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ACE SECURITIES CORP.
Depositor
COUNTRYWIDE HOME LOANS SERVICING LP
a Servicer
SAXON MORTGAGE SERVICES, INC.
a Servicer
OCWEN FEDERAL BANK FSB
a Servicer
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
HSBC BANK USA, NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2005
ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4
Asset Backed Pass-Through Certificates
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................................
SECTION 1.01. Defined Terms......................................................................
SECTION 1.02. Allocation of Certain Interest Shortfalls..........................................
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.............................
SECTION 2.01. Conveyance of the Mortgage Loans...................................................
SECTION 2.02. Acceptance of REMIC I by Trustee...................................................
SECTION 2.03. Repurchase or Substitution of Mortgage Loans.......................................
SECTION 2.04. Representations and Warranties of the Master Servicer..............................
SECTION 2.05. Representations, Warranties and Covenants of each Servicer.........................
SECTION 2.06. Issuance of the REMIC I Regular Interests and the Class R-I Interest...............
SECTION 2.07. Conveyance of the REMIC I Regular Interests and REMIC II Regular Interests;
Acceptance of REMIC I and REMIC II by the Trustee..................................
SECTION 2.08. Issuance of Residual Certificates..................................................
SECTION 2.09. Conveyance of Subsequent Mortgage Loans............................................
SECTION 2.10. Establishment of the Trust.........................................................
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS................................
SECTION 3.01. The Servicers to Act as Servicers..................................................
SECTION 3.02. Sub-Servicing Agreements Between a Servicer and Sub-Servicers......................
SECTION 3.03. Successor Sub-Servicers............................................................
SECTION 3.04. No Contractual Relationship Between Sub-Servicer, Trustee or the
Certificateholders.................................................................
SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement by Successor Servicer.........
SECTION 3.06. Collection of Certain Mortgage Loan Payments.......................................
SECTION 3.07. Collection of Taxes, Assessments and Similar Items; Servicing Accounts.............
SECTION 3.08. Collection Accounts and Distribution Account.......................................
SECTION 3.09. Withdrawals from the Collection Accounts and Distribution Account..................
SECTION 3.10. Investment of Funds in the Investment Accounts.....................................
SECTION 3.11. Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and
Primary Mortgage Insurance.........................................................
SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption Agreements..........................
SECTION 3.13. Realization Upon Defaulted Mortgage Loans..........................................
SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files....................................
SECTION 3.15. Servicing Compensation.............................................................
SECTION 3.16. Collection Account Statements......................................................
SECTION 3.17. Statement as to Compliance.........................................................
SECTION 3.18. Independent Public Accountants' Servicing Report...................................
SECTION 3.19. Annual Certification...............................................................
SECTION 3.20. Access to Certain Documentation....................................................
SECTION 3.21. Title, Management and Disposition of REO Property..................................
SECTION 3.22. Obligations of the Servicers in Respect of Prepayment Interest Shortfalls;
Relief Act Interest Shortfalls.....................................................
SECTION 3.23. Obligations of the Servicers in Respect of Mortgage Rates and Monthly Payments.....
SECTION 3.24. Reserve Fund.......................................................................
SECTION 3.25. Advance Facility...................................................................
SECTION 3.26. The Servicers Indemnification......................................................
SECTION 3.27. Pre-Funding Account................................................................
ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER............
SECTION 4.01. Master Servicer....................................................................
SECTION 4.02. REMIC-Related Covenants............................................................
SECTION 4.03. Monitoring of Servicers............................................................
SECTION 4.04. Fidelity Bond......................................................................
SECTION 4.05. Power to Act; Procedures...........................................................
SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements.........................................
SECTION 4.07. Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee............................................................................
SECTION 4.08. Standard Hazard Insurance and Flood Insurance Policies.............................
SECTION 4.09. Presentment of Claims and Collection of Proceeds...................................
SECTION 4.10. Maintenance of Primary Mortgage Insurance Policies.................................
SECTION 4.11. Trustee to Retain Possession of Certain Insurance Policies and Documents...........
SECTION 4.12. Realization Upon Defaulted Mortgage Loans..........................................
SECTION 4.13. Compensation for the Master Servicer...............................................
SECTION 4.14. REO Property.......................................................................
SECTION 4.15. Annual Officer's Certificate as to Compliance......................................
SECTION 4.16. Annual Independent Accountant's Servicing Report...................................
SECTION 4.17. UCC................................................................................
SECTION 4.18. Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.....
SECTION 4.19. Prepayment Penalty Verification....................................................
ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS..............................................................
SECTION 5.01. Distributions......................................................................
SECTION 5.02. Statements to Certificateholders...................................................
SECTION 5.03. Servicer Reports; P&I Advances.....................................................
SECTION 5.04. Allocation of Realized Losses......................................................
SECTION 5.05. Compliance with Withholding Requirements...........................................
SECTION 5.06. Reports Filed with Securities and Exchange Commission..............................
ARTICLE VI THE CERTIFICATES............................................................................
SECTION 6.01. The Certificates...................................................................
SECTION 6.02. Registration of Transfer and Exchange of Certificates..............................
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates..................................
SECTION 6.04. Persons Deemed Owners..............................................................
SECTION 6.05. Certain Available Information......................................................
ARTICLE VII THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER........................................
SECTION 7.01. Liability of the Depositor, the Servicers and the Master Servicer..................
SECTION 7.02. Merger or Consolidation of the Depositor, the Servicers or the Master Servicer.....
SECTION 7.03. Limitation on Liability of the Depositor, the Servicers, the Master Servicer and
Others.............................................................................
SECTION 7.04. Limitation on Resignation of the Servicers.........................................
SECTION 7.05. Limitation on Resignation of the Master Servicer...................................
SECTION 7.06. Assignment of Master Servicing.....................................................
SECTION 7.07. Rights of the Depositor in Respect of the Servicers and the Master Servicer........
SECTION 7.08. Duties of the Credit Risk Manager..................................................
SECTION 7.09. Limitation Upon Liability of the Credit Risk Manager...............................
SECTION 7.10. Removal of the Credit Risk Manager.................................................
ARTICLE VIII DEFAULT 180
SECTION 8.01. Servicer Events of Default.........................................................
SECTION 8.02. Master Servicer to Act; Appointment of Successor...................................
SECTION 8.03. Notification to Certificateholders.................................................
SECTION 8.04. Waiver of Servicer Events of Default...............................................
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.....................................
SECTION 9.01. Duties of Trustee and Securities Administrator.....................................
SECTION 9.02. Certain Matters Affecting Trustee and Securities Administrator.....................
SECTION 9.03. Trustee and Securities Administrator not Liable for Certificates or Mortgage
Loans..............................................................................
SECTION 9.04. Trustee and Securities Administrator May Own Certificates..........................
SECTION 9.05. Fees and Expenses of Trustee and Securities Administrator..........................
SECTION 9.06. Eligibility Requirements for Trustee and Securities Administrator..................
SECTION 9.07. Resignation and Removal of Trustee and Securities Administrator....................
SECTION 9.08. Successor Trustee or Securities Administrator......................................
SECTION 9.09. Merger or Consolidation of Trustee or Securities Administrator.....................
SECTION 9.10. Appointment of Co-Trustee or Separate Trustee......................................
SECTION 9.11. Appointment of Office or Agency....................................................
SECTION 9.12. Representations and Warranties.....................................................
ARTICLE X TERMINATION.................................................................................
XXXXXXX 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx or Liquidation of All Mortgage Loans...................
SECTION 10.02. Additional Termination Requirements................................................
ARTICLE XI REMIC PROVISIONS............................................................................
SECTION 11.01. REMIC Administration...............................................................
SECTION 11.02. Prohibited Transactions and Activities.............................................
SECTION 11.03. Indemnification....................................................................
ARTICLE XII MISCELLANEOUS PROVISIONS....................................................................
SECTION 12.01. Amendment..........................................................................
SECTION 12.02. Recordation of Agreement; Counterparts.............................................
SECTION 12.03. Limitation on Rights of Certificateholders.........................................
SECTION 12.04. Governing Law......................................................................
SECTION 12.05. Notices............................................................................
SECTION 12.06. Severability of Provisions.........................................................
SECTION 12.07. Notice to Rating Agencies..........................................................
SECTION 12.08. Article and Section References.....................................................
SECTION 12.09. Grant of Security Interest.........................................................
SECTION 12.10. Survival of Indemnification........................................................
EXHIBITS
Exhibit A-1 Form of Class A Certificate
Exhibit A-2 Form of Class M Certificate
Exhibit A-3 Form of Class B Certificate
Exhibit A-4 Form of Class CE-1 Certificate and Class CE-2 Certificate
Exhibit A-5 Form of Class P Certificate
Exhibit A-6 Form of Class R Certificate
Exhibit B-1 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Class B Certificates, Class P Certificates, Class CE-1
Certificates, Class CE-2 Certificates and Residual
Certificates Pursuant to Rule 144A Under the Securities Act
Exhibit B-2 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Class B Certificates, Class P Certificates, Class CE-1
Certificates, Class CE-2 Certificates and Residual
Certificates Pursuant to Rule 501(a) Under the Securities Act
Exhibit B-3 Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in Connection with
Transfer of Residual Certificates
Exhibit C Form of Servicer Certification
Exhibit D Form of Power of Attorney
Exhibit E Subsequent Transfer Instrument
Exhibit F Addition Notice
Exhibit G Identified Subsequent Mortgage Loans
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
Schedule 3 Reserved.
Schedule 4 Standard File Layout - Delinquency Reporting
Schedule 5 Standard File Layout - Scheduled/Scheduled
Schedule 6 Data Requirements of Servicing Advances Incurred Prior to Cut-off Date or Subsequent Cut-off
Date
This Pooling and Servicing Agreement, is dated and effective
as of June 1, 2005, among ACE SECURITIES CORP., as Depositor, COUNTRYWIDE HOME
LOANS SERVICING LP as a Servicer, SAXON MORTGAGE SERVICES, INC. as a Servicer
and OCWEN FEDERAL BANK FSB as a Servicer, XXXXX FARGO BANK, N.A., as Master
Servicer and Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest of the Trust Fund created hereunder. The
Trust Fund will consist of a segregated pool of assets comprised of the Mortgage
Loans, the Subsequent Mortgage Loans and certain other related assets subject to
this Agreement.
REMIC I
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (other than the Pre-Funding Account,
Cap Contracts and the Reserve Fund) as a REMIC for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC I". The Class
R-I Interest will be the sole class of "residual interests" in REMIC I for
purposes of the REMIC Provisions (as defined herein). The following table
irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance and, for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
REMIC I Regular Interests (as defined herein). None of the REMIC I Regular
Interests will be certificated.
REMIC I
REMITTANCE INITIAL LATEST POSSIBLE
DESIGNATION RATE UNCERTIFICATED BALANCE MATURITY DATE (1)
----------------- ------------- ---------------------- -----------------
LT1 Variable(2) $669,436,359.31 July 25, 2035
LT1PF Variable(2) $150,155,255.42 July 25, 2035
LT2 Variable(2) $469,784,737.84 July 25, 2035
LT2PF Variable(2) $170,482,144.27 July 25, 0000
XXX Variable(2) $100.00 July 25, 2035
LTCE2 Variable(2) N/A(3) July 25, 2035
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
(3) REMIC I Regular Interest LTCE2 will not have an Uncertificated Balance, but
will accrue interest on its Notional Amount.
REMIC II
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the REMIC II Remittance
Rate, the initial Uncertificated Balance and, for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for each of the REMIC II Regular Interests (as defined herein). None of
the REMIC II Regular Interests will be certificated.
REMIC II
REMITTANCE INITIAL LATEST POSSIBLE
DESIGNATION RATE UNCERTIFICATED BALANCE MATURITY DATE (1)
------------------ -------------- ---------------------- -----------------
II-LTAA Variable(2) $715,330,663.45 July 25, 2035
II-LTA1A Variable(2) $2,580,075.00 July 25, 2035
II-LTA1B Variable(2) $645,020.00 July 25, 2035
II-LTA2A Variable(2) $1,587,465.00 July 25, 2035
II-LTA2B Variable(2) $518,230.00 July 25, 2035
II-LTA2C Variable(2) $413,750.00 July 25, 2035
II-LTM1 Variable(2) $262,775.00 July 25, 2035
II-LTM2 Variable(2) $226,280.00 July 25, 2035
II-LTM3 Variable(2) $131,385.00 July 25, 2035
II-LTM4 Variable(2) $124,090.00 July 25, 2035
II-LTM5 Variable(2) $113,140.00 July 25, 2035
II-LTM6 Variable(2) $102,190.00 July 25, 2035
II-LTM7 Variable(2) $94,890.00 July 25, 2035
II-LTM8 Variable(2) $87,590.00 July 25, 2035
II-LTM9 Variable(2) $62,045.00 July 25, 2035
II-LTM10 Variable(2) $51,095.00 July 25, 2035
II-LTB1 Variable(2) $69,345.00 July 25, 2035
II-LTB2 Variable(2) $87,590.00 July 25, 2035
II-LTB3 Variable(2) $80,290.00 July 25, 2035
II-LTZZ Variable(2) $7,361,339.97 July 25, 2035
II-LTP Variable(2) $100.00 July 25, 2035
II-LT1SUB Variable(2) $17,457.26 July 25, 2035
II-LT1GRP Variable(2) $81,959.17 July 25, 2035
II-LT2SUB Variable(2) $13,637.79 July 25, 2035
II-LT2GRP Variable(2) $64,026.69 July 25, 2035
II-LTXX Variable(2) $729,752,167.51 July 25, 2035
II-LTCE2 N/A(3) N/A(4) July 25, 2035
-----------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC II
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC II Remittance
Rate" herein.
(3) REMIC II Regular Interest II-LTCE2 will not have REMIC II Remittance
Rate, but will be entitled to 100% of the amounts distributed on REMIC
I Regular Interest LTCE2.
(4) REMIC II Regular Interest II-LTCE2 will not have an Uncertificated
Balance, but will have a Notional Amount equal to the Notional Amount
of REMIC I Regular Interest LTCE2.
REMIC III
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC III." The Class R-III Interest will evidence the sole class
of "residual interests" in REMIC III for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.
INITIAL AGGREGATE
CERTIFICATE PRINCIPAL LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE BALANCE MATURITY DATE (1)
------------------- ----------------- --------------------- -----------------
Class A-1A Variable(2) $516,015,000.00 July 25, 2035
Class A-1B Variable(2) $129,004,000.00 July 25, 2035
Class A-2A Variable(2) $317,493,000.00 July 25, 2035
Class A-2B Variable(2) $103,646,000.00 July 25, 2035
Class A-2C Variable(2) $82,750,000.00 July 25, 2035
Class M-1 Variable(2) $52,555,000.00 July 25, 2035
Class M-2 Variable(2) $45,256,000.00 July 25, 2035
Class M-3 Variable(2) $26,277,000.00 July 25, 2035
Class M-4 Variable(2) $24,818,000.00 July 25, 2035
Class M-5 Variable(2) $22,628,000.00 July 25, 2035
Class M-6 Variable(2) $20,438,000.00 July 25, 2035
Class M-7 Variable(2) $18,978,000.00 July 25, 2035
Class M-8 Variable(2) $17,518,000.00 July 25, 2035
Class M-9 Variable(2) $12,409,000.00 July 25, 2035
Class M-10 Variable(2) $10,219,000.00 July 25, 2035
Class B-1 Variable(2) $13,869,000.00 July 25, 2035
Class B-2 Variable(2) $17,518,000.00 July 25, 2035
Class B-3 Variable(2) $16,058,000.00 July 25, 2035
Class P N/A(3) $100.00 July 25, 2035
Class CE-1 N/A(4) $12,409,496.84 July 25, 2035
Class CE-2 N/A(5) N/A(6) July 25, 2035
-----------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class P Certificates will not accrue interest.
(4) The Class CE-1 Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE-1 Certificates
outstanding from time to time which shall equal the Uncertificated Balance
of the REMIC II Regular Interests (other than REMIC II Regular Interest
II-LTP). The Class CE-1 Certificates will not accrue interest on their
Certificate Principal Balance.
(5) The Class CE-2 Certificates are an interest only class and for each
Distribution Date the Class CE-2 Certificates will be entitled to receive
100% of the amounts distributed on REMIC II Regular Interest II-LTCE2.
(6) For federal income tax purposes, the Class CE-2 Certificates will not have
a Certificate Principal Balance, but will have a Notional Amount equal to
the Notional Amount of REMIC II Regular Interest II-LTCE2.
The Mortgage Loans had an aggregate Scheduled Principal
Balance as of the Cut-off Date, after deducting all Monthly Payments due on or
before the Cut-off Date, of $1,459,858,596.84, which includes the Identified
Subsequent Mortgage Loans. As of the Cut-off Date, the Group I Mortgage Loans
had an aggregate Scheduled Principal Balance equal to $819,591,714.73 and the
Group II Mortgage Loans had an aggregate Scheduled Principal Balance equal to
$640,266,882.11, each of which includes the related Identified Subsequent
Mortgage Loans.
In consideration of the mutual agreements herein contained,
the Depositor, the Servicers, the Master Servicer, the Securities Administrator
and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accepted Master Servicing Practices": With respect to any
Mortgage Loan, as applicable, either (x) those customary mortgage master
servicing practices of prudent mortgage servicing institutions that master
service mortgage loans of the same type and quality as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, to the extent
applicable to the Master Servicer (except in its capacity as successor to any
Servicer), or (y) as provided in Section 3.01 hereof, but in no event below the
standard set forth in clause (x).
"Accepted Servicing Practices": As defined in Section 3.01.
"Account": The Collection Accounts, the Distribution Account
and the Pre-Funding Account, as the context may require.
"Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate, Class B Certificate, Class CE-1 Certificate
or Class CE-2 Certificate and each Distribution Date, interest accrued during
the related Interest Accrual Period at the Pass-Through Rate for such
Certificate for such Distribution Date on the Certificate Principal Balance, in
the case of the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, or on the Notional Amount in the case of the Class CE-1
Certificates and Class CE-2 Certificates, of such Certificate immediately prior
to such Distribution Date. The Class P Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
All distributions of interest on the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates will be calculated on the basis of a
360-day year and the actual number of days in the applicable Interest Accrual
Period. All distributions of interest on the Class CE-1 Certificates and Class
CE-2 Certificates will be based on a 360-day year consisting of twelve 30-day
months. Accrued Certificate Interest with respect to each Distribution Date, as
to any Class A Certificate, Mezzanine Certificate, Class B Certificate or Class
CE-1 Certificate shall be reduced by an amount equal to the portion allocable to
such Certificate pursuant to Section 1.02 hereof, if any, of the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 3.22 or Section 4.18 of
this Agreement or pursuant to the Interim Servicing Agreement and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any, for such
Distribution Date. In addition, Accrued Certificate Interest with respect to
each Distribution Date, as to any Class CE-1 Certificate, shall be reduced by an
amount equal to the portion allocable to such Class CE-1 Certificate of Realized
Losses, if any, pursuant to Section 1.02 and Section 5.04 hereof.
"Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.09, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
five (5) Business Days prior to the related Subsequent Transfer Date and shall
be substantially in the form attached hereto as Exhibit F.
"Adjustable Rate Mortgage Loan": Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.
"Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, the first day of the month in which the Mortgage Rate of an
Adjustable Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each Adjustable Rate
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Administration Fees: The sum of (i) the Servicing Fees, (ii)
the Master Servicing Fee and (iii) the Credit Risk Management Fee.
"Administration Fee Rate": The sum of (i) the Servicing Fee
Rate, (ii) the Master Servicer Fee Rate and (iii) the Credit Risk Management Fee
Rate.
"Advance Facility": As defined in Section 3.25(a).
"Advance Financing Person": As defined in Section 3.25(a).
"Advance Reimbursement Amounts": As defined in Section
3.25(b).
"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 Loss Severity Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.
"Agreement": This Pooling and Servicing Agreement, including
all exhibits and schedules hereto and all amendments hereof and supplements
hereto.
"Allocated Realized Loss Amount": With respect to any Class of
Mezzanine Certificates or Class B Certificates and any Distribution Date, an
amount equal to the sum of any Realized Loss allocated to that Class of
Certificates on the Distribution Date and any Allocated Realized Loss Amount for
that Class remaining unpaid from the previous Distribution Date.
"Amounts Held for Future Distribution": As to any Distribution
Date, the aggregate amount held in the Custodial Accounts and the Collection
Account at the close of business on the immediately preceding Determination Date
on account of (i) all Monthly Payments or portions thereof received in respect
of the Mortgage Loans due after the related Due Period and (ii) Principal
Prepayments and Liquidation Proceeds received in respect of such Mortgage Loans
after the last day of the related Prepayment Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county,
if permitted by law.
"Assignment Agreements": Collectively, the Interim Servicer
Assignment Agreement and the Interim Subservicer Assignment Agreement.
"Authorized Officers": A managing director of the whole loan
trading desk and a managing director in global markets.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Custodial Accounts, Collection Accounts and
Distribution Account as of the close of business on the related Servicer
Remittance Date, (b) the aggregate of any amounts deposited in the Distribution
Account by the Servicers or the Master Servicer in respect of Prepayment
Interest Shortfalls for such Distribution Date pursuant to Section 3.22 or
Section 4.18 of this Agreement or by the Interim Servicer pursuant to the
Interim Servicing Agreement, (c) the aggregate of any P&I Advances for such
Distribution Date made by the Servicers pursuant to Section 5.03 of this
Agreement or by the Interim Servicer pursuant to the Interim Servicing
Agreement, (d) the aggregate of any P&I Advances made by a successor Servicer
(including the Master Servicer) for such Distribution Date pursuant to Section
8.02 of this Agreement and (e) with respect to the Distribution Date immediately
following the end of the Pre-Funding Period, any amounts in the Pre-Funding
Account (exclusive of any investment income therein) after giving effect to any
purchase of Subsequent Mortgage Loans, reduced (to not less than zero) by (2)
the portion of the amount described in clause (1)(a) above that represents (i)
Amounts Held for Future Distribution, (ii) Principal Prepayments on the Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Servicers,
the Trustee, the Master Servicer, the Securities Administrator or the Custodian
pursuant to Section 3.09 or 9.05 of this Agreement or otherwise payable in
respect of Extraordinary Trust Fund Expenses or reimbursable or payable to the
Interim Servicer under the Interim Servicing Agreement, (v) the Credit Risk
Management Fee, (vi) amounts deposited in the Custodial Account, a Collection
Account or the Distribution Account in error, (vii) the amount of any Prepayment
Charges collected by a Servicer or the Interim Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans and (viii) amounts
reimbursable to a successor Servicer (including the Master Servicer) pursuant to
Section 8.02 of this Agreement or pursuant to the Interim Servicing Agreement.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment, that is substantially greater than the preceding monthly payment at the
maturity of such Mortgage Loan.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment, that is substantially greater
than the preceding Monthly Payment at the maturity of such Mortgage Loan.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Book-Entry Certificates": The Offered Certificates and Class
B Certificates for so long as the Certificates of such Class shall be registered
in the name of the Depository or its nominee.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 6.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the States of New York,
California, Florida, Maryland, Minnesota, Texas or in the city in which the
Corporate Trust Office of the Trustee is located, are authorized or obligated by
law or executive order to be closed.
"Cap Contracts": Shall mean (i) the Cap Contract between the
Trustee and the counterparty named thereunder, for the benefit of the Holders of
the Class A-1 Certificates, the Mezzanine Certificates and the Class B
Certificates (the "Group I Cap Contract") and (ii) the Cap Contract between the
Trustee and the counterparty thereunder, for the benefit of the Class A-2
Certificates, the Mezzanine Certificates and the Class B Certificates (the
"Group II Cap Contract").
"Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage plus any subordinate mortgage on the
related Mortgaged Property and related closing costs.
"Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2005-HE4, Class A-1A, Class X-0X, Xxxxx X-0X,
Xxxxx X-0X, Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class B-1, Class B-2,
Class B-3, Class P, Class CE-1, Class CE-2 and Class R Certificates issued under
this Agreement.
"Certificate Factor": With respect to any Class of
Certificates (other than the Residual Certificates) as of any Distribution Date,
a fraction, expressed as a decimal carried to six places, the numerator of which
is the aggregate Certificate Principal Balance (or Notional Amount, in the case
of the Class CE-1 Certificates and Class CE-2 Certificates) of such Class of
Certificates on such Distribution Date (after giving effect to any distributions
of principal and allocations of Realized Losses resulting in reduction of the
Certificate Principal Balance (or Notional Amount, in the case of the Class CE-1
Certificates and Class CE-2 Certificates) of such Class of Certificates to be
made on such Distribution Date), and the denominator of which is the initial
aggregate Certificate Principal Balance (or Notional Amount, in the case of the
Class CE-1 Certificates and Class CE-2 Certificates) of such Class of
Certificates as of the Closing Date.
"Certificate Margin": With respect to the Class A-1A
Certificates and, for purposes of the definition of "Marker Rate", REMIC II
Regular Interest II-LTA1A, 0.230% in the case of each Distribution Date through
and including the Optional Termination Date and 0.460% in the case of each
Distribution Date thereafter.
With respect to the Class A-1B Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA1B, 0.280%
in the case of each Distribution Date through and including the Optional
Termination Date and 0.560% in the case of each Distribution Date thereafter.
With respect to the Class A-2A Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA2A, 0.110%
in the case of each Distribution Date through and including the Optional
Termination Date and 0.220% in the case of each Distribution Date thereafter.
With respect to the Class A-2B Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA2B, 0.250%
in the case of each Distribution Date through and including the Optional
Termination Date and 0.500% in the case of each Distribution Date thereafter.
With respect to the Class A-2C Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA2C, 0.400%
in the case of each Distribution Date through and including the Optional
Termination Date and 0.800% in the case of each Distribution Date thereafter.
With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM1, 0.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.750% in the case of each Distribution Date thereafter.
With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM2, 0.520% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.780% in the case of each Distribution Date thereafter.
With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM3, 0.570% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.855% in the case of each Distribution Date thereafter.
With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM4, 0.650% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.975% in the case of each Distribution Date thereafter.
With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM5, 0.670% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.005% in the case of each Distribution Date thereafter.
With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM6, 0.730% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.095% in the case of each Distribution Date thereafter.
With respect to the Class M-7 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM7, 1.280% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.920% in the case of each Distribution Date thereafter.
With respect to the Class M-8 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM8, 1.400% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.100% in the case of each Distribution Date thereafter.
With respect to the Class M-9 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM9, 1.900% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.850% in the case of each Distribution Date thereafter.
With respect to the Class M-10 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM10, 3.000%
in the case of each Distribution Date through and including the Optional
Termination Date and 4.500% in the case of each Distribution Date thereafter.
With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTB1, 3.000% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.500% in the case of each Distribution Date thereafter.
With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTB2, 3.000% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.500% in the case of each Distribution Date thereafter.
With respect to the Class B-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTB3, 3.000% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.500% in the case of each Distribution Date thereafter.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof, and solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of or beneficially owned by the Depositor, the Seller, a Servicer, the
Master Servicer, the Securities Administrator, the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01. The Trustee and the
Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or a
Servicer in determining whether a Certificate is held by an Affiliate thereof.
All references herein to "Holders" or "Certificateholders" shall reflect the
rights of Certificate Owners as they may indirectly exercise such rights through
the Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Securities Administrator
shall be required to recognize as a "Holder" or "Certificateholder" only the
Person in whose name a Certificate is registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class P Certificate
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 5.04, minus all distributions
allocable to principal made thereon and Realized Losses allocated thereto, if
any, on such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE-1 Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates, the Class B Certificates and the Class P Certificates then
outstanding. The aggregate initial Certificate Principal Balance of each Class
of Regular Certificates is set forth in the Preliminary Statement hereto.
"Certificate Register": The register maintained pursuant to
Section 6.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A Certificate": Any Class A-1A, Class X-0X, Xxxxx X-0X,
Xxxxx X-0X or Class A-2C Certificate.
"Class A Principal Distribution Amount": The Class A Principal
Distribution Amount is an amount equal to the sum of: (i) the Class A-1
Principal Distribution Amount and (ii) the Class A-2 Principal Distribution
Amount and (iii) with respect to the Distribution Date immediately following the
termination of the Pre-Funding Period, any remaining Pre-Funding Amount.
"Class A-1 Allocation Percentage": With respect to any
Distribution Date is the percentage equivalent of a fraction, the numerator of
which is (x) the Group I Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Class A-1 Certificate": Any one of the Class A-1A
Certificates or Class A-1B Certificates executed and authenticated by the
Securities Administrator and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.
"Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-1A Certificates and the Class A-1B Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 57.40%
and (ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date
(which includes the principal balance of the Identified Subsequent Mortgage
Loans).
"Class A-1A Certificate": Any one of the Class A-1A
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-1 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class A-1B Certificate": Any one of the Class A-1B
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-1 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class A-2 Allocation Percentage": With respect to any
Distribution Date is the percentage equivalent of a fraction, the numerator of
which is (x) the Group II Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Class A-2 Certificate": Any Class A-2A, Class A-2B or Class
A-2C Certificate.
"Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-2A, Class A-2B and Class A-2C Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 57.40% and
(ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group
II Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) minus the product of (i) 0.50%
and (ii) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date (which includes the principal balance of the Identified Subsequent Mortgage
Loans).
"Class A-2A Certificate": Any one of the Class A-2A
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-1 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class A-2B Certificate": Any one of the Class A-2B
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-1 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class A-2C Certificate": Any one of the Class A-2C
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-1 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class B Certificate": Any Class B-1, Class B-2 or Class B-3
Certificate.
"Class B-1 Certificate": Any one of the Class B-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class B-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date) and (xii) the Certificate Principal Balance of
the Class B-1 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 93.70% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date (which includes the principal
balance of the Identified Subsequent Mortgage Loans).
"Class B-2 Certificate": Any one of the Class B-2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class B-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date), (xii) the Certificate Principal Balance of
the Class B-1 Certificates (after taking into account the payment of the Class
B-1 Principal Distribution Amount on such Distribution Date) and (xiii) the
Certificate Principal Balance of the Class B-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 96.10% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date (which includes
the principal balance of the Identified Subsequent Mortgage Loans).
"Class B-3 Certificate": Any one of the Class B-3 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class B-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date), (xii) the Certificate Principal Balance of
the Class B-1 Certificates (after taking into account the payment of the Class
B-1 Principal Distribution Amount on such Distribution Date), (xiii) the
Certificate Principal Balance of the Class B-2 Certificates (after taking into
account the payment of the Class B-2 Principal Distribution Amount on such
Distribution Date) and (xiv) the Certificate Principal Balance of the Class B-3
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 98.30% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date (which includes the principal balance of
the Identified Subsequent Mortgage Loans).
"Class CE-1 Certificate": Any one of the Class CE-1
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-4 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class CE-2 Certificate": Any one of the Class CE-2
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-4 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class M Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 64.60% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the principal balance of the Identified
Subsequent Mortgage Loans).
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 70.80% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date (which includes the principal balance of
the Identified Subsequent Mortgage Loans).
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 74.40% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date (which includes
the principal balance of the Identified Subsequent Mortgage Loans).
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 77.80% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the principal balance of the Identified
Subsequent Mortgage Loans).
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 80.90% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date (which includes the principal
balance of the Identified Subsequent Mortgage Loans).
"Class M-6 Certificate": Any one of the Class M-6 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date) and (vii) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 83.70% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date (which includes
the principal balance of the Identified Subsequent Mortgage Loans).
"Class M-7 Certificate": Any one of the Class M-7 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 86.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the principal balance of the Identified
Subsequent Mortgage Loans).
"Class M-8 Certificate": Any one of the Class M-8 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balance of
the Class M-8 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 88.70% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date (which includes the principal
balance of the Identified Subsequent Mortgage Loans).
"Class M-9 Certificate": Any one of the Class M-9 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date). (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date) and (x) the Certificate
Principal Balance of the Class M-9 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 90.40% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date (which includes
the principal balance of the Identified Subsequent Mortgage Loans).
"Class M-10 Certificate": Any one of the Class M-10
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-2 and evidencing a Regular Interest in REMIC III for purposes of the REMIC
Provisions.
"Class M-10 Principal Distribution Amount": With respect to
any Distribution Date on or after the Stepdown Date and on which a Trigger Event
is not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date). (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 91.80% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the principal balance of the Identified
Subsequent Mortgage Loans).
"Class P Certificate": Any one of the Class P Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-5 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class R Certificates": Any one of the Class R Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-6, and evidencing
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest.
"Class R-I Interest": The uncertificated residual interest in
REMIC I.
"Class R-II Interest": The uncertificated residual interest in
REMIC II.
"Class R-III Interest": The uncertificated residual interest
in REMIC III.
"Closing Date": June 29, 2005.
"Code": The Internal Revenue Code of 1986 as amended from time
to time.
"Collection Account": The separate account or accounts created
and maintained, or caused to be created and maintained, by each Servicer
pursuant to Section 3.08(a) of this Agreement, which shall be entitled
"Countrywide Home Loans Servicing LP, as a Servicer for HSBC Bank USA, National
Association as Trustee, in trust for the registered holders of ACE Securities
Corp., Home Equity Loan Trust, Series 2005-HE4, Asset Backed Pass-Through
Certificates", "Saxon Mortgage Services, Inc., as a Servicer for HSBC Bank USA,
National Association as Trustee, in trust for the registered holders of ACE
Securities Corp., Home Equity Loan Trust, Series 2005-HE4, Asset Backed
Pass-Through Certificates" and "Ocwen Federal Bank FSB, as a Servicer for HSBC
Bank USA, National Association as Trustee, in trust for the registered holders
of ACE Securities Corp., Home Equity Loan Trust, Series 2005-HE4, Asset Backed
Pass-Through Certificates", respectively. The Collection Accounts must be
Eligible Accounts.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": The principal corporate trust office
of the Trustee which office at the date of the execution of this instrument is
located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ACE Securities
Corp., 2005-HE4, or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicers. The office of the Securities
Administrator, which for purposes of Certificate transfers and surrender is
located at Xxxxx Fargo Bank, N.A., Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust (ACE 2005-HE4), and for
all other purposes is located at Xxxxx Xxxxx Xxxx, X.X., X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust (ACE 2005-HE4) (or for overnight
deliveries, at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust (ACE 2005-HE4)).
"Corresponding Certificate": With respect to each REMIC II
Regular Interest, as follows:
REMIC II Regular Interest Class
---------------------------------- ---------
REMIC II Regular Interest II-LTA1A A-1A
REMIC II Regular Interest II-LTA1B A-1B
REMIC II Regular Interest II-LTA2A A-2A
REMIC II Regular Interest II-LTA2B A-2B
REMIC II Regular Interest II-LTA2C A-2C
REMIC II Regular Interest II-LTM1 M-1
REMIC II Regular Interest II-LTM2 M-2
REMIC II Regular Interest II-LTM3 M-3
REMIC II Regular Interest II-LTM4 M-4
REMIC II Regular Interest II-LTM5 M-5
REMIC II Regular Interest II-LTM6 M-6
REMIC II Regular Interest II-LTM7 M-7
REMIC II Regular Interest II-LTM8 M-8
REMIC II Regular Interest II-LTM9 M-9
REMIC II Regular Interest II-LTM10 M-10
REMIC II Regular Interest II-LTB1 B-1
REMIC II Regular Interest II-LTB2 B-2
REMIC II Regular Interest II-LTB3 B-3
REMIC II Regular Interest II-LTP P
REMIC II Regular Interest II-LTCE2 CE-2
"Countrywide": Countrywide Home Loans Servicing LP or any
successor thereto appointed hereunder in connection with the servicing and
administration of the New Century Mortgage Loans.
