) or the definition of Assumed Interest
Amount for such Collateral Allocation Group and Class, as applicable.
American Home Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement listed in Exhibit E hereto between the Seller and
American Home Mortgage Holding Corp.
Amount Available for Senior Principal: As to any Distribution Date
and (a) Collateral Allocation Group 1, Available Funds for such Distribution
Date and Collateral Allocation Group, reduced by the aggregate amount
distributable (or allocable to the Accrual Amount, if applicable) on such
Distribution Date in respect of interest on the related Senior Certificates
pursuant to Section 5.02(a)(1)(ii), (b) Collateral Allocation Group 2,
Available Funds for such Distribution Date and Collateral Allocation Group,
reduced by the aggregate amount distributable (or allocable to the Accrual
Amount, if applicable) on such Distribution Date in respect of interest on the
related Senior Certificates pursuant to Section 5.02(a)(2)(ii), (c) Collateral
Allocation Group 3, Available Funds for such Distribution Date and Collateral
Allocation Group, reduced by the aggregate amount distributable (or allocable
to the Accrual Amount, if applicable) on such Distribution Date in respect of
interest on the related Senior Certificates pursuant to Section 5.02(a)(3)(ii)
or (d) Collateral Allocation Group 4, Available Funds for such Distribution
Date and Collateral Allocation Group, reduced by the aggregate amount
distributable (or allocable to the Accrual Amount, if applicable) on such
Distribution Date in respect of interest on the related Senior Certificates
pursuant to Section 5.02(a)(4)(ii).
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Custodial Accounts at the close of business on
the related Determination Date on account of (i) Principal Prepayments
received after the related Prepayment Period and Liquidation Proceeds and
Subsequent Recoveries received in the month of such Distribution Date and (ii)
all Scheduled Payments due after the related Due Date.
Applicable Credit Support Percentage: As defined in Section 5.02(e).
6
Applicable Fraction: With respect to any Mortgage Loan and a
Collateral Allocation Group is the percentage for such Mortgage Loan and
Collateral Allocation Group set forth on the Mortgage Loan Schedule but is
generally calculated as follows:
------------------------------- ------------------------------------------ ------------------------------------------
Loan Group 1 Loan Group 2
Collateral Collateral Collateral Collateral
Net Mortgage Rate Allocation Allocation Allocation Allocation
of the Mortgage Loan Group 1 Group 2 Group 3 Group 4
------------------------------- --------------- ----------- -------------- --------------- ----------- --------------
less than or equal
to 5.25%..................... 100.00% 0.00% 100.00% 0.00%
------------------------------- --------------- -------------------------- --------------- --------------------------
greater than 5.25% and less 7.50% - Net 100.00% - 7.50% - Net 7.50% - Net 100.00% - 7.50% - Net
than 7.50%................... Mortgage Mortgage Mortgage Mortgage
Rate Rate Rate Rate
----------- ----------- ----------- -----------
2.25% 2.25% 2.25% 2.25%
------------------------------- --------------- -------------------------- --------------- --------------------------
7.50% and above.............. 0.00% 100.00% 0.00% 100.00%
------------------------------- --------------- -------------------------- --------------- --------------------------
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 or sufficient under the laws of the
applicable jurisdiction to reflect the sale of the Mortgage to the Trustee.
Assignment of Proprietary Lease: With respect to a Cooperative Loan,
an assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Proprietary Lease.
Assignment of Recognition Agreement: With respect to a Cooperative
Loan, an assignment of the Recognition Agreement sufficient under the laws of
the jurisdiction wherein
7
the related Cooperative Unit is located to reflect the assignment of such
Recognition Agreement; provided, however, that the Trustee shall not be
responsible for determining whether such assignment is sufficient to reflect
the assignment of the Recognition Agreement.
Assumed Balance: With respect to any Distribution Date, Class of
Subordinated Certificates and Collateral Allocation Group, each such Class'
pro rata interest (based on their respective Class Principal Balances) in such
Collateral Allocation Group equal to the product of the Subordinated
Percentage for such Collateral Allocation Group as of such Distribution Date
and the aggregate of the applicable Non-A-P Percentage of the Stated Principal
Balance of each Mortgage Loan or Applicable Fraction thereof in such
Collateral Allocation Group as of the Due Date occurring in the month
preceding the month of such Distribution Date (after giving effect to
Principal Prepayments received in the related Prepayment Period).
Assumed Interest Amount: With respect to any Distribution Date and
Class of Subordinated Certificates, one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
applicable Assumed Balance immediately prior to that Distribution Date.
Authenticating Agent: Any authenticating agent appointed 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 Funds: As to any Distribution Date and the Mortgage Loans
or Applicable Fractions thereof in a Collateral Allocation Group, the sum, for
that Collateral Allocation Group, of (a) the aggregate amount held in the
Custodial Accounts at the close of business on the related Determination Date,
including any Subsequent Recoveries, in respect of such Mortgage Loans in the
related Loan Group in proportion to the Applicable Fraction of those Mortgage
Loans in that Collateral Allocation Group net of (i) the Amount Held for
Future Distribution, (ii) amounts permitted to be withdrawn from the Custodial
Accounts pursuant to Section 4.02(a) in respect of such Mortgage Loans or
Applicable Fractions thereof and (iii) amounts permitted to be withdrawn from
the Distribution Account pursuant to clauses (i)-(v) inclusive of Section
4.02(b), in each case in the related Loan Group in proportion to the
Applicable Fraction of those Mortgage Loans in that Collateral Allocation
Group, (b) the amount of all related Advances made by the Servicers and the
Master Servicer and all Compensating Interest Payments or payments made in
respect of Prepayment Interest Shortfalls paid by the Servicers and the Master
Servicer, in each case, in respect of such Mortgage Loans in the related Loan
Group in proportion to the Applicable Fraction of those Mortgage Loans in that
Collateral Allocation Group, (c) in connection with Defective Mortgage Loans
in the related Loan Group, as applicable, the aggregate of the Purchase Prices
and Substitution Adjustment Amounts, in each case, in proportion to the
Applicable Fraction of those Mortgage Loans in that Collateral Allocation
Group deposited on the related Distribution Account Deposit Date minus (d) all
related fees, charges and other amounts payable or reimbursable to the Master
Servicer, the Securities Administrator, the Custodian or the Trustee under
this Agreement or the Custodial
8
Agreement or to the Servicers under the Purchase and Servicing Agreements, or,
if any amounts are not specifically related to the Mortgage Loans or
Applicable Fractions thereof in that Collateral Allocation Group or the
related Certificate Group, then the applicable Collateral Allocation Group
Percentage for such Collateral Allocation Group for such Distribution Date of
such amounts. The Holders of the Class P Certificates will be entitled to all
Prepayment Penalties received on the Mortgage Loans and such amounts will not
be available for distribution to the Holders of any other Class of
Certificates.
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.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction reported to the Master Servicer by the
related Servicer; provided, however, that a Bankruptcy Loss shall not be
deemed a Bankruptcy Loss hereunder so long as the related Servicer has
notified the Master Servicer in writing that the related Servicer is
diligently pursuing any remedies that may exist in connection with the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis by the
Master Servicer or the related Servicer, in either case without giving effect
to any Debt Service Reduction or Deficient Valuation, as reported by the
related Servicer to the Master Servicer.
Bankruptcy Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated
to the Certificates since the Cut-off Date and (ii) any permissible reductions
in the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee and the Securities Administrator to the effect that any
such reduction will not result in a downgrading of the then current ratings
assigned to the Classes of Certificates rated by it.
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." The Classes of Certificates that
9
constitute "Book-Entry Certificates" as of the Closing Date are set forth in
the Preliminary Statement.
Book-Entry Termination: The date on which the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Book Entry Certificates, and the Depositor is unable to locate a
qualified successor.
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.
Calculation Rate: For each Distribution Date, in the case of the
Class A and Class B Interests, the product of (i) 10 and (ii) the weighted
average rate of the outstanding Class A and Class B Interests, treating each
Class A Interest as capped at zero or reduced by a fixed percentage of 100% of
the interest accruing on such Class.
Certificate: Any one of the certificates signed by the Trustee, or
the Securities Administrator on the Trustee's behalf, and authenticated by the
Securities Administrator as Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the principal balance or
notional amount, as applicable, as of the Closing Date (A) plus any Subsequent
Recoveries added to the Certificate Balance of such Certificate pursuant to
Section 5.02, (B) minus the sum of (i) all distributions of principal
previously made with respect thereto and (ii) all Realized Losses allocated
thereto and, in the case of any Subordinated Certificates, all other
reductions in Certificate Balance previously allocated thereto pursuant to
Section 5.04 and (C) in the case of any Class of Accrual Certificates,
increased by the Accrual Amount added to the Class Principal Balance of such
Class prior to such date.
Certificate Group: As specified in the Preliminary Statement.
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 Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 3.02. The initial
Certificate Registrar is the Securities Administrator under this Agreement.
Certificateholder: The meaning provided in the definition of "Holder."
Class: All Certificates bearing the same Class designation as set
forth in the Preliminary Statement.
Class A-P Certificates: The Class A-P Certificates.
10
Class A-P Deferred Amount: As to any Distribution Date and Collateral
Allocation Group, the aggregate of the applicable A-P Percentage of each
Realized Loss, other than any Excess Loss, on a Discount Mortgage Loan in that
Collateral Allocation Group to be allocated to the related Class A-P Component
on such Distribution Date on or prior to the Senior Credit Support Depletion
Date or previously allocated to but not yet paid to the Holders of the Class
A-P Certificates.
Class 1-A-6 Accretion Direction Rule: On each Distribution Date until
the Senior Credit Support Depletion Date, the Class 1-A-6 Accrual Amount will
be distributed as principal sequentially, to the Class 1-A-5 and Class 1-A-1
and Class 1-A-2 Certificates, in that order, until their respective Class
Principal Balances are reduced to zero, and thereafter to the Class 1-A-6
Certificates.
Class Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the definition of Class
Optimal Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or, with respect to any interest
bearing Component, the sum of (i) one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
related Class Principal Balance, Component Balance, Notional Amount or
Component Notional Amount, as applicable, immediately prior to such
Distribution Date, subject to reduction as provided in Section 5.02(d) and
(ii) any Class Unpaid Interest Amounts for such Class or Component.
Class Principal Balance: With respect to any Class and as to any date
of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Subordination Percentage: With respect to any Distribution Date
and each Class of Subordinated Certificates, the quotient (expressed as a
percentage) of (a) the Class Principal Balance of such Class of Certificates
immediately prior to such Distribution Date divided by (b) the aggregate of
the Class Principal Balances immediately prior to such Distribution Date of
all Classes of Certificates.
Class Unpaid Interest Amounts: As to any Distribution Date and Class
of interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of Class Optimal Interest Distribution Amount.
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.
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.
11
Closing Date: February 28, 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.
Collateral Allocation Group: Any of Collateral Allocation Group 1,
Collateral Allocation Group 2, Collateral Allocation Group 3 or Collateral
Allocation Group 4, as applicable.
Collateral Allocation Group 1: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 1 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 1 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 1.
Collateral Allocation Group 2: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 1 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 2 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 2.
Collateral Allocation Group 3: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 2 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 3 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 3.
Collateral Allocation Group 4: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 2 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 4 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 4.
Collateral Allocation Group Percentage: As to any Collateral
Allocation Group and any Distribution Date, the fraction, expressed as a
percentage, the numerator of which is the aggregate Stated Principal Balance
of the Applicable Fractions of all the Mortgage Loans in that Collateral
Allocation Group as of the related Due Date, and the denominator of which is
the aggregate Stated Principal Balance of all of the Mortgage Loans as of that
Due Date.
Collateral Allocation Group Principal Balance: As to any Distribution
Date and Collateral Allocation Group, the sum of, with respect to each
Mortgage Loan related to that Collateral Allocation Group, the product of (x)
the Stated Principal Balance of that Mortgage Loan as of the Due Date in the
month preceding the month of the Distribution Date (after giving effect to
prepayments received in the Prepayment Period related to such prior Due Date)
and (y) the Applicable Fraction for that Mortgage Loan.
Compensating Interest Payment: As to any Distribution Date and any
Servicer, an amount equal to the lesser of (i) the Prepayment Interest
Shortfall on the Mortgage Loans
12
serviced by such Servicer with respect to such Distribution Date and (ii) the
portion of the applicable Servicing Fee that the related Servicer is required
to remit to the Trust as compensation therefor in accordance with the terms of
the related Purchase and Servicing Agreement.
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, (A) plus any
Subsequent Recoveries added to the Component Balance of such Component
pursuant to Section 5.02, (B) minus the sum of all amounts applied in
reduction of the principal balance of such Component and Realized Losses
allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary Statement.
Component Notional Amount: Not applicable.
Consent: A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.
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: A Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease, if any.
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.
Cooperative Unit: With respect to any Cooperative Loan, a specific
unit in a Cooperative Property.
Corporate Trust Office: With respect to the Trustee, the designated
office of the Trustee in the State of California at which at any particular
time its corporate trust business with respect to this Agreement is
administered, which office at the date of the execution of this Agreement is
located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attn:
Trust Administration-MS0501, and which is the address to which notices to and
correspondence with the Trustee should be directed, 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,
00
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust, Xxxxxx Xxxxxxx
Mortgage Loan Trust 2005-1, and for all other purposes, X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000 (or for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000), Attention: Corporate Trust, Xxxxxx Xxxxxxx Mortgage
Loan Trust 2005-1.
Cross-Over Situation: For any Distribution Date and for each Loan
Group (after taking into account principal distributions on such Distribution
Date) with respect to the Class A and Class B Interests, the Class A and Class
B Interests corresponding to any Loan Group are in the aggregate less than 1%
of the Subordinate Component Balance of the Loan Group to which they
correspond.
Custodial Account: Each custodial account (other than an Escrow
Account) established and maintained by a Servicer pursuant to a Purchase and
Servicing Agreement.
Custodial Agreement: The Custodial Agreements, listed in Exhibit F
hereof, as each such agreement may be amended or supplemented from time to
time as permitted hereunder.
Custodial Certification: As defined in Section 2.01.
Custodian: A Person who is at anytime appointed by the Depositor as a
custodian of the Mortgage Documents and the Trustee Mortgage Files. The
initial Custodians are JPMorgan Chase Bank, National Association and Deutsche
Bank National Trust Company. "Custodian" shall refer to each Custodian or both
Custodians, as the context requires.
Custodian Certification: As defined in Section 2.01.
Cut-off Date: February 1, 2005.
Cut-off Date Pool Principal Balance: $441,146,311.16.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on 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.
Deceased Holder: Not applicable.
Defective Mortgage Loan: The meaning specified in Section 2.05(a).
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 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.
14
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form. As of the Closing Date the
Classes of Certificates being issued as "Definitive Certificates" are set
forth in the Preliminary Statement.
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased, or
replaced or to be replaced with a Replacement Mortgage Loan.
Delinquent: Any Mortgage Loan with respect to which the Scheduled
Payment due on a Due Date is not received.
Depositor: Xxxxxx Xxxxxxx Capital I Inc., a Delaware corporation
having its principal place of business in New York, or its successors in
interest.
Determination Date: With respect to each Servicer, the "Determination
Date" set forth in the related Purchase and Servicing Agreement.
Discount Mortgage Loan: Any Mortgage Loan or Applicable Fraction
thereof in Collateral Allocation Group 1 or Collateral Allocation Group 3, as
applicable, with an Net Mortgage Rate that is less than the Required Coupon
for that Loan Group. For the avoidance of doubt, there are no Discount
Mortgage Loans in Collateral Allocation Group 2 or Collateral Allocation Group
4.
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: With respect to each Servicer, not
later than 1:00 p.m., New York time, on 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 following Business Day, commencing in March
2005.
Distribution Date: The 25th day of each month or, if such 25th day is
not a Business Day, the next succeeding Business Day, commencing in March
2005.
Due Date: With respect to any Distribution Date, the first day of the
month in which such Distribution Date occurs. 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 Purchase and Servicing Agreement.
15
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.
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, as evidenced by a
signed writing delivered by 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.
Eligible Institution: An institution having the highest short-term
debt rating, and one of the two highest long-term debt ratings of the Rating
Agencies or the approval of the Rating Agencies.
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: As specified in the Preliminary
Statement.
Escrow Account: With respect to each Mortgage Loan, as defined in
Article I of the related Purchase and Servicing Agreement.
Estoppel Letter: A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant
Proprietary Lease will be in full force and effect as of the date of issuance
thereof, (ii) the related stock certificate was registered in the Mortgagor's
name and the Cooperative Corporation has not been notified of any lien upon,
pledge of, levy of execution on or disposition of such stock certificate, and
(iii) the Mortgagor is not in default under the appurtenant Proprietary Lease
and all charges due the Cooperative Corporation have been paid.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 6.14.
16
Excess Loss: The amount of any (i) Fraud Loss realized after the
Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss realized after
the Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss realized
after the Bankruptcy Coverage Termination Date.
Xxxxxx Xxx: The entity formerly known as 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.
Fiscal Agent: Not applicable.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section 11.07
the address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance Group,
or such other address as Fitch may hereafter furnish to the Depositor, the
Trustee and the Master Servicer.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred, as reported by the related Servicer to the Master Servicer.
Fraud Loss Coverage Amount: As of the Closing Date, $4,411,463,
subject to reduction from time to time, by the amount of Fraud Losses
allocated to the Certificates. In addition, on each anniversary of the Cut-off
Date, the Fraud Loss Coverage Amount will be reduced as follows: (a) on the
first, second, third and fourth anniversaries of the Cut-off Date, to an
amount equal to the lesser of (i) 1%, for the first and second anniversaries,
and 0.5%, for the third and fourth anniversaries, of the then current
aggregate Stated Principal Balance of the Mortgage Loans on such anniversary
and (ii) the excess of the Fraud Loss Coverage Amount as of the preceding
anniversary of the Cut-off Date over the cumulative amount of Fraud Losses
allocated to the Certificates since such preceding anniversary; and (b) on the
fifth anniversary of the Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a
loss by reason of the denial of coverage under any related Primary Mortgage
Insurance Policy because of such fraud, dishonesty or misrepresentation.
Global Securities: The global certificates representing the
Book-Entry Certificates.
Group 1 Certificates: As specified in the Preliminary Statement.
17
Group 1 Mortgage Loans: The Mortgage Loans in Loan Group 1.
Group 1 Priority Amount: For any Distribution Date and the Class
1-A-3 and Class 1-A-4 Certificates will equal the sum of (i) the product of
(A) the Senior Percentage for the Group 1 Certificates, (B) the Scheduled
Principal Distribution Amount for Collateral Allocation Group 1, (C) the Shift
Percentage and (D) the Group 1 Priority Percentage and (ii) the product of (A)
the Senior Prepayment Percentage for the Group 1 Certificates, (B) the
Unscheduled Principal Distribution Amount for Collateral Allocation Group 1,
(C) the Shift Percentage and (D) the Priority Percentage.
Group 1 Priority Percentage: For any Distribution Date and the Class
1-A-3 and Class 1-A-4 Certificates will equal the percentage equivalent of a
fraction, the numerator of which is the aggregate Class Principal Balance of
the Class 1-A-3 and Class 1-A-4 Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Class
Principal Balance of the Group 1 Senior Certificates (other than the Class
1-A-P Component) immediately prior to such Distribution Date.
Group 1 Senior Certificates: As specified in the Preliminary
Statement.
Group 2 Certificates: As specified in the Preliminary Statement.
Group 2 Mortgage Loans: The Mortgage Loans in Loan Group 2.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Group 3 Certificates: As specified in the Preliminary Statement.
Group 3 Priority Amount: For any Distribution Date and the Class
3-A-3 and Class 3-A-4 Certificates will equal the sum of (i) the product of
(A) the Senior Percentage for the Group 3 Certificates, (B) the Scheduled
Principal Distribution Amount for Collateral Allocation Group 3, (C) the Shift
Percentage and (D) the Group 3 Priority Percentage and (ii) the product of (A)
the Senior Prepayment Percentage for the Group 3 Certificates, (B) the
Unscheduled Principal Distribution Amount for Collateral Allocation Group 3,
(C) the Shift Percentage and (D) the Priority Percentage.
Group 3 Priority Percentage: For any Distribution Date and the Class
3-A-3 and Class 3-A-4 Certificates will equal the percentage equivalent of a
fraction, the numerator of which is the aggregate Class Principal Balance of
the Class 3-A-3 and Class 3-A-4 Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Class
Principal Balance of the Group 3 Senior Certificates (other than the Class
3-A-P Component) immediately prior to such Distribution Date.
Group 3 Senior Certificates: As specified in the Preliminary
Statement.
Group 4 Certificates: As specified in the Preliminary Statement.
Group 4 Senior Certificates: As specified in the Preliminary
Statement.
18
Holder: 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 or the Securities
Administrator shall be protected in relying upon any such consent, only
Certificates that a Responsible Officer of the Trustee or the Securities
Administrator, respectively, knows to be so owned shall be disregarded. The
Trustee or the Securities Administrator 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.
Initial Bankruptcy Coverage Amount: $100,000.
Initial Component Balance: As specified in the Preliminary Statement.
Initial Optional Purchase Date: The first Distribution Date following
the date on which the aggregate Stated Principal Balance is equal to or less
than 1% of the aggregate Stated Principal Balance as of the Cut-off Date.
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
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.
Insured Payment: Not applicable.
19
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Middle REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to any Class of Non-Delay Certificates, its corresponding
Middle REMIC Regular Interest and any Distribution Date, the one month period
commencing on the 25th day of the month preceding the month in which such
Distribution Date occurs and ending on the 24th day of the month in which such
Distribution Date occurs.
Interest Determination Date: With respect to any Interest Accrual
Period for any Class of LIBOR Certificates, the second Business Day prior to
the first day of such Interest Accrual Period.
Interest Distribution Amount: Not applicable.
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 the weighted average Pass-Through Rate
of the applicable Undercollateralized Group, plus any interest accrued on such
Undercollateralized Group remaining unpaid from prior Distribution Dates.
Last Scheduled Distribution Date: The Distribution Date in March 2035.
Latest Possible Maturity Date: The Distribution Date in February 2035.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 5.09.
LIBOR Certificates: As specified in the Preliminary Statement.
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.
Limited Purpose Surety Bond: Collectively, Ambac Assurance
Corporation Surety Bond No. AB0039BE and any other Limited Purpose Surety Bond
securing an Additional Collateral Mortgage Loan.
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 Purchase and
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.
20
Living Holders: Not applicable.
Loan Group: Any of Loan Group 1 or Loan Group 2, as applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group Percentage: As to any Loan Group and any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
aggregate Stated Principal Balance of all the Mortgage Loans in that Loan
Group as of the related Due Date, and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans as of that Due
Date.
Loan Group Principal Balance: As to any Distribution Date and Loan
Group, the aggregate Stated Principal Balance of the Mortgage Loans in that
Loan Group outstanding on the Due Date in the month preceding the month of the
Distribution Date (after giving effect to prepayments received in the
Prepayment Period related to such prior Due Date).
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.
LPMI Mortgage Loan: Certain Mortgage Loans as to which the lender
(rather than the borrower) acquires the Primary Mortgage Insurance Policy and
charges the related borrower an interest premium.
Master REMIC: As described in the Preliminary Statement.
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 Servicer Compensation: With respect to any Master Servicer
that is a successor to Xxxxx Fargo Bank, National Association as Master
Servicer, the portion of the earnings on the funds on deposit in the
Distribution Account payable on each Distribution Date pursuant to Section
4.02(b)(ii) hereof agreed to by and between such successor Master Servicer and
the successor securities administrator; provided, that the sum of such Master
Servicer Compensation and the Securities Administrator Compensation payable on
each Distribution Date shall not exceed the total earnings on funds in the
Distribution Account payable pursuant to Section 4.02(b)(ii) hereof earned
since the prior Distribution Date.
Memorandum: The private placement memorandum dated February 28, 2005
relating to the Private Certificates.
21
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor to Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
Middle REMIC: As specified in the Preliminary Statement.
Middle REMIC Interest: As specified in the Preliminary Statement.
Middle REMIC Regular Interest: As specified in the Preliminary
Statement.
MIN: The mortgage identification number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto.
If Xxxxx'x is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
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 the Custodian pursuant to each Custodial
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 REO Property), including without limitation, each Mortgage Loan listed on
the Mortgage Loan Schedule, as amended from time to time.
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 a 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;
(ii) identify the designated Loan Group in which such Mortgage Loan is
included, (iii) identify any LPMI Mortgage Loan and designate the rate at
which the premium for such insurance is calculated, (iv) separately identify
the Additional Collateral Mortgage Loans, (v) identify the Applicable Fraction
and related Collateral Allocation Group or Collateral Allocation Groups for
such Mortgage Loan.
22
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
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 Proprietary 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.
MSDWCC Purchase Agreement: The Second Amended and Restated Master
Mortgage Loan Purchase Agreement listed in Exhibit E hereto between the Seller
and Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation.
MSMCI Mortgage Loan: A Mortgage Loan sold by the Seller to the
Depositor pursuant to the MSMCI Purchase Agreement.
MSMCI Purchase Agreement: The Mortgage Loan Purchase Agreement listed
in Exhibit E hereto between the Seller and the Depositor.
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 and 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 Shortfalls: As to any Distribution Date and
Collateral Allocation Group, the amount by which the aggregate of Prepayment
Interest Shortfalls for the Mortgage Loans in such Collateral Allocation Group
exceeds the Compensating Interest Payments for the Mortgage Loans or
Applicable Fractions thereof in such Collateral Allocation Group (and any
amounts paid by the Master Servicer in respect of such shortfalls pursuant to
Section 5.06) and that Distribution Date, in each case, based upon the
Applicable Fractions thereof that are part of such Collateral Allocation
Group.
Non-A-P Formula Principal Amount: As to any Distribution Date and
Collateral Allocation Group, the sum of (i) the sum of (x) the applicable
Non-A-P Percentage of (a) the principal portion of each Scheduled Payment
(without giving effect, prior to the Bankruptcy Coverage Termination Date, to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on the Applicable Fraction of each Mortgage Loan in the
related Collateral Allocation Group on the related Due Date, (b) the Stated
Principal Balance of the Applicable Fraction of each Mortgage Loan in the
related Collateral Allocation Group that was repurchased by the Seller or an
Originator or purchased by the Master Servicer pursuant to this Agreement as
of such Distribution Date, (c) the Substitution Adjustment Amount in
connection
23
with any Deleted Mortgage Loan in such Collateral Allocation Group received
with respect to such Distribution Date, (d) any Insurance Proceeds or
Liquidation Proceeds allocable to recoveries of principal of the Applicable
Fraction of Mortgage Loans in the related Collateral Allocation Group that are
not yet Liquidated Mortgage Loans received during the calendar month preceding
the month of such Distribution Date, (e) with respect to the Applicable
Fraction of each Mortgage Loan in the related Collateral Allocation Group that
became a Liquidated Mortgage Loan during the calendar month preceding the
month of such Distribution Date, the amount of Liquidation Proceeds allocable
to principal received with respect to such Mortgage Loan allocable to that
Collateral Allocation Group during the calendar month preceding the month of
such Distribution Date with respect to such Mortgage Loan and, if such
Liquidated Mortgage Loan is an Additional Collateral Mortgage Loan, the
principal portion of the proceeds of any Additional Collateral allocated to
the Collateral Allocation Group, and (f) the Applicable Fraction of all
Principal Prepayments with respect to the Mortgage Loans in the related
Collateral Allocation Group received during the related Prepayment Period, and
(ii) (A) any Subsequent Recoveries for such Loan Group received during the
calendar month preceding the month of such Distribution Date, or (B) with
respect to Subsequent Recoveries attributable to the Applicable Fraction of a
Discount Mortgage Loan in the related Collateral Allocation Group which
incurred (1) an Excess Loss or (2) a Realized Loss after the Senior Credit
Support Depletion Date, the Non-A-P Percentage of the Applicable Fraction of
any Subsequent Recoveries on the Mortgage Loans related to such Collateral
Allocation Group received during the calendar month preceding the month of
such Distribution Date.
Non-A-P Percentage: As to the Applicable Fraction any Discount
Mortgage Loan in Collateral Allocation Group 1 or Collateral Allocation Group
3, a fraction (expressed as a percentage) the numerator of which is the Net
Mortgage Rate of such Discount Mortgage Loan and the denominator of which is
the Required Coupon for such Collateral Allocation Group. As to any
Non-Discount Mortgage in Collateral Allocation Group 1 or Collateral
Allocation Group 3 and any Mortgage Loan or Applicable Fraction thereof in
Collateral Allocation Group 2 or Collateral Allocation Group 4, 100%.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Discount Mortgage Loan: Any Mortgage Loan in Collateral
Allocation Group 1 or Collateral Allocation Group 3 with an Net Mortgage Rate
that is greater than or equal to the Required Coupon for that Loan Group. For
the avoidance of doubt, all of the Mortgage Loans in Collateral Allocation
Group 2 and Collateral Allocation Group 4 are Non-Discount Mortgage Loans.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than a "United States person"
within the meaning of Section 7701(a)(30) of the Code.
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
24
Officer's Certificate of such 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.
Notional Amount: With respect to any Distribution Date and the Class
2-A-2 Certificates, the Class Principal Balance of the Class 2-A-1
Certificates immediately prior to that Distribution Date. With respect to any
Distribution Date and the Class 3-A-6 Certificates, the Class Principal
Balance of the Class 3-A-5 Certificates immediately prior to that Distribution
Date. With respect to any Distribution Date and the Class 4-A-2 Certificates,
the Class Principal Balance of the Class 4-A-1 Certificates immediately prior
to that Distribution Date. With respect to any Distribution Date and the Class
4-A-X Certificates, an amount equal to the product of (i) a fraction, the
numerator of which is the excess of (a) weighted average of the Net Mortgage
Rates for each Mortgage Loan in Loan Group 2 with a Net Mortgage Rate greater
than 7.50% as of the Due Date in the preceding calendar month (after giving
effect to prepayments received in the related Prepayment Period) over (b)
7.50%, and the denominator of which is 5.00% and (ii) the aggregate of the
Stated Principal Balances of each Mortgage Loan in Loan Group 2 with a Net
Mortgage Rate greater than 7.50% as of that Due Date (after giving effect to
prepayments received in the related Prepayment Period).
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary Statement.
Offering Document: The Prospectus or the Memorandum, as applicable.
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 or the Securities Administrator, as applicable.
Officer's Certificate of a 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 (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, the
Securities Administrator or the Master Servicer, as required hereby.
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 ERISA, or the taxation, or the
federal income tax status, of each REMIC.
Option One Servicing Agreement: The Servicing Agreement listed in
Exhibit E hereto between the Seller and Option One Mortgage Corporation
25
Option One Serviced Mortgage Loan: Each Mortgage Loan serviced by
Option One Mortgage Corporation and listed on the Mortgage Loan Schedule.
Original Applicable Credit Support Percentage: With respect to each
of the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class B-1........ 4.00%
Class B-2........ 2.00%
Class B-3........ 1.30%
Class B-4........ 0.90%
Class B-5........ 0.50%
Class B-6........ 0.20%
Original Subordinate Principal Balance: On or prior to the third
Senior Termination Date, the Subordinated Percentage for a Collateral
Allocation Group of the aggregate of the Stated Principal Balances of the
Mortgage Loans or Applicable Fractions thereof in such Collateral Allocation
Group, in each case as of the Cut-off Date; or if such date is after the third
Senior Termination Date, the aggregate of the Class Principal Balances of the
Subordinated Certificates as of the Closing Date.
Originator: Any one of Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation,
American Home Mortgage Corp., Chevy Chase Bank, F.S.B. or Wachovia Mortgage
Corporation, as applicable.
Overcollateralized Group: As defined in Section 5.08(b).
Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
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: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the initial principal balance or notional
amount, as applicable, of such Certificate by the aggregate of the Class
Principal Balance or Notional Amount, as applicable, of all Certificates of
the same 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;
26
(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;
(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 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;
27
(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 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 or (ii) such instrument would
require the Depositor to register as an investment company under the
Investment Company Act of 1940, as amended.
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 Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3-101.
Planned Balance: With respect to any group of Planned Principal
Classes or Components in the aggregate and any Distribution Date appearing in
Schedule B hereto, the Aggregate Planned Balance for such group and
Distribution Date. With respect to any other Planned Principal Class or
Component and any Distribution Date appearing in Schedule B hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
Planned Principal Classes: As specified in the Preliminary Statement.
Prepayment Interest Shortfall: With respect to any Mortgage Loan, the
amount of the shortfall in interest payable on such Mortgage Loan that occurs
as a result of the prepayment by the related Mortgagor of such Mortgage Loan
calculated in accordance with formula set forth in the related Purchase and
Servicing Agreement.
28
Prepayment Penalty: As to a Mortgage Loan, any penalty payable by a
Mortgagor in connection with certain partial prepayments and all prepayments
in full made within the related Prepayment Penalty Period, the Prepayment
Penalties with respect to each applicable Mortgage Loan so held by the Trust
Fund being identified in the Prepayment Penalty Schedule.
Prepayment Penalty Period: As to any Mortgage Loan, the period of
time during which a Prepayment Penalty may be imposed.
Prepayment Penalty Schedule: As of any date, the list of Prepayment
Penalties included in the Trust Fund on that date (including the Prepayment
Penalty summary attached thereto). The Prepayment Penalty Schedule shall set
forth the following information with respect to each Prepayment Penalty:
o the Mortgage Loan account number;
o a code indicating the type of Prepayment Penalty;
o the state of origination in which the related Mortgage Property
is located;
o the first date on which a monthly payment is or was due under the
related Mortgage Note;
o the term of the Prepayment Penalty;
o the original principal amount of the related Mortgage Loan; and
o the Cut-off Date Principal Balance of the related Mortgage Loan.
The Prepayment Penalty Schedule shall be amended from time to time by
the Seller in accordance with this Agreement.
Prepayment Period: With respect to (i) any Mortgage Loan other than
an Option One Serviced Mortgage Loan and any Distribution Date, the calendar
month preceding that Distribution Date and (ii) for any Option One Serviced
Mortgage Loan, the period from the fifteenth day of the calendar month
immediately preceding the month in which the Distribution Date occurs (or in
the case of the first Distribution Date, from February 1, 2005) through the
fourteenth day of the calendar month in which the Distribution Date occurs.
Prepayment Shift Percentage: Not Applicable.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
29
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Reductions: For each Collateral Allocation Group, the sum
of the Non-A-P Formula Principal Distribution Amount and the Non-A-P
Percentage of any Realized Losses allocated to such Collateral Allocation
Group.
Principal Relocation Payment: A payment from any Collateral
Allocation Group to a Subsidiary REMIC Regular Interest other than a Regular
Interest corresponding to that Collateral Allocation Group as provided in the
Preliminary Statement. Principal Relocation Payments shall be made of
principal allocations comprising the Non-A-P Formula Principal Distribution
Amount from a Collateral Allocation Group and shall include a proportionate
allocation of Realized Losses from the Mortgage Loans or Applicable Fractions
thereof related to such Collateral Allocation Group.
Principal Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, the excess, if any, of the aggregate Class
Principal Balance of such Undercollateralized Group immediately prior to such
Distribution Date, over the aggregate Stated Principal Balance of the related
Collateral Allocation Group immediately prior to such Distribution Date.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated
Principal Distribution Amount and any Class of Subordinated Certificates, the
portion of the Subordinated Principal Distribution Amount allocable to such
Class, equal to the product of the Subordinated Principal Distribution Amount
on such Distribution Date and a fraction, the numerator of which is the
related Class Principal Balance thereof and the denominator of which is the
aggregate of the Class Principal Balances of the Subordinated Certificates.
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 February 24, 2005,
together with the accompanying prospectus dated January 28, 2004, relating to
the Certificates.
Purchase and Servicing Agreements: Collectively, the mortgage loan
purchase and servicing agreements, each as amended by the related
Acknowledgement, listed in Exhibit E hereto, as each such agreement may be
amended or supplemented from time to time as permitted hereunder.
Purchase Date: As defined in Section 7.01(c).
Purchase Price: With respect to any Mortgage Loan required or
permitted to be purchased by the Seller or Depositor pursuant to this
Agreement, or by the related Originator or Servicer pursuant to the related
Purchase and Servicing Agreement, an amount equal to the sum
30
of (i) 100% of the unpaid principal balance of the Mortgage Loan on the date
of such purchase and (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 Purchase and Servicing Agreement and (iii) costs and damages
incurred by the Trust Fund in connection with a repurchase pursuant to Section
2.05 hereof that arises out of a violation of any predatory or abusive lending
law with respect to the related Mortgage Loan.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If any such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating category of a Rating Agency shall mean
such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
related 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 Liquidation
Proceeds, 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. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
To the extent the Master Servicer or a Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced by such Subsequent
Recoveries.
Recognition Agreement: An agreement among a Cooperative Corporation,
a lender and a Mortgagor with respect to a Cooperative Loan whereby such
parties (i) acknowledge that such lender may make, or intends to make, such
Cooperative Loan, and (ii) make certain agreements with respect to such
Cooperative Loan.
Record Date: As to any Distribution Date (i) with respect to the
Non-Delay 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 the Delay Certificates
(including the Non-Delay
31
Certificates that are subsequently reissued as Definitive Certificates), the
last Business Day of the month preceding the month of each Distribution Date.