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates, the
Class B Certificates and the Class CE-1 Certificates, and the denominator of
which is the aggregate Stated Principal Balance of the Mortgage Loans,
calculated after taking into account distributions of principal on the Mortgage
Loans and distribution of the Principal Distribution Amount to the Certificates
then entitled to distributions of principal on such Distribution Date.
"Credit Risk Management Agreements": The agreements between
the Credit Risk Manager and each Servicer and/or Master Servicer, regarding the
loss mitigation and advisory services to be provided by the Credit Risk Manager.
"Credit Risk Management Fee": The amount payable to the Credit
Risk Manager on each Distribution Date as compensation for all services rendered
by it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under the Credit Risk Management Agreements, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Stated Principal Balance of the Mortgage Loans and
any related REO Properties as of the first day of the related Due Period.
"Credit Risk Management Fee Rate": 0.014% per annum.
"Credit Risk Manager": The Murrayhill Company, a Colorado
corporation, and its successors and assigns.
"Custodial Account": Shall mean the account maintained by the
Interim Servicer under the Interim Servicing Agreement.
"Custodial Agreement": Either of the DBNT Custodial Agreement
or the Xxxxx Fargo Custodial Agreement, or any other custodial agreement entered
into after the date hereof with respect to any Mortgage Loan subject to this
Agreement.
"Custodian": Either Xxxxx Fargo or DBNT or any other custodian
appointed under any custodial agreement entered into after the date of this
Agreement.
"Cut-off Date": With respect to each Mortgage Loan, June 1,
2005. With respect to all Qualified Substitute Mortgage Loans, their respective
dates of substitution. References herein to the "Cut-off Date," when used with
respect to more than one Mortgage Loan, shall be to the respective Cut-off Dates
for such Mortgage Loans.
"DBNT": Deutsche Bank National Trust Company, a national
banking association.
"DBNT Custodial Agreement": The Custodial Agreement dated as
of June 1, 2005, among the Trustee, DBNT, the Servicers and the Interim
Servicer, as may be amended or supplemented from time to time.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"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 principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 6.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are sixty (60) or more days delinquent,
are in foreclosure, have been converted to REO Properties or have been
discharged by reason of bankruptcy, and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties as
of the last day of the previous calendar month.
"Depositor": ACE Securities Corp., a Delaware corporation, or
its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1+ by S&P, F-1+
by Fitch and P-1 by Xxxxx'x (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date
and (i) Saxon and Ocwen, the 15th day of the calendar month in which such
Distribution Date occurs, or if such 15th day is not a Business Day, the
Business Day immediately preceding such 15th day, (ii) Countrywide, two Business
Days immediately preceding the related Servicer Remittance Date, and (iii) the
Interim Servicer, as set forth in the Interim Servicing Agreement. The
Determination Date for purposes of Article X hereof shall mean the 15th day of
the month or, if such 15th day is not a Business Day, the first Business Day
following such 15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the related Servicer,
on behalf of the Trustee, shall not be considered to Directly Operate an REO
Property solely because the related Servicer establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to such REO
Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Xxxxxxx Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any Trust REMIC or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Account": The separate trust account or accounts
created and maintained by the Securities Administrator pursuant to Section
3.08(b) in the name of the Securities Administrator for the benefit of the
Certificateholders and designated "Xxxxx Fargo Bank, N.A., in trust for
registered holders of ACE Securities Corp. Home Equity Loan Trust, Series
2005-HE4". Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement. The
Distribution Account must be an Eligible Account.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in July 2005.
"Due Date": With respect to each Distribution Date, the day of
the month on which the Monthly Payment is due on a Mortgage Loan during the
related Due Period, exclusive of any days of grace.
"Due Period": With respect any Distribution Date and any
Mortgage Loan, the period commencing on the second day of the month immediately
preceding the month in which such Distribution Date occurs and ending on the
first day of the month in which such Distribution Date occurs. With respect to
any Distribution Date and the Interim Servicer, the period as set forth in the
Interim Servicing Agreement.
"Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC, (iii) a trust account or
accounts maintained with a federal depository institution or state chartered
depository institution acting in its fiduciary capacity, or (iv) an account or
accounts acceptable to each Rating Agency as confirmed and approved in writing
by each Rating Agency. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Liquidation Proceeds": To the extent that such amount
is not required by law to be paid to the related mortgagor, the amount, if any,
by which Liquidation Proceeds with respect to a liquidated Mortgage Loan exceed
the sum of (i) the outstanding principal balance of such Mortgage Loan and
accrued but unpaid interest at the related Net Mortgage Rate through the last
day of the month in which the related Liquidation Event occurs, plus (ii)
related liquidation expenses or other amounts to which the related Servicer or
the Interim Servicer is entitled to be reimbursed from Liquidation Proceeds with
respect to such liquidated Mortgage Loan pursuant to Section 3.09 of this
Agreement or pursuant to the Interim Servicing Agreement.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the
Administration Fee Rate.
"Extraordinary Trust Fund Expense": Any amounts payable or
reimbursable to the Trustee, the Master Servicer, the Securities Administrator,
the Custodians or any director, officer, employee or agent of any such Person
from the Trust Fund pursuant to the terms of this Agreement and any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
11.01(g)(v).
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the Net Monthly Excess Cashflow for such
Distribution Date and (ii) the Overcollateralization Increase Amount for such
Distribution Date.
"Xxxxxx Xxx": Xxxxxx Xxx, formerly known as the Federal
National Mortgage Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Maturity Date": The Distribution Date occurring in July
2035.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by an Originator, the Seller or the Master Servicer pursuant to or as
contemplated by Section 2.03, 3.13(c) or Section 10.01), a determination made by
the related Servicer or the Interim Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the related Servicer
or the Interim Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered, which
determination shall be evidenced by a certificate of a Servicing Officer
delivered to the Master Servicer and maintained in its records.
"Fitch": Fitch Ratings or any successor in interest.
"Xxxxxxx Mac": Xxxxxxx Mac, formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Adjustable Rate
Mortgage Loan.
"Group I": The loan group consisting of the Group I Mortgage
Loans.
"Group I Interest Remittance Amount": With respect to any
Distribution Date is that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced on the Group I
Mortgage Loans (net of the Administration Fees and any Prepayment Charges and
after taking into account amounts payable or reimbursable to the Trustee, the
Custodians, the Securities Administrator, the Credit Risk Manager, the Master
Servicer or the Servicers pursuant to this Agreement or the Custodial Agreements
or the Interim Servicer pursuant to the Interim Servicing Agreement).
"Group I Mortgage Loans": Those Mortgage Loans identified on
the Mortgage Loan Schedule as Group I Mortgage Loans.
"Group I Pre-Funding Sub-Account": The sub-account of the
Pre-Funding Account into which the Original Group I Pre-Funded Amount will be
deposited on the Closing Date.
"Group I Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group I Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group I Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01 of this Agreement or the Interim Servicing Agreement; (iii) the principal
portion of all other unscheduled collections, including Insurance Proceeds,
Liquidation Proceeds and all Principal Prepayments in full and in part, received
during the related Prepayment Period, to the extent applied as recoveries of
principal on the Group I Mortgage Loans, net in each case of payments or
reimbursements to the Trustee, the Custodians, the Master Servicer, the
Securities Administrator, the Servicers or the Interim Servicer, (iv) any
portion of the Original Group I Pre-Funded Amount remaining at the end of the
Pre-Funding Period and (v) the Class A-1 Allocation Percentage of the amount of
any Overcollateralization Increase Amount for such Distribution Date MINUS (vi)
the Class A-1 Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.
"Group I Principal Remittance Amount": With respect to any
Distribution Date will be the sum of (a) the amounts described in clauses (i)
through (iv) of the definition of Group I Principal Distribution Amount.
"Group II": The loan group consisting of the Group II Mortgage
Loans.
"Group II Interest Remittance Amount": With respect to any
Distribution Date is that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced on the Group II
Mortgage Loans (net of the Administration Fees and any Prepayment Charges and
after taking into account amounts payable or reimbursable to the Trustee, the
Custodians, the Securities Administrator, the Credit Risk Manager, the Master
Servicer or the Servicers pursuant to this Agreement or the Custodial Agreements
or payable or reimbursable to the Interim Servicer pursuant to the Interim
Servicing Agreement).
"Group II Mortgage Loans": Those Mortgage Loans identified on
the Mortgage Loan Schedule as Group II Mortgage Loans.
"Group II Pre-Funding Sub-Account": The sub-account of the
Pre-Funding Account into which the Original Group II Pre-Funded Amount will be
deposited on the Closing Date.
"Group II Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group II Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group II Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodians, the
Master Servicer, the Securities Administrator or the Servicers or the Interim
Servicer, (iv) any portion of the Original Group II Pre-Funded Amount remaining
at the end of the Pre-Funding Period and (v) the Class A-2 Allocation Percentage
of the amount of any Overcollateralization Increase Amount for such Distribution
Date MINUS (vi) the Class A-2 Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Distribution Date.
"Group II Principal Remittance Amount": With respect to any
Distribution Date will be the sum of the amounts described in clauses (i)
through (iv) of the definition of Group II Principal Distribution Amount.
"Identified Subsequent Mortgage Loans": The mortgage loans
relating to Group I and Group II as identified on Exhibit G attached hereto
which the Depositor proposes to transfer to the Trust during the Pre-Funding
Period.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Securities Administrator, the Servicers, the Seller, any
Originator and their respective Affiliates, (b) does not have any direct
financial interest in or any material indirect financial interest in the
Depositor, the Master Servicer, the Securities Administrator, the Servicers, the
Seller, any Originator or any Affiliate thereof, and (c) is not connected with
the Depositor, the Master Servicer, the Securities Administrator, the Servicers,
the Seller, any Originator or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Master Servicer, the Securities Administrator, the Servicers,
the Seller, any Originator or any Affiliate thereof merely because such Person
is the beneficial owner of 1% or less of any class of securities issued by the
Depositor, the Master Servicer, the Securities Administrator, the Servicers, the
Seller, any Originator or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than a
Servicer) that would be an "independent contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including a Servicer) if the Trustee has received an Opinion of Counsel to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": As of any Adjustment Date, the index applicable to
the determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan
will generally be the average of the interbank offered rates for six-month
United States dollar deposits in the London market as published in THE WALL
STREET JOURNAL and as most recently available either (a) as of the first
Business Day forty-five (45) days prior to such Adjustment Date or (b) as of the
first Business Day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.
"Initial Group I Mortgage Loan": Any of the Group I Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group I Mortgage Loans as of the Cut-off Date is equal to
$669,436,459.31.
"Initial Group II Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group II Mortgage Loans as of the Cut-off Date is equal
to $469,784,737.84.
"Initial Mortgage Loan": Any of the Initial Group I Mortgage
Loans or Initial Group II Mortgage Loans included in the Trust Fund as of the
Closing Date.
"Institutional Accredited Investor": As defined in Section
6.01(c).
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy, covering a Mortgage Loan or the related
Mortgaged Property, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor or a
senior lienholder in accordance with Accepted Servicing Practices, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, the period commencing on the Distribution Date of the month
immediately preceding the month in which such Distribution Date occurs (or, in
the case of the first Distribution Date, commencing on the Closing Date) and
ending on the day preceding such Distribution Date. With respect to any
Distribution Date and the Class CE-1 Certificates, the Class CE-2 Certificates
and the REMIC I Regular Interests and the REMIC II Regular Interests, the
one-month period ending on the last day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and any Class A Certificate, Mezzanine Certificate or Class B
Certificate, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class as of the immediately preceding Distribution
Date exceeded (b) the actual amount distributed on such Class in respect of
interest on such immediately preceding Distribution Date and (ii) the amount of
any Interest Carry Forward Amount for such Class remaining unpaid from the
previous Distribution Date, plus accrued interest on such sum calculated at the
related Pass-Through Rate for the most recently ended Interest Accrual Period.
"Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates, REMIC II
Regular Interest II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II Regular
Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest
II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2,
REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II
Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular
Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1,
REMIC II Regular Interest II-LTB2, REMIC II Regular Interest II-LTB3 and any
Interest Accrual Period therefor, the second London Business Day preceding the
commencement of such Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificates, any Mezzanine Certificates, any
Class B Certificates and any Class CE-1 Certificates, the aggregate Accrued
Certificate Interest on the Certificates of such Class for such Distribution
Date.
"Interest Remittance Amount": With respect to any Distribution
Date, the sum of: (i) the Group I Interest Remittance Amount and (ii) the Group
II Interest Remittance Amount.
"Interim Servicer": New Century Mortgage Corporation, and any
successor thereto.
"Interim Servicer Assignment Agreement": The Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2005, by and among
the Seller, the Depositor and the Interim Servicer evidencing the assignment of
the Interim Servicing Agreement to the extent of the New Century Mortgage Loans,
to the Depositor.
"Interim Servicing Agreement": The Master Mortgage Loan
Purchase and Interim Servicing Agreement dated as of March 1, 2005, as amended
by Amendment Number One dated as of May 1, 2005, by and among the Seller, the
Interim Servicer and NC Capital Corporation, as modified by the Interim Servicer
Assignment Agreement.
"Interim Subservicer": WMC Mortgage Corp. and any successor
thereto.
"Interim Subservicing Agreement": The Master Mortgage Loan
Purchase and Interim Servicing Agreement dated as of April 1, 2005, by and
between the Seller and the Interim Subservicer, as modified by the Interim
Subservicing Assignment Agreement.
"Interim Subservicer Assignment Agreement": The Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2005, by and among
the Seller, Saxon and the Interim Subservicer evidencing the assignment of the
Interim Subservicing Agreement to the extent of the servicing of the WMC
Mortgage Loans, to Saxon.
"Interim Subservicing Transfer Date": Servicing shall transfer
to Saxon with respect to the WMC Mortgage Loans on July 12, 2005.
"Last Scheduled Distribution Date": The Distribution Date in
July 2035, which is the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date.
"Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period with respect to such Mortgage Loan,
whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal and/or interest due (without regard to any acceleration of payments
under the related Mortgage and Mortgage Note) but delinquent for such Due Period
and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.13(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 10.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds, amounts received in respect of the rental of any REO Property prior to
REO Disposition, or required to be released to a Mortgagor or a senior
lienholder in accordance with applicable law or the terms of the related
Mortgage Loan Documents) received by the related Servicer or the Interim
Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation (other than
amounts required to be released to the Mortgagor or a senior lienholder), (ii)
the liquidation of a defaulted Mortgage Loan through a trustee's sale,
foreclosure sale or otherwise, (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.13(c), Section 3.21 or Section 10.01 of this Agreement or (iv) any
Subsequent Recoveries.
"Loan-to-Value Ratio": As of 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 and the denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the Cities of
London and New York are open and conducting transactions in United States
dollars.
"Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
amount of Realized Losses incurred on a Mortgage Loan and the denominator of
which is the principal balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
"Marker Rate": With respect to the Class CE-1 Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC II Remittance Rate for each of REMIC II Regular Interest
II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II Regular Interest
II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest
II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2,
REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II
Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular
Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1,
REMIC II Regular Interest II-LTB2, REMIC II Regular Interest II-LTB3 and REMIC
II Regular Interest II-LTZZ, with the rate on each such REMIC II Regular
Interest (other than REMIC II Regular Interest II-LTZZ) subject to a cap equal
to the lesser of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the
related Net WAC Pass-Through Rate for the corresponding Certificate for the
purpose of this calculation for such Distribution Date and with the rate on
REMIC II Regular Interest II-LTZZ subject to a cap of zero for the purpose of
this calculation; provided however, each such cap for each REMIC II Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is thirty (30).
"Master Servicer": As of the Closing Date, Xxxxx Fargo Bank,
N.A. and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Master Servicer and the Securities
Administrator shall at all times be the same Person.
"Master Servicer Certification": A written certification
covering servicing of the Mortgage Loans by a Servicer and signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superseded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
"Master Servicer Event of Default": One or more of the events
described in Section 8.01(b).
"Master Servicer Fee Rate": 0.0010% per annum.
"Master Servicing Fee": With respect to each Mortgage Loan and
for any calendar month, an amount equal to one twelfth of the product of the
Master Servicer Fee Rate multiplied by the Scheduled Principal Balance of the
Mortgage Loans as of the Due Date in the preceding calendar month.
"Maximum II-LTZZ Uncertificated Interest Deferral Amount":
With respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC II Remittance Rate applicable to REMIC II Regular Interest II-LTZZ for
such Distribution Date on a balance equal to the Uncertificated Balance of REMIC
II Regular Interest II-LTZZ minus the REMIC II Overcollateralization Amount, in
each case for such Distribution Date, over (ii) Uncertificated Interest on REMIC
II Regular Interest II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II
Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular
Interest II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest
II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4,
REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II
Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular
Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest
II-LTB1, REMIC II Regular Interest II-LTB2 and REMIC II Regular Interest
II-LTB3, for such Distribution Date, with the rate on each such REMIC II Regular
Interest subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate for the
corresponding Certificate for the purpose of this calculation for such
Distribution Date; provided however, each such cap for each REMIC II Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is thirty (30).
"Maximum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"MERS": Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS(R) System": The system of recording transfers of
mortgages electronically maintained by MERS.
"Mezzanine Certificate": Any Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificate.
"MIN": The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
"Minimum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the related Servicer pursuant to Section 3.01 of this
Agreement or by the Interim Servicer pursuant to the Interim Servicing
Agreement; and (c) on the assumption that all other amounts, if any, due under
such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. or any successor
interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The Mortgage Loan Documents pertaining to a
particular Mortgage Loan.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and the Mortgage Loan Documents for which have been delivered to
the related Custodian pursuant to Section 2.01 of this Agreement and pursuant to
the related Custodial Agreement, as held from time to time as a part of the
Trust Fund, the Mortgage Loans so held being identified in the Mortgage Loan
Schedule. After each Subsequent Transfer Date, Mortgage Loans shall include any
Subsequent Mortgage Loans transferred to the Trust on such Subsequent Transfer
Date.
"Mortgage Loan Documents": The documents evidencing or
relating to each Mortgage Loan delivered to the Custodian under the related
Custodial Agreement on behalf of the Trustee.
"Mortgage Loan Purchase Agreement": Shall mean the Mortgage
Loan Purchase Agreement dated as of June 29, 2005, between the Depositor and the
Seller.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule 1.
The Depositor shall deliver or cause the delivery of the initial Mortgage Loan
Schedule to the related Servicer, the Master Servicer, the Custodians and the
Trustee on the Closing Date. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including
the state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the original date of the Mortgage Loan and the remaining
months to maturity from the Cut-off Date, based on the original
amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment as of the Cut-off
Date;
(xiv) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as of
the close of business on the Cut-off Date;
(xvii) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date;
(xviii) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin;
(xix) a code indicating the purpose of the loan (i.e.,
purchase financing, rate/term refinancing, cash-out refinancing);
(xx) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Rate under the terms of the Mortgage Note;
(xxi) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Rate under the terms of the Mortgage Note;
(xxii) the Mortgage Rate at origination;
(xxiii) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Rate Cap;
(xxiv) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date immediately following the Cut-off Date;
(xxv) with respect to each Adjustable Rate Mortgage Loan, the
Index;
(xxvi) the date on which the first Monthly Payment was due on
the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date;
(xxvii) a code indicating whether the Mortgage Loan is an
Adjustable Rate Mortgage Loan or a fixed rate Mortgage Loan;
(xxviii) a code indicating the documentation style (i.e.,
full, stated or limited);
(xxix) a code indicating if the Mortgage Loan is subject to a
primary insurance policy or lender paid mortgage insurance policy and
the name of the insurer;
(xxx) the Appraised Value of the Mortgaged Property;
(xxxi) the sale price of the Mortgaged Property, if
applicable;
(xxxii) a code indicating whether the Mortgage Loan is subject
to a Prepayment Charge, the term of such Prepayment Charge and the
amount of such Prepayment Charge;
(xxxiii) the product type (e.g., 2/28, 15 year fixed, 30 year
fixed, 15/30 balloon, etc.);
(xxxiv) the Mortgagor's debt to income ratio;
(xxxv) the FICO score at origination; and
(xxxvi) the applicable Custodian.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate with
respect to each Adjustable Rate Mortgage Loan (A) as of any date of
determination until the first Adjustment Date following the Cut-off Date shall
be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in
effect immediately following the Cut-off Date and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in
the Mortgage Note, of the Index, as most recently available as of a date prior
to the Adjustment Date as set forth in the related Mortgage Note, plus the
related Gross Margin; provided that the Mortgage Rate on such Adjustable Rate
Mortgage Loan on any Adjustment Date shall never be more than the lesser of (i)
the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date
plus the related Periodic Rate Cap, if any, and (ii) the related Maximum
Mortgage Rate, and shall never be less than the greater of (i) the Mortgage Rate
in effect immediately prior to the Adjustment Date less the Periodic Rate Cap,
if any, and (ii) the related Minimum Mortgage Rate. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the aggregate Senior Interest Distribution Amounts payable to the Holders of
the Class A Certificates, (B) the aggregate Interest Distribution Amounts
payable to the holders of the Mezzanine Certificates and the Class B
Certificates and (C) the Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Administration Fee Rate.
"Net WAC Pass-Through Rate": With respect to the Class A-1
Certificates and any Distribution Date, a rate per annum equal to the product of
(x) the weighted average of the Expense Adjusted Mortgage Rates on the then
outstanding Group I Mortgage Loans, weighted based on their Stated Principal
Balances and any amounts on deposit in the Group I Pre-Funding Sub-Account as of
the first day of the calendar month preceding the month in which the
Distribution Date occurs and (y) a fraction, the numerator of which is thirty
(30) and the denominator of which is the actual number of days elapsed in the
related Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC II Remittance Rate on REMIC II Regular Interest II-LT1GRP, weighted on
the basis of the Uncertificated Balance of such REMIC II Regular Interest.
With respect to the Class A-2 Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Group II
Mortgage Loans, weighted based on their Stated Principal Balances and any
amounts on deposit in the Group II Pre-Funding Sub-Account as of the first day
of the calendar month preceding the month in which the Distribution Date occurs
and (y) a fraction, the numerator of which is thirty (30) and the denominator of
which is the actual number of days elapsed in the related Interest Accrual
Period. For federal income tax purposes, the economic equivalent of such rate
shall be expressed as the weighted average of (adjusted for the actual number of
days elapsed in the related Interest Accrual Period) the REMIC II Remittance
Rate on REMIC II Regular Interest II-LT2GRP, weighted on the basis of the
Uncertificated Balance of such REMIC II Regular Interest.
With respect to the Mezzanine Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Mortgage
Loans, weighted in proportion to the results of subtracting from the aggregate
Stated Principal Balance of the sum of each of (i) the Group I Mortgage Loans
and any amounts on deposit in the Group I Pre-Funding Sub-Account and (ii) the
Group II Mortgage Loans and any amounts on deposit in the Group II Pre-Funding
Sub-Account, as of the first day of the calendar month preceding the month in
which the Distribution Date occurs, the Certificate Principal Balance of the
related Class A Certificates and (y) a fraction, the numerator of which is
thirty (30) and the denominator of which is the actual number of days elapsed in
the related Interest Accrual Period. For federal income tax purposes, the
economic equivalent of such rate shall be expressed as the weighted average of
(adjusted for the actual number of days elapsed in the related Interest Accrual
Period) the REMIC II Remittance Rates on (a) REMIC II Regular Interest
II-LT1SUB, subject to a cap and a floor equal to the weighted average of the
REMIC II Remittance Rate on REMIC II Regular Interest LT1GRP, and (b) REMIC II
Regular Interest II-LT2SUB, subject to a cap and a floor equal to the weighted
average of the REMIC II Remittance Rate on REMIC II Regular Interest LT2GRP,
weighted on the basis of the Uncertificated Balance of each such REMIC II
Regular Interest.
With respect to the Class B Certificates and any Distribution
Date, a rate per annum equal to the product of (x) the weighted average of the
Expense Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted
in proportion to the results of subtracting from the aggregate Stated Principal
Balance of the sum of each of (i) the Group I Mortgage Loans and any amounts on
deposit in the Group I Pre-Funding Sub-Account and (ii) the Group II Mortgage
Loans and any amounts on deposit in the Group II Pre-Funding Sub-Account, as of
the first day of the calendar month preceding the month in which the
Distribution Date occurs, the Certificate Principal Balance of the related Class
A Certificates and (y) a fraction, the numerator of which is thirty (30) and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC II Remittance Rates on (a) REMIC II Regular Interest II-LT1SUB,
subject to a cap and a floor equal to the weighted average of the REMIC II
Remittance Rate on REMIC II Regular Interest LT1GRP, and (b) REMIC II Regular
Interest II-LT2SUB, subject to a cap and a floor equal to the weighted average
of the REMIC II Remittance Rate on REMIC II Regular Interest LT2GRP, weighted on
the basis of the Uncertificated Balance of each such REMIC II Regular Interest.
"Net WAC Rate Carryover Amount": With respect to any Class A
Certificate, Mezzanine Certificate or Class B Certificate and any Distribution
Date on which the Pass-Through Rate is limited to the applicable Net WAC
Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the
amount of interest such Class would have been entitled to receive on such
Distribution Date if the applicable Net WAC Pass-Through Rate would not have
been applicable to such Class on such Distribution Date over (y) the amount of
interest paid to such Class on such Distribution Date at the applicable Net WAC
Pass-Through Rate plus (ii) the related Net WAC Rate Carryover Amount for the
previous Distribution Date not previously distributed to such Class together
with interest thereon at a rate equal to the Pass-Through Rate for such Class
for the most recently ended Interest Accrual Period without taking into account
the applicable Net WAC Pass-Through Rate.
"New Century Mortgage Loans": The Mortgage Loans being
subserviced by the Interim Servicer as of the Closing Date pursuant to the
Interim Servicing Agreement, which will be serviced by Countrywide (or such
other servicer in the event that Countrywide does not purchase the servicing
rights with respect to such Mortgage Loans), from and after the Servicing
Transfer Date pursuant to the terms of this Agreement as specified on the
Mortgage Loan Schedule.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.
"Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the related Servicer, the Interim Servicer
or a successor to the related Servicer or Interim Servicer (including the Master
Servicer) will not or, in the case of a proposed P&I Advance, would not be
ultimately recoverable from related Late Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.
"Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the related Servicer or
the Interim Servicer, will not or, in the case of a proposed Servicing Advance,
would not be ultimately recoverable from related Late Collections, Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein or in the Interim Servicing Agreement.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class CE-1 Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC II Regular
Interests (other than REMIC II Regular Interest II-LTP) for such Distribution
Date. As of the Closing Date, the Notional Amount of the Class CE-1 Certificates
is equal to $12,409,496.84.
With respect to the Class CE-2 Certificates and any
Distribution Date, the Notional Amount of the REMIC II Regular Interest II-LTCE2
for such Distribution Date.
With respect to REMIC II Regular Interest II-LTCE2 and any
Distribution Date, the Notional Amount of the REMIC I Regular Interest LTCE2 for
such Distribution Date.
With respect to REMIC I Regular Interest LTCE2 and any
Distribution Date, the sum of the aggregate principal balances of the Ocwen
Mortgage Loans and the WMC Mortgage Loans (provided Ocwen and WMC are servicing
such Mortgage Loans) for such Distribution Date.
"Ocwen": Ocwen Federal Bank FSB or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Ocwen Mortgage Loans.
"Ocwen Mortgage Loans": Those Mortgage Loans serviced by Ocwen
pursuant to the terms of this Agreement as specified on the Mortgage Loan
Schedule.
"Ocwen Servicing Fee Rate": The rate set forth in a separate
letter agreement among Ocwen, the Depositor, the Trustee, the Master Servicer
and the Securities Administrator.
"Offered Certificates": The Class A Certificates and the
Mezzanine Certificates, collectively.
"Officer's Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the related Servicer, the
Seller or the Depositor, as applicable.
"One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates, REMIC II Regular Interest
II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II Regular Interest
II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest
II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2,
REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II
Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular
Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1,
REMIC II Regular Interest II-LTB2, REMIC II Regular Interest II-LTB3 and any
Interest Accrual Period therefor, the rate determined by the Securities
Administrator on the related Interest Determination Date on the basis of the
offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Securities
Administrator will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If on such Interest Determination
Date, two or more Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.
"One-Month LIBOR Pass-Through Rate": With respect to the Class
A-1A Certificates and, for purposes of the definition of "Marker Rate", REMIC II
Regular Interest II-LTA1A, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.
With respect to the Class A-1B Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA1B, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class A-2A Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA2A, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class A-2B Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA2B, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class A-2C Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTA2C, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM1, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM2, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM3, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM4, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM5, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM6, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-7 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM7, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-8 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM8, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-9 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM9, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-10 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTM10, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTB1, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTB2, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
With respect to the Class B-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC II Regular Interest II-LTB3, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor, the related Servicer,
the Securities Administrator or the Master Servicer, acceptable to the Trustee,
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel.
"Optional Termination Date": The Distribution Date on which
the aggregate principal balance of the Mortgage Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is reduced to less than or equal
to 10% of the sum of (i) the aggregate principal balance of the Mortgage Loans
as of the Cut-off Date and (ii) the Original Pre-Funded Amount.
"Original Group I Pre-Funded Amount": The amount deposited by
the Depositor in the Group I Pre-Funding Sub-Account on the Closing Date, which
amount is $150,155,255.42.
"Original Group II Pre-Funded Amount": The amount deposited by
the Depositor in the Group II Pre-Funding Sub-Account on the Closing Date, which
amount is $170,482,144.27.
"Original Pre-Funded Amount": The sum of the Original Group I
Pre-Funded Amount and the Original Group II Pre-Funded Amount.
"Originators": The Interim Servicer, the Interim Subservicer
and various other originators (each, an "Originator").
"Overcollateralization Amount": With respect to any
Distribution Date, the excess, if any, of (a) the sum of (i) the aggregate
Stated Principal Balances of the Mortgage Loans (including any Subsequent
Mortgage Loans transferred to the Trust) and REO Properties immediately
following such Distribution Date and (ii) any funds on deposit in the
Pre-Funding Account as of the related Determination Date (exclusive of any
investment income therein) over (b) the sum of the aggregate Certificate
Principal Balances of the Class A Certificates, the Mezzanine Certificates, the
Class B Certificates and the Class P Certificates as of such Distribution Date
(after taking into account the payment of the Principal Remittance Amount on
such Distribution Date).
"Overcollateralization Increase Amount": With respect to the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates
and any Distribution Date is any amount of Net Monthly Excess Cashflow actually
applied as an accelerated payment of principal to the extent the Required
Overcollateralization Amount exceeds the Overcollateralization Amount.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, is the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided however that on any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the related Servicer in respect of any Determination Date
pursuant to Section 5.03 of this Agreement, an Advance Financing Person pursuant
to Section 3.25 of this Agreement or in respect of any Distribution Date by a
successor Servicer (including the Master Servicer) pursuant to Section 8.02 of
this Agreement, or the Interim Servicer pursuant to the Interim Servicing
Agreement (which advances shall not include principal or interest shortfalls due
to bankruptcy proceedings or application of the Relief Act or similar state or
local laws).
"Pass-Through Rate": With respect to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, and any Distribution
Date, a rate per annum equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate for such Distribution Date and (ii) the related Net WAC
Pass-Through Rate for such Distribution Date.
With respect to the Class CE-1 Certificates and any
Distribution Date, a rate per annum equal to the percentage equivalent of a
fraction, the numerator of which is the sum of the amounts calculated pursuant
to clauses (i) through (xx) below, and the denominator of which is the aggregate
Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular
Interest II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II Regular Interest
II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest
II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2,
REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II
Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular
Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1,
REMIC II Regular Interest II-LTB2, REMIC II Regular Interest II-LTB3 and REMIC
II Regular Interest II-LTZZ. For purposes of calculating the Pass-Through Rate
for the Class CE-1 Certificates, the numerator is equal to the sum of the
following components:
(i) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC II Regular Interest II-LTAA;
(ii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTA1A minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTA1A;
(iii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTA1B minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTA1B;
(iv) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTA2A minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTA2A;
(v) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LTA2B minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC II Regular Interest II-LTA2B;
(vi) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTA2C minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTA2C;
(vii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM1;
(viii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM2;
(ix) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM3;
(x) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC II Regular Interest II-LTM4;
(xi) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM5 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM5;
(xii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM6 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM6;
(xiii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM7 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM7;
(xiv) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM8 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM8;
(xv) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM9 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM9;
(xvi) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTM10 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTM10;
(xvii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTB1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTB1;
(xviii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTB2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTB2;
(xix) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTB3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTB3;
(xx) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LTZZ minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC II Regular Interest II-LTZZ; and
(xxi) 100% of the interest on REMIC II Regular Interest
II-LTP.
With respect to the Class CE-2 Certificates and any
Distribution Date, an amount equal to 100% of the amounts distributed on REMIC
II Regular Interest II-LTCE2.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. The Class A Certificates, the Mezzanine Certificates
and the Class B Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $25,000 and
integral multiples of $1.00 in excess thereof. The Class P Certificates are
issuable only in Percentage Interests corresponding to initial Certificate
Principal Balances of $20 and integral multiples thereof. The Class CE-1
Certificates and Class CE-2 Certificates are issuable only in minimum Percentage
Interests corresponding to minimum initial Notional Balances of $10,000 and
integral multiples of $1.00 in excess thereof; provided, however, that a single
Certificate of each such Class of Certificates may be issued having a Percentage
Interest corresponding to the remainder of the aggregate initial Notional
Balance of such Class or to an otherwise authorized denomination for such Class
plus such remainder. With respect to any Residual Certificate, the undivided
percentage ownership in such Class evidenced by such Certificate, as set forth
on the face of such Certificate. The Residual Certificates are issuable in
Percentage Interests of 20% and integral multiples of 5% in excess thereof.
"Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Adjustable Rate Mortgage Loan may increase or decrease (without
regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such
Adjustment Date from the Mortgage Rate in effect immediately prior to such
Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, a Servicer, the Master Servicer,
the Trustee or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company (or, if the only Rating Agency is S&P, in the case of
the principal depository institution in a depository institution
holding company, debt obligations of the depository institution holding
company) or its ultimate parent has a short-term uninsured debt rating
in the highest available rating category of Xxxxx'x, Fitch and S&P and
provided that each such investment has an original maturity of no more
than 365 days; and provided further that, if the only Rating Agency is
S&P and if the depository or trust company is a principal subsidiary of
a bank holding company and the debt obligations of such subsidiary are
not separately rated, the applicable rating shall be that of the bank
holding company; and, provided further that, if the original maturity
of such short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of S&P
if S&P is the Rating Agency; and (B) any other demand or time deposit
or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated A-1+ or higher by S&P, F-1 or higher by Fitch and A2
or higher by Moody's, provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type described in
clause (i) above and must (A) be valued daily at current market prices
plus accrued interest, (B) pursuant to such valuation, be equal, at all
times, to 105% of the cash transferred by a party in exchange for such
collateral and (C) be delivered to such party or, if such party is
supplying the collateral, an agent for such party, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each
Rating Agency that rates such securities in its highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds that have been rated "AAA" by
Fitch (if rated by Fitch), "AAA" by S&P or "Aaa" by Moody's including
any such money market fund managed or advised by the Master Servicer,
the Trustee or any of their Affiliates; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies as
a permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, limited liability company,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Xxxxx plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Pre-Funding Account": The account established and maintained
pursuant to Section 3.27.