Redemption Price: With respect to any Class of Certificates to be
redeemed, an amount equal to 100% of the related Class Principal Balance of
the Certificates to be so redeemed, together with interest on such amount at
the applicable Pass-Through Rate through the related Accrual Period (as
increased by any Class Unpaid Interest Amounts), and including, in the case of
the Redemption Price payable in connection with the redemption and retirement
of all of the Certificates, 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 Purchase and Servicing Agreements, or to the Custodian
under the Custodial Agreements (to the extent such amounts are not paid to the
Custodian by the Seller).
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act (formerly known as
the Soldiers' and Sailors' Civil Relief Act of 1940), as amended, and any
similar state laws.
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 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.
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.
Replacement Mortgage Loan: A mortgage loan substituted by an
Originator or 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 related Custodial Agreement, (i) have a Stated
Principal Balance, after deduction of all Scheduled Payments due in the month
of substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan, (ii) have a Mortgage Rate not less than (and not more than two
percentage points greater than) the
32
mortgage rate of the Deleted Mortgage Loan, (iii) have a Loan-to-Value Ratio
equal to or less than that of the Deleted Mortgage Loan, (iv) have a remaining
term to maturity not greater than (and not more than one year less than) that
of the Deleted Mortgage Loan, (v) is otherwise acceptable to the Seller, (vi)
comply with all of the representations and warranties set forth in the related
underlying servicing agreement, as modified by any related assignment thereof,
and (vii) shall be accompanied by an Opinion of Counsel that such Replacement
Mortgage Loan would not adversely affect the REMIC status of any REMIC created
hereunder or would not otherwise be prohibited by this Pooling and Servicing
Agreement.
Required Coupon: With respect to the Collateral Allocation Group 1
Mortgage Loans and the Collateral Allocation Group 3 Mortgage Loans, 5.25% per
annum and with respect to the Collateral Allocation Group 2 Mortgage Loans and
the Collateral Allocation Group 4 Mortgage Loans, 7.50% per annum.
Required Distributions: Not applicable.
Residual Certificate: The Class A-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. With respect to the Master Servicer, any officer in its
master servicing operations with direct responsibility for the Administration
of this Agreement. With respect to the Securities Administrator, any officer
in the corporate trust department or similar group of the Securities
Administrator 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 Classes: As defined in Section 5.02(e).
Restricted Global Security: As defined in Section 3.01(c).
Rounding Amount: Not applicable.
SAIF: The Saving's Association Insurance Fund, or any successor
thereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
If S&P is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to S&P shall be Standard &
Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
Scheduled Balances: Not applicable.
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 related Purchase and Servicing
Agreement, shall give effect to any related Debt
33
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Scheduled Principal Classes: As specified in the Preliminary
Statement.
Scheduled Principal Distribution Amount: As to any Distribution Date
and a Collateral Allocation Group, an amount equal to the Non-A-P Percentage
of all amounts described in subclauses (a) through (d) of clause (i) of the
definition of "Non-A-P Formula Principal Amount" for such Distribution Date
and such Collateral Allocation Group; provided, however, that if a Bankruptcy
Loss that is an Excess Loss is sustained with respect to a Mortgage Loan in
the related Loan Group that is not a Liquidated Mortgage Loan, the Scheduled
Principal Distribution Amount for such Collateral Allocation Group will be
reduced on the related Distribution Date by the applicable Non-A-P Percentage
of the principal portion of such Bankruptcy Loss based on the Applicable
Fraction of 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.
Securities Administrator Compensation: With respect to any Securities
Administrator that is a successor to Xxxxx Fargo Bank, National Association as
Securities Administrator, the portion of the earnings on the funds on deposit
in the Distribution Account payable on each Distribution Date pursuant to
Section 4.02(b)(ii) hereof agreed to by and between such Securities
Administrator and the successor master servicer; provided, that (x) such
Securities Administrator Compensation payable on each Distribution Date shall
equal at least one day's earnings accrued since the prior Distribution Date
and (y) the sum of such Securities Administrator Compensation and the Master
Servicer Compensation payable on each Distribution Date shall not exceed the
total earnings on the funds on deposit in the Distribution Account payable on
each Distribution Date pursuant to Section 4.02(b)(ii) hereof earned since the
prior Distribution Date.
Seller: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
Senior Credit Support Depletion Date: The date on which the Class
Principal Balance of each Class of Subordinated Certificates has been reduced
to zero.
Senior Percentage: As to any Senior Certificate Group and
Distribution Date, the percentage equivalent of a fraction the numerator of
which is the aggregate of the Class Principal Balances of each Class of Senior
Certificates in that Senior Certificate Group (other than the related Class of
Class A-P Certificates and Notional Amount Certificates) immediately prior to
such Distribution Date and the denominator of which is the aggregate of the
applicable Non-A-P Percentage of the Stated Principal Balance of each Mortgage
Loan or the Applicable Fraction thereof in the related Collateral Allocation
Group as of the Due Date occurring in the month prior to the month of such
Distribution Date (after giving effect to prepayments received in the
34
Prepayment Period related to such prior Due Date); provided, however, that on
any Distribution Date after the third Senior Termination Date, the Senior
Percentage for the Senior Certificates of the remaining Senior Certificate
Group is the percentage equivalent of a fraction, the numerator of which is
the aggregate of the Class Principal Balances of each such Class of Senior
Certificates (other than the related Class of Class A-P Certificates and
Notional Amount Certificates) of such remaining Senior Certificate Group
immediately prior to such Distribution Date and the denominator is the
aggregate of the Class Principal Balances of all Classes of Certificates
(other than the related Class of Class A-P Certificates and related Classes of
Notional Amount Certificates), immediately prior to such Distribution Date.
Senior Prepayment Percentage: As to a Senior Certificate Group and
any Distribution Date during the five years beginning on the first
Distribution Date, 100%. The Senior Prepayment Percentage for any Distribution
Date occurring on or after the fifth anniversary of the first Distribution
Date will, except as provided herein, be as follows: for any Distribution Date
in the first year thereafter, the related Senior Percentage plus 70% of the
related Subordinated Percentage for such Distribution Date; for any
Distribution Date in the second year thereafter, the related Senior Percentage
plus 60% of the related Subordinated Percentage for such Distribution Date;
for any Distribution Date in the third year thereafter, the related Senior
Percentage plus 40% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the fourth year thereafter,
the related Senior Percentage plus 20% of the related Subordinated Percentage
for such Distribution Date; and for any Distribution Date thereafter, the
related Senior Percentage for such Distribution Date (unless on any
Distribution Date the Senior Percentage exceeds the initial Senior Percentage
of such Senior Certificate Group, in which case the Senior Prepayment
Percentage for such Distribution Date will once again equal 100%).
Notwithstanding the foregoing, no decrease in any Senior Prepayment Percentage
will occur unless both of the Senior Step Down Conditions are satisfied with
respect to all of the Mortgage Loans.
Senior Principal Distribution Amount: As to any Distribution Date and
Senior Certificate Group, the sum of (i) the sum, not less than zero, of the
related Senior Percentage of the applicable Non-A-P Percentage of all amounts
described in subclauses (a) through (d) of clause (i) of the definition of
Non-A-P Formula Principal Amount with respect to the related Collateral
Allocation Group for such Distribution Date, (ii) with respect to any Mortgage
Loan in the related Loan Group that became a Liquidated Mortgage Loan during
the calendar month preceding the month of such Distribution Date, the lesser
of (x) the related Senior Percentage of the applicable Non-A-P Percentage of
the Stated Principal Balance of the Applicable Fraction of such Mortgage Loan
and (y) either (A) the related Senior Prepayment Percentage of the applicable
Non-A-P Percentage of the amount of the Liquidation Proceeds allocable to
principal received on the Applicable Fraction of the Mortgage Loan, or (B) if
an Excess Loss was sustained with respect to such Liquidated Mortgage Loan
during such prior calendar month, the related Senior Percentage, of the
applicable Non-A-P Percentage of the amount of the Liquidation Proceeds
allocable to principal received with respect to the Applicable Fraction of
such Mortgage Loan, and (iii) the sum of (x) the related Senior Prepayment
Percentage of the applicable Non-A-P Percentage of the amounts described in
subclause (f) of clause (i) of the definition of Non-A-P Formula Principal
Amount with respect to the related Collateral Allocation Group for such
Distribution Date plus (y) the related Senior Prepayment Percentage of any
Subsequent Recoveries described in clause (ii) of the definition of Non-A-P
Formula
35
Principal Amount for such Distribution Date; provided, however, that
if a Bankruptcy Loss that is an Excess Loss is sustained on a Mortgage Loan or
the Applicable Fraction thereof in the related Collateral Allocation Group
that is not a Liquidated Mortgage Loan, the Senior Principal Distribution
Amount will be reduced on the related Distribution Date by the related Senior
Percentage of the applicable Non-A-P Percentage of the principal portion of
such Bankruptcy Loss; provided further, however, on any Distribution Date
after the third Senior Termination Date, the Senior Principal Distribution
Amount for the remaining Senior Certificate Group will be calculated pursuant
to the above formula based on all the Mortgage Loans in the Mortgage Pool, as
opposed to the Mortgage Loans or Applicable Fractions thereof in the related
Collateral Allocation Group and, if such Distribution Date is after the third
Senior Termination Date, shall be reduced by the amount of the principal
distribution made pursuant to (a) if the Group 1 Senior Certificates are
reduced to zero on such date, Section 5.02(a)(1)(iv)(y), (b) if the Group 2
Senior Certificates are reduced to zero on such date, Section
5.02(a)(2)(iv)(y), (c) if the Group 3 Senior Certificates are reduced to zero
on such date, Section 5.02(a)(3)(iv)(y) or (d) if the Group 4 Senior
Certificates are reduced to zero on such date, Section 5.02(a)(4)(iv)(y).
Senior Step Down Conditions: With respect to all Mortgage Loans or
Applicable Fractions thereof and a Collateral Allocation Group: (i) the
outstanding principal balance of all Mortgage Loans or Applicable Fractions
thereof in a Collateral Allocation Group delinquent 60 days or more (including
Mortgage Loans in foreclosure, REO Property and Mortgage Loans the mortgagors
of which are in bankruptcy) (averaged over the preceding six month period), as
a percentage of (a) if such date is on or prior to the third Senior
Termination Date, the Subordinated Percentage for such Collateral Allocation
Group of the aggregate of the applicable Non-A-P Percentage of the aggregate
Stated Principal Balance of the Mortgage Loans or Applicable Fractions thereof
in that Collateral Allocation Group, or (b) if such date is after the third
Senior Termination Date, the aggregate Class Principal Balance of the
Subordinated Certificates, does not equal or exceed 50%, and (ii) cumulative
Realized Losses on the Mortgage Loans or Applicable Fractions thereof in each
Collateral Allocation Group do not exceed: (a) for the Distribution Date on
the fifth anniversary of the first Distribution Date, 30% of the Original
Subordinate Principal Balance, (b) for the Distribution Date on the sixth
anniversary of the first Distribution Date, 35% of the Original Subordinate
Principal Balance, (c) for the Distribution Date on the seventh anniversary of
the first Distribution Date, 40% of the Original Subordinate Principal
Balance, (d) for the Distribution Date on the eighth anniversary of the first
Distribution Date, 45% of the Original Subordinate Principal Balance, and (e)
for the Distribution Date on the ninth anniversary of the first Distribution
Date, 50% of the Original Subordinate Principal Balance.
Senior Termination Date: For Senior Certificate Group 1, the
Distribution Date on which the aggregate Class Principal Balance of the Group
1 Senior Certificates (other than the Class 1-A-P Component) has been reduced
to zero. For Senior Certificate Group 2, the Distribution Date on which the
aggregate Class Principal Balance of the Group 2 Senior Certificates has been
reduced to zero. For Senior Certificate Group 3, the Distribution Date on
which the Class Principal Balance of the Group 3 Senior Certificates (other
than the Class 3-A-P Component) has been reduced to zero. For Senior
Certificate Group 4, the Distribution Date on which the Class Principal
Balance of the Group 4 Senior Certificates has been reduced to zero.
36
Servicer: Each servicer and its respective successors and/or assigns
under a Purchase and Servicing Agreement.
Servicer Advance: A "Servicer Advance" or "Servicing Advance" as
defined in the applicable Purchase and Servicing Agreement.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the related 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 per annum rate specified in the related Purchase and
Servicing Agreement.
Servicing Officer: Any officer of the related Servicer involved in,
or responsible for, the administration and servicing of the related Mortgage
Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Master Servicer by the related Servicer on the
Closing Date pursuant to the related Purchase and Servicing Agreement, as such
list may from time to time be amended.
Shift Percentage: With respect to any Distribution Date occurring
during the five years beginning on the first Distribution Date will equal 0%.
Thereafter, the Shift Percentage for any Distribution Date occurring on or
after the fifth anniversary of the first Distribution Date will be as follows:
for any Distribution Date in the first year thereafter, 30%; for any
Distribution Date in the second year thereafter, 40%; for any Distribution
Date in the third year thereafter, 60%; for any Distribution Date in the
fourth year thereafter, 80%; for any Distribution Date thereafter, 100%.
Special Hazard Coverage Termination Date: The point in time at which
the Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, as reported by the related
Servicer to the Master Servicer, but not including (i) any loss of a type
covered by a hazard insurance policy or a flood insurance policy required to
be maintained with respect to such Mortgaged Property to the extent of the
amount of such loss covered thereby, or (ii) any loss caused by or resulting
from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and
then only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or
37
indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the definition of
the term "Special Hazard Loss;"
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations, confiscation by
order of any government or public authority or risks of contraband
or illegal transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $4,411,463. With respect to any Distribution Date after the
first Distribution Date, the lesser of (a) the greatest of (i) 1% of the
aggregate of the principal balances of the Mortgage Loans, (ii) twice the
principal balance of the largest Mortgage Loan and (iii) the aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged Properties
located in the single California postal zip code area having the highest
aggregate principal balance of any such zip code area and (b) the Special
Hazard Loss Coverage Amount as of the Closing Date less the amount, if any, of
Special Hazard Losses allocated to the Certificates since the Closing Date.
All principal balances for the purpose of this definition will be calculated
as of the first day of the calendar month preceding the month of such
Distribution Date after giving effect to Scheduled Payments on the Mortgage
Loans then due, whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which
a Special Hazard Loss has occurred.
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.
38
Subordinate Component Balance: For any Distribution Date and for each
Collateral Allocation Group, the excess of: the principal balance of such
Collateral Allocation Group as of the first day of the related Due Period over
the Certificate Balance of the Senior Certificates related to such Collateral
Allocation Group on such Distribution Date (prior to all distributions to be
made on such Distribution Date)(each adjusted as necessary to an effective
rate reflecting the accrual of interest on a 30/360 basis).
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: As to any Distribution Date on or prior to
the third Senior Termination Date and any Collateral Allocation Group, 100%
minus the Senior Percentage for the Senior Certificate Group relating to such
Collateral Allocation Group for such Distribution Date. As to any Distribution
Date after the third Senior Termination Date, 100% minus the Senior Percentage
for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and
Collateral Allocation Group, 100% minus the related Senior Prepayment
Percentage for such Distribution Date.
Subordinated Principal Distribution Amount: With respect to any
Distribution Date and Collateral Allocation Group, an amount equal to the sum,
not less than zero, of (i) the Subordinated Percentage of the applicable
Non-A-P Percentage for such Collateral Allocation Group of all amounts
described in subclauses (a) through (d) of clause (i) of the definition of
"Non-A-P Formula Principal Amount" for such Distribution Date, (ii) with
respect to the Applicable Fraction of each Mortgage Loan in that Collateral
Allocation Group that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the applicable Non-A-P
Percentage of the amount of the Liquidation Proceeds allocated to principal
received with respect thereto remaining after application thereof pursuant to
clause (ii) of the definition of Senior Principal Distribution Amount, up to
the Subordinated Percentage for such Collateral Allocation Group of the
applicable Non-A-P Percentage of the Stated Principal Balance of the
Applicable Fraction such Mortgage Loan, (iii) the Subordinated Prepayment
Percentage of the applicable Non-A-P Percentage of all amounts described in
subclause (f) of clause (i) of the definition of "Non-A-P Formula Principal
Amount" for such Collateral Allocation Group and Distribution Date, and (iv)
the Subordinated Prepayment Percentage of any Subsequent Recoveries described
in clause (ii) of the definition of "Non-A-P Formula Principal Amount" for
such Collateral Allocation Group and Distribution Date reduced by Class A-P
Deferred Amounts; provided, however, that on any Distribution Date after the
third Senior Termination Date, the Subordinated Principal Distribution Amount
will not be calculated by Collateral Allocation Group but will equal the
amount calculated pursuant to the formula set forth above based on the
applicable Subordinated Percentage or Subordinated Prepayment Percentage, as
applicable, for the Subordinated Certificates for such Distribution Date with
respect to all of the Mortgage Loans as opposed to only the Applicable
Fractions of the Mortgage Loans in the related Collateral Allocation Group.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, amounts received by
39
the Securities Administrator from the related Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 4.02) specifically
related to such Liquidated Mortgage Loan.
Subsidiary REMIC: As specified in the Preliminary Statement.
Subsidiary REMIC Interest: As specified in the Preliminary Statement.
Subsidiary REMIC Regular Interest: As specified in the Preliminary
Statement.
Substitution Adjustment Amount: As defined in the second paragraph of
Section 2.05(b).
Targeted Balance: With respect to any group of Targeted Principal
Classes or Components in the aggregate and any Distribution Date appearing in
Schedule B hereto, the Aggregate Targeted Balance for such group and
Distribution Date. With respect to any other Targeted Principal Class or
Component and any Distribution Date appearing in Schedule B hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss.301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Securities Administrator.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01.
Trust Fund: The corpus of the trust created pursuant to this
Agreement consisting of (i) the Mortgage Loans and all interest and principal
received on or with respect thereto after the Cut-off Date (other than
Scheduled Payments due on or prior to the Cut-off Date) to the extent not
applied in computing the Cut-off Date Principal Balance thereof; (ii) all
cash, instruments or property held or required to be held in the Custodial
Accounts and the Distribution Account and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; (iv) the Depositor's rights assigned to the Trustee
under the Purchase and Servicing Agreements, as modified by the
Acknowledgements and under the Custodial Agreements; (v) all insurance
policies related to the Mortgage Loans and any insurance proceeds; (vi) the
pledge, control and guaranty agreements and the Limited Purpose Surety Bond
relating to the Additional Collateral Mortgage Loans; and (vii) all proceeds
of the conversion, voluntary or involuntary, of any of the foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, organized under the laws of the United States 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 Custodian on behalf of the Trustee.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
40
Undercollateralized Group: As defined in Section 5.08(a).
Undercollateralization Distribution: As defined in Section 5.08.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41,
67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Underwriter: As specified in the Preliminary Statement.
Underwriting Agreement: The Underwriting Agreement, dated February
24, 2005, among the Seller, the Depositor and the Underwriter.
Unscheduled Principal Distribution Amount: As to any Distribution
Date and a Collateral Allocation Group, an amount equal to the sum of (1) with
respect to each Mortgage Loan in the related Loan Group that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the Non-A-P Percentage of the Liquidation Proceeds
allocable to principal received with respect to such Mortgage Loan based on
the Applicable Fraction thereof, (2) the applicable Non-A-P Percentage of the
amount described in subclause (f) of clause (i) of the definition of Non-A-P
Formula Principal Amount for such Collateral Allocation Group and Distribution
Date and (3) the amount described in clause (ii) of the definition of Non-A-P
Formula Principal Amount for such Collateral Allocation Group and that
Distribution Date.
Uniform Commercial Code: The Uniform Commercial Code as in effect in
any applicable jurisdiction from time to time.
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,
1.00% of all Voting Interests shall be allocated to each Class of Notional
Amount Certificates and the Class A-R Certificates. Voting Interests shall be
allocated among all other Classes of Certificates pro rata based on Class
Principal Balances for each Class then outstanding. Voting Interests shall be
allocated among the Certificates within each such Class in proportion to their
Certificate Balances or Percentage Interests.
Wachovia Serviced Mortgage Loan: Each Mortgage Loan originated by
Wachovia Mortgage Corporation and serviced by Wachovia Mortgage Corporation
and listed on the Mortgage Loan Schedule.
Wachovia Purchase Agreement: The Seller's Purchase, Warranties and
Servicing Agreement listed in Exhibit E hereto between the Seller and Wachovia
Mortgage Corporation.
Weighted Average Net Mortgage Rate: As to any Distribution Date and
Collateral Allocation Group, the average of the Net Mortgage Rate of the
Applicable Fraction of each Mortgage Loan in that Collateral Allocation Group,
weighted on the basis of the Applicable Fraction of its Stated Principal
Balance as of the end of the Prepayment Period related to the immediately
preceding Distribution Date.
41
ARTICLE II
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 2.05, 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 rights of the Depositor as assignee of the Seller with
respect to the Seller's rights under the Purchase and Servicing Agreements
pursuant to the Acknowledgements; (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; (vi) $100
(which amount has been delivered by the Depositor to the Securities
Administrator to be held in the Distribution Account until distributed to the
Holders of the Class P Certificates pursuant to Section 5.02(a)); and (vii) if
applicable, 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
the 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 Custodian acting on the Trustee's behalf, will continue to hold the
documents or instruments listed below with respect to each Mortgage Loan
(each, a "Trustee Mortgage File") so transferred and assigned.
42
On the Closing Date, each Custodian shall deliver to the Trustee and
the Depositor certification (each, a "Custodian Certification") in the form
attached hereto as Exhibit L certifying that, pursuant to each related
Custodial Agreement, the applicable Originator delivered and released to such
Custodian, subject to and in accordance with the relevant section of each
related Purchase and Servicing Agreement, the documents identified in the
relevant section of such Purchase and Servicing Agreement as being required to
be delivered to the Seller as Purchaser, pertaining to the Mortgage Loans as
identified in the related Mortgage Loan Schedule (provided, however, that the
Custodian shall not be required nor does it intend to re-examine the contents
of the Trustee Mortgage File for any of the Mortgage Loans in connection with
entering into this Agreement or providing the Custodian Certification required
pursuant to this Section 2.01):
(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);
(ii) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon, or if the original Mortgage has not yet been returned from
the recording office, a copy of such Mortgage certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy
of the original of the Mortgage which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located, and in
the case of the each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loans and either language indicating that
the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording indicated thereon or a
copy of the Mortgage certified by the public recording office in which such
Mortgage has been recorded;
(iii) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage 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) endorsed to
"Deutsche Bank National Trust Company, as Trustee of Xxxxxx Xxxxxxx Mortgage
Loan Trust 2005-1, Mortgage Pass-Through Certificates, without recourse";
(iv) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage Loan, the originals of all intervening
assignments of the Mortgage, if any, with evidence of recording thereon, or if
the original intervening assignment has not yet been returned from the
recording office, a copy of such assignment certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy
of the original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located;
(v) with respect to each Mortgage Loan (other than a Cooperative
Loan), the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
43
(vi) if any, 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 any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original power of attorney and guaranty agreement with
respect to such Mortgage Loan;
(viii) [reserved];
(ix) with respect to each Mortgage Loan which constitutes a
Cooperative Loan:
(a) the original of any security agreement or similar document
executed in connection with the Cooperative Loan;
(b) the original Recognition Agreement and the original Assignment of
Recognition Agreement;
(c) UCC-1 financing statements with recording information thereon
from the appropriate governmental recording offices if necessary to perfect
the security interest of the Cooperative Loan under the Uniform Commercial
Code in the jurisdiction in which the Cooperative Property is located,
accompanied by UCC-3 financing statements executed in blank for recordation of
the change in the secured party thereunder;
(d) an Estoppel Letter and/or Consent;
(e) a search for (i) federal tax liens, mechanics' liens, lis
pendens, judgments of record or otherwise against (x) the Cooperative
Corporation and (y) the seller of the Cooperative Unit, (ii) filings of
financing statements and (iii) the deed of the cooperative project into the
Cooperative Corporation;
(f) the guaranty of the Mortgage Note and Cooperative Loan, if any;
(g) the original Proprietary Lease and the Assignment of Proprietary
Lease executed by the Mortgagor in blank or if the Proprietary Lease has been
assigned by the Mortgagor to the Seller, then the Seller must execute an
assignment of the Assignment of Proprietary Lease in blank; and
(h) if any, the original or certified copy of the certificates
evidencing ownership of the Cooperative Shares issued by the Cooperative
Corporation and related assignment of such certificates or an assignment of
such Cooperative Shares, in blank, executed by the Mortgagor with such
signature guaranteed;
(x) [reserved]; and
(xi) any other document or instruments required to be delivered under
the related Custodial Agreement.
44
In addition, in connection with the assignment of any MERS Mortgage
Loan, it is understood that the related Originator will cause the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the related
Originator to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage
Loans which are repurchased in accordance with this Agreement) in such
computer files the information required by the MERS(R) System to identify the
series of Certificates issued in connection with such Mortgage Loans. It is
further understood that the related Originator will not, and the Master
Servicer hereby agrees that it will not, alter the information referenced in
this paragraph with respect to any Mortgage Loan during the term of this
Agreement unless and until such Mortgage Loan is repurchased in accordance
with the terms of this Agreement.
(b) As soon as is practicable after the Closing Date, the Depositor
shall cause the Servicer of any Additional Collateral Mortgage Loan to deliver
to the applicable Custodian the Assignment and Notice of Transfer with respect
to each Additional Collateral Mortgage Loan as well as the assignments of any
rights with respect to each Additional Collateral Mortgage Loan under any
Limited Purpose Surety Bond.
(c) In instances where a title insurance policy is required to be
delivered to the applicable Custodian on behalf of the Trustee and is not so
delivered, the Depositor will provide a copy of such title insurance policy to
the applicable 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 such amount to the
Securities Administrator, and delivers to the Securities Administrator, the
Trustee, and the applicable Custodian, 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 applicable Custodian on behalf of the Trustee shall
be held by the Master Servicer or the related Servicer in trust for the
benefit of the Trustee and the Certificateholders.
(e) Neither the Depositor nor the Trust will acquire or hold any
Mortgage Loan that would violate the representations made by the Seller set
forth in clauses (iv) through (vi) of Section 2.05(a) hereof.
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 of notice from the Custodians that each holds the Trustee Mortgage Files
pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule.
(b) 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.
45
(c) Each of the parties hereto acknowledges that (i) the Custodian has
delivered the Custodian Certification stating that it has performed the
applicable review of the Mortgage Loans as required herein and in the
Custodial Agreements on the Closing Date and (ii) thereafter, if applicable,
the Custodian shall perform the applicable review of the Mortgage Loans and
deliver the further certifications as provided herein and in the applicable
Custodial Agreements.
(d) Upon execution of this Agreement, the Depositor hereby delivers to
the Trustee (with a copy to the Securities Administrator) and the Trustee
acknowledges receipt of the Acknowledgements, together with the related
Purchase and Servicing Agreements.
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,
46
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;
(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
47
(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.
Section 2.04 Representations and Warranties of the Depositor and the
Seller as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans or each Mortgage Loan, as the case may be, as of
the date hereof or such other date set forth herein that as of the Closing
Date:
(a) Immediately prior to the transfer and assignment contemplated
herein, the Depositor was the sole owner and holder of the Mortgage Loans. The
Mortgage Loans were not assigned or pledged by the Depositor and the Depositor
had good and marketable title thereto, and the Depositor had full right to
transfer and sell the Mortgage Loans to the Trustee free and clear of any
encumbrance, participation interest, lien, equity, pledge, claim or security
interest and had full right and authority subject to no interest or
participation in, or agreement with any other party to sell or otherwise
transfer the Mortgage Loans.
(b) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust.
(c) As of the Closing Date, the Depositor has not transferred the
Mortgage Loans to the Trustee on behalf of the Trust with any intent to
hinder, delay or defraud an of its creditors.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective
Mortgage Files to the Trustee or the Custodian and shall inure to the benefit
of the Trustee, notwithstanding any restrictive or qualified endorsement or
assignment.
Section 2.05 Representations and Warranties of the Seller; Discovery
of Breach; Repurchase or Substitution of Mortgage Loans.
(a) With respect to the MSMCI Mortgage Loans the Seller hereby makes
the representations and warranties contained in Section 3.01 of the MSMCI
Purchase Agreement to and for the benefit of the Depositor, the Trustee and
the Trust Fund. With respect to the Wachovia Serviced Mortgage Loans the
Seller hereby makes the representations and warranties contained in Section
3.02 of the Wachovia Purchase Agreement (other than the representation
contained in Section 3.02(d) of the Wachovia Purchase Agreement) to and for
the benefit of the Depositor, the Trustee and the Trust Fund. With respect to
the Wachovia Serviced Mortgage Loans the Seller hereby represents and warrants
to and for the benefit of the Depositor, the Trustee and the Trust Fund that
all payments due on or prior to the Cut-off Date for each Wachovia Serviced
Mortgage Loan have been made as of the Closing Date, such Wachovia Serviced
Mortgage Loan is not delinquent thirty (30) days or more in payment and has
not been dishonored; there are no material defaults under the terms of such
Wachovia Serviced Mortgage Loan; the Seller has not advanced funds, or
induced, solicited or knowingly received any
48
advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by any Wachovia Serviced Mortgage Loan; as to each Wachovia Serviced
Mortgage Loan, there has been no more than one thirty (30) day delinquency
during the immediately preceding thirty-day period. The Seller agrees to
comply with the provisions of this Section 2.05 in respect of a breach of any
of such representations and warranties.
The Seller hereby represents and warrants to the Trustee with respect
to the Mortgage Loans as of the date hereof or such other date set forth
herein that as of the Closing Date:
(i) Each Mortgage Loan at origination complied in all material
respects with applicable predatory and abusive lending laws and
consummation of the transactions contemplated by this Agreement will
not involve the violation of any such laws.
(ii) All of the Mortgage Loans were originated in compliance
with all applicable laws, including, but not limited to, all
applicable anti-predatory and abusive lending laws.
(iii) None of the Mortgage Loans is covered by the Home
Ownership and Equity Protection Act of 1994 ("HOEPA").
(iv) None of the Mortgage Loans is a "high cost" loan as
defined by applicable predatory and abusive lending laws.
(v) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the
then current Standard & Poor's LEVELS(R) Version 5.6 Glossary
Revised, Appendix E which is attached hereto as Exhibit Q (the
"Glossary") where (x) a "High Cost Loan" is each loan identified in
the column "Category under applicable anti-predatory lending law" of
the table entitled "Standard & Poor's High Cost Loan Categorization"
in the Glossary as each such loan is defined in the applicable
anti-predatory lending law of the State or jurisdiction specified in
such table and (y) a "Covered Loan" is each loan identified in the
column "Category under applicable anti-predatory lending law" of the
table entitled "Standard & Poor's High Covered Loan Categorization"
in the Glossary as each such loan is defined in the applicable
anti-predatory lending law of the State or jurisdiction specified in
such table.
(vi) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
Upon discovery by the Depositor, the Seller or the related Originator
or receipt of written notice of any materially defective document in, or,
following the date of delivery to the Trustee of the Custodian's
certifications as required under the related Custodial Agreements, that a
document is missing from, a Trustee Mortgage File, or discovery by the
Trustee, the Depositor, the Seller or the related Originator of the breach by
such Originator or Seller of any representation or warranty under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, in the
case of the Originator, or under this Agreement, in the case of the Seller, in
respect of any Mortgage Loan which materially adversely affects the value of
that
49
Mortgage Loan or the interest therein of the Certificateholders (a "Defective
Mortgage Loan") (each of the Depositor, the Seller and the related Originator
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 and the Seller or the related Originator, as applicable, in writing
of such nonconforming or missing document or breach and request that the
Seller or related Originator deliver such missing document or cure or cause
the cure of such defect or breach within a period of time specified in the
related Purchase and Servicing Agreement, and if the Seller or related
Originator, as applicable, does not deliver such missing document or cure such
defect or breach in all material respects during such period, the Trustee,
shall enforce the obligations of the related Originator under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, or the
Seller under this Agreement, as applicable, and cause the related Originator
or the Seller, as the case may be, 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 specified period (subject to Section 2.05(c)
below); provided, however, that, in connection with any such breach that could
not reasonably have been cured within such specified period (unless permitted
a greater period of time to cure under the related Purchase and Servicing
Agreement), subject to Section 2.05(c) below, if the related Originator or the
Seller, as applicable, shall have commenced to cure such breach within such
specified period, the related Originator or the Seller shall be permitted to
proceed thereafter diligently and expeditiously to cure the same within such
additional time as is reasonably necessary to cure such breach. To the extent
that any costs and damages are 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 any Mortgage
Loan repurchased by the related Originator or the Seller, such costs and
damages shall be included in the Purchase Price of such repurchased Mortgage
Loan and shall be borne by the Seller. 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 or cause the Custodian
to release to the related Originator or the Seller, as applicable, 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 determining the sufficiency of such assignment for its
intended purpose). If pursuant to the foregoing provisions the related
Originator or the Seller repurchases a Mortgage Loan that is a MERS Mortgage
Loan, the related Servicer shall cause MERS to designate on the MERS(R) System
the related Originator or the Seller, as applicable, as the beneficial holder
of such Mortgage Loan.
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 2.05(b) below. It is understood and agreed that the
obligations of the Originators and the Seller to cure or to repurchase (or to
substitute for) any related 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
50
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 2.05(b) 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 related Originator or the Seller
substitutes a Replacement Mortgage Loan or Loans, such substitution shall be
effected by delivering to the Custodian, on behalf of the Trustee, for such
Replacement Mortgage Loan or Loans, the Mortgage Note, the Mortgage, any
related assignment thereof and the Acknowledgement 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
Adjustment Amount (as described below), if any, in connection with such
substitution. 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 related Originator or the Seller, as applicable.
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 related Originator
or the Seller, as applicable, 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 related Purchase and Servicing Agreement, as modified by the related
Acknowledgement, including all representations and warranties thereof included
in such Purchase and Servicing Agreement, as modified by the Acknowledgement,
in each case as of the date of substitution.
For any month in which an Originator or 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 Adjustment
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 related Originator or Seller, as
applicable, shall deliver or cause to be delivered to the related Servicer for
deposit in the related Custodial Account an amount equal to the related
Substitution Adjustment Amount, if any, and the Custodian, on behalf of the
Trustee, upon receipt of the related Replacement Mortgage Loan or Loans and
certification by such Servicer of such deposit, shall release to the related
Originator or the Seller, as applicable, 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 related Originator or Seller
shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the related Originator or the Seller, as applicable,
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 cannot be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.
51
(c) Upon discovery by the related Originator, 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 2.05(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 2.05(a) above and/or
in accordance with this Section 2.05(c). The Trustee shall re-convey to the
related Originator or the Seller, as applicable, 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.
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 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 an Originator,
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 an Originator or the Depositor in any Mortgage
Loan or (4) any change under the relevant UCC or other applicable laws.
Neither the Originators 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
52
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, any
Originator 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 intermediate transferees, including the
Trustee, in the Mortgage Loans. In connection with the transactions
contemplated by this Agreement, each of the Originators and the Depositor
authorizes its immediate or intermediate transferee (but not the Trustee) 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 Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held in the dollar
denominations in Certificate Balance, or Notional Amount, as applicable, or in
the Percentage Interests, specified herein. Each Class of Certificates will be
issued in the minimum denominations and integral multiples thereof of the
initial Certificate Balance (or Notional Amount) specified in the Preliminary
Statement hereto.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer of the Trustee or
of the Securities Administrator on the Trustee's behalf. 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 or on behalf of 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 P and Class A-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.
53
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 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 Securities
Administrator on behalf of 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 Balance (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 Balance (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
Securities Administrator on behalf of 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
54
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 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 and the Securities
Administrator to the effect that the purchase and holding of such a
Certificate will not constitute or result in any nonexempt 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 the 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 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. Each
Transferee of an ERISA-Restricted Certificate that is a Book-Entry Certificate
shall be deemed to have made the appropriate representation set forth in
paragraph 2 and the representation set forth in paragraph 3 of 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 to the
Underwriter. 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
55
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 neither
the Securities Administrator nor 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 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 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 (A) is 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 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
56
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 and
the Certificate Registrar 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 the 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 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 or the Certificate
Registrar 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 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 Certificate Registrar receives
evidence to its satisfaction of the destruction,
57
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
Securities Administrator on behalf of 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 Balance. 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.
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 Securities Administrator on behalf of 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
58
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver in
exchange therefor a like aggregate Certificate Balance 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
Securities Administrator is hereby appointed 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 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 Securities Administrator 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 Securities Administrator. If the
Paying Agent is not the Trustee or the Securities Administrator, the
Securities Administrator 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
59
(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.
(c) If (i) (A) the Clearing Agency or the Depositor advises the
Certificate Registrar 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 Certificate Registrar or (ii)
after the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating not less than 50% of the Class Principal
Balance 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, 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.
60
(a) On or prior to the Closing Date, the Master Servicer shall have
caused each Servicer to establish and maintain one or more Custodial Accounts,
as provided in the related Purchase and Servicing Agreement, into which all
Scheduled Payments and unscheduled payments with respect to the related
Mortgage Loans, net of any deductions or reimbursements permitted under the
related Purchase and 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 Purchase and Servicing Agreements.