"Pre-Funding Period": The period from the Closing Date until
the earlier of (i) the date on which the amount on deposit in the Pre-Funding
Account (exclusive of investment income) is reduced to zero or (ii) September
27, 2005.
"Prepayment Assumption": A prepayment rate for the Adjustable
Rate Mortgage Loans of 28% CPR and a prepayment rate of 100% PPC for the fixed
rate Mortgage Loans. The Prepayment Assumption is used solely for determining
the accrual of original issue discount on the Certificates for federal income
tax purposes. A CPR (or Constant Prepayment Rate) represents an annualized
constant assumed rate of prepayment each month of a pool of mortgage loans
relative to its outstanding principal balance for the life of such pool. A 100%
PPC represents (i) a per annum prepayment rate of 4% of the then outstanding
principal balance of the fixed rate Mortgage Loans in the first month of the
life of such Mortgage Loans, (ii) an additional 1.72727% per annum in each month
thereafter through the eleventh month and (iii) a constant prepayment rate of
23% per annum beginning in the twelfth month and in each month thereafter during
the life of the fixed rate Mortgage Loans.
"Prepayment Charge": With respect to any Principal Prepayment,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related Mortgage Note.
"Prepayment Charge Schedule": As of any date, the list of
Mortgage Loans providing for a Prepayment Charge included in the Trust Fund on
such date, attached hereto as Schedule 2 (including the prepayment charge
summary attached thereto). The Depositor shall deliver or cause the delivery of
the Prepayment Charge Schedule to the related Servicer, the Master Servicer and
the Trustee on the Closing Date. The Prepayment Charge Schedule shall set forth
the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on
the related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related
Mortgage Loan; and
(vi) the Stated Principal Balance of the related Mortgage Loan
as of the Cut-off Date.
"Prepayment Interest Excess": With respect to each Mortgage
Loan that was the subject of a Principal Prepayment in full during the portion
of the related Prepayment Period occurring between the first day of the calendar
month in which such Distribution Date occurs and the Determination Date of the
calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. The related Servicer may withdraw such Prepayment Interest Excess
from the related Collection Account in accordance with Section 3.09(a)(x).
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each such Mortgage Loan that was the subject of a
Principal Prepayment in full or in part during the portion of the related
Prepayment Period occurring between the first day of the related Prepayment
Period and the last day of the calendar month preceding the month in which such
Distribution Date occurs that was applied by the related Servicer or the Interim
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the calendar month preceding such
Distribution Date. The obligations of the related Servicer and the Master
Servicer in respect of any Prepayment Interest Shortfall are set forth in
Section 3.22 and Section 4.18, respectively of this Agreement. The obligations
of the Interim Servicer in respect of any Prepayment Interest Shortfalls are set
forth in the Interim Servicing Agreement.
"Prepayment Period": With respect to any Distribution Date and
(i) Saxon and Ocwen, the calendar month preceding the month in which the related
Distribution Date occurs with respect to prepayments in part, and the period
beginning on the sixteenth (16th) day of the month preceding the related
Distribution Date and ending on the fifteenth (15th) day of the month in which
such Distribution Date occurs with respect to prepayments in full, (ii)
Countrywide, the period beginning on the sixteenth (16th) day of the month
preceding the related Distribution Date and ending on the fifteenth (15th) day
of the month in which such Distribution Date occurs with respect to prepayments
in full and in part, and (iii) the Interim Servicer, as set forth in the Interim
Servicing Agreement.
"Principal Prepayment": Any voluntary payment of principal
made by the Mortgagor on a Mortgage Loan which is received in advance of its
scheduled Due Date and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment.
"Principal Distribution Amount": With respect to any
Distribution Date is the sum of the Group I Principal Distribution Amount and
the Group II Principal Distribution Amount.
"Principal Remittance Amount": With respect to any
Distribution Date is the sum of the Group I Principal Remittance Amount and the
Group II Principal Remittance Amount.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.13(c) or Section 10.01, and as confirmed by a certification of a Servicing
Officer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or a P&I Advance by the related Servicer or the
Interim Servicer, which payment or P&I Advance had as of the date of purchase
been distributed pursuant to Section 5.01, through the end of the calendar month
in which the purchase is to be effected and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Net Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or a P&I Advance by the related Servicer
or the Interim Servicer through the end of the calendar month immediately
preceding the calendar month in which such REO Property was acquired, plus (2)
REO Imputed Interest for such REO Property for each calendar month commencing
with the calendar month in which such REO Property was acquired and ending with
the calendar month in which such purchase is to be effected, net of the total of
all net rental income, Insurance Proceeds, Liquidation Proceeds and P&I Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 5.01, (iii) any unreimbursed Servicing Advances and
P&I Advances (including Nonrecoverable P&I Advances and Nonrecoverable Servicing
Advances) and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the related Collection
Account pursuant to Section 3.09(a)(ix) and Section 3.13(b) and (v) in the case
of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the related Servicer, the Interim
Servicer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation and any costs and damages incurred by the Trust Fund and the
Trustee in connection with any violation by any such Mortgage Loan of any
predatory or abusive lending law.
"QIB": As defined in Section 6.01(c).
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) if the mortgage loan is an Adjustable
Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) if the mortgage loan is an
Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the mortgage loan is
an Adjustable Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin
of the Deleted Mortgage Loan, (vi) if the mortgage loan is an Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) be secured by the same lien priority on the
related Mortgaged Property as the Deleted Loan, (xi) have a credit grade at
least equal to the credit grading assigned on the Deleted Mortgage Loan, (xii)
be a "qualified mortgage" as defined in the REMIC Provisions and (xiii) conform
to each representation and warranty set forth in Section 6 of the Mortgage Loan
Purchase Agreement applicable to the Deleted Mortgage Loan. In the event that
one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate principal balances, the Mortgage Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage Rates,
the terms described in clause (vii) hereof shall be determined on the basis of
weighted average remaining term to maturity, the Loan-to-Value Ratios described
in clause (ix) hereof shall be satisfied as to each such mortgage loan, the
credit grades described in clause (x) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.
"Rating Agency or Rating Agencies": Fitch, Xxxxx'x and S&P or
their successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating agencies, or other comparable Persons, designated by the Depositor,
notice of which designation shall be given to the Trustee and the Servicers.
"Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero), as reported by the related Servicer to the Master Servicer (in
substantially the form of Schedule 4 hereto) or by the Interim Servicer to the
Master Servicer pursuant to the Interim Servicing Agreement, equal to (i) the
unpaid principal balance of such Mortgage Loan as of the commencement of the
calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) any amounts
previously withdrawn from the related Collection Account or Custodial Account in
respect of such Mortgage Loan pursuant to Section 3.09(a)(ix) and Section
3.13(b) of this Agreement or pursuant to the Interim Servicing Agreement, minus
(iv) the proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Servicers or the Interim Servicer with
respect to such Mortgage Loan pursuant to Section 3.09(a)(iii) of this Agreement
or pursuant to the Interim Servicing Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the related Collection Account or
Custodial Account in respect of the related Mortgage Loan pursuant to Section
3.09(a)(ix) and Section 3.13(b) of this Agreement or pursuant to the Interim
Servicing Agreement, minus (v) the aggregate of all P&I Advances and Servicing
Advances (in the case of Servicing Advances, without duplication of amounts
netted out of the rental income, Insurance Proceeds and Liquidation Proceeds
described in clause (vi) below) made by the related Servicer or Interim Servicer
in respect of such REO Property or the related Mortgage Loan for which the
related Servicer or the Interim Servicer has been or, in connection with such
Final Recovery Determination, will be reimbursed pursuant to Section 3.21 of
this Agreement or pursuant to the Interim Servicing Agreement out of rental
income, Insurance Proceeds and Liquidation Proceeds received in respect of such
REO Property, minus (vi) the total of all net rental income, Insurance Proceeds
and Liquidation Proceeds received in respect of such REO Property that has been,
or in connection with such Final Recovery Determination, will be transferred to
the Distribution Account pursuant to Section 3.21 of this Agreement or pursuant
to the Interim Servicing Agreement.
With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, 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, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected Monthly Payment.
To the extent the related Servicer or the Interim Servicer
receives Subsequent Recoveries, with respect to any Mortgage Loan, the amount of
Realized Loss with respect to that Mortgage Loan will be reduced to the extent
such recoveries are applied to reduce the Certificate Principal Balance of any
Class on any Distribution Date.
"Record Date": With respect to each Distribution Date and the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates,
the Business Day immediately preceding such Distribution Date for so long as
such Certificates are Book-Entry Certificates. With respect to each Distribution
Date and any other Class of Certificates, including any Definitive Certificates,
the last day of the calendar month immediately preceding the month in which such
Distribution Date occurs.
"Reference Banks": Xxxxxxx'x Bank PLC, The Tokyo Mitsubishi
Bank and National Westminster Bank PLC and their successors in interest;
provided, however, that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Securities
Administrator which are engaged in transactions in Eurodollar deposits in the
International Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of or under common control with
the Depositor or any Affiliate thereof and (iii) which have been designated as
such by the Securities Administrator.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class B Certificate, Class CE-1 Certificate, Class CE-2 Certificate
or Class P Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Regulation S Temporary Global Certificate": As defined in
Section 6.01(c).
"Regulation S Permanent Global Certificate": As defined in
Section 6.01(c).
"Release Date": The fortieth (40th) day after the later of (i)
commencement of the offering of the Class B Certificates and (ii) the Closing
Date.
"Relief Act": The Servicemembers Civil Relief Act, as amended,
or similar state or local laws.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby), the Interim Servicer Assignment Agreement
and the Interim Servicing Agreement, and (v) the Custodial Account, the
Collection Accounts, the Distribution Account and any REO Account, and such
assets that are deposited therein from time to time and any investments thereof,
together with any and all income, proceeds and payments with respect thereto.
Notwithstanding the foregoing, however, REMIC I specifically excludes (i) all
payments and other collections of principal and interest due on the Mortgage
Loans on or before the Cut-off Date and all Prepayment Charges payable in
connection with Principal Prepayments made before the Cut-off Date; (ii) the
Reserve Fund and any amounts on deposit therein from time to time and any
proceeds thereof; (iii) the Cap Contracts; and (iv) the Pre-Funding Account.
"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest LT1 and REMIC I Regular Interest LTP, and (i) for the first three
Distribution Dates, the weighted average of the Expense Adjusted Mortgage Rates
of the Initial Group I Mortgage Loans and (ii) thereafter, the weighted average
of the Expense Adjusted Mortgage Rates of the Group I Mortgage Loans. With
respect to REMIC I Regular Interest LT2, and (i) for the first three
Distribution Dates, the weighted average of the Expense Adjusted Mortgage Rates
of the Initial Group II Mortgage Loans and (ii) thereafter, the weighted average
of the Expense Adjusted Mortgage Rates of the Group II Mortgage Loans. With
respect to REMIC I Regular Interest LT1PF and (i) the first three Distribution
Dates, 0.00% and (ii) thereafter, the weighted average of the Expense Adjusted
Mortgage Rates of the Group I Mortgage Loans. With respect to REMIC I Regular
Interest LT2PF and (i) the first three Distribution Dates, 0.00% and (ii)
thereafter, the weighted average of the Expense Adjusted Mortgage Rates of the
Group II Mortgage Loans. With respect to REMIC I Regular Interest LTCE2, a
weighted average per annum rate, determined on a Mortgage Loan by Mortgage Loan
basis (and solely with respect to the Ocwen Mortgage Loans and the WMC Mortgage
Loans), equal to the excess, if any, of (i) the excess of (a) the Mortgage Rate
for each such Mortgage Loan over (b) the sum of the (x) Ocwen Servicing Fee Rate
or the WCM Servicing Fee Rate, as applicable, (y) Master Servicing Fee Rate and
(z) Credit Risk Management Fee Rate, over (ii) the Net Mortgage Rate of each
such Mortgage Loan.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit
of the REMIC II Regular Interests pursuant to Section 2.07, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC II Interest Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LTAA minus the Marker Rate, divided by (b) 12.
"REMIC II Marker Allocation Percentage": 0.50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1A, REMIC
II Regular Interest II-LTA1B, REMIC II Regular Interest II-LTA2A, REMIC II
Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular
Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest
II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5,
REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II
Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular
Interest II-LTM10, REMIC II Regular Interest II-LTB1, REMIC II Regular Interest
II-LTB2, REMIC II Regular Interest II-LTB3, REMIC II Regular Interest II-LTZZ
and REMIC II Regular Interest II-LTP.
"REMIC II Overcollateralization Amount": With respect to any
date of determination, (i) 0.50% of the aggregate Uncertificated Balances of the
REMIC II Regular Interests (other than the REMIC II Regular Interest II-LTP)
minus (ii) the aggregate of the Uncertificated Balances of REMIC II Regular
Interest II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II Regular Interest
II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest
II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2,
REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II
Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular
Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1,
REMIC II Regular Interest II-LTB2 and REMIC II Regular Interest II-LTB3, in each
case as of such date of determination.
"REMIC II Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to (a) the product of (i) 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC II Regular Interest II-LTA1A,
REMIC II Regular Interest II-LTA1B, REMIC II Regular Interest II-LTA2A, REMIC II
Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular
Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest
II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5,
REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II
Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular
Interest II-LTM10, REMIC II Regular Interest II-LTB1, REMIC II Regular Interest
II-LTB2, REMIC II Regular Interest II-LTB3 and the denominator of which is the
aggregate of the Uncertificated Balances of REMIC II Regular Interest II-LTA1A,
REMIC II Regular Interest II-LTA1B, REMIC II Regular Interest II-LTA2A, REMIC II
Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular
Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest
II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5,
REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II
Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular
Interest II-LTM10, REMIC II Regular Interest II-LTB1, REMIC II Regular Interest
II-LTB2, REMIC II Regular Interest II-LTB3 and REMIC II Regular Interest
II-LTZZ.
"REMIC II Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a "regular interest" in REMIC II. Each REMIC II Regular Interest
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC II Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC II Regular Interest II-LTAA": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTAA
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTA1A": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTA1A
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTA1B": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTA1B
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTA2A": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTA2A
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTA2B": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTA2B
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTA2C": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTA2C
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTB1": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTB1
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTB2": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTB2
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTB3": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTB3
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTCE2": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTCE2
shall accrue interest as set forth in the Preliminary Statement hereto. REMIC 2
Regular Interest II-LTCE2 shall not be entitled to distributions of principal.
"REMIC II Regular Interest II-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM1
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM2
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM3
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM4
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM5": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM5
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM6": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM6
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM7": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM7
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM8": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM8
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM9": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM9
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTM10": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTM10
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTP
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTXX": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTXX
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTZZ": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTZZ
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
II-LT1SUB shall accrue interest at the related REMIC II Remittance Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
II-LT1GRP shall accrue interest at the related REMIC II Remittance Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
II-LT2SUB shall accrue interest at the related REMIC II Remittance Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
II-LT2GRP shall accrue interest at the related REMIC II Remittance Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Remittance Rate": With respect to REMIC II Regular
Interest II-LTAA, REMIC II Regular Interest II-LTA1A, REMIC II Regular Interest
II-LTA1B, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest
II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTM1,
REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II
Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular
Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest
II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10,
REMIC II Regular Interest II-LTB1, REMIC II Regular Interest II-LTB2, REMIC II
Regular Interest II-LTB3, REMIC II Regular Interest II-LTZZ, REMIC II Regular
Interest II-LTP, REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest
II-LT2SUB and REMIC II Regular Interest II-LTXX, the weighted average of the
REMIC I Remittance Rate on the REMIC I Regular Interests, weighted on the basis
of the Uncertificated Balance of each such REMIC I Regular Interest. With
respect to REMIC II Regular Interest II-1GRP, the weighted average of the REMIC
I Remittance Rate on REMIC I Regular Interest LT1, REMIC I Regular Interest
LT1PF and REMIC I Regular Interest LTP, weighted on the basis of the
Uncertificated Balance of each such REMIC I Regular Interest. With respect REMIC
II Regular Interest II-2GRP, the weighted average of the REMIC I Remittance Rate
on REMIC I Regular Interest LT2 and REMIC I Regular Interest LT2PF, weighted on
the basis of the Uncertificated Balance of each such REMIC I Regular Interest.
REMIC II Regular Interest II-LTCE2 will not have a REMIC II Remittance Rate, but
will be entitled to 100% of the amounts distributed on REMIC I Regular Interest
LTCE2.
"REMIC II Sub WAC Allocation Percentage": 0.50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT1GRP,
REMIC II Regular Interest II-LT2SUB, REMIC II Regular Interest II-LT2GRP and
REMIC II Regular Interest II-LTXX.
"REMIC II Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each REMIC II Regular Interest ending with the
designation "SUB,", equal to the ratio between, with respect to each such REMIC
II Regular Interest, the excess of (x) the aggregate Stated Principal Balance of
the Group I Mortgage Loans or Group II Mortgage Loans, as applicable over (y)
the current Certificate Principal Balance of related Class A Certificates.
"REMIC II Required Overcollateralization Amount": 0.50% of the
Required Overcollateralization Amount.
"REMIC III": The segregated pool of assets consisting of all
of the REMIC II Regular Interests conveyed in trust to the Trustee, for the
benefit of the REMIC III Certificateholders pursuant to Section 2.07, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
"REMIC III Certificate": Any Regular Certificate or Class R
Certificate.
"REMIC III Certificateholder": The Holder of any REMIC III
Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
"REMIC Regular Interest": Any REMIC I Regular Interest or
REMIC II Regular Interest.
"REMIC Remittance Rate": The REMIC I Remittance Rate or the
REMIC II Remittance Rate.
"Remittance Report": A report by the related Servicer pursuant
to Section 5.03(a) of this Agreement or the Interim Servicer pursuant to the
Interim Servicing Agreement.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": The account or accounts maintained, or caused
to be maintained, by the related Servicer in respect of an REO Property pursuant
to Section 3.21 of this Agreement or by the Interim Servicer pursuant to the
Interim Servicing Agreement.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 of this Agreement that is allocable to such REO Property) or otherwise,
net of any portion of such amounts (i) payable in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the related Servicer pursuant to Section 3.21(d) of this
Agreement or the Interim Servicer pursuant to the Interim Servicing Agreement
for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and P&I Advances in respect of such REO Property
or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of
such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the related
Servicer or its nominee on behalf of REMIC I through foreclosure or deed-in-lieu
of foreclosure, as described in Section 3.21 of this Agreement or the Interim
Servicer pursuant to the Interim Servicing Agreement.
"Required Overcollateralization Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 0.85% and
(B) the sum of (i) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date and (ii) the Original Pre-Funded Amount, (ii) on or after the
Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
1.70% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) an amount equal to the product of (A)
0.50% and (B) the sum of (i) the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date and (ii) the Original Pre-Funded Amount, and (iii)
on or after the Stepdown Date and a Trigger Event is in effect, the Required
Overcollateralization Amount for the immediately preceding Distribution Date.
Notwithstanding the foregoing, on and after any Distribution Date following the
reduction of the aggregate Certificate Principal Balance of the Class A
Certificates, Mezzanine Certificates and Class B Certificates to zero, the
Required Overcollateralization Amount shall be zero.
"Reserve Fund": A fund created pursuant to Section 3.24 which
shall be an asset of the Trust Fund but which shall not be an asset of any Trust
REMIC.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Securities Administrator
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates
which New York City banks selected by the Securities Administrator, after
consultation with the Depositor, are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Securities Administrator
can determine no such arithmetic mean, the lowest one-month U.S. dollar lending
rate which New York City banks selected by the Securities Administrator are
quoting on such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Xxxxxx Xxx eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.
"Residual Certificate": Any one of the Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any officer of the Trustee having direct responsibility for the administration
of this Agreement and, with respect to a particular matter, to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rule 144A": As defined in Section 6.01(c).
"Saxon": Saxon Mortgage Services, Inc. or any successor
thereto appointed hereunder in connection with the servicing and administration
of the Saxon Mortgage Loans.
"Saxon Mortgage Loans": Those Mortgage Loans serviced by Saxon
pursuant to the terms of this Agreement as specified on the Mortgage Loan
Schedule, which include the WMC Mortgage Loans.
"S&P": Standard and Poor's, a division of the XxXxxx-Xxxx
Companies, Inc.
"Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of REO Property for all previously ended calendar months; and (b) as of
any Due Date subsequent to the occurrence of a Liquidation Event with respect to
such REO Property, zero.
"Securities Act": The Securities Act of 1933, as amended.
"Securities Administrator": As of the Closing Date, Xxxxx
Fargo Bank, N.A. and thereafter, its respective successors in interest that meet
the qualifications of this Agreement. The Securities Administrator and the
Master Servicer shall at all times be the same Person or Affiliates.
"Seller": DB Structured Products, Inc. or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A Certificates.
"Sequential Trigger Event": A Sequential Trigger Event is in
effect on any Distribution Date if, before the 25th Distribution Date, the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Due Period (after giving effect to scheduled payments
received or advanced on or before the related Determination Date and principal
prepayments received during the related Prepayment Period) divided by the sum of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date
exceeds 1.25%, or if, on or after the 25th Distribution Date, a Trigger Event is
in effect.
"Servicer": Countrywide from and after the Servicing Transfer
Date, Saxon or Ocwen, or any successor thereto appointed hereunder in connection
with the servicing and administration of the related Mortgage Loans
(collectively, the "Servicers").
"Servicer Event of Default": One or more of the events
described in Section 8.01(a).
"Servicer Remittance Date": With respect to any Distribution
Date, and (i) Ocwen, by 12:00 p.m. New York time on the 22nd day of the month in
which such Distribution Date occurs; provided that if such 22nd day of a given
month is not a Business Day, the Servicer Remittance Date for such month shall
be the Business Day immediately preceding such 22nd day, (ii) Countrywide, by
1:00 p.m. New York time on the 22nd day of the month in which such Distribution
Date occurs; provided that if such 22nd day of a given month is not a Business
Day, the Servicer Remittance Date for such month shall be the Business Day
immediately preceding such 22nd day, and (iii) Saxon, by 12:00 p.m. on the 21st
day of each month; provided that if the 21st day of a given month is a Saturday,
the Servicer Remittance Date shall be the immediately preceding Business Day and
if the 21st day of a given month is a Sunday or otherwise not a Business Day
(except for Saturdays), the Servicer Remittance Date shall be the next Business
Day.
"Servicer Report": A report (substantially in the form of
Schedule 5 hereto) or otherwise in form and substance acceptable to the Master
Servicer and Securities Administrator on an electronic data file or tape
prepared by the related Servicer pursuant to Section 5.03(a) of this Agreement
or the Interim Servicer pursuant to the Interim Servicing Agreement, as
applicable, with such additions, deletions and modifications as agreed to by the
Master Servicer, the Securities Administrator and the related Servicer or the
Interim Servicer.
"Servicing Advances": The customary and reasonable
"out-of-pocket" costs and expenses incurred prior to or on or after the Cut-off
Date (the amounts incurred prior to the Cut-off Date or prior to the Subsequent
Cut-off Date shall be identified on the Servicing Advance Schedule by (a) the
related Servicer or the Interim Servicer with respect to any Mortgage Loans or
Subsequent Mortgage Loans that were transferred to such Servicer or Interim
Servicer prior to the Cut-off Date or prior to the Subsequent Cut-off Date
and/or (b) the Depositor with respect to any Mortgage Loans or Subsequent
Mortgage Loans that were transferred to the related Servicer or Interim Servicer
after the Cut-off Date or the Subsequent Cut-off Date, as applicable) by such
Servicer or the Interim Servicer in connection with a default, delinquency or
other unanticipated event by such Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including but not limited to foreclosures, in respect of a
particular Mortgage Loan, including any expenses incurred in relation to any
such proceedings that result from the Mortgage Loan being registered on the
MERS(R) System, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property, (iv) the performance of its
obligations under Section 3.01, Section 3.07, Section 3.11, Section 3.13 and
Section 3.21 of this Agreement and (v) obtaining any legal documentation
required to be included in the Mortgage File and/or correcting any outstanding
title issues (i.e., any lien or encumbrance on the Mortgaged Property that
prevents the effective enforcement of the intended lien position) reasonably
necessary for the related Servicer or the Interim Servicer to perform its
obligations under this Agreement or the Interim Servicing Agreement. Servicing
Advances also include any reasonable "out-of-pocket" cost and expenses
(including legal fees) incurred by the related Servicer or the Interim Servicer
in connection with executing and recording instruments of satisfaction, deeds of
reconveyance or Assignments to the extent not recovered from the Mortgagor or
otherwise payable under this Agreement. Neither the Servicers nor the Interim
Servicer shall be required to make any Nonrecoverable Servicing Advances.
"Servicing Advance Schedule": With respect to any Servicing
Advances incurred prior to the Cut-off Date or prior to the Subsequent Cut-off
Date, the schedule or schedules provided by (a) the related Servicer or the
Interim Servicer with respect to any Mortgage Loans or Subsequent Mortgage Loans
that were transferred to such Servicer or Interim Servicer prior to the Cut-off
Date or prior to the Subsequent Cut-off Date and/or (b) the Depositor with
respect to any Mortgage Loans or Subsequent Mortgage Loans that were transferred
to the related Servicer or Interim Servicer after the Cut-off Date or the
Subsequent Cut-off Date, as applicable, to the Master Servicer and, if such
schedule is provided by the Depositor, the related Servicer, on the earlier of
the date on which such Servicer or the Interim Servicer seeks reimbursement for
a Servicing Advance made by the related Servicer or the Interim Servicer or five
(5) Business Days following the Servicing Transfer Date, which schedule or
schedules shall contain the information set forth on Schedule 6.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one-twelfth of the product of the
Servicing Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month. The Servicing Fee is
payable solely from collections of interest on the Mortgage Loans; provided,
however, that Ocwen shall only be entitled to a portion of the Servicing Fee
calculated at the Ocwen Servicing Fee Rate.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the related Servicer or
the Interim Servicer involved in, or responsible for, the administration and
servicing of Mortgage Loans, whose name and specimen signature appear on a list
of Servicing Officers furnished by the related Servicer or the Interim Servicer
to the Trustee, the Master Servicer, the Securities Administrator and the
Depositor on the Closing Date, as such list may from time to time be amended.
"Servicing Transfer Date": With respect to the New Century
Mortgage Loans, servicing shall transfer to Countrywide (or such other servicer
in the event that Countrywide does not purchase the servicing rights with
respect to the New Century Mortgage Loans) on September 1, 2005 or such other
date agreed to by the Depositor and the Interim Servicer.
"Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.
"Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 11.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the related Servicer or the Interim Servicer or a successor to
such Servicer or the Interim Servicer (including the Master Servicer) and
distributed pursuant to Section 5.01 of this Agreement or pursuant to the
Interim Servicing Agreement on or before such date of determination, (ii) all
Principal Prepayments received after the Cut-off Date, to the extent distributed
pursuant to Section 5.01 of this Agreement on or before such date of
determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by
the related Servicer or the Interim Servicer as recoveries of principal in
accordance with the provisions of Section 3.13 of this Agreement, to the extent
distributed pursuant to Section 5.01 of this Agreement or pursuant to the
Interim Servicing Agreement on or before such date of determination, and (iv)
any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation made during or prior to the Prepayment Period for the most recent
Distribution Date coinciding with or preceding such date of determination; and
(b) as of any date of determination coinciding with or subsequent to the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such Mortgage Loan would be distributed, zero. With respect to any
REO Property: (a) as of any date of determination up to but not including the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, an amount (not less than
zero) equal to the Stated Principal Balance of the related Mortgage Loan as of
the date on which such REO Property was acquired on behalf of REMIC I, minus the
sum of (i) if such REO Property was acquired before the Distribution Date in any
calendar month, the principal portion of the Monthly Payment due on the Due Date
in the calendar month of acquisition, to the extent advanced by the related
Servicer or the Interim Servicer, or a successor to such Servicer or the Interim
Servicer (including the Master Servicer) and distributed pursuant to Section
5.01 of this Agreement, on or before such date of determination and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 of this Agreement on or before such date of determination; and (b)
as of any date of determination coinciding with or subsequent to the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the later to
occur of (x) the Distribution Date occurring in July 2008 and (y) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans, but prior to any distribution of the Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date), is greater than or equal to approximately 42.60% and (ii)
the first Distribution Date on which the aggregate Certificate Principal Balance
of the Class A Certificates has been reduced to zero.
"Subordinate Certificates": Collectively, the Mezzanine
Certificates, the Class B Certificates and the Class CE-1 Certificates.
"Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust pursuant to a Subsequent Transfer Instrument,
the later of (i) first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage Loan.
"Subsequent Group I Mortgage Loan": A Subsequent Mortgage Loan
identified and expected to be purchased by the Trust during the Pre-Funding
Period and assigned to the Group I Mortgage Loans.
"Subsequent Group II Mortgage Loan": A Subsequent Mortgage
Loan identified and expected to be purchased by the Trust during the Pre-Funding
Period and assigned to the Group II Mortgage Loans.
"Subsequent Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.09, such Mortgage Loan being
identified on the Mortgage Loan Schedule attached to a Subsequent Transfer
Instrument.
"Subsequent Mortgage Loan Purchase Agreement": The agreement
between the Depositor and the Seller, regarding the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor.
"Subsequent Recoveries": As of any Distribution Date, amounts
received during the related Prepayment Period by a Servicer or Interim Servicer
specifically related to a defaulted Mortgage Loan or disposition of an REO
Property prior to the related Prepayment Period that resulted in a Realized
Loss, after the liquidation or disposition of such defaulted Mortgage Loan.
"Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
transferred to the Trust Fund.
"Subsequent Transfer Instrument": Each Subsequent Transfer
Instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form attached hereto as Exhibit E, by which
Subsequent Mortgage Loans are transferred to the Trust Fund.
"Sub-Servicer": Any Person with which a Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicers pursuant to Section 3.02 of this Agreement.
"Sub-Servicing Agreement": The written contract between a
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02 of this Agreement.
"Substitution Shortfall Amount": As defined in Section 2.03.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust REMICs under the REMIC Provisions, together
with any and all other information reports or returns that may be required to be
furnished to the Certificateholders or filed with the Internal Revenue Service
or any other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on
the Dow Xxxxx Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 10.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if either (x) the Delinquency Percentage exceeds 35.21% of
the Credit Enhancement Percentage with respect to such Distribution Date or (y)
the aggregate amount of Realized Losses incurred since the Cut-off Date through
the last day of the related Due Period divided by the sum of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date and the Original
Pre-Funded Amount exceeds the applicable percentages set forth below with
respect to such Distribution Date:
DISTRIBUTION DATE PERCENTAGE
----------------- ----------
July 2007 to June 2008.......... 1.25%, plus 1/12 of 1.50% for each month thereafter
July 2008 to June 2009.......... 2.75%, plus 1/12 of 1.75% for each month thereafter
July 2009 to June 2010.......... 4.50%, plus 1/12 of 1.25% for each month thereafter
July 2010 to June 2011.......... 5.75%, plus 1/12 of 0.75% for each month thereafter
July 2011 and thereafter........ 6.50%
"Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2005-HE4, the trust created hereunder.
"Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II, REMIC III and the Pre-Funding Account, the Reserve Fund and any
amounts on deposit therein and any proceeds thereof, and the Cap Contracts.
"Trust REMIC": REMIC I, REMIC II or REMIC III.
"Trustee": HSBC Bank USA, National Association a national
banking association, or its successor in interest, or any successor trustee
appointed as herein provided.
"Uncertificated Balance": The amount of the REMIC Regular
Interests outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC Regular Interest shall equal the amount
set forth in the Preliminary Statement hereto as its initial uncertificated
balance. On each Distribution Date, the Uncertificated Balance of the REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 5.01 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 5.04 and the
Uncertificated Balance of REMIC II Regular Interest II-LTZZ shall be increased
by interest deferrals as provided in Section 5.01(a)(1)(i). The Uncertificated
Balance of each REMIC II Regular Interest shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC Regular
Interest for any Distribution Date, one month's interest at the REMIC Remittance
Rate applicable to such REMIC Regular Interest for such Distribution Date,
accrued on the Uncertificated Balance thereof immediately prior to such
Distribution Date. Uncertificated Interest in respect of the REMIC Regular
Interests shall accrue on the basis of a 360-day year consisting of twelve
30-day months. Uncertificated Interest with respect to each Distribution Date,
as to any REMIC Regular Interest, shall be reduced by an amount equal to the sum
of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.22
or Section 4.18 of this Agreement or pursuant to the Interim Servicing Agreement
and (b) the aggregate amount of any Relief Act Interest Shortfall, if any
allocated, in each case, to such REMIC Regular Interest or REMIC Regular
Interest pursuant to Section 1.02. In addition, Uncertificated Interest with
respect to each Distribution Date, as to any Uncertificated REMIC Regular
Interest, shall be reduced by Realized Losses, if any, allocated to such
Uncertificated REMIC Regular Interest pursuant to Section 1.02 and Section 5.04.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.11.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations)
provided that, for purposes solely of the restrictions on the transfer of any
Class R Certificate, no partnership or other entity treated as a partnership for
United States federal income tax purposes shall be treated as a United States
Person unless all persons that own an interest in such partnership either
directly or through any entity that is not a corporation for United States
federal income tax purposes are required to be United States Persons, or an
estate whose income is subject to United States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
a trust which was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under subpart E of part I of subchapter J of chapter I of
the Code), and which was treated as a United States person on August 20, 1996
may elect to continue to be treated as a United States person notwithstanding
the previous sentence. The term "United States" shall have the meaning set forth
in Section 7701 of the Code.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the related Originator of the Mortgage Loan at the time of origination of the
Mortgage Loan by an appraiser who met the minimum requirements of Xxxxxx Xxx and
Xxxxxxx Mac and (b) the value thereof as determined by a review appraisal
conducted by the related Originator of the Mortgage Loan in accordance with the
related Originator's underwriting guidelines, and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan; provided, however, (A) in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the related Originator of the Mortgage
Loan of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
Xxxxxx Mae and Xxxxxxx Mac and (2) the value thereof as determined by a review
appraisal conducted by the related Originator of the Mortgage Loan in accordance
with the related Originator's underwriting guidelines, and (B) in the case of a
Mortgage Loan originated in connection with a "lease-option purchase," such
value of the Mortgaged Property is based on the lower of the value determined by
an appraisal made for the Originator of such Mortgage Loan at the time of
origination or the sale price of such Mortgaged Property if the "lease option
purchase price" was set less than twelve (12) months prior to origination, and
is based on the value determined by an appraisal made for the related Originator
of such Mortgage Loan at the time of origination if the "lease option purchase
price" was set twelve (12) months or more prior to origination.