(b) The Securities Administrator, as Paying Agent for the Trustee,
shall establish and maintain an Eligible Account entitled "Distribution
Account of Deutsche Bank National Trust Company, as Trustee for the benefit of
Xxxxxx Xxxxxxx Mortgage Loan Trust 2005-1, Holders of Mortgage Pass-Through
Certificates." The Securities Administrator shall, promptly upon receipt from
the Servicers on each related 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 Purchase and 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 Compensating 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 Funds, 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 Initial Optional Purchase Date, the
Securities Administrator, as Paying Agent, shall withdraw from funds available
in the Distribution Account and distribute the Available Funds 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 Custodians, 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 this Agreement or any Purchase
and Servicing Agreement or the Custodial Agreements.
(e) [Reserved].
61
(f) 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 or any of its Affiliates, or is managed or
advised by the Securities Administrator or any Affiliate, 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 of amounts on deposit in the Distribution
Account 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; provided, however, that if Xxxxx Fargo Bank, National Association is no
longer the Master Servicer and the Securities Administrator, any such income
and gain shall be used to pay the successor Master Servicer and the successor
Securities Administrator, the Master Servicer Compensation and the Securities
Administrator Compensation, respectively. 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.
Section 4.02 Permitted Withdrawals from the Custodial Accounts and the
Distribution Account.
(a) Each Servicer may from time to time make withdrawals from its
Custodial Account for the following purposes:
(i) to reimburse itself for unreimbursed Advances made by it,
such right of reimbursement pursuant to this subclause (i) being
limited to amounts received on the Mortgage Loan(s) in respect of
which any such Advance was made;
(ii) to reimburse itself for any Nonrecoverable Advance
previously made by it;
(iii) to reimburse itself for unreimbursed Servicer Advances,
each Servicer's right to reimbursement pursuant to this clause (a)
with respect to any Mortgage Loan being limited to amounts received
on such Mortgage Loan(s) which represent late recoveries of the
payments for which such advances were made pursuant to the related
Purchase and Servicing Agreement;
(iv) to reimburse itself for expenses incurred by it and
reimbursable pursuant to the related Purchase and Servicing
Agreement; and
(v) to withdraw any amount deposited in the Custodial Account
and not required to be deposited therein.
To the extent required by the related Purchase and Servicing Agreement each
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from its
Custodial Account pursuant to such subclauses (i), (ii), (iii), (iv) and (v).
Prior to making any withdrawal from its Custodial Account pursuant to
62
subclause (ii), the related Servicer shall deliver to the Master Servicer an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans(s), and their respective portions of
such Nonrecoverable Advance.
(b) The Securities Administrator shall withdraw funds from the
Distribution Account for distributions to Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to withhold pursuant to Section
10.01). In addition, the Securities Administrator may from time to time make
withdrawals from the Distribution Account for the following purposes:
(i) to pay all costs and expenses described in clause (d) of
the definition of "Available Funds";
(ii) (x) for so long as Xxxxx Fargo Bank, National Association
is the Master Servicer and the Securities Administrator, to pay to
the Securities Administrator the investment earnings on the
Distribution Account as its compensation for the related
Distribution Date and (y) thereafter, concurrently, to the Master
Servicer and the Securities Administrator, the Master Servicer
Compensation and the Securities Administrator Compensation,
respectively;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be
deposited therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 7.01 hereof.
(v) [Reserved].
Section 4.03 [Reserved].
Section 4.04 [Reserved].
Section 4.05 Reports to Trustee and Certificateholders.
On each Distribution Date, the Securities Administrator shall have
prepared and shall make available to the Trustee, the Depositor, the Rating
Agencies 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;
63
(d) the amount of any unpaid Class Interest Shortfall and the related
accrued interest thereon, with respect to each Class of Certificates;
(e) the Class Principal Balance or Notional 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 Loan Group and in the Trust Fund and the Collateral Allocation Group
Principal Balance at the end of the related Prepayment Period, and the
applicable Weighted Average Net Mortgage Rate of each Loan Group and the
Mortgage Pool and the Applicable Fraction of each Mortgage Loan in each
Collateral Allocation Group at the beginning of the related Due Period;
(g) the Senior Percentage and the Subordinated Percentage for each
Collateral Allocation Group for the following Distribution Date;
(h) the Senior Prepayment Percentage and Subordinate Prepayment
Percentage for each Collateral Allocation Group for the following Distribution
Date;
(i) in the aggregate and with respect to each Loan Group and each
Collateral Allocation Group, the amount of the Servicing Fee paid to or
retained by the Master Servicer and by each Servicer, respectively, and in the
aggregate with respect to each Loan Group;
(j) in the aggregate and with respect to each Loan Group and Collateral
Allocation Group, the amount of Advances for the related Due Period;
(k) in the aggregate and with respect to each Loan Group, and
Collateral Allocation Group (based upon the Applicable Fractions of the
Mortgage Loans) 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;
(l) in the aggregate and with respect to each Loan Group and Collateral
Allocation Group (based upon the Applicable Fractions of the Mortgage Loans),
the total number and principal balance of any REO properties as of the close
of business on the last day of the preceding Due Period;
(m) in the aggregate and with respect to each Loan Group and Collateral
Allocation Group (based upon the Applicable Fractions of the Mortgage Loans),
the amount of Realized Losses incurred during the preceding calendar month;
(n) in the aggregate and with respect to each Loan Group and Collateral
Allocation Group (based upon the Applicable Fractions of the Mortgage Loans),
the cumulative amount of Realized Losses incurred since the Closing Date;
(o) the Realized Losses, if any, allocated to each Class of
Certificates on that Distribution Date;
64
(p) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on the Distribution Date;
(q) the Special Hazard Loss Coverage Amount, the Fraud Loss Coverage
Amount and the Bankruptcy Loss Coverage Amount, in each case as of the related
Determination Date;
(r) the Pass-Through Rate for each Class of Certificates for that
Distribution Date;
(s) the amount of any Principal Transfer Amounts or Interest Transfer
Amounts paid to an Undercollateralized Group or Principal Transfers between
Groups pursuant to Section 5.08 hereof; and
(t) the total amount of Prepayment Penalties collected, as reported
by the Servicers.
The Securities Administrator shall make such reports available each
month via its website at xxxx://xxx.xxxxxxx.xxx. Assistance in using the
website may be obtained by calling the Securities Administrator'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 reports, 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 the
Master Servicer and the Servicers, and neither the Trustee nor the Securities
Administrator shall 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 Purchase and 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 Securities Administrator or the
Paying Agent shall make all distributions in accordance with this Article V.
Such distributions shall be made by check
65
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
Balance 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. Notwithstanding the reduction of the Class Principal Balance of
any Class of Certificates to zero, such Class will be outstanding hereunder
(solely for the purpose of receiving distributions and not for any other
purpose) until the termination of the respective obligations and
responsibilities of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee hereunder in accordance with Article VII. 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 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 Balances or initial
Class Notional Amounts (or Percentage Interests).
Section 5.02 Priorities of Distribution.
(a) (1) With respect to the Available Funds for Collateral Allocation
Group 1 on each Distribution Date, the Securities Administrator shall withdraw
such Available Funds from the funds available therefor in the Distribution
Account and apply such funds to distributions on the specified Classes of
Group 1 Senior Certificates in the following order and priority and, in each
case, to the extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 1
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of
the Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(1)(iii);
66
(iii) the Class 1-A-6 Accrual Amount shall be distributed in
accordance with the Class 1-A-6 Accretion Direction Rule;
(iv) to each Class of Group 1 Senior Certificates, concurrently
as follows:
(x) to the Class 1-A-P Component, an amount allocable to
the related A-P Formula Principal Amount, up to the outstanding
Component Principal Balance thereof; and
(y) on each Distribution Date prior to the Senior Credit
Support Depletion Date the related Non-A-P Formula Principal
Amount up to the amount of the Senior Principal Distribution
Amount for Collateral Allocation Group 1 for such Distribution
Date, will be distributed concurrently, to the following
Classes of Certificates sequentially as follows:
(a) to the Class A-R Certificates, until its Class
Principal Balance is reduced to zero;
(b) concurrently, to the Class 1-A-3 and Class 1-A-4
Certificates, pro rata, the Group 1 Priority Amount, until
their respective Class Principal Balances are reduced to zero;
(c) concurrently (A) 32.37% to the Class 1-A-1
Certificates and (B) 67.63% to the Class 1-A-2 Certificates,
until the Class Principal Balance of the Class 1-A-1
Certificates is reduced to zero;
(d) sequentially, to the Class 1-A-2, Class 1-A-5 and
Class 1-A-6 Certificates, in that order, until their respective
Class Principal Balances are reduced to zero; and
(e) concurrently, to the Class 1-A-3 and Class 1-A-4
Certificates, pro rata, without regard to the Group 1 Priority
Amount, until their respective Class Principal Balances are
reduced to zero; and
(v) to the Class 1-A-P Component, in an amount up to the
related Class A-P Deferred Amount, from amounts otherwise
distributable (without regard to this Section 5.02(a)(1)(v))
sequentially, to the Class B-6, Class B-5, Class B-4, Class B-3,
Class B-2 and Class B-1 Certificates, in that order, pursuant to
Section 5.02(a)(6) hereof.
(2) With respect to Available Funds for Collateral Allocation Group 2, on
each Distribution Date, the Securities Administrator shall withdraw the
Available Funds from the funds available therefor in the Distribution Account
and apply such funds to distributions on the specified Classes of Group 2
Certificates in the following order and priority and, in each case, to the
extent of Available Funds remaining:
(i) [Reserved];
67
(ii) concurrently, to each interest-bearing Class of Group 2
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of
the Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(2)(iii);
(iii) [Reserved]; and
(iv) to each Class of Group 2 Senior Certificates, concurrently
as follows:
(x) [Reserved]; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P Formula
Principal Amount up to the amount of the Senior Principal
Distribution Amount for Loan Group 2 for such Distribution
Date will be distributed to the Class 2-A-1 Certificates,
until its Class Principal Balance is reduced to zero;
(3) With respect to Available Funds for Collateral Allocation Group 3, on
each Distribution Date, the Securities Administrator shall withdraw the
Available Funds from the funds available therefor in the Distribution Account
and apply such funds to distributions on the specified Classes of Group 3
Certificates in the following order and priority and, in each case, to the
extent of Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 3
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of
the Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(3)(iii);
(iii) [Reserved];
(iv) to each Class of Group 3 Senior Certificates, concurrently
as follows:
(x) to the Class 3-A-P Component, an amount
allocable to the related A-P Formula Principal
Amount, up to the outstanding Component Principal
Balance thereof; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P
Formula Principal Amount up to the amount of the
Senior Principal Distribution Amount for Loan Group
3 for such Distribution Date will be distributed
sequentially, to the following Classes of
Certificates in the following order of priority:
68
(a) concurrently, to the Class 3-A-3 and Class 3-A-4
Certificates, pro rata, the Group 3 Priority Amount, until
their respective Class Principal Balances are reduced to zero;
(b) concurrently, to the Class 3-A-1, Class 3-A-2 and
Class 3-A-5 Certificates, pro rata, until their respective
Class Principal Balances are reduced to zero;
(c) to the Class 3-A-7 Certificates until its Class
Principal Balance is reduced to zero; and
(d) concurrently, to the Class 3-A-3 and Class 3-A-4
Certificates, pro rata, without regard to the Group 3 Priority
Amount, until their respective Class Principal Balances are
reduced to zero; and
(v) to the Class 3-A-P Component, in an amount up to the
related Class A-P Deferred Amount, from amounts otherwise
distributable (without regard to this Section 5.02(a)(3)(v))
sequentially, to the Class B-6, Class B-5, Class B-4, Class B-3,
Class B-2 and Class B-1 Certificates, in that order, pursuant to
Section 5.02(a)(6) hereof.
(4) With respect to Available Funds for Collateral Allocation Group 4, on
each Distribution Date, the Securities Administrator shall withdraw the
Available Funds from the funds available therefor in the Distribution Account
and apply such funds to distributions on the specified Classes of Group 4
Certificates in the following order and priority and, in each case, to the
extent of Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 4
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of
the Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(4)(iii);
(iii) [Reserved];
(iv) to each Class of Group 4 Senior Certificates, concurrently
as follows:
(x) [Reserved]; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P Formula
Principal Amount up to the amount of the Senior Principal
Distribution Amount for Loan Group 4 for such Distribution
Date will be distributed to the Class 4-A-1 Certificates,
until its Class Principal Balance is reduced to zero;
69
(5) On each Distribution Date, after making the distributions described in
Section 5.02(a)(1), Section 5.02(a)(2), Section 5.02(a)(3) and Section
5.02(a)(4) above, Available Funds from each Loan Group after making the
distributions described in Section 5.02(a)(1), Section 5.02(a)(2), Section
5.02(a)(3) and Section 5.02(a)(4) will be distributed to the Senior
Certificates to the extent provided in Section 5.08 hereof.
(6) On each Distribution Date, Available Funds from all of the Loan Groups
remaining after making the distributions described in Section 5.02(a)(1),
Section 5.02(a)(2), Section 5.02(a)(3), Section 5.02(a)(4) and Section
5.02(a)(5) above, will be distributed to the Subordinated Certificates and the
Class A-R Certificates in the following order and priority and, in each case,
to the extent of such funds remaining:
(A) to the Class B-1 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(C) to the Class B-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(E) to the Class B-3 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(G) to the Class B-4 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(H) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(I) to the Class B-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
70
(J) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(K) to the Class B-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(L) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero; and
(M) to the Class A-R Certificates, any remaining funds in
the Trust Fund; provided, however, that such amounts shall not
include the $100 held in trust for the Class P Certificate.
On each Distribution Date, all amounts representing Prepayment
Penalties received by the Securities Administrator with respect to the related
Prepayment Period will be distributed to the holders of the Class P
Certificates. On the Distribution Date in July 2010, the $100 held in trust
for the Class P Certificates will be distributed to the holders of the Class P
Certificates.
On any Distribution Date, amounts distributed in respect of Class A-P
Deferred Amounts will not reduce the Class Principal Balance of the related
Class of Class A-P Certificates.
On any Distribution Date, to the extent the Amount Available for
Senior Principal related to a Collateral Allocation Group is insufficient to
make the full distribution required to be made pursuant to subclause (iv)(x)
above, (A) the amount distributable on the related Components of the Class A-P
Certificates in respect of principal pursuant to such subclause (iv)(x) shall
be equal to the product of (1) the Amount Available for Senior Principal for
that Collateral Allocation Group and Distribution Date and (2) a fraction, the
numerator of which is the A-P Formula Principal Amount for that Collateral
Allocation Group and Distribution Date and the denominator of which is the sum
of the A-P Formula Principal Amount and the Senior Principal Distribution
Amount for that Collateral Allocation Group and Distribution Date and (B) the
amount distributable on the Senior Certificates, other than the related
Components of the Class A-P Certificates, in respect of principal pursuant to
clause (iv)(y) shall be equal to the product of (1) the Amount Available for
Senior Principal for that Collateral Allocation Group and Distribution Date
and (2) a fraction, the numerator of which is the Senior Principal
Distribution Amount for that Collateral Allocation Group and Distribution Date
and the denominator of which is the sum of the Senior Principal Distribution
Amount and the A-P Formula Principal Amount for that Collateral Allocation
Group and Distribution Date.
(b) On each Distribution Date with respect to each Class or Component
of Accrual Certificates, the Accrual Amount for such Class or Component for
such Distribution Date shall not (except as provided in the second to last
sentence in this paragraph) be distributed as interest with respect to such
Class or Component of Accrual Certificates, but shall instead be added to the
related Class Principal Balance of such Class on the related Distribution
Date. With respect to any Distribution Date on which principal payments on any
Class or Component of Accrual
71
Certificates are distributed pursuant to Section 5.02(a)(1)(iv)(y), Section
5.02(a)(2)(iv)(y), Section 5.02(a)(3)(iv)(y) or Section 5.02(a)(4)(iv)(y), as
applicable, the related Accrual Amount shall be deemed to have been added on
such Distribution Date to the related Class Principal Balance or Component
Balance (and included in the amount distributable on the related Class or
Classes or Component of Accretion Directed Certificates pursuant to Section
5.02(a)(1)(iii), Section 5.02(a)(2)(iii), Section 5.02(a)(3)(iii) or Section
5.02(a)(4)(iii), as applicable, for such Distribution Date) and the related
distribution thereon shall be deemed to have been applied concurrently towards
the reduction of all or a portion of the amount so added and, to the extent of
any excess, towards the reduction of the Class Principal Balance or Component
Balance of such Class or Component of Accrual Certificates immediately prior
to such Distribution Date.
(c) On each Distribution Date on or after the Senior Credit Support
Depletion Date, notwithstanding the allocations and priorities set forth in
Section 5.02(a)(1)(iv)(y), 5.02(a)(2)(iv)(y), 5.02(a)(3)(iv)(y) and Section
5.02(a)(4)(iv)(y), the portion of Available Funds available to be distributed
as principal of the Senior Certificates in each Senior Certificate Group
(other than any related Class A-P Component) shall be distributed
concurrently, as principal, on such Classes, pro rata, on the basis of their
respective Class Principal Balances, until the Class Principal Balances
thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in clause (i) of
the definition of Class Optimal Interest Distribution Amount for each Class of
Certificates for such Distribution Date shall be reduced for each Class of
Senior Certificates of a Senior Certificate Group and each Class of
Subordinated Certificates by (i) the related Class' pro rata share of Net
Prepayment Interest Shortfalls for such Collateral Allocation Group based (x)
with respect to a Class of Senior Certificates, on the related Class Optimal
Interest Distribution Amount and (y) with respect to a Class of Subordinated
Certificates on or prior to the third Senior Termination Date on the Assumed
Interest Amount and on or after such Senior Termination Date, the related
Class' Class Optimal Interest Distribution Amount for such Distribution Date,
without taking into account such Net Prepayment Interest Shortfalls and (ii)
the related Class' Allocable Share of (A) after the Special Hazard Coverage
Termination Date, with respect to the Applicable Fraction of each Mortgage
Loan in the related Collateral Allocation Group (or, after the Senior Credit
Support Depletion Date, any Mortgage Loan) that became a Special Hazard
Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Net
Mortgage Rate on the Stated Principal Balance of the Applicable Fraction of
such Mortgage Loan as of the Due Date in such month over the amount of
Liquidation Proceeds applied as interest on the Applicable Fraction of such
Mortgage Loan with respect to such month, (B) after the Bankruptcy Coverage
Termination Date, with respect to each Mortgage Loan that became subject to a
Bankruptcy Loss during the calendar month preceding the month of such
Distribution Date, the interest portion of the related Debt Service Reduction
or Deficient Valuation allocable to the Applicable Fraction of such Mortgage
Loan, (C) each Relief Act Shortfall for the Applicable Fractions of Mortgage
Loans in the related Collateral Allocation Group (or, after the Senior Credit
Support Depletion Date, any Mortgage Loan) incurred during the calendar month
preceding the month of such Distribution Date and (D) after the Fraud Loss
Coverage Termination Date, with respect to the Applicable Fraction of each
Mortgage Loan in the related Collateral Allocation Group (or, after the Senior
Credit Support Depletion Date, any Mortgage Loan) that became a Fraud Loan
during the calendar month preceding the month of such Distribution Date, the
excess of one month's interest at the related
72
Net Mortgage Rate on the Stated Principal Balance of the Applicable Fraction
of such Mortgage Loan as of the Due Date in such month over the amount of
Liquidation Proceeds applied as interest on the Applicable Fraction of such
Mortgage Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in Section
5.02(a)(6), if, on any Distribution Date, with respect to any Class of
Subordinated Certificates (other than the Class of Subordinated Certificates
then outstanding with the highest priority of distribution), the sum of the
related Class Subordination Percentages of such Class and of all Classes of
Subordinated Certificates that have a higher numerical Class designation than
such Class (the "Applicable Credit Support Percentage") is less than the
Original Applicable Credit Support Percentage for such Class, no distribution
of Principal Prepayments will be made to any such Classes (the "Restricted
Classes") and the amount of such Principal Prepayments otherwise distributable
to the Restricted Classes shall be distributed to any Classes of Subordinated
Certificates having lower numerical Class designations than such Class, pro
rata, based on their respective Class Principal Balances immediately prior to
such Distribution Date and shall be distributed in the sequential order
provided in Section 5.02(a)(6).
(f) If the amount of a Realized Loss on a Mortgage Loan or Applicable
Fraction thereof has been reduced by application of Subsequent Recoveries with
respect to such Mortgage Loan or Applicable Fraction thereof, the amount of
such Subsequent Recoveries will be applied sequentially, in the order of
payment priority, to increase the Class Principal Balance of each Class of
Certificates to which Realized Losses have been allocated, but in each case by
not more than the amount of Realized Losses previously allocated to that Class
of Certificates pursuant to Section 5.04. Holders of such Certificates will
not be entitled to any payment in respect of the Class Optimal Interest
Distribution Amount on the amount of such increases for any Interest Accrual
Period preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied pro rata to the Certificate Balance of each
Certificate of such Class.
Section 5.03 [Reserved].
Section 5.04 Allocation of Losses.
(a) On or prior to each Distribution Date, the Securities Administrator
shall aggregate the information provided by each Servicer with respect to the
total amount of Realized Losses, including Excess Losses, experienced on the
Mortgage Loans for the related Distribution Date.
(b) Realized Losses with respect to any Distribution Date shall be
allocated as follows:
(i) the applicable A-P Percentage of any Realized Loss,
including any Excess Loss, on a Mortgage Loan, based upon the
related Applicable Fraction, in a Collateral Allocation Group shall
be allocated to the related Component of the Class A-P Certificates,
until the Class Principal Balance thereof is reduced to zero; and
(ii) (A) the applicable Non-A-P Percentage of any Realized Loss
(other than an Excess Loss) shall be allocated first to the
Subordinated Certificates in reverse order of their respective
numerical Class designations (beginning with the Class of
Subordinated Certificates then outstanding with the highest
numerical Class designation)
73
until the respective Class Principal Balance of each such Class is
reduced to zero, and second to the Senior Certificates (other than
the Class A-P Certificates or the Notional Amount Certificates, as
applicable), pro rata on the basis of their respective Class
Principal Balances or, in the case of any Class of Accrual
Certificates or Accrual Component, on the basis of the lesser of
their Class Principal Balance or Component Balance, as applicable,
and their initial Class Principal Balance or Component Balance, as
applicable, in each case immediately prior to the related
Distribution Date until the respective Class Principal Balance of
each such Class is reduced to zero; provided, that any Realized
Losses (other than an Excess Loss) on the Mortgage Loans, based upon
the related Applicable Fraction, in Collateral Allocation Group 1
otherwise allocable to the Class 1-A-1, Class 1-A-3 or Class 1-A-6
Certificates shall be allocated to the Class 1-A-4 Certificates,
until its Class Principal Balance is reduced to zero; provided,
further, that any Realized Losses (other than an Excess Loss) on the
Mortgage Loans, based upon the related Applicable Fraction, in
Collateral Allocation Group 3 otherwise allocable to the Class 3-A-3
or Class 3-A-7 Certificates shall be allocated to the Class 3-A-4
Certificates, until its Class Principal Balance is reduced to zero;
and
(B) the applicable Non-A-P Percentage of any Excess Losses on
the Mortgage Loans, based upon the related Applicable Fraction, in a
Collateral Allocation Group shall be allocated to the Classes of
Certificates of the related Senior Certificate Group (other than the
Class A-P Certificates or the Notional Amount Certificates, as
applicable) and the Subordinated Certificates then outstanding, pro
rata, on the basis of, with respect to such Senior Certificates,
their respective Class Principal Balances, or in the case of any
Class of Accrual Certificates or Accrual Component, on the basis of
the lesser of their respective Class Principal Balance and their
respective initial Class Principal Balance or their respective
Component Balance or their respective initial Component Balance, as
the case may be, in each case immediately prior to the related
Distribution Date and, with respect to each Class of Subordinated
Certificates, the applicable Assumed Balance for each such Class
relating to the Collateral Allocation Group in which such Realized
Loss occurs; provided, however, on any Distribution Date after the
third Senior Termination Date for a Senior Certificate Group, such
Excess Losses on the Applicable Fractions of the Mortgage Loans in
the related Collateral Allocation Group will be allocated to the
Subordinated Certificates on the basis of their respective Class
Principal Balances; and provided further that after the Senior
Credit Support Depletion Date, such Excess Losses shall be allocated
pro rata to all Classes and Components of Senior Certificates (other
than the Class A-P Certificates or the Notional Amount Certificates,
as applicable) regardless of Senior Certificate Group on the basis
of their respective initial Class Principal Balances or Component
Balances, as applicable, or in the case of any or in the case of any
Class of Accrual Certificates or Accrual Component, on the basis of
the lesser of their respective Class Principal Balance and their
respective initial Class Principal Balance or their respective
Component Balance or their respective initial Component Balance, as
the case may be, in each case immediately prior to the related
Distribution Date.
(c) The Class Principal Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class designation
shall be reduced on each Distribution Date by the sum of (i) the amount of any
payments on each Component of the Class A-P
74
Certificates in respect of related Class A-P Deferred Amounts and (ii) the
amount, if any, by which the aggregate of the Class Principal Balances of all
outstanding Classes of Certificates (after giving effect to the distribution
of principal and the allocation of Realized Losses and Class A-P Deferred
Amounts on such Distribution Date) exceeds the sum of the Pool Stated
Principal Balance for the following Distribution Date.
(d) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Principal Balance of a Class of Certificates pursuant
to Section 5.04(b) above shall be allocated among the Certificates of such
Class in proportion to their respective Certificate Balances.
(e) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 5.04(b) above shall be accomplished by reducing the
Certificate Balance or Component Balance thereof, as applicable, immediately
following the distributions made on the related Distribution Date in
accordance with the definition of "Certificate Balance" or "Component
Balance," as the case may be. All Realized Losses or Excess Losses allocated
to a Class of Component Certificates will be allocated, pro rata, to the
related Components.
(f) For the avoidance of doubt, no Realized Losses shall be allocated
to the Class P Certificates.
Section 5.05 Advances by the Master Servicer.
If any Servicer fails to remit any Advance required to be made under
the applicable Purchase and 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 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 and the
Securities Administrator to such effect.
Section 5.06 Compensating Interest Payments.
The amount of compensation payable to the Securities Administrator in
respect of the Mortgage Loans and any Distribution Date shall be reduced (but
not below zero) by the amount of any aggregate Compensating Interest Payment
from the Servicers for such Distribution Date, but only to the extent that
Prepayment Interest Shortfalls relating to such Distribution Date are required
to be paid by the Servicers pursuant to the Purchase and Servicing Agreements,
as amended by the Acknowledgements, but are not actually paid by the Servicer.
Such amount shall not be treated as an Advance and shall not be reimbursable.
75
Section 5.07 [Reserved].
Section 5.08 Cross-Collateralization; Adjustments to Available Funds.
(a) On each Distribution Date after the first Senior Termination Date
but prior to the earlier of the Senior Credit Support Depletion Date and the
third Senior Termination Date, the Securities Administrator shall distribute
the principal portion of Available Funds on the Applicable Fractions of the
Mortgage Loans relating to the Senior Certificates that will have been paid in
full to the holders of the Senior Certificates of the other Certificate
Groups.
(b) If on any Distribution Date the aggregate Class Principal Balance
of the Senior Certificates of a Senior Certificate Group (other than any
related Class of Class A-P Certificates or Component thereof) after giving
effect to distributions to be made on that Distribution Date, is greater than
the Non-A-P Pool Balance for that Collateral Allocation Group (any such group,
an "Undercollateralized Group"), all amounts otherwise distributable as
principal to the Subordinated Certificates (or, following the Senior Credit
Support Depletion Date, the amounts described in the following sentence) will
be distributed as principal to the Senior Certificates of that
Undercollateralized Group (other than any related Class of Class A-P
Certificates or Component thereof) until the aggregate Class Principal Balance
of the Senior Certificate Group (other than any related Class of Class A-P
Certificates or Component thereof) of the Undercollateralized Group equals the
Non-A-P Pool Balance for that Collateral Allocation Group (such distribution,
an "Undercollateralization Distribution"). If a Senior Certificate Group
(other than any related Class of Class A-P Certificates or Component thereof)
constitutes an Undercollateralized Group on any Distribution Date following
the Senior Credit Support Depletion Date, Undercollateralization Distributions
will be made from the excess of Available Funds for the other Collateral
Allocation Groups remaining after all required amounts for that Distribution
Date have been distributed to those Senior Certificate Groups (other than any
related Class of Class A-P Certificates or Component thereof). If more than
one Undercollateralized Group on any Distribution Date is entitled to an
Undercollateralization Distribution, such Undercollateralization Distribution
will be allocated among the Undercollateralized Groups, pro rata, based upon
the amount by which the aggregate Class Principal Balance of each Class of
Senior Certificates in such Senior Certificate Group (other than any related
Class of Class A-P Certificates or Component thereof) exceeds the sum of the
Non-A-P Balances for the related Undercollateralized Group. If more than one
Senior Certificate Group on any Distribution Date is required to make an
Undercollateralization Distribution to an Undercollateralized Group, the
payment of such Undercollateralization Distributions will be allocated among
such Senior Certificate Groups (other than any related Class of Class A-P
Certificates or Component thereof), pro rata, based upon the aggregate excess
of Available Funds for the Senior Certificate Groups other than the
Undercollateralized Group remaining after all required amounts for that
Distribution Date have been distributed to those Senior Certificates.
(c) On each Distribution Date after the first Senior Termination Date
but prior to the earlier of the Senior Credit Support Depletion Date and the
third Senior Termination Date, the Non-A-P Formula Principal Amount for the
Collateral Allocation Group relating to the Senior Certificate Group that has
been paid in full, will be distributed to the other Senior Certificate Groups
(other than any related Class of Class A-P Certificates or Component thereof),
so that each remaining Senior Certificate Group receives its pro rata portion
thereof. If principal from
76
one Collateral Allocation Group is distributed to the Senior Certificate
Groups (other than any related Class of Class A-P Certificates or Component
thereof) that are not related to that Collateral Allocation Group according to
this paragraph, the Subordinated Certificates will not receive that principal
as a distribution.
Section 5.09 Determination of Pass-Through Rates for LIBOR
Certificates.
(a) On each Interest Determination Date so long as any LIBOR
Certificates are outstanding, the Securities Administrator will determine
LIBOR on the basis of the British Bankers' Association ("BBA") "Interest
Settlement Rate" for one-month deposits in U.S. dollars as found on Telerate
page 3750 as of 11:00 a.m. London time on each LIBOR Determination Date.
"Telerate Page 3750" means the display page currently so designated on the
Moneyline Telerate Service (formerly the Dow Xxxxx Markets) (or such other
page as may replace that page on that service for the purpose of displaying
comparable rates or prices).
(b) If on any Interest Determination Date, LIBOR cannot be determined
as provided in paragraph (a) of this Section 5.09, the Securities
Administrator shall either (i) request each Reference Bank to inform the
Securities Administrator of the quotation offered by its principal London
office for making one-month United States dollar deposits in leading banks in
the London interbank market, as of 11:00 a.m. (London time) on such Interest
Determination Date or (ii) in lieu of making any such request, rely on such
Reference Bank quotations that appear at such time on the Reuters Screen LIBOR
Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and Provisions for Swaps, 1986 Edition), to the
extent available. LIBOR for the next Interest Accrual Period will be
established by the Securities Administrator on each interest Determination
Date as follows:
(i) If on any Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next applicable
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to
the nearest whole multiple of 1/32%).
(ii) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the
next Interest Accrual Period shall be whichever is the higher of (i)
LIBOR as determined on the previous Interest Determination Date or
(ii) the Reserve Interest Rate. The "Reserve Interest Rate" shall be
the rate per annum which the Securities Administrator determines to
be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/32%) of the one-month United States
dollar lending rates that New York City banks selected by the
Securities Administrator are quoting, on the relevant Interest
Determination Date, to the principal London offices of at least two
of the Reference Banks to which such quotations are, in the opinion
of the Securities Administrator, being so made, or (ii) in the event
that the Securities Administrator can determine no such arithmetic
mean, the lowest one-month United States dollar lending rate which
New York City banks selected by the Securities Administrator are
quoting on such Interest Determination Date to leading European
banks.
77
(iii) If on any Interest Determination Date the Securities
Administrator is required but is unable to determine the Reserve
Interest Rate in the manner provided in paragraph (b) above, LIBOR
for the related Classes of Certificates shall be LIBOR as determined
on the preceding applicable Interest Determination Date or in the
case of the first Interest Determination Date, 2.59%.
Until all of the LIBOR Certificates are paid in full, the Securities
Administrator will at all times retain at least four Reference Banks for the
purpose of determining LIBOR with respect to each Interest Determination Date.
The Securities Administrator initially shall designate the Reference Banks.
Each "Reference Bank" shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, shall not
control, be controlled by, or be under common control with, the Securities
Administrator and shall have an established place of business in London. If
any such Reference Bank should be unwilling or unable to act as such or if the
Master Servicer should terminate its appointment as Reference Bank, the
Securities Administrator shall promptly appoint or cause to be appointed
another Reference Bank. The Securities Administrator shall have no liability
or responsibility to any Person for (i) the selection of any Reference Bank
for purposes of determining LIBOR or (ii) any inability to retain at least
four Reference Banks which is caused by circumstances beyond its reasonable
control.
(c) The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Securities
Administrator on each Interest Determination Date so long as the LIBOR
Certificates are outstanding on the basis of LIBOR and the respective formulae
appearing in footnotes corresponding to the LIBOR Certificates in the table
relating to the Certificates in the Preliminary Statement.
(d) In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Securities Administrator may conclusively rely and shall be protected in
relying upon the offered quotations (whether written, oral or on the Dow Xxxxx
Markets) from the BBA designated banks, the Reference Banks or the New York
City banks as to LIBOR, the Interest Settlement Rate or the Reserve Interest
Rate, as appropriate, in effect from time to time. The Securities
Administrator shall not have any liability or responsibility to any Person for
(i) the selection of New York City banks for purposes of determining any
Reserve Interest Rate or (ii) its inability, following a good-faith reasonable
effort, to obtain such quotations from, the BBA designated banks, the
Reference Banks or the New York City banks or to determine such arithmetic
mean, all as provided for in this Section 5.09.
(e) The establishment of LIBOR and each Pass-Through Rate for the
LIBOR Certificates by the Securities Administrator shall (in the absence of
manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Securities Administrator.
78
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
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 (in its capacity as successor Master
Servicer) as a 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 Securities Administrator shall take such action as it
deems appropriate to cause the instrument to be corrected, and if the
instrument is not corrected to the Securities Administrator 's satisfaction,
the Securities Administrator 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:
79
(i) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good
faith in accordance with the 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 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;
(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
(i) to remit funds (or to make Advances) or (ii) 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 indemnity reasonably satisfactory to it
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, any Servicer 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 Master 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 related to a
Mortgage Loan.
(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
80
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 or the Acknowledgements.
(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 indemnity reasonably satisfactory
to it 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 any Servicer under this Agreement or any Purchase and
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 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) Neither the Trustee nor, except as otherwise provided herein, 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.
81
(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, or
of any Servicer.
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 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, unless requested in writing to do so by the
Holders of at least a majority in Class Principal Balance (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 indemnity
reasonably satisfactory to it 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 to the
Trustee or the Securities Administrator, as applicable, by the Trust
Fund;
(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
82
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 the Acknowledgements or to
institute, conduct or defend any litigation hereunder or in relation
hereto, in each case at the request, order or direction of any of
the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or
the Securities Administrator, as applicable, security or indemnity
reasonably satisfactory to it 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;
(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; and
(ix) In order to comply with its duties under the U.S.A.
Patriot Act, the Trustee shall obtain and verify certain information
and documentation from the other parties to this Agreement,
including, but not limited to each such party's name, address and
other identifying information.
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, any Purchase and
Servicing Agreement or Acknowledgement or of the Certificates (other than, in
the case of the Securities Administrator, 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
83
Securities Administrator shall not be responsible for the legality or validity
of this Agreement or any other document or agreement described in this Section
6.03 or the validity, priority, perfection or sufficiency of the security for
the Certificates issued or intended to be issued hereunder. Neither the
Trustee nor, except as otherwise provided herein, the Securities Administrator
shall have any 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.
Section 6.05 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be (i) an institution whose
accounts are insured by the FDIC, (ii) 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 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.
Section 6.06 Resignation and Removal of Trustee and the Securities
Administrator.
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Securities
Administrator, the Depositor and the Master Servicer. Upon receiving such
notice of resignation, the Depositor will promptly appoint a successor
trustee, by written instrument, one copy of which instrument shall be
delivered to the resigning Trustee, one copy to the successor trustee, one
copy to the Securities Administrator and one copy to the Master Servicer. If
no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time (i) the Trustee 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 Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee of its property shall be appointed, or any public
officer shall take charge
84
or control of the Trustee or of either of their property or affairs for the
purpose of rehabilitation, conservation or liquidation, (iii) 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 due to the location of the
Trustee, or (iv) the continued use of the Trustee 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 and the Depositor
shall appoint a successor trustee, acceptable to the Master Servicer by
written instrument, one copy of which instrument shall be delivered to the
Trustee so removed, one copy to the successor trustee, one copy to the
Securities Administrator and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Balance (or
Percentage Interest) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee and to the Depositor remove the Trustee 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, one copy to the Securities Administrator and one copy
to the Master Servicer; the Depositor shall thereupon appoint a successor
trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee, as
provided in Section 6.07. If no successor trustee shall have been so appointed
and shall have accepted appointment within 30 days after such notice of
dismissal, the Trustee who received such notice of dismissal may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(e) The Securities Administrator shall not resign except in accordance
with the provisions of Sections 9.06 and 9.07 hereof, to the same extent that
the Master Servicer is entitled to resign or assign or delegate, as
applicable, its duties hereunder.