"Verification Report": As defined in Section 4.19.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any such Certificate. With respect to any
date of determination, 98% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and the Class
CE-1 Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.
"Xxxxx Fargo": Xxxxx Fargo Bank, N.A. or any successor
thereto.
"Xxxxx Fargo Custodial Agreement": The Custodial Agreement
dated as of June 1, 2005, among the Trustee, Xxxxx Fargo and the Servicers, as
may be amended or supplemented from time to time.
"WMC Mortgage Loans": The Mortgage Loans being subserviced by
the Interim Subservicer as of the Closing Date pursuant to the Interim
Subservicing Agreement.
"WMC Servicing Fee Rate": 0.40% per annum.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
CE-1 Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Servicers pursuant to Section 3.22 of this Agreement or by the Master Servicer
pursuant to Section 4.18 of this Agreement or by the Interim Servicer pursuant
to the Interim Servicing Agreement) and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to the Class CE-1 Certificates, second, to the Class B-3
Certificates, third, to the Class B-2 Certificates, fourth, to the Class B-1
Certificates, fifth, to the Class M-10 Certificates, sixth, to the Class M-9
Certificates, seventh, to the Class M-8 Certificates, eighth, to the Class M-7
Certificates, ninth, to the Class M-6 Certificates, tenth, to the Class M-5
Certificates, eleventh, to the Class M-4 Certificates, twelfth, to the Class M-3
Certificates, thirteenth, to the Class M-2 Certificates, fourteenth, to the
Class M-1 Certificates and fifteenth, to the Class A Certificates, on a PRO RATA
basis, in each case based on, and to the extent of, one month's interest at the
then applicable respective Pass-Through Rate on the respective Certificate
Principal Balance or Notional Amount, as applicable, of each such Certificate
and (2) the aggregate amount of any Realized Losses allocated to the Class B
Certificates, the Mezzanine Certificates and Net WAC Rate Carryover Amounts paid
to the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates incurred for any Distribution Date shall be allocated to the Class
CE-1 Certificates on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount thereof, as
applicable.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Servicers pursuant to Section 3.22 of this Agreement
or the Master Servicer pursuant to Section 4.18 or by the Interim Servicer
pursuant to the Interim Servicing Agreement) shall be allocated first, (i) with
respect to the Group I Mortgage Loans, to REMIC I Regular Interest LT1 and REMIC
I Regular Interest LT1PF, in each case to the extent of one month's interest at
the then applicable respective REMIC I Remittance Rate on the respective
Uncertificated Balance of each such REMIC I Regular Interest; provided, however,
with respect to the first three Distribution Dates, such amounts relating to the
Initial Group I Mortgage Loans shall be allocated to REMIC I Regular Interest
LT1 and such amounts relating to the Subsequent Group I Mortgage Loans shall be
allocated to REMIC I Regular Interest LT1PF and (b) with respect to the Group II
Mortgage Loans, to REMIC I Regular Interest LT2 and REMIC I Regular Interest
LT2PF, in each case to the extent of one month's interest at the then applicable
respective REMIC I Remittance Rate on the respective Uncertificated Balance of
each such REMIC I Regular Interest; provided, however, with respect to the first
three Distribution Dates, such amounts relating to the Initial Group II Mortgage
Loans shall be allocated to REMIC I Regular Interest LT2 and such amounts
relating to the Subsequent Group II Mortgage Loans shall be allocated to REMIC I
Regular Interest LT2PF.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC II Regular Interests for any Distribution Date:
(A) The REMIC II Marker Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (to the extent
not covered by payments by the Servicers pursuant to Section 3.22 of
this Agreement or the Master Servicer pursuant to Section 4.18 or by
the Interim Servicer pursuant to the Interim Servicing Agreement) and
the REMIC II Marker Allocation Percentage of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC II Regular Interest
II-LTAA, REMIC II Regular Interest II-LTA1A, REMIC II Regular Interest
II-LTA1B, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest
II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest
II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest
II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest
II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest
II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest
II-LTB1, REMIC II Regular Interest II-LTB2, REMIC II Regular Interest
II-LTB3, and REMIC II Regular Interest II-LTZZ PRO RATA based on, and
to the extent of, one month's interest at the then applicable
respective REMIC II Remittance Rate on the respective Uncertificated
Balance of each such REMIC II Regular Interest; and
(B) The REMIC II Sub WAC Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (to the extent
not covered by payments by the Servicers pursuant to Section 3.22 of
this Agreement or by the Master Servicer pursuant to Section 4.18 of
this Agreement or by the Interim Servicer pursuant to the Interim
Servicing Agreement) and the REMIC II Sub WAC Allocation Percentage of
any Relief Act Interest Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated first, to
Uncertificated Interest payable to REMIC II Regular Interest II-LT1SUB,
REMIC II Regular Interest II-LT1GRP, REMIC II Regular Interest
II-LT2SUB, REMIC II Regular Interest II-LT2GRP and REMIC II Regular
Interest II-LTXX, PRO RATA based on, and to the extent of, one month's
interest at the then applicable respective REMIC II Remittance Rate on
the respective Uncertificated Balance of each such REMIC II Regular
Interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of the Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse, for the benefit of the
Certificateholders, all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in and
to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement (including, without
limitation the right to enforce the obligations of the other parties thereto
thereunder) and the Subsequent Mortgage Loan Purchase Agreement, such assets as
shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Pre-Funding Account, and all other assets
included or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor and the Servicers and the Interim Servicer
on or with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee and each Servicer an executed copy of
the Mortgage Loan Purchase Agreement.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with the Custodian pursuant to the related
Custodial Agreement the documents with respect to each Mortgage Loan as
described under Section 2 of the Custodial Agreement (the "Mortgage Loan
Documents"). In connection with such delivery and as further described in the
Custodial Agreements, the Custodians will be required to review such Mortgage
Loan Documents and deliver to the Trustee, the Depositor, each Servicer and the
Seller certifications (in the forms attached to the Custodial Agreement) with
respect to such review with exceptions noted thereon. In addition, under the
Custodial Agreements the Depositor will be required to cure certain defects with
respect to the Mortgage Loan Documents for the related Mortgage Loans after the
delivery thereof by the Depositor to the Custodians as more particularly set
forth therein.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.11, and preparation and delivery of the certifications shall be
performed by the Custodians pursuant to the terms and conditions of the
Custodial Agreements.
The Depositor shall deliver or cause the related Originator to
deliver to the related Servicer copies of all trailing documents required to be
included in the Mortgage File at the same time the originals or certified copies
thereof are delivered to the Trustee or Custodians, such documents including the
mortgagee policy of title insurance and any Mortgage Loan Documents upon return
from the recording office. The Servicers shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicers to be reimbursed for any such costs the
Servicers may incur in connection with performing its obligations under this
Agreement.
The Mortgage Loans permitted by the terms of this Agreement to
be included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Seller that no Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003 or as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004) and (ii) Qualified
Substitute Mortgage Loans (which, by definition as set forth herein and referred
to in the Mortgage Loan Purchase Agreement, are required to conform to, among
other representations and warranties, the representation and warranty of the
Seller that no Qualified Substitute Mortgage Loan is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 or as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004.
The Depositor and the Trustee on behalf of the Trust understand and agree that
it is not intended that any Mortgage Loan be included in the Trust that is a
"High-Cost Home Loan" as defined in HOEPA or any other applicable predatory or
abusive lending law.
SECTION 2.02. Acceptance of REMIC I by Trustee.
The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage
Loan Documents and all other assets included in the definition of "REMIC I"
under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the Distribution Account) and declares that it holds (or the applicable
Custodian on its behalf holds) and will hold such documents and the other
documents delivered to it constituting a Mortgage Loan Document, and that it
holds (or the applicable Custodian on its behalf holds) or will hold all such
assets and such other assets included in the definition of "REMIC I" in trust
for the exclusive use and benefit of all present and future Certificateholders.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
a breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially
and adversely affects the value of such Mortgage Loan or the interest therein of
the Certificateholders, the Trustee shall promptly notify the Seller and the
related Servicer of such defect, missing document or breach and request that the
Seller deliver such missing document, cure such defect or breach within sixty
(60) days from the date the Seller was notified of such missing document, defect
or breach, and if the Seller 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 Seller under the Mortgage Loan Purchase Agreement
to repurchase such Mortgage Loan from REMIC I at the Purchase Price within
ninety (90) days after the date on which the Seller was notified of such missing
document, defect or breach, if and to the extent that the Seller is obligated to
do so under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be remitted to the related Servicer for deposit
in the related Collection Account and the Trustee, upon receipt of written
certification from such Servicer of such deposit, shall release or cause the
applicable Custodian (upon receipt of a request for release in the form attached
to the respective Custodial Agreement) to release to the Seller the related
Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as the Seller shall furnish to it and as shall be necessary to vest in
the Seller any Mortgage Loan released pursuant hereto, and the Trustee shall not
have any further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be
removed from REMIC I (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(b). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee and the Certificateholders.
In addition, promptly upon the earlier of discovery by a
Servicer or receipt of notice by a Servicer of the breach of the representation
or covenant of the Seller set forth in Section 5(xii) of the Mortgage Loan
Purchase Agreement which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment Charge, such Servicer
shall promptly notify the Seller and the Trustee of such breach. The Trustee
shall enforce the obligations of the Seller under the Mortgage Loan Purchase
Agreement to remedy such breach to the extent and in the manner set forth in the
Mortgage Loan Purchase Agreement.
(b) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee or the applicable
Custodian on behalf of the Trustee, for such Qualified Substitute Mortgage Loan
or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and
such other documents and agreements, with all necessary endorsements thereon, as
are required by Section 2 of the Custodial Agreement, as applicable, together
with an Officers' Certificate providing that each such Qualified Substitute
Mortgage Loan satisfies the definition thereof and specifying the Substitution
Shortfall Amount (as described below), if any, in connection with such
substitution. The applicable Custodian on behalf of the Trustee shall
acknowledge receipt of such Qualified Substitute Mortgage Loan or Loans and,
within ten (10) Business Days thereafter, review such documents and deliver to
the Depositor, the Trustee and the related Servicer, with respect to such
Qualified Substitute Mortgage Loan or Loans, an initial certification pursuant
to the Custodial Agreement, with any applicable exceptions noted thereon. Within
one year of the date of substitution, the applicable Custodian on behalf of the
Trustee shall deliver to the Depositor, the Trustee and the related Servicer a
final certification pursuant to the Custodial Agreement with respect to such
Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of REMIC I and will be
retained by the Seller. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Deleted Mortgage
Loan on or before the Due Date in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Depositor shall give or cause to be
given written notice to the Certificateholders that such substitution has taken
place, shall amend the Mortgage Loan Schedule to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of
the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee and the related Servicer. Upon
such substitution, such Qualified Substitute Mortgage Loan or Loans shall
constitute part of the Trust Fund and shall be subject in all respects to the
terms of this Agreement and the Mortgage Loan Purchase Agreement, including all
applicable representations and warranties thereof included herein or in the
Mortgage Loan Purchase Agreement.
For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer will determine the amount (the "Substitution Shortfall
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate of, as to each such Qualified Substitute
Mortgage Loan, the Scheduled Principal Balance thereof as of the date of
substitution, together with one month's interest on such Scheduled Principal
Balance at the applicable Net Mortgage Rate, plus all outstanding P&I Advances
and Servicing Advances (including Nonrecoverable P&I Advances and Nonrecoverable
Servicing Advances) related thereto. On the date of such substitution, the
Seller will deliver or cause to be delivered to the related Servicer for deposit
in the related Collection Account an amount equal to the Substitution Shortfall
Amount, if any, and the Trustee or the applicable Custodian on behalf of the
Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or
Loans, upon receipt of a request for release in the form attached to the
respective Custodial Agreement and certification by the related Servicer of such
deposit, shall release to the Seller the related Mortgage File or Files and the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as the Seller shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any Trust
REMIC, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any Trust REMIC
to fail to qualify as a REMIC at any time that any Certificate is outstanding.
(c) Upon discovery by the Depositor, the Seller, a Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two (2) Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or substitute one
or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within ninety (90) days of the earlier of discovery or receipt of such notice
with respect to such affected Mortgage Loan. Such repurchase or substitution
shall be made by (i) the Seller if the affected Mortgage Loan's status as a
non-qualified mortgage is or results from a breach of any representation,
warranty or covenant made by the Seller under the Mortgage Loan Purchase
Agreement or (ii) the Depositor, if the affected Mortgage Loan's status as a
non-qualified mortgage does not result from a breach of a representation or
warranty. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a). The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
(d) With respect to a breach of the representations made
pursuant to Section 5(xii) of the Mortgage Loan Purchase Agreement that
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Seller shall be required to take the
actions set forth in this Section 2.03.
(e) Within ninety (90) days of the earlier of discovery by a
Servicer or receipt of notice by a Servicer of the breach of any representation,
warranty or covenant of such Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan or Prepayment Charge, such Servicer shall cure such breach in all material
respects.
SECTION 2.04. Representations and Warranties of the Master
Servicer.
The Master Servicer hereby represents, warrants and covenants
to the Servicers, the Depositor and the Trustee, for the benefit of each of the
Trustee and the Certificateholders, that as of the Closing Date or as of such
date specifically provided herein:
(i) The Master Servicer is a national banking association duly
formed, validly existing and in good standing under the laws of the
United States of America and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Master Servicer;
(ii) The Master Servicer has the full power and authority to
conduct its business as presently conducted by it and to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly authorized
the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the
Master Servicer, the consummation by the Master Servicer of any other
of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Master Servicer and will not (A) result in a breach of any term
or provision of charter and by-laws of the Master Servicer or (B)
conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may
be bound, or any statute, order or regulation applicable to the Master
Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Master Servicer; and the
Master Servicer is not a party to, bound by, or in breach or violation
of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Master
Servicer's knowledge, would in the future materially and adversely
affect, (x) the ability of the Master Servicer to perform its
obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Master Servicer taken
as a whole;
(iv) The Master Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant made by it and contained in this Agreement;
(v) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to perform any of its other obligations hereunder in accordance with
the terms hereof,
(vi) There are no actions or proceedings against, or
investigations known to it of, the Master Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by the Master
Servicer of its obligations under, or validity or enforceability of,
this Agreement; and
(vii) 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 by it of
the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.04 shall survive the
resignation or termination of the parties hereto and the termination of this
Agreement and shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.
SECTION 2.05. Representations, Warranties and Covenants of
each Servicer.
(a) Countrywide hereby represents, warrants and covenants to
the Master Servicer, the Securities Administrator, the Depositor and the
Trustee, for the benefit of each of such Persons and the Certificateholders that
as of the Closing Date or as of such date specifically provided herein:
(i) Countrywide is a limited partnership duly organized and
validly existing under the laws of the State of its formation and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by Countrywide in any
state in which a Mortgaged Property related to a Countrywide Mortgage
Loan is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Countrywide Mortgage Loan and to
service the New Century Mortgage Loans in accordance with the terms of
this Agreement;
(ii) Countrywide has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. Countrywide has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of Countrywide,
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by
Countrywide, the servicing of the New Century Mortgage Loans by
Countrywide hereunder, the consummation by Countrywide of any other of
the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of Countrywide and will not (A) result in a breach of any term or
provision of the formation documents of Countrywide or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which Countrywide is a party or by which it may be bound, or any
statute, order or regulation applicable to Countrywide of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Countrywide; and Countrywide is not a party to, bound
by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to Countrywide's knowledge, would in the future
materially and adversely affect, (x) the ability of Countrywide to
perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of Countrywide
taken as a whole or (z) the legality, validity or enforceability of
this Agreement;
(iv) Countrywide does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
made by it and contained in this Agreement;
(v) No litigation is pending against Countrywide that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Countrywide to
service the New Century Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(vi) There are no actions or proceedings against, or
investigations known to it of, Countrywide before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by Countrywide of
its obligations under, or the validity or enforceability of, this
Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Countrywide of, or compliance by
Countrywide with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
(viii) Countrywide has fully furnished and will continue to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
on a monthly basis;
(ix) Countrywide is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS; and
(x) Countrywide will not waive any Prepayment Charge other
than in accordance with the standard set forth in Section 3.01.
(b) Saxon hereby represents, warrants and covenants to the
Master Servicer, the Securities Administrator, the Depositor and the Trustee,
for the benefit of each of such Persons and the Certificateholders that as of
the Closing Date or as of such date specifically provided herein:
(i) Saxon is a corporation organized and validly existing
under the laws of the State of its incorporation and is duly authorized
and qualified to transact any and all business contemplated by this
Agreement to be conducted by a Servicer in any state in which a
Mortgaged Property related to a Saxon Mortgage Loan is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Saxon Mortgage Loan and to service the Saxon
Mortgage Loans in accordance with the terms of this Agreement;
(ii) Saxon has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. Saxon has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of Saxon, enforceable
against it in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity;
(iii) The execution and delivery of this Agreement by Saxon,
the servicing of the Saxon Mortgage Loans by Saxon hereunder, the
consummation by Saxon of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of Saxon and will not (A)
result in a breach of any term or provision of the charter or by-laws
of Saxon or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other
material agreement or instrument to which Saxon is a party or by which
it may be bound, or any statute, order or regulation applicable to
Saxon of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Saxon; and Saxon is not a
party to, bound by, or in breach or violation of any indenture or other
material agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to Saxon's knowledge, would
in the future materially and adversely affect, (x) the ability of Saxon
to perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of Saxon taken as
a whole or (z) the legality, validity or enforceability of this
Agreement;
(iv) Saxon does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made
by it and contained in this Agreement;
(v) No litigation is pending against Saxon that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Saxon to service the
Saxon Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vi) There are no actions or proceedings against, or
investigations known to it of, Saxon before any court, administrative
or other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially
and adversely affect the performance by Saxon of its obligations under,
or the validity or enforceability of, this Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Saxon of, or compliance by Saxon with, this
Agreement or the consummation by it of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date;
(viii) Saxon has fully furnished and will continue to fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
on a monthly basis;
(ix) Saxon is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are
registered with MERS; and
(x) Saxon will not waive any Prepayment Charge related to a
Saxon Mortgage Loan other than in accordance with the standard set
forth in Section 3.01.
(c) Ocwen hereby represents, warrants and covenants to the
Master Servicer, the Securities Administrator, the Depositor and the Trustee,
for the benefit of each of such Persons and the Certificateholders that as of
the Closing Date or as of such date specifically provided herein:
(i) As of the Closing Date, Ocwen is a federally chartered
savings bank duly organized and validly existing under the laws of the
United States, and as of July 1, 2005, Ocwen will be a limited
liability company duly organized and validly existing under the laws of
the jurisdiction of its formation, and is duly authorized and qualified
to transact any and all business contemplated by this Agreement to be
conducted by Ocwen in any state in which a Mortgaged Property related
to an Ocwen Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Ocwen Mortgage
Loan and to service the Ocwen Mortgage Loans in accordance with the
terms of this Agreement;
(ii) Ocwen has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. Ocwen has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of Ocwen, enforceable
against it in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity;
(iii) The execution and delivery of this Agreement by Ocwen,
the servicing of the Ocwen Mortgage Loans by Ocwen hereunder, the
consummation by Ocwen of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of Ocwen and will not (A)
result in a breach of any term or provision of the charter or by-laws
of Ocwen or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other
material agreement or instrument to which Ocwen is a party or by which
it may be bound, or any statute, order or regulation applicable to
Ocwen of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Ocwen; and Ocwen is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to Ocwen's knowledge, would in the
future materially and adversely affect, (x) the ability of Ocwen to
perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of Ocwen taken as
a whole or (z) the legality, validity or enforceability of this
Agreement;
(iv) Ocwen does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made
by it and contained in this Agreement;
(v) No litigation is pending against Ocwen that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Ocwen to service the
Ocwen Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vi) There are no actions or proceedings against, or
investigations known to it of, Ocwen before any court, administrative
or other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially
and adversely affect the performance by Ocwen of its obligations under,
or the validity or enforceability of, this Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Ocwen of, or compliance by Ocwen with, this
Agreement or the consummation by it of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date;
(viii) Ocwen has fully furnished and will continue to fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
on a monthly basis;
(ix) Ocwen is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are
registered with MERS; and
(x) Ocwen will not waive any Prepayment Charge other than in
accordance with the standard set forth in Section 3.01.
Notwithstanding anything to the contrary contained in this
Agreement, if the covenant of the related Servicer set forth in Section
2.05(a)(ix), 2.05 (b)(ix) and 2.05(c)(ix) above is breached, the related
Servicer will pay the amount of such waived Prepayment Charge, from its own
funds without any right of reimbursement, for the benefit of the Holders of the
Class P Certificates, by depositing such amount into the related Collection
Account within 90 days of the earlier of discovery by the related Servicer or
receipt of notice by the related Servicer of such breach. Furthermore,
notwithstanding any other provisions of this Agreement, any payments made by the
related Servicer in respect of any waived Prepayment Charges pursuant to this
paragraph shall be deemed to be paid outside of the Trust Fund.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive the
resignation or termination of the parties hereto, the termination of this
Agreement and the delivery of the Mortgage Files to the Custodian and shall
inure to the benefit of the Trustee, the Master Servicer, the Securities
Administrator, the Depositor, the Certificateholders. Upon discovery by any such
Person or the related Servicer of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the Trustee. Subject to Section 8.01, unless such breach shall not
be susceptible of cure within 90 days, the obligation of the related Servicer
set forth in Section 2.03(e) to cure breaches shall constitute the sole remedy
against the related Servicer available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05.
SECTION 2.06. Issuance of the REMIC I Regular Interests and
the Class R-I Interest.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to the applicable Custodian on its behalf of the Mortgage
Loan Documents, subject to the provisions of Section 2.01 and Section 2.02
hereof and Section 2 of the respective Custodial Agreement, together with the
assignment to it of all other assets included in REMIC I, the receipt of which
is hereby acknowledged. The interests evidenced by the Class R-I Interest,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Holders of the Class R-I
Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, respectively, and all ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC I Regular
Interests, shall be as set forth in this Agreement.
SECTION 2.07. Conveyance of the REMIC I Regular Interests and
REMIC II Regular Interests; Acceptance of REMIC I and REMIC II by the Trustee.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R-II Interest
and REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Holders of the Class R-II Interest and REMIC II (as holder of the
REMIC I Regular Interests). The rights of the Holder of the Class R-II Interest
and REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC II in respect of the Class R-II
Interest and REMIC II Regular Interests, respectively, and all ownership
interests evidenced or constituted by the Class R-II Interest and the REMIC II
Regular Interests, shall be as set forth in this Agreement. The Class R-II
Interest and the REMIC II Regular Interests shall constitute the entire
beneficial ownership interest in REMIC II.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests for the benefit of the Class R-III
Interest and REMIC III (as holder of the REMIC II Regular Interests). The
Trustee acknowledges receipt of the REMIC II Regular Interests and declares that
it holds and will hold the same in trust for the exclusive use and benefit of
all present and future Holders of the Class R-III Interest and REMIC III (as
holder of the REMIC II Regular Interests). The rights of the Holder of the Class
R-III Interest and REMIC III (as holder of the REMIC II Regular Interests) to
receive distributions from the proceeds of REMIC III in respect of the Class
R-III Interest and Regular Certificates, respectively, and all ownership
interests evidenced or constituted by the Class R-III Interest and the Regular
Certificates, shall be as set forth in this Agreement. The Class R-III Interest
and the Regular Certificates shall constitute the entire beneficial ownership
interest in REMIC III.
SECTION 2.08. Issuance of Residual Certificates.
The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and the REMIC II Regular Interests and, concurrently therewith
and in exchange therefor, pursuant to the written request of the Depositor
executed by an officer of the Depositor, the Securities Administrator has
executed and authenticated and the Trustee has delivered to or upon the order of
the Depositor, the Class R Certificates in authorized denominations. The Class R
Certificates evidence ownership in the Class R-I Interest, the Class R-II
Interest and the Class R-III Interest.
SECTION 2.09. Conveyance of Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b) below
in consideration of the Securities Administrator's delivery, on behalf of the
Trustee, on the Subsequent Transfer Dates to or upon the order of the Depositor
of all or a portion of the balance of funds in the Pre-Funding Account, the
Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set over
and convey without recourse to the Trust Fund but subject to the other terms and
provisions of this Agreement all of the right, title and interest of the
Depositor in and to (i) the Subsequent Mortgage Loans identified on the Mortgage
Loan Schedule attached to the related Subsequent Transfer Instrument delivered
by the Depositor on such Subsequent Transfer Date, (ii) all interest accruing
thereon on and after the Subsequent Cut-off Date and all collections in respect
of interest and principal due after the Subsequent Cut-off Date and (iii) all
items with respect to such Subsequent Mortgage Loans to be delivered pursuant to
Section 2.01 and the other items in the related Mortgage Files; provided,
however, that the Depositor reserves and retains all right, title and interest
in and to principal received and interest accruing on the Subsequent Mortgage
Loans prior to the related Subsequent Cut-off Date. The transfer to the Trustee
for deposit in the mortgage pool by the Depositor of the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule shall be absolute and is intended
by the Depositor, the Servicers, the Trustee and the Certificateholders to
constitute and to be treated as a sale of the Subsequent Mortgage Loans by the
Depositor to the Trust Fund. The related Mortgage File for each Subsequent
Mortgage Loan shall be delivered to the Trustee (or the related Custodian on its
behalf) at least three (3) Business Days prior to the related Subsequent
Transfer Date.
The purchase price paid on behalf of the Trustee from amounts released
from the Group I Pre-Funding Sub-Account or the Group II Pre-Funding
Sub-Account, as applicable, shall be one-hundred percent (100%) of the aggregate
Stated Principal Balance of the related Subsequent Mortgage Loans so transferred
(as identified on the Mortgage Loan Schedule provided by the Depositor). This
Agreement shall constitute a fixed-price purchase contract in accordance with
Section 860G(a)(3)(A)(ii) of the Code.
(b) The Depositor shall transfer to the Trustee for deposit in
the mortgage pool the Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Securities
Administrator shall release funds from the Group I Pre-Funding Sub-Account or
the Group II Pre-Funding Sub-Account, as applicable, only upon the satisfaction
of each of the following conditions on or prior to the related Subsequent
Transfer Date:
(i) the Depositor shall have provided the Trustee, the
Securities Administrator and the Rating Agencies with a timely Addition
Notice and shall have provided any information reasonably requested by
the Trustee with respect to the Subsequent Mortgage Loans;
(ii) the Depositor shall have delivered to the Trustee and the
Securities Administrator a duly executed Subsequent Transfer
Instrument, which shall include a Mortgage Loan Schedule listing the
Subsequent Mortgage Loans, and the Seller shall have delivered a
computer file acceptable to the Trustee and the Securities
Administrator containing such Mortgage Loan Schedule to the Trustee and
the Securities Administrator at least three (3) Business Days prior to
the related Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form of Exhibit E, the Depositor shall not be insolvent nor shall it
have been rendered insolvent by such transfer nor shall it be aware of
any pending insolvency;
(iv) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(v) the Pre-Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Subsequent
Mortgage Loans in a manner that it believed to be adverse to the
interests of the Certificateholders;
(vii) the Depositor shall have delivered to the Trustee (with
a copy to the Securities Administrator) a Subsequent Transfer
Instrument confirming the satisfaction of the conditions precedent
specified in this Section 2.09 and, pursuant to the Subsequent Transfer
Instrument, assigned to the Trustee without recourse for the benefit of
the Certificateholders all the right, title and interest of the
Depositor, in, to and under the Subsequent Mortgage Loan Purchase
Agreement, to the extent of the Subsequent Mortgage Loans; and
(viii) the Depositor shall have delivered to the Trustee an
Opinion of Counsel addressed to the Trustee and the Rating Agencies
with respect to the transfer of the Subsequent Mortgage Loans
substantially in the form of the Opinion of Counsel delivered to the
Trustee on the Closing Date regarding the true sale of the Subsequent
Mortgage Loans.
(c) Each subsequent mortgage loan that has been identified and
is expected to be sold to the trust on the related Subsequent Transfer Date will
have the characteristics set forth below as of the Cut-off Date. In addition,
the obligation of the Trust Fund to purchase any Subsequent Mortgage Loan that
has not been identified on the Cut-off Date, but is sold to the Trust during the
Pre-Funding Period, is subject to the satisfaction of the conditions set forth
in the immediately preceding paragraph and the accuracy of the following
representations and warranties with respect to each such Subsequent Mortgage
Loan determined as of the applicable Subsequent Transfer Date: (i) such
subsequent mortgage loan may not be fifty-nine (59) or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
servicer of each subsequent mortgage loan will be Saxon or Ocwen; (iii) such
subsequent mortgage loan will be secured by a first or second lien; (iv) the
original term to stated maturity of such subsequent mortgage loan will not be
less than 180 months and will not exceed 360 months; (v) the latest maturity
date of any subsequent mortgage loan will be no later than June 1, 2035; (vi) no
subsequent mortgage loan will have a first payment date occurring after July 1,
2005; (vii) such subsequent mortgage loan will have a credit score of not less
than approximately 492; (viii) such subsequent mortgage loan will not have a
combined loan-to-value ratio greater than 100%; (ix) such subsequent mortgage
loan will not have a principal balance greater than approximately $771,200; (x)
if such subsequent mortgage loan is an Adjustable Rate Mortgage Loan, it will
have a Gross Margin not less than approximately 3.040% per annum; and (x) such
subsequent mortgage loan will have a Maximum Mortgage Rate not less than
approximately 10.500%.
(d) As of each Subsequent Cut-off Date, the aggregate of the
Subsequent Mortgage Loans identified and expected to be sold to the trust on the
related Subsequent Transfer Date, including the unidentified Subsequent Mortgage
Loans that have not been identified on the Cut-off Date and are sold to the
trust during the Pre-Funding Period, will satisfy the following criteria: (i)
have a weighted average Gross Margin of approximately 5.723% per annum; (ii)
have a weighted average credit score greater than approximately 646; (iii) have
no less than approximately 96.26% of the Mortgaged Properties be owner occupied;
(iv) have no less than approximately 88.23% of the Mortgaged Properties be
single family detached or planned unit developments; (v) have no more than
approximately 32.59% of the subsequent mortgage loans be cash out refinance;
(vi) have a weighted average remaining term to stated maturity of less than
approximately 345 months; (vii) have a weighted average combined loan-to-value
ratio of not more than approximately 82.30%; (viii) no more than approximately
4.86% of the subsequent mortgage loans by aggregate principal balance will be
balloon loans; (ix) no more than approximately 44.33% of the subsequent mortgage
loans by aggregate principal balance will be concentrated in one state; (x) have
a weighted average Maximum Mortgage Rate not less than approximately 13.481%;
and (xi) be acceptable to the Rating Agencies.
(e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by any Rating Agency if the inclusion of any such
Subsequent Mortgage Loan would adversely affect the ratings of any Class of
Certificates. At least one (1) Business Day prior to the Subsequent Transfer
Date, each Rating Agency shall notify the Trustee as to which Subsequent
Mortgage Loans, if any, shall not be included in the transfer on the Subsequent
Transfer Date; provided, however, that the Seller shall have delivered to each
Rating Agency at least three (3) Business Days prior to such Subsequent Transfer
Date a computer file acceptable to each Rating Agency describing the
characteristics specified in paragraphs (c) and (d) above.
SECTION 2.10. Establishment of the Trust.
The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "ACE Securities Corp., Home Equity Loan
Trust, Series 2005-HE4" and does hereby appoint HSBC Bank USA, National
Association as Trustee in accordance with the provisions of this Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS; ACCOUNTS
SECTION 3.01. The Servicers to Act as Servicers.
It is intended that Countrywide will purchase the servicing
rights relating to the New Century Mortgage Loans on or about September 1, 2005,
and will service such New Century Mortgage Loans in accordance with the terms
and conditions of this Agreement. In the event that Countrywide does not
purchase the servicing rights relating to the New Century Mortgage Loans, a
qualified successor servicer will be appointed in accordance with Section 8.02
hereof and Countrywide will not have any obligations as a Servicer with respect
to the New Century Mortgage Loans under this Agreement unless otherwise agreed
by the parties hereto.
The obligations of each of Countrywide, Saxon and Ocwen
hereunder to service and administer the Mortgage Loans shall be limited to the
New Century Mortgage Loans, the Saxon Mortgage Loans (including the WMC Mortgage
Loans) and the Ocwen Mortgage Loans, respectively, and with respect to the
duties and obligations of each Servicer, references herein to the related
Mortgage Loans shall be limited to (i) the New Century Mortgage Loans (and the
related proceeds thereof and related REO Properties) in the case of Countrywide,
(ii) the Saxon Mortgage Loans (and the related proceeds and related REO
Properties) in the case of Saxon, and (iii) the Ocwen Mortgage Loans (and the
related proceeds and related REO Properties) in the case of Ocwen, and in no
event shall any Servicer have any responsibility or liability with respect to
any Mortgage Loans serviced by the other Servicers hereunder. In addition, from
and after the Closing Date to the Servicing Transfer Date, the New Century
Mortgage Loans will be serviced and administered by the Interim Servicer
pursuant to the Interim Servicing Agreement, and no Servicer will have any
responsibility to service or administer such Mortgage Loans or have any other
obligation with respect to such Mortgage Loans during that period.
On and after the Closing Date with respect to the Ocwen
Mortgage Loans and the Saxon Mortgage Loans and on and after the Servicing
Transfer Date with respect to the New Century Mortgage Loans, the Servicers
shall service and administer the Mortgage Loans on behalf of the Trust Fund and
in the best interests of and for the benefit of the Certificateholders (as
determined by the related Servicer in its reasonable judgment) in accordance
with the terms of this Agreement and the respective Mortgage Loans and all
applicable law and regulations and, to the extent consistent with such terms, in
the same manner in which it services and administers similar mortgage loans for
its own portfolio, giving due consideration to customary and usual standards of
practice of prudent mortgage lenders and loan servicers administering similar
mortgage loans but without regard to:
(i) any relationship that the related Servicer or any
Affiliate of the related Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the related Servicer
or any Affiliate of such Servicer;
(iii) the related Servicer's obligation to make P&I Advances
or Servicing Advances; or
(iv) the related Servicer's right to receive compensation for
its services hereunder;
provided, however, that (a) with respect to the New Century Mortgage Loans
serviced pursuant to the Interim Servicing Agreement, Countrywide will be
entitled to seek indemnification in accordance with Section 7.03 hereof for any
liability attributable to it as a result of the acts and omissions of the
Interim Servicer or any other prior servicer or the failure of an Interim
Servicer or any other prior servicer to service the New Century Mortgage Loans
in accordance with the Interim Servicing Agreement; and (b) with respect to the
WMC Mortgage Loans serviced pursuant to the Interim Subservicing Agreement,
Saxon will be entitled to seek indemnification in accordance with Section 7.03
hereof for any liability attributable to it as a result of the acts and
omissions of the Interim Subservicer or the failure of the Interim Subservicer
to service the WMC Mortgage Loans in accordance with the Interim Subservicing
Agreement.