(f) If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 9.10 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any
time the Securities Administrator shall become incapable of acting, or shall
be adjudged as bankrupt or insolvent, or a receiver of the Securities
Administrator or of its property shall be appointed, or any public officer
shall take charge or control of the Securities Administrator or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or a tax is imposed with respect to the Trust Fund by any state
in which the Securities Administrator or the Trust Fund is located and the
imposition of such tax would be avoided by the appointment of a different
Securities Administrator, then the Depositor or the Trustee may remove the
Securities Administrator and appoint a successor securities administrator by
written instrument, in triplicate, one copy of which instrument shall be
delivered to the Securities Administrator so removed, one copy of which shall
be delivered to the Master Servicer and one copy to the successor securities
administrator.
(g) If no successor securities administrator shall have been appointed
and shall have accepted appointment within 60 days after Xxxxx Fargo Bank,
N.A., as Securities Administrator, ceases to be the securities administrator
pursuant to this Section 6.06, then the Trustee (as successor Securities
Administrator) shall perform the duties of the Securities Administrator
85
pursuant to this Agreement. The Trustee shall notify the Rating Agencies of
any change of the Securities Administrator. In such event, the Trustee shall
assume all of the rights and obligations of the Securities Administrator
hereunder arising thereafter except that the Trustee shall not be (i) liable
for losses of the predecessor Securities Administrator or any acts or
omissions of the predecessor Securities Administrator hereunder, (ii) deemed
to have made any representations and warranties of the Securities
Administrator made herein and (iii) subject to the same resignation
limitations as set forth in Section 9.06 hereof; provided, however, that the
Trustee (as successor securities administrator) shall not resign until a
successor securities administrator has accepted appointment pursuant to
Section 6.07 hereof. The Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions hereunder of
the Securities Administrator until such time as the Trustee may be required to
act as successor Securities Administrator pursuant to this Section 6.06 and
thereupon only for the acts or omissions of the Trustee as successor
Securities Administrator. If the Trustee is unwilling, or unable, to act as
successor Securities Administrator, then, in such event, the Trustee may
appoint, or petition a court of competent jurisdiction to appoint a successor
Securities Administrator meeting the criteria set forth in Section 9.10
hereof. Such successor Securities Administrator shall be entitled to the
Securities Administrator Compensation.
(h) The Trustee as successor securities administrator shall be
entitled to be reimbursed for all reasonable costs and expenses associated
with the transfer of the duties of the Securities Administrator by the
predecessor Securities Administrator, including, without limitation, any costs
or expenses associated with the complete transfer of all securities
administrator data and the completion, correction or manipulation of such
securities administrator data as may be required by the Trustee as successor
securities administrator to correct any errors or insufficiencies in such
securities administrator data or otherwise to enable the Trustee or successor
securities administrator to perform the duties of the Securities Administrator
properly and effectively; provided, however, that the predecessor Securities
Administrator shall not be obligated to make any such reimbursements if such
Securities Administrator was terminated or removed without cause or if such
termination or removal was a result of the imposition of any tax on the Trust
Estate by any state in which the Securities Administrator or the Trust Fund is
located. If such costs are not paid by the predecessor Securities
Administrator, the Trustee shall pay such costs from the Trust Fund.
(i) The Trustee, as successor Securities Administrator, as
compensation for its activities hereunder as successor Securities
Administrator, shall be entitled to retain or withdraw from the Distribution
Account an amount equal to the Securities Administrator Compensation.
(j) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor securities administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor securities administrator.
86
(k) Any resignation or removal of the Securities Administrator and
appointment of a successor securities administrator pursuant to any of the
provisions of this Section 6.06 or Section 9.06 shall become effective upon
acceptance by the successor securities administrator of appointment as
provided in Section 6.07 hereof.
(l) If the Securities Administrator and the Master Servicer are the
same Person, any removal of the Master Servicer pursuant to an Event of
Default shall also result in the removal of the Securities Administrator and
require the appointment of a successor pursuant to this Section and Section
6.07.
(m) The Securities Administrator shall cooperate with the Trustee and
any successor securities administrator in effecting the termination of the
Securities Administrator's responsibilities and rights hereunder, providing to
the Trustee and successor securities administrator all documents and records
in electronic or other form reasonably requested by it to enable it to assume
the Securities Administrator's functions hereunder and for the transfer to the
Trustee or successor Securities Administrator of all amounts in the
Distribution Account or any other account or fund maintained by the Securities
Administrator with respect to the Trust Fund. Neither the Trustee nor the
Master Servicer, as applicable, nor any other successor, as applicable, 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 predecessor Securities Administrator to deliver, or any
delay in delivering, cash, documents or records to it, (ii) the failure of the
predecessor Securities Administrator to cooperate as required by this
Agreement, (iii) the failure of the predecessor Securities Administrator to
deliver the related Mortgage Loan data as required by this Agreement or (iv)
restrictions imposed by any regulatory authority having jurisdiction over the
predecessor Securities Administrator. No successor securities administrator
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 related to such distribution, or
(ii) the failure of Trustee or the Master Servicer to cooperate as required by
this Agreement.
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 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
87
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
Master Servicer 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 costs 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 Balance (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 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
88
Advances pursuant to Section 5.05 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.
(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.
89
(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 Securities Administrator on behalf of 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 Securities Administrator is hereby appointed 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 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 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.
90
The Trustee and the Securities Administrator and their respective
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense (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 under the Custodial Agreements, the Purchase and
Servicing Agreements or Acknowledgements or in connection with the performance
of their duties hereunder or thereunder 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 or thereunder, 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 Master Servicer for its duties
hereunder with respect to the Mortgage Loans shall be paid by the Securities
Administrator. The Securities Administrator shall be compensated for its
duties hereunder pursuant to Section 4.02(b) hereof. 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 misconduct.
(b) As compensation for its services hereunder, the Trustee and each
Custodian shall each be entitled to receive a fee (which, in the case of the
Trustee, shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) which shall be paid by the
Master Servicer pursuant to a separate agreement between the Trustee, the
Custodians and the Master Servicer. Any expenses incurred by the Trustee or
the Custodians shall be reimbursed in accordance with Section 6.11.
Notwithstanding any provision in any Custodial Agreement to the contrary, the
parties hereto acknowledge and agree that (i) the Master Servicer shall only
be obligated to pay to each Custodian the fee agreed to by such Custodian and
the Master Servicer in the separate fee agreement referred to above, and (ii)
91
except as may be expressly set forth therein with respect to the Master
Servicer, in no event shall the Master Servicer have any responsibility or
liability for the payment of any other fees or any expenses or other amounts,
if any, that may be payable to a Custodian under the related Custodial
Agreement, all of which shall be payable in accordance with the terms and
conditions of such Custodial Agreement.
Section 6.13 Collection of Monies.
Except as otherwise expressly provided in this Agreement, the
Securities Administrator on behalf of the Trustee may demand payment or
delivery of, and shall receive and collect, all money and other property
payable to or receivable by the Securities Administrator on behalf of the
Trustee pursuant to this Agreement. The Securities Administrator on behalf of
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" with respect to the Master Servicer:
(i) Any failure by the Master Servicer to furnish the
Securities Administrator the Mortgage Loan data on the Mortgage
Loans sufficient to prepare the reports described in Section 4.05
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 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 not less than 25% of
the Class Principal Balance 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 (vii) and
(ix) below) on the part of the Master Servicer contained in this
Agreement which continues unremedied for a period of 60 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
(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
92
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 90 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 or the Securities
Administrator, any failure of the Master Servicer to make any
Advances required to be made by it hereunder; or
(x) Any failure by the Master Servicer to deposit in the
Distribution Account or remit to the Securities Administrator any
payment required to be made by the Master Servicer under the terms
of this Agreement, which failure shall continue unremedied for three
Business Days after the date upon which written notice of such
failure shall have been given to the Master Servicer by the
Securities Administrator, Trustee or the Depositor or to the Master
Servicer and the Trustee by the Holders of Certificates having not
less than 25% of the Voting Rights evidenced by the Certificates; or
(xi) If the Master Servicer and the Securities Administrator
are the same Person, any removal of the Securities Administrator
pursuant to Section 6.06.
If an Event of Default described in clauses (i) through (xi) of this
Section shall occur with respect to the Master Servicer, 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
shall, if so directed
93
by Certificateholders evidencing more than 50% of the Class Principal Balance
of each Class of Certificates, terminate all of the respective 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 with
respect to the Master Servicer 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 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 affected 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 which includes, without limitation, notifying the
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, any related Custodial Account and any other account or
fund maintained with respect to the Certificates or thereafter received with
respect to the affected Mortgage Loans. The Master Servicer being terminated
shall bear all costs of the transfer of the master servicing to the successor
master servicer, 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 the Agreement, if necessary. If such costs
are not paid by the terminated Master Servicer, the Trustee shall pay such
costs from the Trust Fund.
Notwithstanding the termination of its activities as Master Servicer,
any 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 a Responsible
Officer of the Trustee 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 Securities Administrator shall
immediately give written notice to the Master Servicer upon the failure of the
Master Servicer to make Advances as required under this Agreement with a copy
to the Trustee.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee or the Securities Administrator, as applicable,
pursuant to Section 6.14(a) or the Trustee or the Securities Administrator, as
applicable, 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
94
Servicer, hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the failure of the Master Servicer to provide information required by this
Agreement shall not be considered a default by the Trustee or the Securities
Administrator, as applicable, hereunder. In addition, neither the Trustee nor
the Securities Administrator, as applicable, shall have any 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 capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer. As
compensation for being the successor master servicer, the Trustee shall be
entitled to receive all compensation payable to the Master Servicer under this
Agreement. Any successor to the Master Servicer hereunder also may assume the
obligations of the Securities Administrator hereunder and as successor in such
capacity shall be entitled to the compensation payable to the Securities
Administrator pursuant to Section 4.02 hereof from and after the date of such
assumption.
(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 respective responsibilities, duties
or liabilities of a master servicer, like the Master Servicer. Any entity
designated by the Trustee, 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 the 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 master 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 the Servicers of the assignment of the master servicing
functions and providing the Trustee and successor master servicer 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 all amounts which shall at the time
be or should have been deposited by the Master Servicer in the Distribution
Account, any Custodial Account, or 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 the Securities Administrator, as
applicable, nor any other successor, as applicable, 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 related Mortgage Loan
95
data 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 Securities Administrator
to deliver, or any delay in delivering cash, documents or records to it
related to such distribution, or (ii) the failure of Trustee or the Securities
Administrator 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 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 Securities Administrator or the Paying Agent
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.
96
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 Balance (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 security or indemnity
reasonably satisfactory to it 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 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.
Section 6.19 Action Upon Certain Failures of the Master Servicer and
Upon Event of Default.
In the event that a Responsible Officer of the Trustee shall have
actual knowledge or written notice 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 Securities Administrator is notified 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,
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 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 forward to
Certificateholders Form 1099 (supplemental tax information) (or otherwise
furnish information within the control of the Securities Administrator) 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 or the Trustee, as applicable, resulting
from any error in any of such tax or information returns directly resulting
97
from errors in the information provided by such Master Servicer except to the
extent that such information was provided in reasonable reliance upon
information from any 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 the Code and regulations thereunder to be made
available to the Certificateholders. The Master Servicer agrees that it shall
cause each Servicer to, provide the Securities Administrator with such
information related to the Mortgage Loans in the possession of such Servicer,
as may reasonably be required for the Securities Administrator to prepare such
reports.
(c) Within 15 days after each Distribution Date, the Securities
Administrator shall, on behalf of the Trust and in accordance with industry
standards, file with the Securities and Exchange Commission (the "Commission")
via the Electronic Data Gathering and Retrieval System (XXXXX), a Form 8-K (or
any comparable form containing the same or comparable information or other
information mutually agreed upon) with a copy of the report to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
Xxxxx 00, 0000 (xxx, if applicable, prior to March 30 of each year), the
Securities Administrator 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 Master Servicer will cause an
officer in charge of master servicing 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 timely received by the Securities Administrator prior to March
30, the Securities Administrator 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 Securities Administrator. Promptly
following the first date legally permissible under applicable regulations and
interpretations of the Commission, the Securities Administrator 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. The Master Servicer agrees to furnish to the
Securities Administrator 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 Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items with the Commission other than those
specified in this section.
98
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 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 Master Servicer has the option 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. If the Master Servicer elects to exercise such
option, it 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 Redemption Price or (b) state in such
notice that the Redemption 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 Redemption Price.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator, the Trustee and the Custodian shall be reimbursed from the
Redemption Price for any Advances, Servicer Advances, accrued and unpaid
Servicing Fees or other amounts with respect to the Mortgage Loans and any
related assets being purchased pursuant to Section 7.01(c) above that are
reimbursable to such parties (and such other amounts which, if not related to
the Mortgage Loans and other assets of the Trust Fund not being purchased,
that are then due and owing to any such Person) under this Agreement and the
related Purchase and Servicing Agreement or the related Custodial Agreement.
Section 7.02 Procedure Upon Termination of Trust Fund.
(a) Notice of any termination pursuant to the provisions of Section
7.01, specifying the Distribution Date upon which the final distribution shall
be made or the purchase of the
99
Trust's assets will occur, shall be given promptly by the Securities
Administrator by first class mail to Certificateholders mailed in the case of
a redemption of the Certificates, no later than (i) the first day of the month
in which the Distribution Date selected for redemption of the Certificates
shall occur or (ii) upon (x) the sale of all of the property of the Trust Fund
by the Securities Administrator or in the case of a sale of assets of the
Trust Fund, or (y) upon the final payment or other liquidation of the last
Mortgage Loan or REO Property in the Trust Fund. Such notice shall specify (A)
the Initial Optional Purchase Date, 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 Securities
Administrator therein specified. The Securities Administrator shall give such
notice to the Trustee, 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 and the Securities Administrator shall terminate,
the Distribution Account and any other account or fund maintained with respect
to the Certificates, subject to the Securities Administrator'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 above-mentioned written notice, the Securities Administrator shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice any Certificates shall not
have been surrendered for cancellation, the Securities Administrator 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
Securities Administrator shall deliver any remaining funds being held by it to
the Holder of the Class A-R Certificates and the Holder of the Class A-R
Certificates 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 Securities
Administrator 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 Securities Administrator
in connection with any purchase 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 Master Servicer,
exercising its option to purchase all of the Mortgage Loans pursuant to
Section 7.01(c), delivers to the Trustee and the Securities Administrator, an
Opinion of Counsel (at the Master Servicer's expense), addressed to the
100
Trustee and the Securities Administrator 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 Securities Administrator on
behalf of 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 7.01 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
Securities Administrator on behalf of the Trustee under this Section and to
take such other action in connection therewith as may be reasonably requested
by the Trustee, 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 any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
101
(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 Certificate Registrar,
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 Certificate Registrar shall, within
five Business Days after the receipt of such application, afford such
Applicants reasonable access during the normal business hours of the
Certificate Registrar to the most recent list of Certificateholders held by
the Certificate Registrar 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.
(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 none of 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
102
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 none of the Trustee, the Securities Administrator,
the Master Servicer or 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 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
103
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers'
and Master Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Depositor and
the Certificateholders shall monitor the performance of the Servicers under
the Purchase and Servicing Agreements, and shall use its reasonable good faith
efforts to cause the Servicers duly and punctually to perform all of their
respective duties and obligations thereunder. Upon the occurrence of a default
of which a Responsible Officer of the Master Servicer has actual knowledge
under a Purchase and 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 related Purchase and Servicing Agreement; (ii)
exercise any rights it may have to enforce the related Purchase and Servicing
Agreement against such Servicer; and/or (iii) waive any such default under the
related Purchase and Servicing Agreement or take any other action with respect
to such default as is permitted thereunder. Notwithstanding anything to the
contrary in this Agreement, with respect to any Additional Collateral Mortgage
Loan, the Master Servicer will have no duty or obligation to supervise,
monitor or oversee the activities of the related Servicer under any Purchase
and Servicing Agreement with respect to any Additional Collateral or under any
agreement relating to the pledge of, or the perfection of a pledge or security
interest in, any Additional Collateral except upon the occurrence of the
following events (i) in the case of a final liquidation of any Mortgaged
Property secured by Additional Collateral, the Master Servicer shall enforce
the obligation of the Servicer under the related Servicing Agreement to
liquidate such Additional Collateral as required by such Servicing Agreement,
and (ii) if the Master Servicer assumes the obligations of such Servicer as
successor Servicer under the related Servicing Agreement pursuant to this
Section 9.01, as successor Servicer, it shall be bound to service and
administer the Additional Collateral in accordance with the provisions of such
Servicing Agreement.
(b) Upon any termination by the Master Servicer of a Servicer's rights
and powers pursuant to its Purchase and Servicing Agreement, the rights and
powers of such Servicer with respect to the related 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 Purchase and Servicing Agreement, unless or
until the Master Servicer shall have appointed (and the Trustee shall have
acknowledged), with the consent of the Rating Agencies and in accordance with
the applicable provisions of the related Purchase and Servicing Agreement, a
new Xxxxxx Xxx- or FHLMC-approved Person to serve as successor to the
Servicer; provided, however, 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 letter from the Rating
Agencies, the Master Servicer may elect to continue to serve as successor
servicer under the Purchase and Servicing Agreement. Upon appointment of a
successor servicer, as authorized under this Section 9.01(b), unless the
successor servicer shall
104
have assumed the obligations of the terminated Servicer under such Purchase
and Servicing Agreement, the Master Servicer and such successor servicer shall
enter into a servicing agreement in a form substantially similar to the
affected Purchase and Servicing Agreement, and the Trustee shall acknowledge
such servicing agreement. In connection with any such appointment, the Master
Servicer may make such arrangements for the compensation of such successor
servicer as it and such successor servicer 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 Purchase and
Servicing Agreement.
The Master Servicer shall pay the costs of such enforcement
(including the termination of a 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.
If the Seller is the owner of the servicing rights and the Seller
chooses to terminate that Servicer with or without cause and sell those
servicing rights to a successor servicer, then the Depositor shall cause the
Seller to give reasonable prior written notice to the Master Servicer, and
obtain the prior written consent of the Rating Agencies and a New Xxxxxx Mae-
or FHLMC-approved Person reasonably acceptable to the Master Servicer shall be
chosen by the Seller and appointed as successor servicer with the
acknowledgment of the Master Servicer and the Trustee. The Depositor shall
cause the costs of such transfer (including any costs of the Master Servicer)
to be borne by the Seller.
(c) Upon any termination of a Servicer's rights and powers pursuant to
its Purchase and 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
such Servicer under the related Purchase and Servicing Agreement, which notice
shall also specify the name and address of any such successor servicer.
(d) The Depositor shall not consent to the assignment by any Servicer
of such Servicer's rights and obligations under the related Purchase and
Servicing Agreement without the prior written consent of the Master Servicer,
which consent shall not be unreasonably withheld.
(e) The Trustee shall execute and deliver, at the written request of
the Master Servicer or any Servicer, and furnish to the Master Servicer and
any Servicer, at the expense of the requesting party, a power of attorney in
the standard form provided by the Trustee to take title to the Mortgaged
Properties after foreclosure in the name of and on behalf of the Trustee
105
and for the purposes described herein to the extent necessary or desirable to
enable the Master Servicer or any Servicer to perform its respective duties.
The Trustee shall not be liable for the actions of the Master Servicer or any
Servicer under such powers of attorney.
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 by the
Master Servicer under this Agreement), the Trustee shall thereupon assume all
of the rights and obligations of such Master Servicer hereunder and under each
Purchase and Servicing Agreement entered into with respect to the Mortgage
Loans or shall appoint or petition a court to appoint a Xxxxxx-Xxx or
FHLMC-approved servicer as successor servicer that is acceptable to the
Depositor and the Rating Agencies. The Trustee, as successor master servicer,
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 Purchase and Servicing Agreements 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 Purchase and 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 Purchase and
Servicing Agreement, this 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 Purchase and
Servicing Agreement and this Agreement to the assuming party.
Section 9.03 Representations and Warranties of the Master Servicer.
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 execution, delivery and performance of which have
been duly authorized by all necessary corporate action on the part
of the Master Servicer;
106
(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 Xxx- 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 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.
107
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
this Section 9.03. 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, the resignation or removal of the Trustee 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.
For so long as Xxxxx Fargo Bank, National Association is the
Master Servicer and the Securities Administrator, the Master Servicer shall be
entitled to be paid by the Securities Administrator reasonable compensation
for the Master Servicer's services hereunder in an amount to be agreed upon
between the Master Servicer and the Securities Administrator. Should Xxxxx
Fargo Bank, National Association no longer be both the Master Servicer and the
Securities Administrator, the Master Servicer shall be entitled to receive the
Master Servicer Compensation payable pursuant to Section 4.02(b)(ii) hereof.
The Master Servicer shall be entitled to be paid by the
Trust Fund, and either retain or withdraw from the Distribution Account (i)
amounts necessary to reimburse itself for any previously unreimbursed
Advances, Servicer Advances and Nonrecoverable Advances with respect to the
Mortgage Loans in accordance with the definition of "Available Funds" and (ii)
amounts representing assumption fees, late payment charges or other ancillary
income not included in the definition of "Available Funds" 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, the Master Servicer shall be entitled to reimbursement
from the Distribution Account for all reasonable expenses, disbursements and
advances incurred or made by the Master Servicer in connection with the
performance of its duties hereunder and under the Purchase and Servicing
Agreements, as modified by the Acknowledgements (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,
108
disbursement or advance as may be attributable to its willful
misfeasance, bad faith or negligence.
The Master Servicer and any director, officer, employee or agent of
the Master Servicer shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or related to, any claim or
legal action (including any pending or threatened claim or legal action)
relating to this Agreement, the Purchase and Servicing Agreements, the
Custodial Agreements or the Certificates, other than any loss, liability or
expense resulting from the Master Servicer's failure to perform its duties
hereunder or thereunder or incurred by reason of the Master Servicer's
negligence, willful misfeasance or bad faith.
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 shall be a Person that
shall be qualified and approved to service mortgage loans for Xxxxxx Mae or
FHLMC and shall have a net worth of not less than $15,000,000.
Section 9.06 Resignation of Master Servicer and Securities
Administrator.
Except as otherwise provided in Sections 9.05, 9.07 and 9.10 hereof,
neither the Master Servicer nor the Securities Administrator shall resign from
the obligations and duties hereby imposed on it unless the duties of the
Master Servicer or the Securities Administrator, as applicable, 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 or the Securities Administrator shall be evidenced by an Opinion of
Counsel that shall be Independent to such effect delivered to the Trustee. No
resignation of the Master Servicer or the Securities Administrator shall
become effective until the Trustee shall have assumed, or a successor master
servicer or successor securities administrator, as applicable, shall have been
appointed pursuant to Section 6.07 or 9.02, as applicable, and until such
successor shall have assumed, such Master Servicer's or Securities
Administrator's responsibilities and obligations under this Agreement. Notice
of any such resignation shall be given promptly by the Master Servicer or the
Securities Administrator, as applicable, to the Depositor and 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 Xxxxx
Fargo Bank, National Association (or any successor thereto) also shall resign
or be removed, as applicable, as Securities Administrator, Paying Agent,
Authenticating Agent and Certificate Registrar under this Agreement. In such
event, the obligations of the Master Servicer and the Securities Administrator
shall be assumed by the
109
Trustee as successor or by such other successor master servicer and/or
securities administrator, as applicable, appointed by the Trustee (subject to
the provisions of Sections 6.07 and 9.02(a)).
Section 9.07 Assignment or Delegation of Duties by the Master
Servicer and Securities Administrator.
Except as expressly provided herein, neither the Master Servicer nor
the Securities Administrator shall assign or transfer any of their respective
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 respective duties, covenants or obligations to be performed by the
Master Servicer or Securities Administrator, as applicable, hereunder;
provided, however, that the Master Servicer and the Securities Administrator
shall each 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 of the respective
duties, covenants or obligations to be performed and carried out by the Master
Servicer or the Securities Administrator, as applicable, hereunder. Notice of
such permitted assignment shall be given promptly by the Master Servicer or
the Securities Administrator, as applicable, to the Depositor and the Trustee.
If, pursuant to any provision hereof, the respective duties of the Master
Servicer or the Securities Administrator are transferred to a successor master
servicer or successor securities administrator, as applicable, the entire
amount of the compensation payable to the Master Servicer or Securities
Administrator pursuant hereto shall thereafter be payable to such successor
master servicer or successor securities administrator. Such successor Master
Servicer shall also pay the fees of the Trustee, as provided herein.
Section 9.08 Limitation on Liability of the Master Servicer and
Others.
(a) 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.
110
The Master Servicer shall not be liable for any acts or omissions of
the Servicers 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 and the Purchase and
Servicing Agreements.
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 Acknowledgements and the
related Purchase and Servicing Agreements. 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(a), whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
Section 9.10 Eligibility Requirements for Securities
Administrator.
The Securities Administrator hereunder shall at all times be
a corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade or at least
"A/F1" by Fitch if Fitch is a Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 9.10 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.10, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 6.06 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the
Depositor, the Seller, the Master Servicer, any Custodian or the Trustee and
their respective affiliates.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01 REMIC Administration.
111
(a) REMIC elections as set forth in the Preliminary Statement 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.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-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.
(d) The Securities Administrator shall prepare, the Trustee shall sign
and the Securities Administrator shall file 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 other than the
Master REMIC: (i) treat the accrual period for interests in such REMIC as the
calendar month; (ii) account for distributions made from each REMIC other than
the Master REMIC as made on the first day of each succeeding calendar month;
(iii) account for income under the all-OID method at the weighted average of
the Net Mortgage Rates; (iv) use the aggregation method provided in Treasury
Regulation section 1.1275-2(c); and (v) account for income and expenses
related to each REMIC other than the Master REMIC in the manner resulting in
the lowest amount of excess inclusion income possible accruing to the Holder
of the residual interest in each such 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
112
(ii) to the Certificateholders and the Trustee such information or reports as
are required by the Code or REMIC Provisions.
(f) To the extent within their control, 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 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. None of 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) to the effect that the
contemplated action 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 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 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,
(A) out of other amounts held in the Distribution Account, and shall reduce
amounts otherwise payable to holders of regular interests in any such REMIC or
(B) to the extent that any such taxes are imposed on the REMIC as a result of
the breach of any representation, warranty or covenant of the Master Servicer,
the Securities Administrator or any Servicer, then the Master Servicer, the
Securities Administrator, or that Servicer, as applicable, shall pay when due
any and all such taxes.
(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) [Reserved].
113
(l) The Class A-R Holder shall act as "tax matters person" with
respect to each REMIC created hereunder and the Securities Administrator shall
act as agent for the Class A-R Holder in such roles, unless and until another
party is so designated by the Class A-R Holder.
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 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, substitution or acceptance) 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).
The Master Servicer with respect to the Mortgage Loans shall not
consent to any modification of any such Mortgage Loan for which the consent of
the Master Servicer is required under the applicable Purchase and Servicing
Agreement under which such Mortgage Loan is serviced, that would (i) increase
the interest rate in respect of such Mortgage, defer for a period in excess of
six months or forgive the payment of any principal or interest, reduce the
outstanding principal amount (except for actual payments of principal),
increase the Servicing Fee on such Mortgage Loan or extend the final maturity
date on such Mortgage Loan, or (ii) result in a substitution or release of
collateral or in the provision of additional collateral for the Mortgage Loan,
unless the applicable Mortgage Loan is in default or default is reasonably
foreseeable in respect of such Mortgage Loan, or the Master Servicer has
received an Opinion of Counsel (at the expense of the party requesting consent
for such modification) that such modification will not result in an Adverse
REMIC Event.
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 Purchase and Servicing Agreements or
under any Acknowledgement, (2) for any Losses other than arising out
114
of malfeasance, willful misconduct or negligent performance by the Service
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 Purchase and 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 and the
Securities Administrator 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 Purchase and 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 Purchase and Servicing Agreement) to, dispose of any REO
Property within three years 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.
Section 10.05 Fidelity.
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
115
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers and
trustees.
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 Purchase and 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 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 Balance (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
116
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 Balance 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 Balance 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 Securities
Administrator 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.
Section 11.04 Voting Rights.
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
Balance 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 Class are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act,
each of the Depositor, the Master Servicer, the Securities Administrator and
the Trustee (upon instruction from the Depositor) 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,
117
a copy (excluding exhibits) of any report on Form 8-K or Form 10-K filed with
the Securities and Exchange Commission pursuant to Section 6.20(b). Any
reasonable out-of-pocket expenses incurred by the Securities Administrator in
providing copies of such documents shall be reimbursed by the Depositor.
Section 11.06 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
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,
Xxxxxx Xxxxxxx Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
telephone number (000) 000-0000, Attention: Xxxxxx Xxxxxxx Mortgage Loan Trust
2005-1, (b) in the case of the Seller, Xxxxxx Xxxxxxx Mortgage Capital Inc.,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxxxxx Mortgage Loan 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:
Xxxxxx Xxxxxxx Mortgage Loan Trust 2005-1, (d) with respect to the Trustee or
the Certificate Registrar, its respective Corporate Trust Office, and (e) in
the case of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency, 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
118
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.
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 Purchase and 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, to
the address specified therefor in the definition corresponding to the name of
such Rating Agency.
(c) The Securities Administrator shall provide or make available to
the Rating Agencies reports prepared pursuant to Section 4.05. In addition,
the Securities Administrator shall, at the expense of the Trust Fund, make
available to each Rating Agency such information
119
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 Purchase and Servicing Agreement, the related Purchase and
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 (not in its individual corporate
capacity, but solely as Master Servicer hereunder), 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, except that the Trustee
shall not be prohibited from filing a proof of claim in any such proceeding.
120
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.
XXXXXX XXXXXXX CAPITAL I INC.,
as Depositor
By: /s/ Xxxxxxx Xxx
----------------------------------------
Name: Xxxxxxx Xxx
Title: Executive Director
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Associate
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Associate
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxx Xxxxx
----------------------------------------
Name: Xxx Xxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ Xxx Xxxxx
----------------------------------------
Name: Xxx Xxxxx
Title: Vice President
Solely for purposes of Section 2.05
accepted and agreed to by:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By: /s/ Xxxxxxx Xxx
----------------------------------
Name: Xxxxxxx Xxx
Title: Executive Director
2
EXHIBIT A
FORMS OF CERTIFICATES
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) 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 satisfy the requirements for
exemptive relief under Sections I and III of XXXX
X-0
95-60; or (z) herewith delivers to the Certificate Registrar an
opinion of counsel satisfactory to the Certificate Registrar
and the Securities Administrator 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 Pooling and Servicing 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 February 1,
2005 (the "Agreement"), by and among Xxxxxx Xxxxxxx Capital I
Inc., as Depositor, Xxxxx Fargo Bank, National Association, as
Master Servicer and as Securities Administrator, and Deutsche
Bank National Trust Company, as Trustee with respect to Xxxxxx
Xxxxxxx Mortgage Loan 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 has 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 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 interest and that
it 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 Certificate
Registrar
B-2
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 Pooling and
Servicing 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
Pooling and Servicing 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
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
----------------------------
Date
Re: Xxxxxx Xxxxxxx Mortgage Loan 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
[RESERVED]
D-1
EXHIBIT E
LIST OF PURCHASE AND SERVICING AGREEMENTS
1. Second Amended and Restated Master Mortgage Loan Purchase Agreement, dated
as of February 1, 2004 between Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation,
as seller, and Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser;
2. Amended and Restated Master Servicing Agreement dated as of February 1,
2004 between Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, as servicer, and
Xxxxxx Xxxxxxx Mortgage Capital Inc.;
3. Servicing Agreement, dated as of May 29, 2003 between Option One Mortgage
Corporation, as servicer, and Xxxxxx Xxxxxxx Mortgage Capital Inc., as owner;
4. Seller's Purchase, Warranties and Servicing Agreement dated as of September
1, 2004 between Wachovia Mortgage Corporation, as seller and servicer and
Xxxxxx Xxxxxxx Mortgage Capital Inc., as Purchaser.
5. Mortgage Loan Purchase And Warranties Agreement, dated as of November 1,
2003 between American Home Mortgage Holding Corp., as seller, and Xxxxxx
Xxxxxxx Mortgage Capital Inc., as purchaser;
6. Mortgage Loan Sale And Servicing Agreement dated as of September 1, 2004
between Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser, and Chevy Chase
Bank, F.S.B., as seller and servicer.
E-1
EXHIBIT F
LIST OF CUSTODIAL AGREEMENTS
1. Custodial Agreement dated as of November 14, 2003 between American Home
Mortgage Holding Corp., as seller, Xxxxxx Xxxxxxx Mortgage Capital Inc., as
purchaser, and Deutsche Bank Trust Company Americas, as
custodian;
2. Custodial Agreement dated as of February 1, 2005 between Wachovia Mortgage
Corporation, as seller and servicer, Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit
Corporation, as seller and servicer, Chevy Chase Bank, F.S.B., as seller and
servicer, Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser, and Deutsche
Bank National Trust Company, as trustee, Xxxxx Fargo Bank, N.A., as securities
administrator and JPMorgan Chase Bank, as custodian.
F-1
EXHIBIT G
ASSIGNMENT AND NOTICE OF TRANSFER WITH RESPECT TO ADDITIONAL
COLLATERAL MORTGAGE LOANS
G-1
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Xxxxxx Xxxxxxx Mortgage Loan Trust 2005-1,
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement,
dated as of February 1, 2005 (the "Pooling and Servicing Agreement"), by and
among Xxxxxx Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer and as Securities Administrator, and Deutsche
Bank National Trust Company, 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 Underwriter, the Certificate Registrar 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 Xxxxxx Xxxxxxx Mortgage Loan Trust 2005-1, Mortgage Pass-Through
Certificates (the "Privately Offered Certificates") of Xxxxxx Xxxxxxx Capital
I 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 February 1, 2005
(the "Pooling and Servicing Agreement"), by and among Xxxxxx Xxxxxxx
Capital I Inc., as Depositor, Xxxxx Fargo Bank, National Association,
as Master Servicer and as Securities Administrator, and Deutsche Bank
National Trust Company, 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 Pooling and
Servicing Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Pooling and Servicing
Agreement.
I-2
You and the Certificate Registrar 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 satisfy the requirements for exemptive
relief under Sections I and III of PTCE 95-60; or (z) herewith delivers to the
Certificate Registrar an opinion of counsel satisfactory to the Certificate
Registrar and the Securities Administrator 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 and
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, 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
Pooling and Servicing Agreement, dated as of February 1, 2005 (the "Pooling
and Servicing Agreement"), by and among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as Master Servicer and as
Securities Administrator, and Deutsche Bank National Trust Company, as
Trustee, 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
[On File with Securities Administrator]
K-1
EXHIBIT L
INITIAL CERTIFICATION OF CUSTODIAN
[DATE]
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
[Deutsche Bank National Trust Company]
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: Trust Administration-MS0501
RE: Xxxxxx Xxxxxxx Mortgage Loan Trust 2005-1,
Mortgage Pass-Through Certificates Series 2005-1
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Custodian on behalf
of the Trustee, hereby certifies that, except for the exceptions noted on the
schedule attached hereto, (a) all documents required to be delivered to the
Custodian on behalf of the Trustee pursuant to Sections 2.01(a)(i) through
(iv) and (b), (c), (d), (e) and (g), and if delivered to it, the documents
identified in Section 2.01(a)(v) through (viii) and (ix)(c) and (f) of the
Pooling and Servicing Agreement are in its possession, (b) such documents have
been reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
(c) based on its examination and only as to the foregoing documents, these
documents with respect to each Mortgage Loan accurately reflects the
information contained in the Mortgage Note and Mortgage and (d) each Mortgage
Note has been endorsed and each assignment of Mortgage has been delivered as
provided in Section 2.01 of the Pooling and Servicing Agreement. The Custodian
has made no independent examination of any documents contained in each
Mortgage File beyond the review specifically mentioned above. The Custodian
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents delivered in accordance
with Section 2.01 of the Pooling and Servicing Agreement or any of the
Mortgage Loans identified in the Mortgage Loan Schedule, or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
The Custodian on behalf of the Trustee acknowledges receipt of notice
that the Depositor has granted to the Trustee for the benefit of the
Certificateholders a security interest in all of the Depositor's right, title
and interest in and to the Mortgage Loans.
L-1
Capitalized terms used herein without definition shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
[DEUTSCHE BANK NATIONAL TRUST COMPANY]
[JPMORGAN CHASE BANK],
as Custodian
By:____________________________________
Authorized Representative
M-1
EXHIBIT M
[RESERVED]
M-1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[On File with the Trustee and the Securities Administrator]
L-1
SCHEDULE B
PRINCIPAL BALANCES SCHEDULE
[Attached to Prospectus]
S-1