To the extent consistent with the foregoing, each Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes and shall waive (or permit a Sub-Servicer to
waive) a Prepayment Charge only under the following circumstances: (i) such
waiver is standard and customary in servicing similar Mortgage Loans and such
waiver is related to a default or reasonably foreseeable default and would, in
the reasonable judgment of such Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default, (ii) such Prepayment Charge is unenforceable in accordance
with applicable law or the collection of such related Prepayment Charge would
otherwise violate applicable law or (iii) the collection of such Prepayment
Charge would be considered "predatory" pursuant to written guidance published or
issued by any applicable federal, state or local regulatory authority acting in
its official capacity and having jurisdiction over such matters. Notwithstanding
any provision in this Agreement to the contrary, in the event the Prepayment
Charge payable under the terms of the Mortgage Note is less than the amount of
the Prepayment Charge set forth in the Prepayment Charge Schedule or other
information provided to the related Servicer, such Servicer shall not have any
liability or obligation with respect to such difference, and in addition shall
not have any liability or obligation to pay the amount of any uncollected
Prepayment Charge if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Prepayment Charge Schedule.
Subject only to the above-described servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
related Mortgage Loans, each Servicer shall have full power and authority, to do
or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable with the goal of
maximizing proceeds of the Mortgage Loan. Without limiting the generality of the
foregoing, each Servicer in its own name is hereby authorized and empowered by
the Trustee when the related Servicer believes it appropriate in its best
judgment, to execute and deliver, on behalf of the Trust Fund, the
Certificateholders and the Trustee or any of them, and upon written notice to
the Trustee, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge or subordination, and all other comparable
instruments, with respect to the related Mortgage Loans and the related
Mortgaged Properties and to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Trustee, for the benefit of the Trust Fund and the Certificateholders. Each
Servicer shall service and administer the related Mortgage Loans in accordance
with applicable state and federal law and shall provide to the Mortgagors any
reports required to be provided to them thereby. Each Servicer shall also comply
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under any standard hazard insurance policy. Subject to Section
3.14, the Trustee shall execute, at the written request of a Servicer, and
furnish to such Servicer a power of attorney in the form of Exhibit D hereto and
other documents necessary or appropriate to enable such Servicer to carry out
its servicing and administrative duties hereunder and furnished to the Trustee
by such Servicer, and the Trustee shall not be liable for the actions of such
Servicer under such powers of attorney and shall be indemnified by such Servicer
for any cost, liability or expense incurred by the Trustee in connection with
such Servicer's use or misuse of any such power of attorney.
In accordance with Accepted Servicing Practices, each Servicer
shall make or cause to be made Servicing Advances as necessary for the purpose
of effecting the payment of taxes and assessments on the Mortgaged Properties,
which Servicing Advances shall be reimbursable in the first instance from
related collections from the related Mortgagors pursuant to Section 3.07, and
further as provided in Section 3.09; provided, however, the related Servicer
shall only make such Servicing Advance if the related Mortgagor has not made
such payment and if the failure to make such Servicing Advance would result in
the loss of the related Mortgaged Property due to a tax sale or foreclosure as
result of a tax lien. Any cost incurred by a Servicer in effecting the payment
of taxes and assessments on a Mortgaged Property shall not, for the purpose of
calculating the Stated Principal Balance of such Mortgage Loan or distributions
to Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
The parties to this Agreement acknowledge that Servicing Advances shall be
reimbursable pursuant to Section 3.09 of this Agreement, and agree that no
Servicing Advance shall be rejected or disallowed by any party unless it has
been shown that such Servicing Advance was not made in accordance with the terms
of this Agreement. Notwithstanding the foregoing, the parties understand and
agree that, with respect to any Mortgage Loan (1) the Master Servicer shall not
approve the reimbursement of any Servicing Advance made with respect to such
Mortgage Loan prior to the Cut-off Date or the Subsequent Cut-off Date (each, a
"Pre-Cut-off Date Advance") unless and until it has received a Servicing Advance
Schedule listing the amount of Pre-Cut-off Date Advances made in respect of such
Mortgage Loan from (a) the related Servicer or the Interim Servicer with respect
to any Mortgage Loans or Subsequent Mortgage Loans that were transferred to such
Servicer or Interim Servicer prior to the Cut-off Date or prior to the
Subsequent Cut-off Date and/or (b) the Depositor with respect to any Mortgage
Loans or Subsequent Mortgage Loans that were transferred to the related Servicer
or Interim Servicer after the Cut-off Date or the Subsequent Cut-off Date, as
applicable, (2) the aggregate Pre-Cut-off Date Advances reimbursable hereunder
with respect to such Mortgage Loan shall not exceed the amount of Pre-Cut-off
Date Advances for such Mortgage Loan shown on the Servicing Advance Schedule
delivered to the Master Servicer, (3) the Depositor shall be deemed to have
agreed with and approved the Pre-Cut-off Date Advances shown on any Servicing
Advance Schedule furnished to the Master Servicer, and (4) the Master Servicer
will have no liability to the Depositor, the related Servicer or any other
Person, including any Certificateholder, for approving reimbursement of related
Pre-Cut-off Date Advances so long as the aggregate amount of such advances
reimbursed hereunder does not exceed of the amount of Pre-Cut-off Date Advances
for such Mortgage Loan shown on the Servicing Advance Schedule.
Notwithstanding anything in this Agreement to the contrary, no
Servicer may make any future advances with respect to a Mortgage Loan and no
Servicer shall permit any modification with respect to any related Mortgage Loan
that would change the Mortgage Rate, reduce or increase the principal balance
(except for reductions resulting from actual payments of principal) or change
the final maturity date on such related Mortgage Loan (unless, as provided in
Section 3.06, the related Mortgagor is in default with respect to the related
Mortgage Loan or such default is, in the judgment of the related Servicer,
reasonably foreseeable) or any modification, waiver or amendment of any term of
any related Mortgage Loan that would both (A) effect an exchange or reissuance
of such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause any Trust
REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions.
In the event that the Mortgage Loan Documents relating to a
Mortgage Loan contain provisions requiring the related Mortgagor to arbitrate
disputes (at the option of the Trustee, on behalf of the Trust), the Trustee
hereby authorizes the related Servicer to waive the Trustee's right or option to
arbitrate disputes and to send written notice of such waiver to the Mortgagor,
although the Mortgagor may still require arbitration at its option.
From and after the Servicing Transfer Date and the Interim
Subservicing Transfer Dates, the related Servicer will fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and Trans Union Credit Information
Company or their successors on a monthly basis.
SECTION 3.02. Sub-Servicing Agreements Between a Servicer and
Sub-Servicers.
Each Servicer may arrange for the subservicing of any Mortgage
Loan by a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that
such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Each
Sub-Servicer shall be (i) authorized to transact business in the state or states
where the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a Xxxxxxx
Mac or Xxxxxx Mae approved mortgage servicer. Notwithstanding the provisions of
any Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer or a Sub-Servicer or reference to
actions taken through such Servicer or otherwise, the related Servicer shall
remain obligated and liable to the Depositor, the Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the related Servicer
alone were servicing and administering the Mortgage Loans. Every Sub-Servicing
Agreement entered into by a Servicer shall contain a provision giving the
successor Servicer the option to terminate such agreement in the event a
successor Servicer is appointed. All actions of each Sub-Servicer performed
pursuant to the related Sub-Servicing Agreement shall be performed as an agent
of the related Servicer with the same force and effect as if performed directly
by the related Servicer.
For purposes of this Agreement, the related Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Mortgage Loans that are received by a Sub-Servicer regardless of whether
such payments are remitted by the Sub-Servicer to the related Servicer. For
purposes of this Agreement, the Assignment Agreements shall not be deemed to be
Sub-Servicing Agreements.
SECTION 3.03. Successor Sub-Servicers.
Any Sub-Servicing Agreement shall provide that the related
Servicer shall be entitled to terminate any Sub-Servicing Agreement and to
either itself directly service the related Mortgage Loans or enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 3.02. Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by any successor to the related Servicer
(which may be the Trustee or the Master Servicer) without fee, in accordance
with the terms of this Agreement, in the event that the related Servicer (or any
successor to the related Servicer) shall, for any reason, no longer be the
Servicer of the related Mortgage Loans (including termination due to a Servicer
Event of Default).
SECTION 3.04. No Contractual Relationship Between
Sub-Servicer, Trustee or the Certificateholders.
Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the related Servicer alone and the Master
Servicer, Trustee and the Certificateholders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect to any Sub-Servicer except as set forth in Section 3.05.
SECTION 3.05. Assumption or Termination of Sub-Servicing
Agreement by Successor Servicer.
In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of a Servicer
hereunder by a successor Servicer (which may be the Trustee or the Master
Servicer) pursuant to Section 8.02, it is understood and agreed that such
Servicer's rights and obligations under any Sub-Servicing Agreement then in
force between such Servicer and a Sub-Servicer shall be assumed simultaneously
by such successor Servicer without act or deed on the part of such successor
Servicer; provided, however, that any successor Servicer may terminate the
Sub-Servicer.
Each Servicer shall, upon the reasonable request of the Master
Servicer, but at its own expense, deliver to the assuming party documents and
records relating to each Sub-Servicing Agreement and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.
The Servicing Fee payable to any such successor Servicer shall
be payable from payments received on the Mortgage Loans in the amount and in the
manner set forth in this Agreement.
SECTION 3.06. Collection of Certain Mortgage Loan Payments.
Each Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the related Mortgage
Loans, and shall, to the extent such procedures shall be consistent with this
Agreement and Accepted Servicing Practices, follow such collection procedures as
it would follow with respect to mortgage loans comparable to the Mortgage Loans
and held for its own account. Consistent with the foregoing, each Servicer may
in its discretion (i) waive any late payment charge or, if applicable, penalty
interest or (ii) extend the due dates for the Monthly Payments due on a Mortgage
Note related to a Mortgage Loan for a period of not greater than 180 days;
provided that any extension pursuant to this clause shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder. Notwithstanding the foregoing, in the event that any Mortgage Loan is
in default or, in the judgment of the related Servicer, such default is
reasonably foreseeable, the related Servicer, consistent with Accepted Servicing
Practices may waive, modify or vary any term of such Mortgage Loan (including
modifications that change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor if in the related Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Certificateholders (taking into account any estimated
Realized Loss that might result absent such action).
SECTION 3.07. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
To the extent the terms of a Mortgage provide for Escrow
Payments, the related Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. the related Servicer shall deposit in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the related
Servicer's receipt thereof, all Escrow Payments collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event later than the second Business Day after the
deposit of good funds into the clearing account, and retain therein, all Escrow
Payments collected on account of the Mortgage Loans, for the purpose of
effecting the timely payment of any such items as required under the terms of
this Agreement. Withdrawals of amounts from a Servicing Account may be made by
the related Servicer only to (i) effect timely payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items; (ii) reimburse
itself out of related collections for any Servicing Advances made pursuant to
Section 3.01 (with respect to taxes and assessments) and Section 3.11 (with
respect to fire, flood and hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Servicing Account; or, only to
the extent not required to be paid to the related Mortgagors, to pay itself
interest on balances in the Servicing Account; or (v) clear and terminate the
Servicing Account at the termination of the related Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. As part of its servicing duties, each Servicer shall
pay to the Mortgagors interest on funds in Servicing Accounts, to the extent
required by law and, to the extent that interest earned on funds in the
Servicing Accounts is insufficient, to pay such interest from its or their own
funds, without any reimbursement therefor. Notwithstanding the foregoing, no
Servicer shall be obligated to collect Escrow Payments if the related Mortgage
Loan does not require such payments but each Servicer shall nevertheless be
obligated to make Servicing Advances as provided in Section 3.01 and Section
3.11. In the event a Servicer shall deposit in the Servicing Accounts any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Servicing Accounts, any provision to the contrary notwithstanding.
To the extent that a Mortgage does not provide for Escrow
Payments, the related Servicer (i) shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien and (ii) shall ensure that all insurance required to be maintained
on the Mortgaged Property pursuant to this Agreement is maintained. If any such
payment has not been made and the related Servicer receives notice of a tax lien
with respect to the Mortgage Loan being imposed, the related Servicer shall,
promptly and to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property unless the related Servicer determines the advance to be
nonrecoverable. Each Servicer assumes full responsibility for the payment of all
such bills and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances to effect such payments
subject to its determination of recoverability.
SECTION 3.08. Collection Accounts and Distribution Account.
(a) On behalf of the Trust Fund, each Servicer shall establish
and maintain one or more "Collection Accounts", held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, each
Servicer shall deposit or cause to be deposited in the clearing account in which
it customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after such Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event later than two
Business Days after the deposit of good funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date other
than amounts attributable to a Due Date on or prior to the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the related Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee and any Prepayment Interest Excess) on each related
Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property) and
all Subsequent Recoveries with respect to the related Mortgage Loans;
(iv) any amounts required to be deposited by the related
Servicer pursuant to Section 3.10 in connection with any losses
realized on Permitted Investments with respect to funds held in the
Collection Account;
(v) any amounts required to be deposited by the related
Servicer pursuant to the second paragraph of Section 3.11(a) in respect
of any blanket policy deductibles;
(vi) any Purchase Price or Substitution Shortfall Amount
delivered to the related Servicer and all proceeds (net of amounts
payable or reimbursable to the related Servicer, the Master Servicer,
the Trustee, the Custodians or the Securities Administrator) of
Mortgage Loans purchased in accordance with Section 2.03, Section 3.13
or Section 10.01; and
(vii) any Prepayment Charges collected by the related Servicer
in connection with the Principal Prepayment of any of the Mortgage
Loans or amounts required to be deposited by the related Servicer in
connection with a breach of its obligations under Section 2.05.
The foregoing requirements for deposit in the related
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges, assumption fees or other similar fees need not be deposited by
the related Servicer in the related Collection Account and may be retained by
the related Servicer as additional compensation. In the event a Servicer shall
deposit in the related Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from the related
Collection Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Securities Administrator
shall establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee, the Trust
Fund and the Certificateholders. On behalf of the Trust Fund, each Servicer
shall deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before 12:00 noon New York time on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the related Collection Account and
the amount of all Prepayment Charges collected by the related Servicer in
connection with the Principal Prepayment of any of the Mortgage Loans then on
deposit in the related Collection Account and the amount of any funds
reimbursable to an Advance Financing Person pursuant to Section 3.25. If the
balance on deposit in a Collection Account exceeds $100,000 as of the
commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the related Servicer shall, on or before 5:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the related Servicer, the
Trustee, the Master Servicer, the Securities Administrator or the Seller
pursuant to Section 3.09 and shall pay such amounts to the Persons entitled
thereto or shall establish a separate Collection Account (which shall also be an
Eligible Account) and withdraw from the existing Collection Account the amount
on deposit therein in excess of $100,000 and deposit such excess in the newly
created Collection Account.
With respect to any remittance received by the Securities
Administrator on the Servicer Remittance Date on which such payment was due, the
Securities Administrator shall send written notice thereof to the related
Servicer. The related Servicer shall pay to the Securities Administrator
interest on any such late payment by such Servicer at an annual rate equal to
Prime Rate (as defined in THE WALL STREET JOURNAL) plus one percentage point,
but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be paid by the related Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the day following such Servicer Remittance Date and ending with
the Business Day on which such payment is made, both inclusive. The payment by
the related Servicer of any such interest, or the failure of the Securities
Administrator to notify the related Servicer of such interest, shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the related Servicer.
(c) Funds in the Collection Accounts and funds in the
Distribution Account may be invested in Permitted Investments in accordance with
the provisions set forth in Section 3.10. Each Servicer shall give notice to the
Trustee, the Securities Administrator and the Master Servicer of the location of
the Collection Account maintained by it when established and prior to any change
thereof. The Securities Administrator shall give notice to the Servicers and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the related Servicer in immediately available funds to the
Securities Administrator for deposit in the Distribution Account. In the event a
Servicer shall deliver to the Securities Administrator for deposit in the
Distribution Account any amount not required to be deposited therein, it may at
any time request that the Securities Administrator withdraw such amount from the
Distribution Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In no event shall the Securities Administrator
incur liability as a result of withdrawals from the Distribution Account at the
direction of a Servicer in accordance with the immediately preceding sentence.
In addition, each Servicer shall deliver to the Securities Administrator no
later than the Servicer Remittance Date the amounts set forth in clauses (i)
through (iv) below:
(i) any P&I Advances, as required pursuant to Section 5.03;
(ii) any amounts required to be deposited pursuant to Section
3.21(d) or 3.21(f) in connection with any related REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01; and
(iv) any amounts required to be deposited pursuant to Section
3.22 in connection with any Prepayment Interest Shortfalls.
SECTION 3.09. Withdrawals from the Collection Accounts and
Distribution Account.
(a) Each Servicer shall, from time to time, make withdrawals
from the related Collection Account for any of the following purposes or as
described in Section 5.03:
(i) to remit to the Securities Administrator for deposit in
the Distribution Account the amounts required to be so remitted
pursuant to Section 3.08(b) or permitted to be so remitted pursuant to
the first sentence of Section 3.08(d);
(ii) subject to Section 3.13(d), to reimburse itself
(including any successor Servicer) for P&I Advances made by it, but
only to the extent of amounts received which represent Late Collections
(net of the related Servicing Fees) of Monthly Payments on related
Mortgage Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 5.03;
(iii) subject to Section 3.13(d), to pay itself any unpaid
Servicing Fees and reimburse itself any unreimbursed Servicing Advances
with respect to each related Mortgage Loan, but only to the extent of
any Liquidation Proceeds and Insurance Proceeds received with respect
to such related Mortgage Loan;
(iv) to pay to itself as servicing compensation (in addition
to the Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the related Collection
Account;
(v) to pay to itself or the Seller, as the case may be, with
respect to each related Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.13(c) all
amounts received thereon not included in the Purchase Price or the
Substitution Shortfall Amount;
(vi) to reimburse itself (including any successor to the
related Servicer) for
(A) any P&I Advance or Servicing Advance previously
made by it which the related Servicer has determined
to be a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance in accordance with
the provisions of Section 5.03 provided however, that
no Servicer shall be entitled to reimbursement for
any Servicing Advance made prior to the Cut-off Date
if such Servicer determines that such Servicing
Advance constitutes a Nonrecoverable Servicing
Advance; or
(B) any unpaid Servicing Fees to the extent not
recoverable from Liquidation Proceeds, Insurance
Proceeds or other amounts received with respect to
the related Mortgage Loan under Section 3.06(a)(iii);
(vii) to reimburse itself or the Depositor for expenses
incurred by or reimbursable to itself or the Depositor, as the case may
be, pursuant to Section 3.01 or Section 7.03;
(viii) to reimburse itself or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect
giving rise to the purchase obligation under Section 2.03 of this
Agreement that were included in the Purchase Price of the related
Mortgage Loan, including any expenses arising out of the enforcement of
the purchase obligation;
(ix) to pay, or to reimburse itself for advances in respect
of, expenses incurred in connection with any related Mortgage Loan
pursuant to Section 3.13(b);
(x) to pay to itself any Prepayment Interest Excess on the
related Mortgage Loans to the extent not retained pursuant to Section
3.08(a)(ii)); and
(xi) to clear and terminate the Collection Account pursuant to
Section 10.01.
Each Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (ii), (iii), (v), (vi), (vii), (viii), (ix)
and (x) above.
(b) The Securities Administrator shall, from time to time,
make withdrawals from the Distribution Account, for any of the following
purposes, without priority:
(i) to make distributions to Certificateholders in accordance
with Section 5.01;
(ii) to pay to itself, the Custodians and the Master Servicer
amounts to which it is entitled pursuant to Section 9.05 or any other
provision of this Agreement and any Extraordinary Trust Fund Expenses;
(iii) to reimburse itself or the Master Servicer pursuant to
Section 8.02;
(iv) reserved;
(v) to pay any amounts in respect of taxes pursuant to Section
11.01(g)(v);
(vi) to pay the Master Servicing Fee to the Master Servicer;
(vii) to pay the Credit Risk Management Fee to the Credit Risk
Manager; and
(viii) to clear and terminate the Distribution Account
pursuant to Section 10.01.
SECTION 3.10. Investment of Funds in the Investment Accounts.
(a) Each Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
related Collection Account to invest the funds in such Collection Account (for
purposes of this Section 3.10, an "Investment Account") in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if a Person other than the Securities Administrator is the obligor
thereon, and (ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Securities
Administrator is the obligor on such Permitted Investment. Amounts in the
Distribution Account may be invested in Permitted Investments as directed in
writing by the Master Servicer and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Securities Administrator is the obligor thereon, and (ii)
no later than the date on which such funds are required to be withdrawn from
such account pursuant to this Agreement, if the Securities Administrator is the
obligor thereon. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds shall be made in the name of
the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Securities Administrator shall be entitled to sole possession over
each such investment in the Distribution Account and, subject to subsection (b)
below, the income thereon, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Securities Administrator
or its agent, together with any document of transfer necessary to transfer title
to such investment to the Trustee or its nominee. In the event amounts on
deposit in a Collection Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion over such
Investment Account shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last
day such Permitted Investment may otherwise mature hereunder
in an amount equal to the lesser of (1) all amounts then
payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder promptly upon
receipt by such party of written notice from the related
Servicer that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on deposit
in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in a Collection Account a Servicer, shall be for the benefit of such
Servicer and shall be subject to its withdrawal in accordance with Section 3.09.
Each Servicer shall deposit in the Collection Account maintained by it the
amount of any loss incurred in respect of any such Permitted Investment made
with funds in such account immediately upon realization of such loss. All
earnings and gain realized from the investment of funds deposited in the
Distribution Account shall be for the benefit of the Master Servicer. The Master
Servicer shall remit from its own funds for deposit into the Distribution
Account the amount of any loss incurred on Permitted Investments in the
Distribution Account.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 9.01 and Section
9.02(a)(v), shall, at the written direction of the related Servicer, take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
(d) The Trustee, the Master Servicer or their respective
Affiliates are permitted to receive additional compensation that could be deemed
to be in the Trustee's or the Master Servicer's economic self-interest for (i)
serving as investment adviser, administrator, shareholder servicing agent,
custodian or sub-custodian with respect to certain of the Permitted Investments,
(ii) using Affiliates to effect transactions in certain Permitted Investments
and (iii) effecting transactions in certain Permitted Investments. Such
compensation shall not be considered an amount that is reimbursable or payable
to the Trustee or the Master Servicer pursuant to Section 3.09 or 3.10 or
otherwise payable in respect of Extraordinary Trust Fund Expenses. Such
additional compensation shall not be an expense of the Trust Fund.
SECTION 3.11. Maintenance of Hazard Insurance, Errors and
Omissions and Fidelity Coverage and Primary Mortgage Insurance.
(a) The terms of each Mortgage Note require the related
Mortgagor to maintain fire, flood and hazard insurance policies. To the extent
such policies are not maintained, the related Servicer shall cause to be
maintained for each Mortgaged Property fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located in
an amount which is at least equal to the lesser of the current principal balance
of the related Mortgage Loan and the amount necessary to compensate fully for
any damage or loss to the improvements which are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire and hazard insurance on each REO Property with extended coverage as is
customary in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property. Each Servicer will comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by a Servicer under any such policies
(other than amounts to be applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with Accepted Servicing Practices, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
related Collection Account, subject to withdrawal pursuant to Section 3.09, if
received in respect of a Mortgage Loan, or in the REO Account, subject to
withdrawal pursuant to Section 3.21, if received in respect of an REO Property.
Any cost incurred by a Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, the related Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid principal balance of the related Mortgage Loan and
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).
In the event that the related Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of B:VI
or better in Best's Key Rating Guide or otherwise acceptable to Xxxxxx Xxx or
Xxxxxxx Mac insuring against hazard losses on all of the related Mortgage Loans,
it shall conclusively be deemed to have satisfied its obligations to cause fire
and hazard insurance to be maintained on the Mortgaged Properties, it being
understood and agreed that such policy may contain a deductible clause, in which
case the related Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.11, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
related Collection Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as administrator and servicer of the related Mortgage Loans, the
related Servicer agrees to prepare and present, on behalf of itself, the
Trustee, the Trust Fund, the Certificateholders, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of its respective obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
related Mortgage Loans, unless the related Servicer, has obtained a waiver of
such requirements from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Xxxxxx Mae or Xxxxxxx Mac, unless the related Servicer, has obtained a waiver
of such requirements from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall be
deemed to have complied with this provision if an Affiliate of such Servicer,
has such errors and omissions and fidelity bond coverage and, by the terms of
such insurance policy or fidelity bond, the coverage afforded thereunder extends
to such Servicer. Any such errors and omissions policy and fidelity bond shall
by its terms not be cancelable without thirty days' prior written notice to the
Trustee.
(c) No Servicer shall take any action that would result in
noncoverage under any applicable primary mortgage insurance policy of any loss
which, but for the actions of such Servicer would have been covered thereunder.
Each Servicer shall use its best efforts to keep in force and effect any
applicable primary mortgage insurance policy and, to the extent that the related
Mortgage Loan requires the Mortgagor to maintain such insurance, any other
primary mortgage insurance applicable to any Mortgage Loan. Except as required
by applicable law or the related Mortgage Loan Documents, the related Servicer
shall not cancel or refuse to renew any such primary mortgage insurance policy
that is in effect at the date of the initial issuance of the related Mortgage
Note and is required to be kept in force hereunder.
Each Servicer agrees to present on behalf of the Trustee and
the Certificateholders claims to the applicable insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Section 3.08, any
amounts collected by a Servicer under any primary mortgage insurance policies
shall be deposited in the related Collection Account, subject to withdrawal
pursuant to Section 3.09. Notwithstanding any provision to the contrary, no
Servicer shall have any responsibility with respect to a primary mortgage
insurance policy unless such Servicer has been made aware of such policy, as
reflected on the Mortgage Loan Schedule or otherwise and have been provided with
adequate information to administer such policy.
SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption
Agreements
Each Servicer shall, to the extent it has knowledge of any
conveyance of any related Mortgaged Property by any related Mortgagor (whether
by absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall exercise any such rights if prohibited by law from doing so. If a
Servicer reasonably believes that it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer shall enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the then current underwriting criteria of the related Servicer
for mortgage loans similar to the related Mortgage Loans. In connection with any
assumption or substitution, the related Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. No Servicer shall take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by a
Servicer in respect of an assumption or substitution of liability agreement will
be retained by such Servicer as additional servicing compensation. In connection
with any such assumption, no material term of the Mortgage Note (including but
not limited to the related Mortgage Rate and the amount of the Monthly Payment)
may be amended or modified, except as otherwise required pursuant to the terms
thereof. Each Servicer shall notify the Trustee (or the applicable Custodian)
that any such substitution or assumption agreement has been completed by
forwarding to the Trustee the executed original of such substitution or
assumption agreement, which document shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, no Servicer shall be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the related Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.12, the term
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
SECTION 3.13. Realization Upon Defaulted Mortgage Loans.
(a) Each Servicer shall use its best efforts, consistent with
Accepted Servicing Practices, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.06. Each Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Servicers as contemplated in Sections 3.09 and
3.21. The foregoing is subject to the provision that, in any case in which a
Mortgaged Property shall have suffered damage from an Uninsured Cause, the
related Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.13 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the related Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, such Servicer shall not, on behalf of the Trust Fund, either
(i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trust Fund, the Trustee or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless such Servicer has also
previously determined, based on its reasonable judgment and a prudent report
prepared by an Independent Person who regularly conducts environmental audits
using customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as
are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be
required under any federal, state or local law or regulation,
or that if any such materials are present for which such
action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with
respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.13 shall be advanced by the related Servicer, subject to the
related Servicer's right to be reimbursed therefor from the related Collection
Account as provided in Section 3.09(a)(ix), such right of reimbursement being
prior to the rights of Certificateholders to receive any amount in the related
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.
If the related Servicer determines, as described above, that
it is in the best economic interest of the Trust Fund to take such actions as
are necessary to bring any such Mortgaged Property into compliance with
applicable environmental laws, or to take such action with respect to the
containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials affecting any such
Mortgaged Property, then the related Servicer shall take such action as it deems
to be in the best economic interest of the Trust Fund. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the related
Servicer, subject to the related Servicer's right to be reimbursed therefor from
the related Collection Account as provided in Sections 3.09(a)(iii) or
3.09(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the related Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
(c) Each Servicer shall have the right to purchase from REMIC
I any defaulted Mortgage Loan serviced by it that is 90 days or more delinquent,
which such Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee, in form and substance satisfactory to such Servicer and
the Trustee prior to purchase), at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the related Collection Account, and the Trustee, upon receipt of written
certification from the related Servicer of such deposit, shall release or cause
to be released to the related Servicer the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as the related Servicer shall
furnish and as shall be necessary to vest in the related Servicer title to any
Mortgage Loan released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
related Servicer for any related unreimbursed Servicing Advances and P&I
Advances, pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the related Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the related Servicer pursuant to Section 3.09(a)(iii). The portion
of the recovery allocated to interest (net of unpaid Servicing Fees) and the
portion of the recovery allocated to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the related Servicer for any related
unreimbursed Servicing or P&I Advances in accordance with Section 3.09(a)(ii)
and any other amounts reimbursable to the related Servicer pursuant to Section
3.09, and second, as part of the amounts to be transferred to the Distribution
Account in accordance with Section 3.08(b).
SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by the related Servicer of a notification that payment in
full has been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the related Servicer will
promptly furnish to the applicable Custodian, on behalf of the Trustee, two
copies of a request for release substantially in the form attached to the
respective Custodial Agreement signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the related Collection Account have
been or will be so deposited) and shall request that the applicable Custodian,
on behalf of the Trustee, deliver to the related Servicer the related Mortgage
File. Upon receipt of such certification and request, the applicable Custodian,
on behalf of the Trustee, shall within five (5) Business Days release the
related Mortgage File to the related Servicer and the Trustee and the applicable
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the related Servicer is authorized, to
give, as agent for the Trustee, as the mortgagee under the Mortgage that secured
the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, shall be chargeable to the related Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the related Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The applicable Custodian, on behalf of the Trustee, shall,
upon the request of the related Servicer, and delivery to the applicable
Custodian, on behalf of the Trustee, of two copies of a request for release
signed by a Servicing Officer substantially in the form attached to the
respective Custodial Agreement (or in a mutually agreeable electronic format
which will, in lieu of a signature on its face, originate from a Servicing
Officer), release within five (5) Business Days the related Mortgage File held
in its possession or control to the related Servicer. Such trust receipt shall
obligate the related Servicer to return the Mortgage File to the applicable
Custodian on behalf of the Trustee, when the need therefor by the related
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which
case, upon receipt of a certificate of a Servicing Officer similar to that
hereinabove specified, the Mortgage File shall be released by the applicable
Custodian, on behalf of the Trustee, to the related Servicer.
Notwithstanding the foregoing, in connection with a Principal
Prepayment in full of any Mortgage Loan, the Master Servicer may request release
of the related Mortgage File from the applicable Custodian, in accordance with
the provisions of the respective Custodial Agreement, in the event the related
Servicer fails to do so.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the related Servicer, any court pleadings, requests
for trustee's sale or other documents prepared and delivered to the Trustee and
reasonably acceptable to it and necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale. So long as no Servicer Event of Default shall have occurred and
be continuing, the related Servicer shall have the right to execute any and all
such court pleadings, requests and other documents as attorney-in-fact for, and
on behalf of the Trustee.
SECTION 3.15. Servicing Compensation.
Except as otherwise provided in the Assignment Agreements with
respect to the Servicer's and each Interim Subservicer's servicing compensation
for the month in which servicing is transferred from such Interim Subservicer to
the Servicer, as compensation for its activities hereunder, the Servicer shall
be entitled to the Servicing Fee with respect to each Mortgage Loan serviced by
it payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.22. In addition, each Servicer shall be entitled to recover
unpaid Servicing Fees out of Insurance Proceeds or Liquidation Proceeds to the
extent permitted by Section 3.09(a)(iii) and out of amounts derived from the
operation and sale of an REO Property to the extent permitted by Section 3.21.
The right to receive the Servicing Fee may not be transferred in whole or in
part except in connection with the transfer of all of a Servicer's
responsibilities and obligations under this Agreement to the extent permitted
herein.
Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds charges and other miscellaneous
fees (other than Prepayment Charges) and ancillary income shall be retained by
the related Servicer only to the extent such fees or charges are received by the
related Servicer. Each Servicer shall also be entitled pursuant to Section
3.09(a)(iv) to withdraw from the related Collection Account and pursuant to
Section 3.21(b) to withdraw from any REO Account, as additional servicing
compensation, interest or other income earned on deposits therein, subject to
Section 3.10. In addition, the related Servicer shall be entitled to retain or
withdraw from the related Collection Account, pursuant to Section 3.09(a)(x),
any Prepayment Interest Excess with respect to the Mortgage Loans serviced by it
as additional servicing compensation. Each Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided herein.
SECTION 3.16. Collection Account Statements.
Upon request, not later than fifteen (15) days after each
Distribution Date, each Servicer shall forward to the Master Servicer, the
Securities Administrator, the Trustee and the Depositor a statement prepared by
the institution at which the related Collection Account is maintained setting
forth the status of the related Collection Account as of the close of business
on such Distribution Date and showing, for the period covered by such statement,
the aggregate amount of deposits into and withdrawals from the related
Collection Account of each category of deposit specified in Section 3.08(a) and
each category of withdrawal specified in Section 3.09. Copies of such statement
and any similar statements provided by each Servicer shall be provided by the
Securities Administrator to any Certificateholder and to any Person identified
to the Securities Administrator as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by each Servicer to the Securities Administrator.
SECTION 3.17. Statement as to Compliance.
Not later than March 15th of each calendar year commencing in
2006 (or, with respect to Saxon, if the Master Servicer notifies Saxon prior to
February 1st in any calendar year thereafter that it has filed a Form 15
Suspension Notice, not later than March 24th of such year), each Servicer shall
deliver to the Trustee, the Master Servicer and the Depositor an Officers'
Certificate in a form acceptable for filing with the Securities and Exchange
Commission as an exhibit to Form 8-K or other required form (upon which the
Master Servicer can conclusively rely in connection with its obligations under
Section 5.06) stating, as to each signatory thereof, that (i) a review of the
activities of such Servicer during the preceding year and of performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officer's knowledge, based on such review, such Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trustee to any
Certificateholder, upon request at the expense of the requesting party, provided
such statement is delivered by the Servicers to the Trustee.
SECTION 3.18. Independent Public Accountants' Servicing
Report.
Not later than March 15th of each calendar year commencing in
2006 (or, with respect to Saxon, if the Master Servicer notifies Saxon prior to
February 1st in any calendar year thereafter that a Form 15 Suspension Notice
has been filed, not later than March 24th of such year), each Servicer, at its
expense, shall cause a nationally recognized firm of independent certified
public accountants to furnish to such Servicer a report in a form acceptable for
filing with the Securities and Exchange Commission as an exhibit to Form 10-K or
other required form stating that (i) it has obtained a letter of representation
regarding certain matters from the management of such Servicer which includes an
assertion that such Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
and such firm has determined that the related Servicer has complied in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. Immediately upon receipt of such report, each Servicer shall
furnish a copy of such report to the Master Servicer, the Trustee and each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the expense of the requesting party, provided
that such statement is delivered by the Servicers to the Trustee.
SECTION 3.19. Annual Certification.
(a) Each Servicer shall deliver to the Master Servicer, (i) on
or before March 15th of each calendar year beginning in 2006 (or, if any such
day is not a Business Day, the immediately preceding Business Day) or such
alternative date reasonably specified by the Master Servicer which shall occur
not later than fifteen (15) days prior to the date any Form 10-K is required to
be filed with the Commission in connection with the transactions contemplated by
this Agreement, a certification in the form attached hereto as Exhibit C, or
(ii) with respect to Saxon, on or before March 24th of each calendar year in
which the Master Servicer notifies Saxon on or before February 1st that a Form
15 Suspension Notice has been filed. Such certification shall be signed by the
senior officer in charge of servicing of the related Servicer.
(b) Each Servicer shall indemnify and hold harmless the Master
Servicer, the Securities Administrator, the Trustee, the Depositor and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by such Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.19 or such Servicer's
negligence, bad faith or willful misconduct in connection therewith. Such
indemnity shall survive the termination or resignation of the parties hereto or
the termination of this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator, the Trustee and the Depositor, then such Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer, the
Securities Administrator, the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor in such proportion as is
appropriate to reflect the relative fault of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor on the one hand and such Servicer
on the other in connection with a breach of such Servicer's obligations under
this Section 3.19.
SECTION 3.20. Access to Certain Documentation.
Each Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificate Owner,
access to the documentation regarding the related Mortgage Loans required by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the related Servicer designated by it. Nothing in this Section 3.20 shall
limit the obligation of the related Servicer to comply with any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the related Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section. Nothing
in this Section 3.20 shall require the related Servicer to collect, create,
collate or otherwise generate any information that it does not generate in its
usual course of business. No Servicer shall be required to make copies of or
ship documents to any Person unless provisions have been made for the
reimbursement of the costs thereof.
SECTION 3.21. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property
related to a Mortgage Loan shall be taken in the name of the Trustee, or its
nominee, on behalf of the Trust Fund and for the benefit of the
Certificateholders. The related Servicer, on behalf of REMIC I, shall either
sell any REO Property by the close of the third calendar year following the
calendar year in which REMIC I acquires ownership of such REO Property for
purposes of Section 860(a)(8) of the Code or request from the Internal Revenue
Service, no later than sixty (60) days before the day on which the three-year
grace period would otherwise expire an extension of the three-year grace period,
unless the related Servicer had delivered to the Trustee an Opinion of Counsel,
addressed to the Trustee and the Depositor, to the effect that the holding by
REMIC I of such REO Property subsequent to three (3) years after its acquisition
will not result in the imposition on any Trust REMIC created hereunder of taxes
on "prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC hereunder to fail to qualify as a REMIC under Federal law
at any time that any Certificates are outstanding. The related Servicer shall
manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) Each Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee, on
behalf of the Trust Fund and for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. Each Servicer shall be permitted
to allow the related Collection Account to serve as the REO Account, subject to
the maintenance of separate ledgers for each REO Property. Each Servicer shall
be entitled to retain or withdraw any interest income paid on funds deposited in
the related REO Account.
(c) Each Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property related to a Mortgage Loan
serviced by it as are consistent with the manner in which such Servicer manages
and operates similar property owned by it or any of its Affiliates, all on such
terms and for such period as such Servicer deems to be in the best interests of
Certificateholders. In connection therewith, each Servicer shall deposit, or
cause to be deposited in the clearing account in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage loan
servicing activities on a daily basis, and in no event more than one (1)
Business Day after such Servicer's receipt thereof, and shall thereafter deposit
in the REO Account, in no event more than two (2) Business Days after the
deposit of good funds into the clearing account, all revenues received by it
with respect to an REO Property related to a Mortgage Loan serviced by it and
shall withdraw therefrom funds necessary for the proper operation, management
and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the related
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the related Servicer would make such advances if the
related Servicer owned the REO Property and if in the related Servicer's
judgment, the payment of such amounts will be recoverable from the rental or
sale of the REO Property.
Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding the foregoing, the related
Servicer, on behalf of the Trust Fund, shall not:
(iv) enter into, renew or extend any New Lease with respect to
any REO Property, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
(v) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(vi) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon,
and then only if more than ten percent of the construction of such
building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(vii) allow any Person to Directly Operate any REO Property on
any date more than ninety (90) days after its date of acquisition by
the Trust Fund;
unless, in any such case, the related Servicer has obtained an Opinion of
Counsel, provided to the related Servicer and the Trustee, to the effect that
such action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by REMIC I, in which case the related Servicer may take such actions
as are specified in such Opinion of Counsel.
The related Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(viii) the terms and conditions of any such contract shall not
be inconsistent herewith;
(ix) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the related Servicer as soon as
practicable, but in no event later than thirty (30) days following the
receipt thereof by such Independent Contractor;
(x) none of the provisions of this Section 3.21(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the related Servicer of any of
its duties and obligations to the Trustee on behalf of the Trust Fund
and for the benefit of the Certificateholders with respect to the
operation and management of any such REO Property; and
(xi) the related Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of such
REO Property.
The related Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the related Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The related Servicer shall be solely
liable for all fees owed by it to any such Independent Contractor, irrespective
of whether the related Servicer's compensation pursuant to Section 3.15 is
sufficient to pay such fees. Any such agreement shall include a provision that
such agreement may be immediately terminated by the Trustee (as successor
Servicer) or any other successor Servicer (including the Master Servicer)
without fee, in the event the related shall for any reason, no longer be the
Servicer of the related Mortgage Loans (including termination due to a Servicer
Event of Default).
(d) In addition to the withdrawals permitted under Section
3.21(c), the related Servicer may from time to time make withdrawals from the
REO Account for any REO Property: (i) to pay itself unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Servicer Remittance Date,
the related Servicer shall withdraw from each REO Account maintained by it and
deposit into the Distribution Account in accordance with Section 3.08(d)(ii),
for distribution on the related Distribution Date in accordance with Section
5.01, the income from the related REO Property received during the prior
calendar month, net of any withdrawals made pursuant to Section 3.21(c) or this
Section 3.21(d).
(e) Subject to the time constraints set forth in Section
3.21(a), each REO Disposition shall be carried out by the related Servicer at
such price and upon such terms and conditions as the related Servicer shall deem
necessary or advisable, as shall be normal and usual in accordance with Accepted
Servicing Practices.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the related Servicer as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.08(d)(ii) on the Servicer Remittance Date in the month following the receipt
thereof for distribution on the related Distribution Date in accordance with
Section 5.01. Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The related Servicer shall file information returns (and
shall provide a certification of a Servicing Officer to the Master Servicer that
such filings have been made) with respect to the receipt of mortgage interest
received in a trade or business, reports of foreclosures and abandonments of any
Mortgaged Property and cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
SECTION 3.22. Obligations of the Servicers in Respect of
Prepayment Interest Shortfalls; Relief Act Interest Shortfalls.
Each Servicer shall deliver to the Securities Administrator
for deposit into the Distribution Account on or before 12:00 noon New York time
on the Servicer Remittance Date from its own funds an amount equal to the lesser
of (i) the aggregate amount of the Prepayment Interest Shortfalls attributable
to prepayments in full on the related Mortgage Loans for the related
Distribution Date resulting solely from voluntary Principal Prepayments received
by the related Servicer during the related Prepayment Period and (ii) the
aggregate amount of the related Servicing Fees payable to related Servicer on
such Distribution Date with respect to the related Mortgage Loans. No Servicer
shall have the right to reimbursement for any amounts remitted to the Securities
Administrator in respect of this Section 3.22. No Servicer shall be obligated to
pay the amounts set forth in this Section 3.22 with respect to shortfalls
resulting from the application of the Relief Act.
SECTION 3.23. Obligations of the Servicers in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by a Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the related Servicer, upon discovery
or receipt of notice thereof, immediately shall deliver to the Securities
Administrator for deposit in the Distribution Account from its own funds the
amount of any such shortfall and shall indemnify and hold harmless the Trust
Fund, the Trustee, the Securities Administrator, the Master Servicer, the
Depositor and any successor Servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.23 shall not limit the ability of
the Servicer to seek recovery of any such amounts from the related Mortgagor
under the terms of the related Mortgage Note and Mortgage, to the extent
permitted by applicable law.
SECTION 3.24. Reserve Fund.
(a) No later than the Closing Date, the Securities
Administrator shall establish and maintain a separate, segregated trust account
entitled, "Reserve Fund, Xxxxx Fargo Bank, N.A., in trust for the registered
holders of ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4, Asset
Backed Pass-Through Certificates." On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Reserve Fund $1,000. In addition,
the amount deposited in the Reserve Fund shall be increased by any payments
received by the Securities Administrator under the Group I Cap Contract and
deposited into the Reserve Fund for the benefit of the Class A-1 Certificates,
Mezzanine Certificates and the Class B Certificates and under the Group II Cap
Contract and deposited in the Reserve Fund for the benefit of the Class A-2
Certificates, the Mezzanine Certificates and the Class B Certificates.
(b) On each Distribution Date, the Securities Administrator
shall deposit into the Reserve Fund the amounts described in Section
5.01(a)(7)(vi), rather than distributing such amounts to the Class CE-1
Certificateholders, and Section 5.01(a)(7)(vii). On each such Distribution Date,
the Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates and will distribute such amounts to the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, in the
amounts and priorities set forth in Section 5.01(a). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Securities
Administrator shall deposit, into the Reserve Fund on behalf of the Class CE-1
Certificateholders, from amounts otherwise distributable to the Class CE-1
Certificateholders, an amount such that when added to other amounts already on
deposit in the Reserve Fund, the aggregate amount on deposit therein is equal to
$1,000.
(c) For federal and state income tax purposes, the Class CE-1
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000) and any amounts paid to the Reserve Fund from the Cap Contracts shall
be treated as amounts distributed by REMIC III to the Holders of the Class CE-1
Certificates. Upon the termination of the Trust Fund, or the payment in full of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, all amounts remaining on deposit in the Reserve Fund will be
released by the Trust Fund and distributed to the Class CE-1 Certificateholders
or their designees. The Reserve Fund will be part of the Trust Fund but not part
of any REMIC and any payments to the Holders of the Class A Certificates, the
Mezzanine Certificates or the Class B Certificates of Net WAC Rate Carryover
Amounts will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860(G)(a)(1).
(d) By accepting a Class CE-1 Certificate, each Class CE-1
Certificateholder hereby agrees that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE-1 Certificateholders. By
accepting a Class CE-1 Certificate, each Class CE-1 Certificateholder further
agrees that its agreement to such action by the Securities Administrator is
given for good and valuable consideration, the receipt and sufficiency of which
is acknowledged by such acceptance.
(e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE-1 Certificates, the Securities Administrator
shall direct any depository institution maintaining the Reserve Fund to invest
the funds in such account in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Securities Administrator or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Securities
Administrator or an Affiliate manages or advises such investment. All income and
gain earned upon such investment shall be deposited into the Reserve Fund. In no
event shall the Securities Administrator be liable for any investments made
pursuant to this clause (e). If the Holders of a majority in Percentage Interest
in the Class CE-1 Certificates fail to provide investment instructions, funds on
deposit in the Reserve Fund shall be held uninvested by the Securities
Administrator without liability for interest or compensation.
(f) For federal tax return and information reporting, the
right of the Class A Certificateholders, the Mezzanine Certificateholders and
Class B Certificateholders to receive payments from the Reserve Fund in respect
of any Net WAC Rate Carryover Amount shall be assigned a value of $86,000.00
with respect to Certificates covered by the Group I Cap Contract and $110,000.00
with respect to Certificates covered by the Group II Cap Contract.
SECTION 3.25. Advance Facility.
(a) Notwithstanding anything to the contrary contained herein,
(i) each Servicer is hereby authorized to enter into an advance facility
("Advance Facility") but no more than two Advance Facilities without the prior
written consent of the Trustee, which consent shall not be unreasonably
withheld, under which (A) the related Servicer sells, assigns or pledges to an
advancing person (an "Advance Financing Person") its rights under this Agreement
to be reimbursed for any P&I Advances or Servicing Advances and/or (B) an
Advance Financing Person agrees to finance some or all P&I Advances or Servicing
Advances required to be made by the related Servicer pursuant to this Agreement
and (ii) each Servicer is hereby authorized to assign its rights to the
Servicing Fee (which rights shall terminate upon the resignation, termination or
removal of the related Servicer pursuant to the terms of this Agreement); it
being understood that neither the Trust Fund nor any party hereto shall have a
right or claim (including without limitation any right of offset) to any amounts
for reimbursement of P&I Advances or Servicing Advances so assigned or to the
portion of the Servicing Fee so assigned. Subject to the provisions of the first
sentence of this Section 3.25(a), no consent of the Depositor, Trustee, Master
Servicer, Certificateholders or any other party is required before a Servicer
may enter into an Advance Facility, but such Servicer shall provide notice to
the Depositor, Master Servicer and the Trustee of the existence of any such
Advance Facility promptly upon the consummation thereof stating (a) the identity
of the Advance Financing Person and (b) the identity of any Person ("Servicer's
Assignee") who has the right to receive amounts in reimbursement of previously
xxxxxxxxxxxx X&X Advances or Servicing Advances. Notwithstanding the existence
of any Advance Facility under which an advancing person agrees to finance P&I
Advances and/or Servicing Advances on such Servicer's behalf, such Servicer
shall remain obligated pursuant to this Agreement to make P&I Advances and
Servicing Advances pursuant to and as required by this Agreement, and shall not
be relieved of such obligations by virtue of such Advance Facility.
(b) Reimbursement amounts ("Advance Reimbursement Amounts")
shall consist solely of amounts in respect of P&I Advances and/or Servicing
Advances made with respect to the related Mortgage Loans for which the related
Servicer would be permitted to reimburse itself in accordance with this
Agreement, assuming the related Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
(c) The related Servicer shall maintain and provide to any
successor Servicer (with, upon request, a copy to the Trustee) a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any advancing person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
(d) Reimbursement amounts distributed with respect to each
Mortgage Loan shall be allocated to outstanding xxxxxxxxxxxx X&X Advances or
Servicing Advances (as the case may be) made with respect to that Mortgage Loan
on a "first-in, first out" (FIFO) basis. The documentation establishing any
Advance Facility shall require the related Servicer to provide to the related
advancing person or its designee loan-by-loan information with respect to each
such reimbursement amount distributed to such advancing person or Advance
Facility trustee on each Distribution Date, to enable the advancing person or
Advance Facility trustee to make the FIFO allocation of each such reimbursement
amount with respect to each Mortgage Loan. The related Servicer shall remain
entitled to be reimbursed by the advancing person or Advance Facility trustee
for all P&I Advances and Servicing Advances funded by the related Servicer to
the extent the related rights to be reimbursed therefor have not been sold,
assigned or pledged to an advancing person.
(e) Any amendment to this Section 3.25 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.25,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor, and the related Servicer without the
consent of any Certificateholder, notwithstanding anything to the contrary in
this Agreement, provided, that the Trustee has been provided an Opinion of
Counsel that such amendment is authorized hereunder and has no material adverse
effect on the Certificateholders, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the Trustee
or the Trust Fund; provided, further, that the amendment shall not be deemed to
adversely affect in any material respect the interests of the Certificateholders
if the Person requesting the amendment obtains a letter from each Rating Agency
(instead of obtaining an Opinion of Counsel to such effect) stating that the
amendment would not result in the downgrading or withdrawal of the respective
ratings then assigned to the Certificates; it being understood and agreed that
any such rating letter in and of itself will not represent a determination as to
the materiality of any such amendment and will represent a determination only as
to the credit issues affecting any such rating. Prior to entering into an
Advance Facility, the related Servicer shall notify the lender under such
facility in writing that: (a) the P&I Advances and/or Servicing Advances
financed by and/or pledged to the lender are obligations owed to the related
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of P&I Advances and/or Servicing
Advances only to the extent provided herein, and neither the Master Servicer,
the Securities Administrator, the Trustee nor the Trust are otherwise obligated
or liable to repay any P&I Advances and/or Servicing Advances financed by the
lender; (b) the related Servicer will be responsible for remitting to the lender
the applicable amounts collected by it as Servicing Fees and as reimbursement
for P&I Advances and/or Servicing Advances funded by the lender, as applicable,
subject to the restrictions and priorities created in this Agreement; and (c)
neither the Master Servicer, the Securities Administrator nor the Trustee shall
have any responsibility to calculate any amount payable under an Advance
Facility or to track or monitor the administration of the financing arrangement
between the related Servicer and the lender or the payment of any amount under
an Advance Facility.
(f) The related Servicer shall indemnify the Master Servicer,
the Securities Administrator, the Trustee and the Trust Fund for any cost,
liability or expense relating to the Advance Facility including, without
limitation, a claim, pending or threatened, by an Advance Financing Person.
SECTION 3.26. The Servicers Indemnification.
Each Servicer agrees to indemnify the Trustee, Master Servicer
and the Securities Administrator, from, and hold the Trustee, Master Servicer
and the Securities Administrator harmless against, any loss, liability or
expense (including reasonable attorney's fees and expenses) incurred by any such
Person by reason of such Servicer's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement or by reason of
such Servicer's reckless disregard of its obligations and duties under this
Agreement. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of related Servicer, the Trustee, the
Master Servicer and the Securities Administrator. Any payment hereunder made by
the related Servicer to any such Person shall be from the related Servicer's own
funds, without reimbursement from REMIC I therefor.
SECTION 3.27. Pre-Funding Account.
(a) No later than the Closing Date, the Securities
Administrator shall establish and maintain a trust account which shall at all
times be an Eligible Account and shall be titled "Pre-Funding Account, Xxxxx
Fargo Bank, N.A., in trust for the registered holders of ACE Securities Corp.
Home Equity Loan Trust, Series 2005-HE4, Asset-Backed Pass Through Certificates"
(the "Pre-Funding Account"). The Pre-Funding Account shall consist of two
sub-accounts, the "Group I Pre-Funding Sub-Account" and the "Group II
Pre-Funding Sub-Account". The Securities Administrator shall, promptly upon
receipt, deposit in the Group I Pre-Funding Sub-Account and the Group II
Pre-Funding Sub-Account and retain therein the Original Group I Pre-Funded
Amount and the Original Group II Pre-Funded Amount remitted on the Closing Date
by the Depositor. Funds deposited in the Pre-Funding Account shall be held in
trust for the Certificateholders for the uses and purposes set forth herein.
(b) The Securities Administrator will invest funds deposited
in the Pre-Funding Account as directed by the Depositor in Permitted Investments
with a maturity date (i) no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if a Person other than the Securities Administrator
or an Affiliate manages or advises such investment, (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if the Securities Administrator or an Affiliate manages or
advises such investment or (iii) within one (1) Business Day of the Securities
Administrator's receipt thereof. For federal income tax purposes, the Depositor
shall be the owner of the Pre-Funding Account and shall report all items of
income, deduction, gain or loss arising therefrom. All income and gain realized
from investment of funds deposited in the Pre-Funding Account shall be
transferred to the Depositor. The Depositor shall deposit in the Pre-Funding
Account the amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss without any right of
reimbursement therefor. At no time will the Pre-Funding Account be an asset of
any REMIC created hereunder.
(c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Securities Administrator as follows:
(i) On any Subsequent Transfer Date, the Securities
Administrator shall withdraw from the Group I Pre-Funding Sub-Account
or the Group II Pre-Funding Sub-Account, as applicable, an amount equal
to 100% of the Stated Principal Balances of the Subsequent Group I
Mortgage Loans or the Subsequent Group II Mortgage Loans, as
applicable, transferred and assigned to the Trustee for deposit in the
mortgage pool on such Subsequent Transfer Date and pay such amount to
or upon the order of the Depositor upon satisfaction of the conditions
set forth in Section 2.09 with respect to such transfer and assignment;
(ii) If the amount on deposit in the Pre-Funding Account
(exclusive of any investment income therein) has not been reduced to
zero during the Pre-Funding Period, on the day immediately following
the termination of the Pre-Funding Period, the Securities Administrator
shall deposit into the Distribution Account any amounts remaining in
the Pre-Funding Account (exclusive of any investment income therein)
for distribution in accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the
end of the Pre-Funding Period and (B) the termination of this
Agreement, with any amounts remaining on deposit therein being paid to
the Holders of the Certificates then entitled to distributions in
respect of principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC I on the date of withdrawal.
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING
OF THE MORTGAGE LOANS BY THE MASTER SERVICER
SECTION 4.01. Master Servicer.
The Master Servicer shall, from and after the Closing Date
supervise, monitor and oversee the obligations of the Servicers under this
Agreement and the Interim Servicer under the Interim Servicing Agreement to
service and administer the related Mortgage Loans in accordance with the terms
of this Agreement and the Interim Servicing Agreement and shall have full power
and authority to do any and all things which it may deem necessary or desirable
in connection with such master servicing and administration. In performing its
obligations hereunder, the Master Servicer shall act in a manner consistent with
Accepted Master Servicing Practices. Furthermore, the Master Servicer shall
oversee and consult with the Servicers and the Interim Servicer as necessary
from time-to-time to carry out the Master Servicer's obligations hereunder,
shall receive, review and evaluate all reports, information and other data
provided to the Master Servicer by the Servicers and the Interim Servicer and
shall cause the Servicers and the Interim Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicers under this Agreement or the Interim Servicer under the Interim
Servicing Agreement. The Master Servicer shall independently and separately
monitor the Servicers' and the Interim Servicer's servicing activities with
respect to each related Mortgage Loan, reconcile the results of such monitoring
with such information provided in the previous sentence on a monthly basis and
coordinate corrective adjustments to the Servicers' or the Interim Servicer's
and Master Servicer's records, and based on such reconciled and corrected
information, prepare the statements specified in Section 5.03 and any other
information and statements required to be provided by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers or the Interim Servicer
to the Distribution Account pursuant to the terms hereof based on information
provided to the Master Servicer by the Servicers and the Interim Servicer.
Notwithstanding anything to the contrary herein, the Master Servicer shall have
no obligation to supervise, monitor or oversee the performance of (i) the
Interim Servicer under the Interim Servicing Agreement on or after the related
Servicing Transfer Date, or (ii) the Interim Subservicer.
The Trustee shall furnish the related Servicer, the Interim
Servicer and the Master Servicer with any limited powers of attorney and other
documents in form as provided to it necessary or appropriate to enable the
related Servicer, the Interim Servicer and the Master Servicer to service and
administer the related Mortgage Loans and REO Property. The Trustee shall have
no responsibility for any action of the Master Servicer, the related Servicer or
the Interim Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer, the related Servicer or the Interim
Servicer, as applicable, for any cost, liability or expense incurred by the
Trustee in connection with such Person's misuse of any such power of attorney.
The Trustee, the Custodians and the Securities Administrator
shall provide access to the records and documentation in possession of the
Trustee, the Custodians or the Securities Administrator regarding the related
Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee, the Custodians or the
Securities Administrator; provided, however, that, unless otherwise required by
law, none of the Trustee, the Custodians or the Securities Administrator shall
be required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Trustee,
the Custodians and the Securities Administrator shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's, the
Custodians' or the Securities Administrator's actual costs.
The Trustee shall execute and deliver to the related Servicer,
the Interim Servicer or the Master Servicer upon request any court pleadings,
requests for trustee's sale or other documents necessary or desirable to (i) the
foreclosure or trustee's sale with respect to a Mortgaged Property; (ii) any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or any other Mortgage Loan Document; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or any other Mortgage Loan Document or otherwise available at
law or equity.
SECTION 4.02. REMIC-Related Covenants.
For as long as each REMIC shall exist, the Trustee and the
Securities Administrator shall act in accordance herewith to treat such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the related Servicer, the Interim Servicer or the
Master Servicer to assure such continuing treatment. In particular, the Trustee
shall not (a) sell or permit the sale of all or any portion of the Mortgage
Loans or of any investment of deposits in an Account unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received a REMIC Opinion prepared at the expense of the Trust Fund;
and (b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.03 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of an Opinion of
Counsel stating that such contribution will not result in an Adverse REMIC Event
as defined in Section 11.01(f).
SECTION 4.03. Monitoring of Servicers.
(a) The Master Servicer shall be responsible for monitoring
the compliance by the Servicers with their respective duties under this
Agreement and the Interim Servicer with their respective duties under the
Interim Servicing Agreement. In the review of the related Servicer's or the
Interim Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the related Servicer or the Interim Servicer with regard to such
Servicer's or Interim Servicer's compliance with the terms of this Agreement or
the Interim Servicing Agreement, as applicable. In the event that the Master
Servicer, in its judgment, determines that the related Servicer or the Interim
Servicer should be terminated in accordance with the terms hereof or the terms
of the Interim Servicing Agreement or that a notice should be sent pursuant to
the terms hereof or the terms of the Interim Servicing Agreement with respect to
the occurrence of an event that, unless cured, would constitute a Servicer Event
of Default, or an event of default under the Interim Servicing Agreement, the
Master Servicer shall notify the related Servicer, the Interim Servicer, the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and
the Certificateholders, shall enforce the obligations of the Servicers under
this Agreement and the Interim Servicer under the Interim Servicing Agreement
and shall, in the event that a Servicer fails to perform its obligations in
accordance with this Agreement, subject to this Section and Article VIII, the
Trustee shall terminate the rights and obligations of such Servicer hereunder in
accordance with the provisions of Article VIII. In the event that the Interim
Servicer fails to perform its obligations in accordance with the Interim
Servicing Agreement, the Master Servicer shall terminate the rights and
obligations of the Interim Servicer, as servicer, in accordance with the Interim
Servicing Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) The Master Servicer shall be entitled to be reimbursed by
the related Servicer or the Interim Servicer, as applicable (or from amounts on
deposit in the Distribution Account if the related Servicer or the Interim
Servicer is unable to fulfill its obligations hereunder or under the Interim
Servicing Agreement) for all reasonable out-of-pocket or third party costs
associated with the transfer of servicing from the predecessor Servicer (or if
the predecessor Servicer is the Master Servicer, from the Servicer immediately
preceding the Master Servicer) or the Interim Servicer, including without
limitation, any reasonable out-of-pocket or third party costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Master Servicer to correct any errors or insufficiencies in the servicing data
or otherwise to enable the Master Servicer to service the related Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.
(d) The Master Servicer shall require the Servicers and the
Interim Servicer to comply with the remittance requirements and other
obligations set forth in this Agreement and the Interim Servicing Agreement.
(e) If the Master Servicer acts as successor to a Servicer or
the Interim Servicer, it will not assume liability for the representations and
warranties of the terminated Servicer or Interim Servicer.
SECTION 4.04. Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect
a blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
SECTION 4.05. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the related Servicer or the Interim
Servicer to) knowingly or intentionally take any action, or fail to take (or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC or result in the imposition
of a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not cause
REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC or result in the
imposition of a tax upon REMIC I, REMIC II or REMIC III, as the case may be. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney prepared and delivered to it and reasonably
acceptable to it by empowering the Master Servicer, the related Servicer or the
Interim Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with this Agreement or the Interim Servicing Agreement, and the
Trustee shall execute and deliver such other documents prepared and delivered to
it and reasonably acceptable to it, as the Master Servicer, the related Servicer
or the Interim Servicer may request, to enable the Master Servicer to master
service and administer the related Mortgage Loans and carry out its duties
hereunder, in each case in accordance with Accepted Master Servicing Practices
(and the Trustee shall have no liability for misuse of any such powers of
attorney by the Master Servicer, the related Servicer or the Interim Servicer
and shall be indemnified by the Master Servicer, the related Servicer or the
Interim Servicer, as applicable, for any cost, liability or expense incurred by
the Trustee in connection with such Person's use or misuse of any such power of
attorney). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.10. In the performance of
its duties hereunder, the Master Servicer shall be an independent contractor and
shall not, except in those instances where it is taking action in the name of
the Trustee, be deemed to be the agent of the Trustee.
SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements.
To the extent Mortgage Loans contain enforceable due-on-sale
clauses, the Master Servicer shall cause the related Servicer or the Interim
Servicer, as applicable, to enforce such clauses in accordance with this
Agreement or the Interim Servicing Agreement. If applicable law prohibits the
enforcement of a due-on-sale clause or such clause is otherwise not enforced in
accordance with this Agreement or the Interim Servicing Agreement and, as a
consequence, a Mortgage Loan is assumed, the original Mortgagor may be released
from liability in accordance with this Agreement or the Interim Servicing
Agreement.
SECTION 4.07. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit to the Trustee or the
applicable Custodian such documents and instruments coming into the possession
of the Master Servicer from time to time as are required by the terms hereof to
be delivered to the Trustee or the applicable Custodian. Any funds received by
the Master Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan shall be remitted to the Securities
Administrator for deposit in the Distribution Account. The Master Servicer
shall, and, subject to Section 3.20 of this Agreement or, to the extent provided
therein, the Interim Servicing Agreement, shall cause the related Servicer or
the Interim Servicer to, provide access to information and documentation
regarding the Mortgage Loans to the Trustee, its agents and accountants at any
time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory agents
and examiners of such Office and Corporation or examiners of any other federal
or state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority,
such access to be afforded without charge but only upon reasonable request in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or
under the control of, the Master Servicer, in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be remitted to the Trustee for
deposit in the Distribution Account.
SECTION 4.08. Standard Hazard Insurance and Flood Insurance
Policies.
For each Mortgage Loan, the Master Servicer shall enforce the
obligation of each Servicer under this Agreement or the Interim Servicer under
the Interim Servicing Agreement to maintain or cause to be maintained standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of this Agreement or the Interim Servicing
Agreement. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in Section 3.11 of the
Agreement or the eligibility requirements set forth in the Interim Servicing
Agreement and that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in respect of a
defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
SECTION 4.09. Presentment of Claims and Collection of
Proceeds.
The Master Servicer shall enforce each Servicer's obligations
under this Agreement and the Interim Servicer's obligations under the Interim
Servicing Agreement to prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer in respect of such policies, bonds
or contracts shall be promptly remitted to the Trustee for deposit in the
Distribution Account upon receipt, except that any amounts realized that are to
be applied to the repair or restoration of the Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable insurance policy need not be so or remitted.
SECTION 4.10. Maintenance of Primary Mortgage Insurance
Policies.
(a) The Master Servicer shall not take, or permit the related
Servicer or the Interim Servicer to take (to the extent such action is
prohibited by this Agreement or the Interim Servicing Agreement), any action
that would result in noncoverage under any primary mortgage insurance policy of
any loss which, but for the actions of the Master Servicer, the related Servicer
or the Interim Servicer, as applicable, would have been covered thereunder. The
Master Servicer shall use its best reasonable efforts to cause the related
Servicer or the Interim Servicer to keep in force and effect (to the extent that
the Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement or the Interim Servicing Agreement. The Master
Servicer shall not, and shall not permit the related Servicer or the Interim
Servicer to, cancel or refuse to renew any primary mortgage insurance policy
that is in effect at the date of the initial issuance of the Mortgage Note and
is required to be kept in force hereunder except in accordance with the
provisions of this Agreement or the Interim Servicing Agreement.
(b) The Master Servicer agrees to cause the related Servicer
or the Interim Servicer to present, on behalf of the Trustee and the
Certificateholders, claims to the insurer under any primary mortgage insurance
policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any primary mortgage insurance policies
respecting defaulted Mortgage Loans.
SECTION 4.11. Trustee to Retain Possession of Certain
Insurance Policies and Documents.
The Trustee or the applicable Custodian, shall retain
possession and custody of the originals (to the extent available) of any primary
mortgage insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
related Servicer and the Interim Servicer have otherwise fulfilled their
respective obligations under this Agreement and the Interim Servicing Agreement,
the Trustee or the applicable Custodian shall also retain possession and custody
of each Mortgage File in accordance with and subject to the terms and conditions
of this Agreement and the Custodial Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the applicable
Custodian, upon the execution or receipt thereof the originals of any primary
mortgage insurance policies, any certificates of renewal, and such other
documents or instruments that constitute Mortgage Loan Documents that come into
the possession of the Master Servicer from time to time.
SECTION 4.12. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall cause the related Servicer or the
Interim Servicer to foreclose upon, repossess or otherwise comparably convert
the ownership of Mortgaged Properties securing such of the Mortgage Loans as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments, all in accordance with this
Agreement or the Interim Servicing Agreement.
SECTION 4.13. Compensation for the Master Servicer.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Master Servicing Fee and
the income from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The compensation payable to
the Master Servicer in respect of any Distribution Date shall be reduced in
accordance with Section 4.18. 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.
SECTION 4.14. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause the related Servicer or the
Interim Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement or the Interim Servicing
Agreement. Further, the Master Servicer shall cause the related Servicer or the
Interim Servicer to sell any REO Property prior to three years after the end of
the calendar year of its acquisition by REMIC I unless (i) the Trustee shall
have been supplied by the related Servicer or the Interim Servicer with an
Opinion of Counsel to the effect that the holding by the Trust Fund of such REO
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of any REMIC hereunder as defined in
section 860F of the Code or cause any REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel) or (ii) the related Servicer or the
Interim Servicer shall have applied for, prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the related Servicer or the Interim Servicer to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement or the Interim Servicing Agreement in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall cause the related Servicer or
the Interim Servicer to deposit all funds collected and received in connection
with the operation of any REO Property in the REO Account or in the account
delegated for such amounts under the Interim Servicing Agreement.
SECTION 4.15. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the
Rating Agencies on or before March 15 of each year, commencing on March 15,
2006, an Officer's Certificate, certifying that with respect to the period
ending December 31 of the prior year: (i) such Servicing Officer has reviewed
the activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that the Master
Servicer has failed to perform any of its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a material default in the performance or fulfillment of
any such duties, responsibilities or obligations, specifying each such default
known to such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
SECTION 4.16. Annual Independent Accountant's Servicing
Report.
If the Master Servicer has, during the course of any calendar
year, directly serviced any of the Mortgage Loans, then the Master Servicer at
its expense shall cause a nationally recognized firm of independent certified
public accountants to furnish a statement to the Trustee, the Rating Agencies
and the Seller on or before March 15 of each year, commencing on March 15, 2006
to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Xxxxxxx Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.
SECTION 4.17. UCC.
The Depositor agrees to file continuation statements for any
Uniform Commercial Code financing statements which the Seller has informed the
Depositor were filed on the Closing Date in connection with the Trust. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.
SECTION 4.18. Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
In the event of any Prepayment Interest Shortfalls, the Master
Servicer shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the related Servicer or the Interim Servicer with respect
to Prepayment Interest Shortfalls attributable to Principal Prepayments in full
on the Mortgage Loans for the related Distribution Date, and not so paid by the
related Servicer or the Interim Servicer and (ii) the aggregate amount of the
compensation payable to the Master Servicer for such Distribution Date in
accordance with Section 4.13, without reimbursement therefor.
SECTION 4.19. Prepayment Penalty Verification.
On or prior to each Servicer Remittance Date, each Servicer
shall provide in an electronic format acceptable to the Master Servicer the data
necessary for the Master Servicer to perform its verification duties set forth
in this Section 4.19. The Master Servicer or a third party reasonably acceptable
to the Master Servicer and the Depositor (the "Verification Agent") will perform
such verification duties and will use its best efforts to issue its findings in
a report (the "Verification Report") delivered to the Master Servicer and the
Depositor within ten (10) Business Days following the related Distribution Date;
provided, however, that if the Verification Agent is unable to issue the
Verification Report within ten (10) Business Days following the Distribution
Date, the Verification Agent may issue and deliver to the Master Servicer and
the Depositor the Verification Report upon the completion of its verification
duties. The Master Servicer shall forward the Verification Report to the related
Servicer and shall notify the related Servicer if the Master Servicer has
determined that the related Servicer did not deliver the appropriate Prepayment
Charge to the Securities Administrator in accordance with this Agreement. Such
written notification from the Master Servicer shall include the loan number,
prepayment penalty code and prepayment penalty amount as calculated by the
Master Servicer or the Verification Agent, as applicable, of each Mortgage Loan
for which there is a discrepancy. If the related Servicer agrees with the
verified amounts, the related Servicer shall adjust the immediately succeeding
Servicer Report and the amount remitted to the Trustee with respect to
prepayments accordingly. If the related Servicer disagrees with the
determination of the Master Servicer, the related Servicer shall, within five
(5) Business Days of its receipt of the Verification Report, notify the Master
Servicer of such disagreement and provide the Master Servicer with detailed
information to support its position. The related Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and the related Servicer will
indicate the effect of such resolution on the related Servicer Report and shall
adjust the amount remitted with respect to prepayments on such Servicer
Remittance Date accordingly.
During such time as the related Servicer and the Master
Servicer are resolving discrepancies with respect to the Prepayment Charges, no
payments in respect of any disputed Prepayment Charges will be remitted to the
Securities Administrator for deposit in the Distribution Account and the Master
Servicer shall not be obligated to deposit such payments, unless otherwise
required pursuant to Section 8.01 hereof. In connection with such duties, the
Master Servicer shall be able to rely solely on the information provided to it
by the related Servicer in accordance with this Section. The Master Servicer
shall not be responsible for verifying the accuracy of any of the information
provided to it by the related Servicer or the Interim Servicer.
ARTICLE V
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 5.01. Distributions.
(a) (1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the Holders of the Class R Certificates, in respect
of the Class R-I Interest, as the case may be:
With respect to the Group I Mortgage Loans:
(i) to the Holders of REMIC I Regular Interest LT1, REMIC I
Regular Interest LT1PF, REMIC I Regular Interest LTCE2 and REMIC I
Regular Interest LTP in an amount equal to (A) the Uncertificated
Interest for each REMIC I Regular Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates; and
(ii) to the Holders of REMIC I Regular Interest LTP, on the
Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or
any Distribution Date thereafter until $100 has been distributed
pursuant to this clause;
(2) to the Holders of REMIC I Regular Interest LT1 and REMIC I
Regular Interest LT1PF, in an amount equal to the remainder of the
Available Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(a) to the Holders of REMIC I Regular Interest LT1,
until the Uncertificated Balance of REMIC I Regular Interest
LT1 is reduced to zero;
(b) to the Holders of REMIC I Regular Interest LT1PF,
until the Uncertificated Balance of REMIC I Regular Interest
LT1PF is reduced to zero; and
(c) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-1 Interest);
provided, however, that for the first three Distribution Dates, such
amounts relating to the Initial Group I Mortgage Loans shall be
allocated to REMIC I Regular Interest I-LT1 and such amounts relating
to the Subsequent Group I Mortgage Loans shall be allocated to REMIC I
Regular Interest LT1PF.
With respect to the Group II Mortgage Loans:
(3) to the Holders of REMIC I Regular Interest LT2, REMIC I
Regular Interest LTCE2 and REMIC I Regular Interest LT2PF in an amount
equal to (A) the Uncertificated Interest for each REMIC I Regular
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates;
(4) to the Holders of REMIC I Regular Interest LT2 and REMIC I
Regular Interest LT2PF, in an amount equal to the remainder of the
Available Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (1) above, allocated as follows:
(a) to the Holders of REMIC I Regular Interest LT2,
until the Uncertificated Balance of REMIC I Regular Interest
LT2 is reduced to zero;
(b) to the Holders of REMIC I Regular Interest LT2PF,
until the Uncertificated Balance of REMIC I Regular Interest
LT2PF is reduced to zero; and
(c) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-1 Interest);
provided, however, that for the first three Distribution Dates, such
amounts relating to the Initial Group II Mortgage Loans shall be
allocated to REMIC I Regular Interest LT2 and such amounts relating to
the Subsequent Group II Mortgage Loans shall be allocated to REMIC I
Regular Interest LT2PF.
On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC I to the Holders of REMIC I Regular Interest
LTP. The payment of the foregoing amounts to the Holders of REMIC I Regular
Interest LTP shall not reduce the Uncertificated Balance thereof.
(b) (1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC II to REMIC III
on account of the REMIC II Regular Interests or withdrawn from the Distribution
Account and distributed to the Holders of the Class R Certificates, in respect
of the Class R-II Interest, as the case may be:
(i) to Holders of REMIC II Regular Interest II-LTAA, REMIC II
Regular Interest II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II
Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II
Regular Interest II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II
Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II
Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II
Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II
Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II
Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1, REMIC II
Regular Interest II-LTB2, REMIC II Regular Interest II-LTB3, REMIC II
Regular Interest II-LTZZ, REMIC II Regular Interest II-LTP and REMIC II
Regular Interest II-LTCE2, PRO RATA, in an amount equal to (A) the
Uncertificated Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Interest in respect of REMIC
II Regular Interest II-LTZZ shall be reduced when the REMIC II
Overcollateralization Amount is less than the REMIC II Required
Overcollateralization Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum II-LTZZ Uncertificated Interest Deferral
Amount and such amount will be payable to the Holders of REMIC II
Regular Interest II-LTA1A, REMIC II Regular Interest II-LTA1B, REMIC II
Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II
Regular Interest II-LTA2C, REMIC II Regular Interest II-LTM1, REMIC II
Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II
Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II
Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II
Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II
Regular Interest II-LTM10, REMIC II Regular Interest II-LTB1, REMIC II
Regular Interest II-LTB2 and REMIC II Regular Interest II-LTB3 in the
same proportion as the Overcollateralization Increase Amount is
allocated to the Corresponding Certificates and the Uncertificated
Balance of REMIC II Regular Interest II-LTZZ shall be increased by such
amount;
(ii) to Holders of REMIC II Regular Interest II-LT1SUB, REMIC
II Regular Interest II-LT1GRP, REMIC II Regular Interest II-LT2SUB,
REMIC II Regular Interest II-LT2GRP, and REMIC II Regular Interest
II-LTXX, PRO rata, in an amount equal to (A) the Uncertificated
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates;
(iii) to the Holders of REMIC II Regular Interests, in an
amount equal to the remainder of the REMIC II Marker Allocation
Percentage of the available funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(A) 98.00% of such remainder to the Holders of REMIC
II Regular Interest II-LTAA, until the Uncertificated Balance
of such Uncertificated REMIC II Regular Interest is reduced to
zero;
(B) 2.00% of such remainder, first, to the Holders of
REMIC II Regular Interest II-LTA1A, REMIC II Regular Interest
II-LTA1B, REMIC II Regular Interest II-LTA2A, REMIC II Regular
Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC
II Regular Interest II-LTM1, REMIC II Regular Interest
II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular
Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II
Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7,
REMIC II Regular Interest II-LTM8, REMIC II Regular Interest
II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular
Interest II-LTB1, REMIC II Regular Interest II-LTB2 and REMIC
II Regular Interest II-LTB3, 1.00% of and in the same
proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Balances
of such REMIC II Regular Interests are reduced to zero and
second to the Holders of REMIC II Regular Interest II-LTZZ,
until the Uncertificated Balance of such REMIC II Regular
Interest is reduced to zero;
(C) to the Holders of REMIC II Regular Interest
II-LTP, all Prepayment Charges and on the Distribution Date
immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed
pursuant to this clause; then
(D) any remaining amount to the Holders of the Class
R-II Interest, in respect of the Class R-II Interest;
provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of REMIC II Regular Interest II-LTAA and REMIC II Regular Interest
II-LTZZ, respectively.
(i) to the Holders of REMIC II Regular Interests, in an amount
equal to the remainder of the REMIC II Sub WAC Allocation Percentage of
available funds for such Distribution Date after the distributions made
pursuant to clause (ii) above, and such that distributions of principal
shall be deemed to be made to the REMIC II Regular Interests first, so
as to keep the Uncertificated Balance of each REMIC II Regular Interest
ending with the designation "GRP" equal to 0.01% of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan
Group; second, to each REMIC II Regular Interest ending with the
designation "SUB," so that the Uncertificated Balance of each such
REMIC II Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related
Loan Group over (y) the current Certificate Principal Balance of the
Class A Certificate in the related Loan Group (except that if any such
excess is a larger number than in the preceding distribution period,
the least amount of principal shall be distributed to such REMIC II
Regular Interests such that the REMIC II Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC II Regular
Interest II-LTXX.
(ii) Notwithstanding the distributions described in Section
5.01(a)(1), distributions of funds shall be made to Certificateholders
only in accordance with Section 5.01(2) through (7) and Section
5.01(c).
(2) On each Distribution Date, the Securities Administrator
shall withdraw from the Distribution Account to the extent on deposit
therein an amount equal to the Group I Interest Remittance Amount and
make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the Group I Interest
Remittance Amount remaining for such Distribution Date:
FIRST, concurrently, to the Holders of the Class A-1A
Certificates and the Class A-1B Certificates, the Senior
Interest Distribution Amount allocable to each such Class, on
a pro rata basis, based on the entitlement of each such Class;
and
SECOND, concurrently, to the Holders of the Class A-2A, Class
A-2B and Class A-2C Certificates, the Senior Interest
Distribution Amount allocable to each such Class, to the
extent remaining unpaid after the distribution of the Group II
Interest Remittance Amount as set forth in Section 5.01(a)(3)
below on a pro rata basis, based on the entitlement of each
such Class.
(3) On each Distribution Date, the Securities Administrator
shall withdraw from the Distribution Account to the extent on deposit
therein an amount equal to the Group II Interest Remittance Amount and
make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the Group II Interest
Remittance Amount remaining for such Distribution Date:
FIRST, concurrently, to the Holders of the Class A-2A, Class
A-2B and Class A-2C Certificates, the Senior Interest
Distribution Amount allocable to each such Class, on a pro
rata basis, based on the entitlement of each such Class; and
SECOND, concurrently, to the Holders of the Class A-1A
Certificates and the Class A-1B Certificates, the Senior
Interest Distribution Amount allocable to each such Class, to
the extent remaining unpaid after the distribution of the
Group I Interest Remittance Amount as set forth in Section
5.01(a)(2) above, on a pro rata basis, based on the
entitlement of each such Class.
(4) On each Distribution Date, the Securities Administrator
shall withdraw from the Distribution Account to the extent on deposit
therein an amount equal to the Group I Interest Remittance Amount, and
the Group II Interest Remittance Amount remaining after the
distributions required by clauses (2) and (3) above and make the
following disbursements and transfers in the order of priority
described below, in each case to the extent of the Group I Interest
Remittance Amount and Group II Interest Remittance Amount remaining for
such Distribution Date:
sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8, Class M-9, Class M-10, Class B-1, Class B-2 and Class B-3
Certificates, in that order, the Interest Distribution Amount
allocable to each such Class.
(5) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, the Securities
Administrator shall withdraw from the Distribution Account to the
extent on deposit therein an amount equal to the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the
following order of priority:
(i) The Group I Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, to the Holders of the Class A-1A Certificates and the
Class A-1B Certificates as follows:
(1) for each Distribution Date on which a Sequential Trigger
Event is not in effect for such Distribution Date, concurrently, to the
Holders of the Class A-1A Certificates and Class A-1B Certificates, on
a pro rata basis, based on the Certificate Principal Balance of each
such Class, until the Certificate Principal Balance of each such Class
has been reduced to zero; and
(2) for each Distribution Date on which a Sequential Trigger
Event is in effect for such Distribution Date, sequentially, to the
Holders of the Class A-1A Certificates and Class A-1B Certificates, in
that order, until the Certificate Principal Balance of each such Class
has been reduced to zero.
SECOND, sequentially, to the Holders of the Class A-2A, Class
A-2B and Class A-2C Certificates, in that order, after taking
into account the distribution of the Group II Principal
Distribution Amount as described in Section 5.01(a)(5)(ii)
below, until the Certificate Principal Balance of each such
Class has been reduced to zero.
(ii) The Group II Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, sequentially, to the Holders of the Class A-2A, Class
A-2B and Class A-2C Certificates, in that order, until the
Certificate Principal Balance of each such Class has been
reduced to zero; and
SECOND, to the Holders of the Class A-1A Certificates and the
Class A-1B Certificates, after taking into account the
distribution of the Group I Principal Distribution Amount as
described in Section 5.01(a)(5)(i) above as follows:
(1) for each Distribution Date on which a Sequential Trigger
Event is not in effect for such Distribution Date, concurrently, to the
Holders of the Class A-1A Certificates and Class A-1B Certificates, on
a pro rata basis, based on the Certificate Principal Balance of each
such Class, until the Certificate Principal Balance of each such Class
has been reduced to zero; and
(2) for each Distribution Date on which a Sequential Trigger
Event is in effect for such Distribution Date, sequentially, to the
Holders of the Class A-1A Certificates and Class A-1B Certificates, in
that order, until the Certificate Principal Balance of each such Class
has been reduced to zero.
(iii) The Group I Principal Distribution Amount and Group II
Principal Distribution Amount remaining after distributions pursuant to
Sections 5.01(a)(5)(i) and (ii) above shall be distributed in the
following order of priority:
sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8, Class M-9, Class M-10, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until the Certificate Principal
Balance of each such Class has been reduced to zero.
(6) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, the Securities
Administrator shall withdraw from the Distribution Account to the
extent on deposit therein an amount equal to the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the
following order of priority:
(i) The Group I Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, concurrently, to the Holders of the Class A-1A
Certificates and the Class A-1B Certificates, the Class A-1
Principal Distribution Amount, on a pro rata basis, based on
the Certificate Principal Balance of each such Class, until
the Certificate Principal Balance of each such Class has been
reduced to zero; and
SECOND, sequentially, to the Holders of the Class A-2A, Class
A-2B and Class A-2C Certificates, in that order, after taking
into account the distribution of the Group II Principal
Distribution Amount pursuant to Section 5.01(a)(6)(ii) below,
up to an amount equal to the amount, if any, of the Class A-2
Principal Distribution Amount remaining unpaid on such
Distribution Date, until the Certificate Principal Balance of
each such Class has been reduced to zero.
(ii) The Group II Principal Distribution Amount shall be
distributed in the following order of priority:
FIRST, sequentially, to the Holders of the Class A-2A, Class
A-2B and Class A-2C Certificates, in that order, the Class A-2
Principal Distribution Amount, until the Certificate Principal
Balance of each such Class has been reduced to zero; and
SECOND, concurrently, to the Holders of the Class A-1A
Certificates and the Class A-1B Certificates, on a pro rata
basis, after taking into account the distribution of the Group
I Principal Distribution Amount pursuant to Section
5.01(a)(6)(i) above, up to an amount equal to the amount, if
any, of the Class A-1 Principal Distribution Amount remaining
unpaid on such Distribution Date, until the Certificate
Principal Balance of each such Class has been reduced to zero.
(iii) The Principal Distribution Amount remaining after
distributions pursuant to Sections 5.01(a)(6)(i) and (ii) above shall
be distributed in the following order of priority:
FIRST, to the Holders of the Class M-1 Certificates, the
lesser of (x) the remaining Principal Distribution Amount and
(y) the Class M-1 Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-1 Certificates
has been reduced to zero;
SECOND, to the Holders of the Class M-2 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the amounts distributed to the
Holders of the Class M-1 Certificates under clause FIRST
above, and (y) the Class M-2 Principal Distribution Amount,
until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero;
THIRD, to the Holders of the Class M-3 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above and to the Holders of the Class M-2
Certificates under clause SECOND above, and (y) the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-3 Certificates has been reduced to
zero;
FOURTH, to the Holders of the Class M-4 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above and to the Holders of
the Class M-3 Certificates under clause THIRD above, and (y)
the Class M-4 Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-4 Certificates
has been reduced to zero;
FIFTH, to the Holders of the Class M-5 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above and to the
Holders of the Class M-4 Certificates under clause FOURTH
above, and (y) the Class M-5 Principal Distribution Amount,
until the Certificate Principal Balance of the Class M-5
Certificates has been reduced to zero;
SIXTH, to the Holders of the Class M-6 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above and to the Holders of the Class M-5 Certificates under
clause FIFTH above, and (y) the Class M-6 Principal
Distribution Amount, until the Certificate Principal Balance
of the Class M-6 Certificates has been reduced to zero;
SEVENTH, to the Holders of the Class M-7 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above and to the Holders of the Class M-6
Certificates under clause SIXTH above, and (y) the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-7 Certificates has been reduced to
zero;
EIGHTH, to the Holders of the Class M-8 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above, to the Holders of the Class M-6
Certificates under clause SIXTH above and to the Holders of
the Class M-7 Certificates under clause SEVENTH above, and (y)
the Class M-8 Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-8 Certificates
has been reduced to zero;
NINTH, to the Holders of the Class M-9 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above, to the Holders of the Class M-6
Certificates under clause SIXTH above, to the Holders of the
Class M-7 Certificates under clause SEVENTH above and to the
Holders of the Class M-8 Certificates under clause EIGHTH
above, and (y) the Class M-9 Principal Distribution Amount,
until the Certificate Principal Balance of the Class M-9
Certificates has been reduced to zero;
TENTH, to the Holders of the Class M-10 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above, to the Holders of the Class M-6
Certificates under clause SIXTH above, to the Holders of the
Class M-7 Certificates under clause SEVENTH above, to the
Holders of the Class M-8 Certificates under clause EIGHTH
above, and to the Holders of the Class M-9 Certificates under
clause NINTH above, and (y) the Class M-10 Principal
Distribution Amount, until the Certificate Principal Balance
of the Class M-10 Certificates has been reduced to zero;
ELEVENTH, to the Holders of the Class B-1 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above, to the Holders of the Class M-6
Certificates under clause SIXTH above, to the Holders of the
Class M-7 Certificates under clause SEVENTH above, to the
Holders of the Class M-8 Certificates under clause EIGHTH
above, to the Holders of the Class M-9 Certificates under
clause NINTH above and to the Holders of the Class M-10
Certificates under clause TENTH above, and (y) the Class B-1
Principal Distribution Amount, until the Certificate Principal
Balance of the Class B-1 Certificates has been reduced to
zero;
TWELFTH, to the Holders of the Class B-2 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above, to the Holders of the Class M-6
Certificates under clause SIXTH above, to the Holders of the
Class M-7 Certificates under clause SEVENTH above, to the
Holders of the Class M-8 Certificates under clause EIGHTH
above, to the Holders of the Class M-9 Certificates under
clause NINTH above, to the Holders of the Class M-10
Certificates under clause TENTH above and to the Holders of
the Class B-1 Certificates under clause ELEVENTH above, and
(y) the Class B-2 Principal Distribution Amount, until the
Certificate Principal Balance of the Class B-2 Certificates
has been reduced to zero; and
THIRTEENTH, to the Holders of the Class B-3 Certificates, the
lesser of (x) the excess of (i) the remaining Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class M-1 Certificates under
clause FIRST above, to the Holders of the Class M-2
Certificates under clause SECOND above, to the Holders of the
Class M-3 Certificates under clause THIRD above, to the
Holders of the Class M-4 Certificates under clause FOURTH
above, to the Holders of the Class M-5 Certificates under
clause FIFTH above, to the Holders of the Class M-6
Certificates under clause SIXTH above, to the Holders of the
Class M-7 Certificates under clause SEVENTH above, to the
Holders of the Class M-8 Certificates under clause EIGHTH
above, to the Holders of the Class M-9 Certificates under
clause NINTH above, to the Holders of the Class M-10
Certificates under clause TENTH above, to the Holders of the
Class B-1 Certificates under clause ELEVENTH above and, to the
Holders of the Class B-2 Certificates under clause TWELFTH
above and (y) the Class B-3 Principal Distribution Amount,
until the Certificate Principal Balance of the Class B-3
Certificates has been reduced to zero
(7) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow
exclusive of any Overcollateralization Reduction Amount) shall be
distributed as follows:
(i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an
amount equal to any Extra Principal Distribution Amount, payable to
such Holders in accordance with the priorities set forth in Section
5.01(c) below;
(ii) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class M-10, Class B-1, Class B-2 and Class B-3 Certificates, in
that order, in an amount equal to the Interest Carry Forward Amount
allocable to each such Class;
(iii) sequentially, to the Holders of the Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9, Class M-10, Class B-1, Class B-2 and Class B-3 Certificates,
in that order, in an amount equal to the Allocated Realized Loss Amount
allocable to each such Class;
(iv) concurrently, to the Holders of the Class A Certificates,
in an amount equal to such Certificates' allocated share of any
Prepayment Interest Shortfalls on the related Mortgage Loans to the
extent not covered by payments pursuant to Section 3.22 or 4.18 of this
Agreement or pursuant to the Interim Servicing Agreement and any
shortfalls resulting from the application of the Relief Act or similar
state or local law or the bankruptcy code with respect to the related
Mortgage Loans to the extent not previously reimbursed pursuant to
Section 1.02;
(v) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class M-10, Class B-1, Class B-2 and Class B-3 Certificates, in
that order, in an amount equal to such certificates' share of any
Prepayment Interest Shortfalls on the Mortgage Loans to the extent not
covered by payments pursuant to Sections 3.22 or Section 4.18 of this
Agreement or pursuant to the Interim Servicing Agreement and any Relief
Act Interest Shortfall, in each case that were allocated to such Class
for such Distribution Date and for any prior Distribution Date, to the
extent not previously reimbursed pursuant to Section 1.02;
(vi) to the Reserve Fund from amounts otherwise payable to the
Class CE-1 Certificates, and then from the Reserve Fund to the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9, Class M-10, Class B-1, Class B-2 and Class
B-3 Certificates in that order, in an amount equal to the unpaid amount
of any Net WAC Rate Carryover Amount for each such Class for such
Distribution Date;
(vii) to the Reserve Fund, the amount required to be deposited
therein pursuant to Section 3.24(b), after taking into account amounts
received under the Cap Contracts;
(viii) to the Holders of the Class CE-2 Certificates, (A) for
so long as Ocwen is the Servicer of the Ocwen Mortgage Loans, with
respect to each Ocwen Mortgage Loan, one-twelfth of the product of (x)
the excess of the Servicing Fee Rate over the Ocwen Servicing Fee Rate
multiplied by (y) the Scheduled Principal Balance of such Ocwen
Mortgage Loan as of the Due Date in the preceding calendar month; and
(B) for so long as the Interim Subservicer is interim subservicing the
WMC Mortgage Loans, with respect to each WMC Mortgage Loan, one-twelfth
of the product of (x) the excess of the Servicing Fee Rate over the WMC
Servicing Fee Rate multiplied by (y) the Scheduled Principal Balance of
such WMC Mortgage Loan as of the Due Date in the preceding calendar
month;
(ix) to the Holders of the Class CE-1 Certificates the
Interest Distribution Amount and any Overcollateralization Reduction
Amount for such Distribution Date; and
(x) to the Holders of the Class R Certificates, in respect of
the Class R-II Interest, any remaining amounts; provided that if such
Distribution Date is the Distribution Date immediately following the
expiration of the latest Prepayment Charge term as identified on the
Mortgage Loan Schedule or any Distribution Date thereafter, then any
such remaining amounts will be distributed first, to the Holders of the
Class P Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and second, to the Holders of the Class R
Certificates.
The Class CE-1 Certificates are intended to receive all
principal and interest received by the Trust on the Mortgage Loans that is not
otherwise distributable to any other Class of Regular Certificates or REMIC
Regular Interests. If the Securities Administrator determines that the Residual
Certificates are entitled to any distributions on any Distribution Date other
than the final Distribution Date, the Securities Administrator, prior to any
such distribution to any Residual Certificate, shall notify the Depositor of
such impending distribution. Upon such notification, the Depositor will prepare
and request that the other parties hereto enter into an amendment to the Pooling
and Servicing Agreement pursuant to Section 12.01, to revise such mistake in the
distribution provisions.
On each Distribution Date, after making the distributions of
the Available Distribution Amount as set forth above, the Securities
Administrator will first, withdraw from the Reserve Fund all income from the
investment of funds in the Reserve Fund and distribute such amount to the
Holders of the Class CE-1 Certificates, and second, withdraw from the Reserve
Fund, to the extent of amounts remaining on deposit therein, the amount of any
Net WAC Rate Carryover Amount for such Distribution Date and distribute such
amount first, concurrently, to the Class A Certificates, on a PRO RATA basis;
second, to the Class M-1 Certificates, third, to the Class M-2 Certificates,
fourth, to the Class M-3 Certificates, fifth, to the Class M-4 Certificates,
sixth, to the Class M-5 Certificates, seventh, to the Class M-6 Certificates,
eighth, to the Class M-7 Certificates, ninth, to the Class M-8 Certificates,
tenth, to the Class M-9 Certificates, eleventh, to the Class M-10 Certificates,
twelfth, to the Class B-1 Certificates, thirteenth, to the Class B-2
Certificates and fourteenth, to the Class B-3 Certificates, in each case to the
extent to the extent any Net WAC Rate Carryover Amount is allocable to each such
Class.
(c) (i) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Extra Principal
Distribution Amount shall be distributed in the following order of priority;
FIRST, concurrently, to the Holders of the Class A
Certificates as follows:
(A) for each Distribution Date on which a Sequential Trigger
Event is not in effect for such Distribution Date,
concurrently to the Holders of the Class A Certificates, on a
pro rata basis, based on the Certificate Principal Balance of
each such Class, until the Certificate Principal Balance of
each such Class has been reduced to zero; provided, however
that the pro rata allocation to the Class A-2A, Class A-2B and
Class A-2C Certificates pursuant to this clause shall be based
on the total Certificate Principal Balance of the Class A-2A,
Class A-2B and Class A-2C Certificates, but shall be
distributed to the Class A-2A, Class A-2B and Class A-2C
Certificates on a sequential basis, in that order, until the
Certificate Principal Balance of each such Class has been
reduced to zero; and
(B) for each Distribution Date on which a Sequential Trigger
Event is in effect for such Distribution Date, concurrently to
the Holders of the Class A Certificates, on a pro rata basis,
based on the Certificate Principal Balance of each such Class,
until the Certificate Principal Balance of each such Class has
been reduced to zero; provided, however that the pro rata
allocation to the Class A-1A Certificates and the Class A-1B
Certificates pursuant to this clause shall be based on the
total Certificate Principal Balance of the Class A-1A
Certificates and the Class A-1B Certificates, but shall be
distributed to the Class A-1A Certificates and the Class A-1B
Certificates on a sequential basis, in that order, until the
Certificate Principal Balance of each such Class has been
reduced to zero; provided, further that the pro rata
allocation to the Class A-2A, Class A-2B and Class A-2C
Certificates pursuant to this clause shall be based on the
total Certificate Principal Balance of the Class A-2A, Class
A-2B and Class A-2C Certificates, but shall be distributed to
the Class A-2A, Class A-2B and Class A-2C Certificates on a
sequential basis, in that order, until the Certificate
Principal Balance of each such Class has been reduced to zero.
SECOND, sequentially, to the Holders of the Class M-1, Class
M-2, Class M 3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class M-10, Class B-1, Class B-2 and
Class B-3 Certificates, in that order, until the Certificate
Principal Balance of each such Class has been reduced to zero.
(ii) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions
of principal to the extent of the Extra Principal Distribution Amount
shall be distributed in the following order of priority:
FIRST, (a) the lesser of (x) the Group I Principal
Distribution Amount and (y) the Class A-1 Principal
Distribution Amount, shall be distributed concurrently to the
Holders of the Class A-1A Certificates and the Class A-1B
Certificates, on a pro rata basis, based on the Certificate
Principal Balance of each such Class, until the Certificate
Principal Balance of each such Class has been reduced to zero
and (b) the lesser of (x) the Group II Principal Distribution
Amount and (y) the Class A-2 Principal Distribution Amount,
shall be distributed sequentially to the Holders of the Class
A-2A, Class A-2B and Class A-2C Certificates until the
Certificate Principal Balance of each such Class has been
reduced to zero;
SECOND, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the
Holders of the Class A Certificates pursuant to clause FIRST
of this Section 5.01(c)(ii), and (y) the Class M-1 Principal
Distribution Amount, shall be distributed to the Holders of
the Class M-1 Certificates, until the Certificate Principal
Balance of such Class has been reduced to zero;
THIRD, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii) and to
the Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), and (y) the Class M-2
Principal Distribution Amount, shall be distributed to the
Holders of the Class M-2 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero;
FOURTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii) and to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), and (y) the Class M-3 Principal
Distribution Amount, shall be distributed to the Holders of
the Class M-3 Certificates, until the Certificate Principal
Balance of such Class has been reduced to zero;
FIFTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii) and to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), and (y) the Class M-4 Principal Distribution
Amount, shall be distributed to the Holders of the Class M-4
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero;
SIXTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii) and to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), and (y)
the Class M-5 Principal Distribution Amount, shall be
distributed to the Holders of the Class M-5 Certificates,
until the Certificate Principal Balance of such Class has been
reduced to zero;
SEVENTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii) and to
the Holders of the Class M-5 Certificates pursuant to clause
SIXTH of this Section 5.01(c)(ii), and (y) the Class M-6
Principal Distribution Amount, shall be distributed to the
Holders of the Class M-6 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero;
EIGHTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii) and to the Holders of the Class
M-6 Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii), and (y) the Class M-7 Principal Distribution
Amount, shall be distributed to the Holders of the Class M-7
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero;
NINTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii), to the Holders of the Class M-6
Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii) and to the Holders of the Class M-7 Certificates
pursuant to clause EIGHTH of this Section 5.01(c)(ii), and (y)
the Class M-8 Principal Distribution Amount, shall be
distributed to the Holders of the Class M-8 Certificates,
until the Certificate Principal Balance of such Class has been
reduced to zero;
TENTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii), to the Holders of the Class M-6
Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii), to the Holders of the Class M-7 Certificates
pursuant to clause EIGHTH of this Section 5.01(c)(ii) and to
the Holders of the Class M-8 Certificates pursuant to clause
NINTH of this Section 5.01(c)(ii), and (y) the Class M-9
Principal Distribution Amount, shall be distributed to the
Holders of the Class M-9 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero;
ELEVENTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii), to the Holders of the Class M-6
Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii), to the Holders of the Class M-7 Certificates
pursuant to clause EIGHTH of this Section 5.01(c)(ii), to the
Holders of the Class M-8 Certificates pursuant to clause NINTH
of this Section 5.01(c)(ii) and to the Holders of the Class
M-9 Certificates pursuant to clause TENTH of this Section
5.01(c)(ii) and (y) the Class M-10 Principal Distribution
Amount, shall be distributed to the Holders of the Class M-10
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero;
TWELFTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii), to the Holders of the Class M-6
Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii), to the Holders of the Class M-7 Certificates
pursuant to clause EIGHTH of this Section 5.01(c)(ii), to the
Holders of the Class M-8 Certificates pursuant to clause NINTH
of this Section 5.01(c)(ii), to the Holders of the Class M-9
Certificates pursuant to clause TENTH of this Section
5.01(c)(ii) and to the Holders of the Class M-10 Certificates
pursuant to clause ELEVENTH of this Section 5.01(c)(ii), and
(y) the Class B-1 Principal Distribution Amount, shall be
distributed to the Holders of the Class B-1 Certificates,
until the Certificate Principal Balance of such Class has been
reduced to zero;
THIRTEENTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii), to the Holders of the Class M-6
Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii), to the Holders of the Class M-7 Certificates
pursuant to clause EIGHTH of this Section 5.01(c)(ii), to the
Holders of the Class M-8 Certificates pursuant to clause NINTH
of this Section 5.01(c)(ii), to the Holders of the Class M-9
Certificates pursuant to clause TENTH of this Section
5.01(c)(ii), to the Holders of the Class M-10 Certificates
pursuant to clause ELEVENTH of this Section 5.01(c)(ii) and to
the Holders of the Class B-1 Certificates pursuant to clause
TWELFTH of this Section 5.01(c)(ii) and (y) the Class B-2
Principal Distribution Amount, shall be distributed to the
Holders of the Class B-2 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero; and
FOURTEENTH, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A Certificates
pursuant to clause FIRST of this Section 5.01(c)(ii), to the
Holders of the Class M-1 Certificates pursuant to clause
SECOND of this Section 5.01(c)(ii), to the Holders of the
Class M-2 Certificates pursuant to clause THIRD of this
Section 5.01(c)(ii), to the Holders of the Class M-3
Certificates pursuant to clause FOURTH of this Section
5.01(c)(ii), to the Holders of the Class M-4 Certificates
pursuant to clause FIFTH of this Section 5.01(c)(ii), to the
Holders of the Class M-5 Certificates pursuant to clause SIXTH
of this Section 5.01(c)(ii), to the Holders of the Class M-6
Certificates pursuant to clause SEVENTH of this Section
5.01(c)(ii), to the Holders of the Class M-7 Certificates
pursuant to clause EIGHTH of this Section 5.01(c)(ii), to the
Holders of the Class M-8 Certificates pursuant to clause NINTH
of this Section 5.01(c)(ii), to the Holders of the Class M-9
Certificates pursuant to clause TENTH of this Section
5.01(c)(ii), to the Holders of the Class M-10 Certificates
pursuant to clause ELEVENTH of this Section 5.01(c)(ii), to
the Holders of the Class B-1 Certificates pursuant to clause
TWELFTH of this Section 5.01(c)(ii) and to the Holders of the
Class B-2 Certificates pursuant to clause THIRTEENTH of this
Section 5.01(c)(ii), and (y) the Class B-3 Principal
Distribution Amount, shall be distributed to the Holders of
the Class B-3 Certificates, until the Certificate Principal
Balance of such Class has been reduced to zero.
(d) On each Distribution Date, the Securities Administrator
shall withdraw any amounts then on deposit in the Distribution Account that
represent Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.
(e) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 5.01(g) or
Section 10.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator in
writing at least five (5) Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Certificates
having an initial aggregate Certificate Principal Balance that is in excess of
the lesser of (i) $5,000,000 or (ii) two-thirds of the initial Certificate
Principal Balance of such Class of Certificates, or otherwise by check mailed by
first class mail to the address of such Holder appearing in the Certificate
Register. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Securities Administrator or such other location
specified in the notice to Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Depositor, the Servicer, the Securities Administrator or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(f) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee, the
Servicer, the Securities Administrator or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
(g) Except as otherwise provided in Section 10.01, whenever
the Securities Administrator expects that the final distribution with respect to
any Class of Certificates will be made on the next Distribution Date, the
Securities Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:
(i) the Securities Administrator expects that the final
distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Securities Administrator therein
specified, and
(ii) no interest shall accrue on such Certificates from and
after the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Securities Administrator and credited to the
account of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 5.01(g) shall not
have been surrendered for cancellation within six (6) months after the time
specified in such notice, the Securities Administrator shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates but shall continue to hold any remaining funds for the benefit of
non-tendering Certificateholders. The costs and expenses of maintaining the
funds in trust and of contacting such Certificateholders shall be paid out of
the assets remaining in such trust fund. If within one year after the final
notice any such Certificates shall not have been surrendered for cancellation,
the Securities Administrator shall pay to the Depositor all such amounts, and
all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Securities Administrator as a result of such
Certificateholder's failure to surrender its Certificate(s) on the final
Distribution Date for final payment thereof in accordance with this Section
5.01(g). Any such amounts held in trust by the Securities Administrator shall be
held uninvested in an Eligible Account.
(h) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate, a
Mezzanine Certificate or a Class B Certificate be reduced more than once in
respect of any particular amount both (a) allocated to such Certificate in
respect of Realized Losses pursuant to Section 5.04 and (b) distributed to the
Holder of such Certificate in reduction of the Certificate Principal Balance
thereof pursuant to this Section 5.01 from Net Monthly Excess Cashflow and (ii)
in no event shall the Uncertificated Balance of a REMIC Regular Interest be
reduced more than once in respect of any particular amount both (a) allocated to
such REMIC Regular Interest in respect of Realized Losses pursuant to Section
5.04 and (b) distributed on such REMIC Regular Interest in reduction of the
Uncertificated Balance thereof pursuant to this Section 5.01.
SECTION 5.02. Statements to Certificateholders.
On each Distribution Date, the Securities Administrator (based
on the information set forth in the Servicer Reports for such Distribution Date
and information provided by the Trustee or the counterparty to the Cap Contracts
with respect to payments made pursuant to the Cap Contracts) shall make
available to each Holder of the Certificates, a statement as to the
distributions made on such Distribution Date setting forth:
(i) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
principal, and the amount of the distribution made on such Distribution
Date to the Holders of the Class P Certificates allocable to Prepayment
Charges;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
interest;
(iii) the aggregate Servicing Fee received by the Servicer,
and the Master Servicing Fee received by the Master Servicer during the
related Due Period;
(iv) the aggregate amount of P&I Advances for such
Distribution Date;
(v) Reserved;
(vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) delinquent thirty (30) to fifty-nine (59) days, (b)
delinquent sixty (60) to eighty-nine (89) days, (c) delinquent ninety
(90) or more days, in each case, as of the last day of the preceding
calendar month, (d) as to which foreclosure proceedings have been
commenced and (e) with respect to which the related Mortgagor has filed
for protection under applicable bankruptcy laws, with respect to whom
bankruptcy proceedings are pending or with respect to whom bankruptcy
protection is in force;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid principal balance and the Scheduled Principal
Balance of such Mortgage Loan;
(ix) if available, the book value of any REO Property as of
the close of business on the last Business Day of the calendar month
preceding the Distribution Date;
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period and the aggregate amount of any
Prepayment Charges received in respect thereof;
(xi) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the aggregate amount of Realized
Losses incurred since the Closing Date;
(xii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Distribution Account for such Distribution
Date;
(xiii) the aggregate Certificate Principal Balance of each
Class of Certificates, after giving effect to the distributions, and
allocations of Realized Losses, made on such Distribution Date,
separately identifying any reduction thereof due to allocations of
Realized Losses;
(xiv) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of the Class
A Certificates, the Mezzanine Certificates, the Class B Certificates,
and the Class CE-1 Certificates for such Distribution Date and the
Interest Carry Forward Amount, if any, with respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates
on such Distribution Date, and in the case of the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates separately
identifying any reduction thereof due to allocations of Realized
Losses, Prepayment Interest Shortfalls, Relief Act Interest Shortfalls
and Net WAC Rate Carryover Amounts;
(xvi) the aggregate amount of any Prepayment Interest
Shortfall for such Distribution Date, to the extent not covered by
payments by the Servicers pursuant to Section 3.22 of this Agreement or
the Master Servicer pursuant to Section 4.18 of this Agreement or the
Interim Servicer pursuant to the Interim Servicing Agreement;
(xvii) the aggregate amount of Relief Act Interest Shortfalls
for such Distribution Date;
(xviii) the Required Overcollateralization Amount and the
Credit Enhancement Percentage for such Distribution Date;
(xix) the Overcollateralization Increase Amount, if any, for
such Distribution Date;
(xx) the Overcollateralization Reduction Amount, if any, for
such Distribution Date;
(xxi) the Net WAC Rate Carryover Amount, if any, for such
Distribution Date;
(xxii) the Net WAC Rate Carryover Amount, if any, outstanding
after reimbursements therefor on such Distribution Date and any amounts
received under the Cap Contracts;
(xxiii) the respective Pass-Through Rates applicable to the
Class A Certificates, the Mezzanine Certificates, the Class B
Certificates, and the Class CE-1 Certificates for such Distribution
Date;
(xxiv) the amount of any deposit to the Reserve Fund
contemplated by Section 3.24(b);
(xxv) the balance of the Reserve Fund prior to the deposit or
withdrawal of any amounts on such Distribution Date;
(xxvi) the amount of any deposit to the Reserve Fund pursuant
to Section 5.01(a)(7)(vi);
(xxvii) the balance of the Reserve Fund after all deposits and
withdrawals on such Distribution Date;
(xxviii) the Loss Severity Percentage with respect to each
Mortgage Loan;
(xxix) the Aggregate Loss Severity Percentage;
(xxx) the amount withdrawn from the Pre-Funding Account
pursuant to Section 3.27(c) on that Distribution Date, the amount
remaining on deposit in the Pre-Funding Account following such
Distribution Date, and the amount withdrawn from the Pre-Funding
Account and used to buy Subsequent Mortgage Loans prior to such
Distribution Date; and
(xxxi) for the distribution occurring on the Distribution Date
immediately following the end of the Pre-Funding Period, the balance on
deposit in the Group I Pre-Funding Sub-Account and/or the Group II
Pre-Funding Sub-Account that has not been used to purchase Subsequent
Group I Mortgage Loans and/or Subsequent Group II Mortgage Loans, as
applicable, and that is being distributed to the related Class A
Certificates as a mandatory distribution of principal, if any, on such
Distribution Date.
The Securities Administrator will make such statement (and, at
its option, any additional files containing the same information in an
alternative format) available each month to the Certificateholders and the
Rating Agencies via the Securities Administrator's internet website. The
Securities Administrator's internet website shall initially be located at
http:\\xxx.xxxxxxx.xxx and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at 0-000-000-0000.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes.
In the case of information furnished pursuant to subclauses
(i) and (ii) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.
Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Regular
Certificate a statement containing the information set forth in subclauses (i)
through (iii) above, aggregated for such calendar year or applicable portion
thereof during which such person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.
Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Residual
Certificate a statement setting forth the amount, if any, actually distributed
with respect to the Residual Certificates, as appropriate, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder.
The Securities Administrator shall, upon request, furnish to
each Certificateholder during the term of this Agreement, such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be reasonable with respect to the Certificateholder, as applicable, or
otherwise with respect to the purposes of this Agreement, all such reports or
information to be provided at the expense of the Certificateholder, in
accordance with such reasonable and explicit instructions and directions as the
Certificateholder may provide.
On each Distribution Date the Securities Administrator shall
provide Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for
each Class of Certificates as of such Distribution Date, using a format and
media mutually acceptable to the Securities Administrator and Bloomberg.
SECTION 5.03. Servicer Reports; P&I Advances.
(a) (i) With respect to Saxon and Ocwen, on or before 12:00
noon New York time on the 18th calendar day of each month, and if the 18th
calendar day is not a Business Day, the immediately following Business Day,
Saxon and Ocwen shall, and (ii) with respect to Countrywide, on or before 12:00
noon New York time on the 20th calendar day of each month, and if the 20th
calendar day is not a Business Day, the immediately preceding Business Day,
Countrywide shall, deliver to the Master Servicer and the Securities
Administrator by telecopy or electronic mail (or by such other means as the
related Servicer, the Master Servicer and the Securities Administrator may agree
from time to time) a remittance report containing such information with respect
to the related Mortgage Loans and the related Distribution Date as is reasonably
available to the related Servicer as the Master Servicer or the Securities
Administrator may reasonably require so as to enable the Master Servicer to
master service the related Mortgage Loans and oversee the servicing by the
related Servicer and the Securities Administrator to fulfill its obligations
hereunder with respect to securities and tax reporting.
(b) The amount of P&I Advances to be made by the related
Servicer or the Interim Servicer on any Distribution Date shall equal, subject
to Section 5.03(d), (i) the aggregate amount of Monthly Payments (net of the
related Servicing Fees), due during the related Due Period in respect of the
Mortgage Loans serviced by such Servicer or Interim Servicer, which Monthly
Payments were delinquent as of the close of business on the related
Determination Date and (ii) with respect to each REO Property, which was
acquired during or prior to the related Prepayment Period and as to which an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the REO Imputed Interest on such REO Property for the
most recently ended calendar month, over the net income from such REO Property
deposited in the related Collection Account or Custodial Account pursuant to
Section 3.21 of this Agreement or pursuant the Interim Servicing Agreement for
distribution on such Distribution Date; provided, however, neither Servicer nor
any Interim Servicer shall be required to make P&I Advances with respect to
Relief Act Interest Shortfalls, or with respect to Prepayment Interest
Shortfalls in excess of its obligations under Section 3.22 or under the Interim
Servicing Agreement. For purposes of the preceding sentence, the Monthly Payment
on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for such Balloon Mortgage Loan.
By 12:00 noon New York time with respect to Ocwen and Saxon,
and by 1:00 p.m. New York time with respect to Countrywide, on the Servicer
Remittance Date, each Servicer shall remit in immediately available funds to the
Securities Administrator for deposit in the Distribution Account an amount equal
to the aggregate amount of P&I Advances, if any, to be made in respect of the
related Mortgage Loans for the related Distribution Date either (i) from its own
funds or (ii) from the related Collection Account, to the extent of any Amounts
Held For Future Distribution on deposit therein (in which case it will cause to
be made an appropriate entry in the records of the related Collection Account
that Amounts Held For Future Distribution have been, as permitted by this
Section 5.03, used by the related Servicer in discharge of any such P&I Advance)
or (iii) in the form of any combination of (i) and (ii) aggregating the total
amount of P&I Advances to be made by the related Servicer with respect to the
related Mortgage Loans. In addition, the related Servicer shall have the right
to reimburse itself for any outstanding P&I Advance made from its own funds from
Amounts Held for Future Distribution. Any Amounts Held For Future Distribution
used by the related Servicer to make P&I Advances or to reimburse itself for
outstanding P&I Advances shall be appropriately reflected in the related
Servicer's records and replaced by the related Servicer by deposit in the
related Collection Account no later than the close of business on the Servicer
Remittance Date immediately following the Due Period or Prepayment Period for
which such amounts relate. The Securities Administrator will notify the related
Servicer and the Master Servicer by the close of business on the Business Day
prior to the Distribution Date in the event that the amount remitted by the
related Servicer to the Securities Administrator on such date is less than the
P&I Advances required to be made by the related Servicer for the related
Distribution Date.
(c) The obligation of each Servicer to make such P&I Advances
is mandatory, notwithstanding any other provision of this Agreement but subject
to (d) below, and, with respect to any related Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Fund pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section. Notwithstanding
anything to the contrary contained in this section 5.03(c), Countrywide shall
have no obligation to make any P&I Advances with respect the New Century
Mortgage Loans before the Servicing Transfer Date.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder or under the
Interim Servicing Agreement by the related Servicer or the Interim Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively.
The determination by the related Servicer or the Interim Servicer that it has
made a Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance or that
any proposed P&I Advance or Servicing Advance, if made, would constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively,
shall be evidenced by a certification of a Servicing Officer delivered to the
Master Servicer.
(e) Subject to and in accordance with the provisions of
Article VIII, in the event a Servicer fails to make any required P&I Advance,
then the Master Servicer (in its capacity as successor servicer) or any other
successor Servicer shall be required to make such P&I Advance on the
Distribution Date on which such Servicer was required to make such Advance,
subject to its determination of recoverability. In addition, in the event that
the Interim Servicer fails to make a required P&I Advance under the Interim
Servicing Agreement, the Master Servicer (in its capacity as successor servicer)
or any other successor servicer will be required to make such P&I Advance,
subject to its determination of recoverability.
SECTION 5.04. Allocation of Realized Losses.
(a) Prior to the Determination Date, each Servicer and the
Interim Servicer shall determine as to each Mortgage Loan serviced by such
Servicer or the Interim Servicer and any related REO Property and include in the
monthly remittance report provided to the Master Servicer and the Securities
Administrator (substantially in the form of Schedule 4 hereto) such information
as is reasonably available to the Servicers and the Interim Servicer as the
Master Servicer or the Securities Administrator may reasonably require so as to
enable the Master Servicer to master service the Mortgage Loans and oversee the
servicing by the Servicers and the Interim Servicer and the Securities
Administrator to fulfill its obligations hereunder with respect to securities
and tax reporting, which shall include, but not be limited to: (i) the total
amount of Realized Losses, if any, incurred in connection with any Final
Recovery Determinations made during the related Prepayment Period; and (ii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal. Prior to each Determination Date, each Servicer and the Interim
Servicer shall also determine as to each Mortgage Loan: (i) the total amount of
Realized Losses, if any, incurred in connection with any Deficient Valuations
made during the related Prepayment Period; and (ii) the total amount of Realized
Losses, if any, incurred in connection with Debt Service Reductions in respect
of Monthly Payments due during the related Due Period.
(b) All Realized Losses on the Mortgage Loans allocated to any
REMIC II Regular Interest pursuant to Section 5.04(d) on the Mortgage Loans
shall be allocated by the Securities Administrator on each Distribution Date as
follows: FIRST, to Net Monthly Excess Cashflow; SECOND, to the Class CE-1
Certificates; THIRD, to the Class B-3 Certificates until the Certificate
Principal Balance of the Class B-3 Certificates has been reduced to zero;
FOURTH, to the Class B-2 Certificates until the Certificate Principal Balance of
the Class B-2 Certificates has been reduced to zero; FIFTH, to the Class B-1
Certificates until the Certificate Principal Balance of the Class B-1
Certificates has been reduced to zero; SIXTH, to the Class M-10 Certificates,
until the Certificate Principal Balance of the Class M-10 Certificates has been
reduced to zero; SEVENTH, to the Class M-9 Certificates, until the Certificate
Principal Balance of the Class M-9 Certificates has been reduced to zero;
EIGHTH, to the Class M-8 Certificates, until the Certificate Principal Balance
of the Class M-8 Certificates has been reduced to zero; NINTH, to the Class M-7
Certificates, until the Certificate Principal Balance of the Class M-7
Certificates has been reduced to zero; TENTH, to the Class M-6 Certificates,
until the Certificate Principal Balance of the Class M-6 Certificates has been
reduced to zero; ELEVENTH, to the Class M-5 Certificates, until the Certificate
Principal Balance of the Class M-5 Certificates has been reduced to zero;
TWELFTH, to the Class M-4 Certificates, until the Certificate Principal Balance
of the Class M-4 Certificates has been reduced to zero; THIRTEENTH, to the Class
M-3 Certificates, until the Certificate Principal Balance of the Class M-3
Certificates has been reduced to zero; FOURTEENTH, to the Class M-2
Certificates, until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero; and FIFTEENTH, to the Class M-1
Certificates, until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero. All Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate
or Class B Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class CE-1 Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section
5.01(a)(7)(viii). No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A Certificates or Class P
Certificates.
As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among two or more specified Classes of Certificates means an
allocation on a PRO RATA basis, among the various Classes so specified, to each
such Class of Certificates on the basis of their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date. All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the, Certificates of such
Class in proportion to the Percentage Interests evidenced thereby.
In addition, in the event that a Servicer receives any
Subsequent Recoveries with respect to a Mortgage Loan serviced by it, the
related Servicer shall deposit such funds into the related Collection Account
pursuant to Section 3.08. If, after taking into account such Subsequent
Recoveries and any Subsequent recoveries received by the Interim Servicer, the
amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries
will be applied to increase the Certificate Principal Balance of the Class of
Subordinate Certificates with the highest payment priority to which Realized
Losses have been allocated, but not by more than the amount of Realized Losses
previously allocated to that Class of Subordinate Certificates pursuant to this
Section 5.04 and not previously reimbursed to such Class of Subordinate
Certificates with Net Monthly Excess Cashflow pursuant to Section 5.01(a)(7).
The amount of any remaining Subsequent Recoveries will be applied to
sequentially increase the Certificate Principal Balance of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Realized Losses previously
allocated to such Class of Subordinate Certificates pursuant to this Section
5.04 and not previously reimbursed to such Class of Subordinate Certificates
with Net Monthly Excess Cashflow pursuant to Section 5.01(a)(7)(iii). Holders of
such Certificates will not be entitled to any payment in respect of current
interest 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 to the Certificate Principal Balance of each
Subordinate Certificate of such Class in accordance with its respective
Percentage Interest.
(c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee, based solely on the instructions of the Securities
Administrator, on each Distribution Date to the following REMIC I Regular
Interests, as follows: to REMIC I Regular Interest LT1 and REMIC I Regular
Interest LT1PF until the Uncertificated Balance of each such REMIC I Regular
Interest has been reduced to zero; provided however, with respect to the first
three Distribution Dates, all Realized Losses on the Initial Group I Mortgage
Loans shall be allocated to REMIC I Regular Interest LT1 until the
Uncertificated Balance of each such REMIC I Regular Interest has been reduced to
zero, and all Realized Losses on the Subsequent Group I Mortgage Loans shall be
allocated to REMIC I Regular Interest LT1PF until the Uncertificated Balance
thereof has been reduced to zero. All Realized Losses on the Group II Mortgage
Loans shall be allocated by the Trustee on each Distribution Date to REMIC I
Regular Interest LT2 and REMIC I Regular Interest LT2PF until the Uncertificated
Balance of each such REMIC I Regular Interest has been reduced to zero; provided
however, with respect to the first three Distribution Dates, all Realized Losses
on the Initial Group II Mortgage Loans shall be allocated to REMIC I Regular
Interest LT2 until the Uncertificated Balance of such REMIC I Regular Interest
has been reduced to zero, and all Realized Losses on the Subsequent Group II
Mortgage Loans shall be allocated to REMIC I Regular Interest LT2PF until the
Uncertificated Balance thereof has been reduced to zero.
(d) (i) The REMIC II Marker Percentage of all Realized Losses
on the Mortgage Loans shall be allocated by the Trustee, based solely on the
instructions of the Securities Administrator, on each Distribution Date to the
following REMIC II Regular Interests in the specified percentages, as follows:
FIRST, to Uncertificated Interest payable to the REMIC II Regular Interest
II-LTAA and REMIC II Regular Interest II-LTZZ up to an aggregate amount equal to
the REMIC II Interest Loss Allocation Amount, 98.00% and 2.00%, respectively;
SECOND, to the Uncertificated Balances of the REMIC II Regular Interest II-LTAA
and REMIC II Regular Interest II-LTZZ up to an aggregate amount equal to the
REMIC II Principal Loss Allocation Amount, 98.00% and 2.00%, respectively;
THIRD, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA,
REMIC II Regular Interest II-LTB3 and REMIC II Regular Interest II-LTZZ, 98.00%,
1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC II
Regular Interest II-LTB3 has been reduced to zero; FOURTH, to the Uncertificated
Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTB2
and REMIC II Regular Interest II-LTZZ, 98.00%, 1.00% and 1.00%, respectively,
until the Uncertificated Balance of REMIC II Regular Interest II-LTB2 has been
reduced to zero; FIFTH, to the Uncertificated Balances of REMIC II Regular
Interest II-LTAA, REMIC II Regular Interest II-LTB1 and REMIC II Regular
Interest II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC II Regular Interest II-LTB1 has been reduced to
zero; SIXTH, to the Uncertificated Balances of REMIC II Regular Interest
II-LTAA, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest
II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance
of REMIC II Regular Interest II-LTM10 has been reduced to zero; SEVENTH, to the
Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular
Interest II-LTM9 and REMIC II Regular Interest II-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest
II-LTM9 has been reduced to zero; EIGHTH, to the Uncertificated Balances of
REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM8 and REMIC
II Regular Interest II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC II Regular Interest II-LTM8 has been reduced to
zero; NINTH, to the Uncertificated Balances of REMIC II Regular Interest
II-LTAA, REMIC II Regular Interest II-LTM7 and REMIC II Regular Interest
II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance
of REMIC II Regular Interest II-LTM7 has been reduced to zero; TENTH, to the
Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular
Interest II-LTM6 and REMIC II Regular Interest II-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest
II-LTM6 has been reduced to zero; ELEVENTH, to the Uncertificated Balances of
REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM5 and REMIC
II Regular Interest II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC II Regular Interest II-LTM5 has been reduced to
zero; TWELFTH, to the Uncertificated Balances of REMIC II Regular Interest
II-LTAA, REMIC II Regular Interest II-LTM4 and REMIC II Regular Interest
II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance
of REMIC II Regular Interest II-LTM4 has been reduced to zero; THIRTEENTH, to
the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II
Regular Interest II-LTM3 and REMIC II Regular Interest II-LTZZ, 98.00%, 1.00%
and 1.00%, respectively, until the Uncertificated Balance of REMIC II Regular
Interest II-LTM3 has been reduced to zero; FOURTEENTH, to the Uncertificated
Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM2
and REMIC II Regular Interest II-LTZZ, 98.00%, 1.00% and 1.00%, respectively,
until the Uncertificated Balance of REMIC II Regular Interest II-LTM2 has been
reduced to zero; and FIFTEENTH, to the Uncertificated Balances of REMIC II
Regular Interest II-LTAA, REMIC II Regular Interest II-LTM1 and REMIC II Regular
Interest II-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC II Regular Interest II-LTM1 has been reduced to
zero.
(ii) The REMIC II Sub WAC Allocation Percentage of all
Realized Losses shall be applied after all distributions have been made
on each Distribution Date first, so as to keep the Uncertificated
Balance of each REMIC II Regular Interest ending with the designation
"GRP" equal to 0.01% of the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group; second, to each REMIC II
Regular Interest ending with the designation "SUB," so that the
Uncertificated Balance of each such REMIC II Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the current
Certificate Principal Balance of the Class A Certificate in the related
Loan Group (except that if any such excess is a larger number than in
the preceding distribution period, the least amount of Realized Losses
shall be applied to such REMIC II Regular Interests such that the REMIC
II Subordinated Balance Ratio is maintained); and third, any remaining
Realized Losses shall be allocated to REMIC II Regular Interest
II-LTXX.
SECTION 5.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee and the Securities Administrator shall comply with all federal
withholding requirements respecting payments to Certificateholders of interest
or original issue discount that the Trustee reasonably believes are applicable
under the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Securities Administrator does withhold any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Securities
Administrator shall indicate the amount withheld to such Certificateholders.
SECTION 5.06. Reports Filed with Securities and Exchange
Commission.
The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within fifteen (15) days after each
Distribution Date, the Securities Administrator shall, in accordance with
industry standards, file with the Commission via the Electronic Data Gathering
and Retrieval System ("XXXXX"), a Form 8-K (or other comparable Form containing
the same or comparable information or other information mutually agreed upon)
with a copy of the statement to be furnished to the Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2006, the
Securities Administrator shall, in accordance with industry standards, file a
Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior
to (i) March 20, 2006 and (ii) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 20th of each year thereafter, the Master
Servicer shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of compliance of the Servicer to be
delivered pursuant to this Agreement and, if applicable, the annual independent
accountant's servicing report and annual statement of compliance to be delivered
by the Master Servicer pursuant to Sections 4.15 and 4.16. Prior to (i) March
31, 2006 and (ii) unless and until a Form 15 Suspension Notice shall have been
filed, March 31 of each year thereafter, the Securities Administrator shall file
a Form 10-K, in substance conforming to industry standards, with respect to the
Trust. Such Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second preceding
sentence. The Depositor hereby grants to the Securities Administrator a limited
power of attorney to execute and file each such document on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of (i)
receipt by the Securities Administrator from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. The Depositor agrees to promptly furnish to the Securities Administrator,
from time to time upon request, such further information, reports and financial
statements within its control related to this Agreement, the Mortgage Loans as
the Securities Administrator reasonably deems appropriate to prepare and file
all necessary reports with the Commission. The Securities Administrator shall
have no responsibility to file any items other than those specified in this
Section 5.06; provided, however, the Securities Administrator will cooperate
with the Depositor in connection with any additional filings with respect to the
Trust Fund as the Depositor deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Fees and expenses incurred by the
Securities Administrator in connection with this Section 5.06 shall not be
reimbursable from the Trust Fund.
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates.
(a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I and REMIC II.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-6. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. 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
herein executed by the Securities Administrator by manual signature, and such
certificate of authentication 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.
(b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Securities Administrator except to another Depository that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall only transfer the Ownership Interests in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Securities Administrator is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Servicers and, if the Trustee is not the
Book-Entry Custodian, the Trustee, any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.
(c) The Class B Certificates initially offered and sold in
offshore transactions in reliance on Regulation S shall be issued in the form of
a temporary global certificate in definitive, fully registered form (each, a
"Regulation S Temporary Global Certificate"), which shall be deposited with the
Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository for the account of designated agents holding on behalf of
Euroclear or Clearstream. Beneficial interests in each Regulation S Temporary
Global Certificate may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 6.02. After
the expiration of the Release Date, a beneficial interest in a Regulation S
Temporary Global Certificate may be exchanged for a beneficial interest in the
related permanent global certificate of the same Class (each, a "Regulation S
Permanent Global Certificate"), in accordance with the procedures set forth in
Section 6.02. Each Regulation S Permanent Global Certificate shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.
The Class B Certificates offered and sold to Qualified
Institutional Buyers ("QIBs") in reliance on Rule 144A under the Securities Act
("Rule 144A") or institutional investors that are accredited investors within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act ("Institutional Accredited Investors") will be issued in the form
of Book-Entry Certificates.
(d) The Class CE-1 Certificates, Class CE-2 Certificates and
Class P Certificates offered and sold to QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") will be issued in the form of Definitive
Certificates.
(e) The Trustee, the Servicers, the Securities Administrator,
the Master Servicer and the Depositor may for all purposes (including the making
of payments due on the Book-Entry Certificates and Global Certificates) deal
with the Depository as the authorized representative of the Certificate Owners
with respect to the Book-Entry Certificates and Global Certificates for the
purposes of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates and Global
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates and Global
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Certificateholders and shall
give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Securities Administrator
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (B) the Depositor is unable to
locate a qualified successor, (ii) the Depositor at its option advises the
Securities Administrator in writing that it elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Servicer Event
of Default, Certificate Owners representing in the aggregate not less than 51%
of the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than
$10,000 immediately prior to the issuance of a Definitive Certificate shall be
issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate or a Global Certificate, as applicable. None of the
Depositor, the Servicers, the Master Servicer, the Securities Administrator or
the Trustee shall be liable for any delay in the 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 Depository shall be deemed
to be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
SECTION 6.02. Registration of Transfer and Exchange of
Certificates.
(a) The Securities Administrator shall cause to be kept at one
of the offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) No transfer of any Class B Certificate, Class CE-1
Certificate, Class CE-2 Certificate, Class P Certificate or Residual Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. In the event that such a
transfer of a Class B Certificate, Class CE-1 Certificate, Class CE-2
Certificate, Class P Certificate or Residual Certificate is to be made without
registration or qualification (other than in connection with the initial
transfer of any such Certificate by the Depositor), the Securities Administrator
shall require receipt of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, written certifications from
the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-1; (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the Securities Act, written certifications from
the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-2; (iii) if such transfer is purportedly being made in
reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-1 and (iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or the Servicers), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the Securities Act or any other securities laws or to take any action not
otherwise required under this Agreement to permit the transfer of such
Certificates without registration or qualification. Any Certificateholder
desiring to effect the transfer of any such Certificate shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Master Servicer, the
Securities Administrator and the Servicers against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
A holder of a beneficial interest in a Regulation S Temporary
Global Certificate must provide Euroclear or Clearstream, as the case may be,
with a certificate in the form of Annex A to Exhibit B-1 hereto certifying that
the beneficial owner of the interest in such Global Certificate is not a U.S.
Person (as defined in Regulation S), and Euroclear or Clearstream, as the case
may be, must provide to the Trustee and Securities Administrator a certificate
in the form of Exhibit B-1 hereto prior to (i) the payment of interest or
principal with respect to such holder's beneficial interest in the Regulation S
Temporary Global Certificate and (ii) any exchange of such beneficial interest
for a beneficial interest in a Regulation S Permanent Global Certificate.
(c) No transfer of a Class CE-1 Certificate, Class CE-2
Certificate, Class P Certificate or a Residual Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101 ("Plan Assets") unless the Securities Administrator is provided with
an Opinion of Counsel on which the Depositor, the Master Servicer, the
Securities Administrator, the Trustee and the Servicers may rely, which
establishes to the satisfaction of the Securities Administrator that the
purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Servicers, the Trustee, the
Master Servicer, the Securities Administrator or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the
Servicers, the Trustee, the Master Servicer, the Securities Administrator, the
Trust Fund. An Opinion of Counsel will not be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the
Securities Administrator, shall be a written representation) from the Depositor
of the status of such transferee as an affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate or Class B
Certificate will be deemed to have represented by virtue of its purchase or
holding of such Certificate (or interest therein) that either (a) such
Transferee is not a Plan or purchasing such Certificate with Plan Assets, (b) in
the case of a Mezzanine Certificate, or a Class B-1 Certificate, it has acquired
and is holding such Certificate in reliance on Prohibited Transaction Exemption
("PTE") 94-84 or FAN 97-03E, as amended by PTE 97-34, 62 Fed. Reg. 39021 (July
21, 1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41,
67 Fed. Reg. 54487 (August 22, 2002) (the "Exemption"), and that it understands
that there are certain conditions to the availability of the Exemption including
that such Certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by a Rating Agency and, in the case of the Class B-1
Certificates, that it will represent that it is an "accredited investor" as
defined in Rule 501(a)(1) of Regulation D issued under the Securities Act and
will obtain a representation from any transferee that such transferee is an
accredited investor so long as it is required to obtain a representation
regarding compliance with the Securities Act or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in PTCE 95-60, and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied.
If any Certificate or any interest therein is acquired or held
in violation of the conditions described in this Section 6.02(c), the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicers, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Securities
Administrator or its designee under clause (iii)(A) below to deliver payments to
a Person other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of Transfer and to do
all other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status
as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate, the Trustee
shall require delivery to it, and shall not register the
Transfer of any Residual Certificate until its receipt of, an
affidavit and agreement (a "Transfer Affidavit and Agreement,"
in the form attached hereto as Exhibit B-3) from the proposed
Transferee, in form and substance satisfactory to the
Securities Administrator, representing and warranting, among
other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any Person that is
not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor
to remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 6.02(d) and agrees to be bound by
them.
(C) Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed Transferee under clause
(B) above, if an authorized officer of the Securities
Administrator who is assigned to this transaction has actual
knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (x) to require
a Transfer Affidavit and Agreement from any other Person to
whom such Person attempts to transfer its Ownership Interest
in a Residual Certificate and (Y) not to transfer its
Ownership Interest unless it provides a Transferor Affidavit
(in the form attached hereto as Exhibit B-2) to the Securities
Administrator stating that, among other things, it has no
actual knowledge that such other Person is not a Permitted
Transferee.
(E) Each Person holding or acquiring an Ownership
Interest in a Residual Certificate, by purchasing an Ownership
Interest in such Certificate, agrees to give the Securities
Administrator written notice that it is a "pass-through
interest holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Residual Certificate, if
it is, or is holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through interest holder."
(ii) The Securities Administrator will register the Transfer
of any Residual Certificate only if it shall have received the Transfer
Affidavit and Agreement and all of such other documents as shall have
been reasonably required by the Securities Administrator as a condition
to such registration. In addition, no Transfer of a Residual
Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such
Certificate to the effect that such Transferee is a Permitted
Transferee.
(iii) (A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
6.02(d), then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights as holder
thereof retroactive to the date of registration of such Transfer of
such Residual Certificate. The Securities Administrator 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
6.02(d) or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such
holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a holder
of a Residual Certificate in violation of the restrictions in
this Section 6.02(d) and to the extent that the retroactive
restoration of the rights of the holder of such Residual
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Securities
Administrator shall have the right, without notice to the
holder or any prior holder of such Residual Certificate, to
sell such Residual Certificate to a purchaser selected by the
Securities Administrator on such terms as the Securities
Administrator may choose. Such purported Transferee shall
promptly endorse and deliver each Residual Certificate in
accordance with the instructions of the Securities
Administrator. Such purchaser may be the Securities
Administrator itself or any Affiliate of the Securities
Administrator. The proceeds of such sale, net of the
commissions (which may include commissions payable to the
Securities Administrator or its Affiliates), expenses and
taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Securities
Administrator, and the Securities Administrator shall not be
liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
(iv) The Securities Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax imposed (A) as
a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is a Disqualified Organization, including
the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Residual Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Residual
Certificate having as among its record holders at any time any Person
which is a Disqualified Organization. Reasonable compensation for
providing such information may be charged or collected by the
Securities Administrator.
(v) The provisions of this Section 6.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided
that there shall have been delivered to the Securities Administrator at
the expense of the party seeking to modify, add to or eliminate any
such provision the following:
(A) written notification from each Rating Agency to
the effect that the modification, addition to or elimination
of such provisions will not cause such Rating Agency to
downgrade its then-current ratings of any Class of
Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Securities Administrator, to the effect
that such modification of, addition to or elimination of such
provisions will not cause any Trust REMIC to cease to qualify
as a REMIC and will not cause any Trust REMIC, as the case may
be, to be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person that is not a
Permitted Transferee or a Person other than the prospective
transferee to be subject to a REMIC-tax caused by the Transfer
of a Residual Certificate to a Person that is not a Permitted
Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Securities
Administrator maintained for such purpose pursuant to Section 9.11. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver, the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Securities
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Securities Administrator duly executed
by, the Holder thereof or his attorney duly authorized in writing. In addition,
with respect to each Class R Certificate, the holder thereof may exchange, in
the manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest,
respectively, in each case that was evidenced by the Class R Certificate being
exchanged.
(g) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Securities Administrator
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Securities Administrator in accordance
with its customary procedures.
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Securities Administrator, or the Securities Administrator receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected purchaser, the Securities
Administrator, shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC created hereunder, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
SECTION 6.04. Persons Deemed Owners.
The Depositor, the Servicers, the Trustee, the Master
Servicer, the Securities Administrator and any agent of any of them may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Depositor, the Servicers,
the Trustee, the Master Servicer, the Securities Administrator or any agent of
any of them shall be affected by notice to the contrary.
SECTION 6.05. Certain Available Information.
On or prior to the date of the first sale of any Class B
Certificate, Class CE-1 Certificate, Class CE-2 Certificate, Class P Certificate
or Residual Certificate to an Independent third party, the Depositor shall
provide to the Securities Administrator ten copies of any private placement
memorandum or other disclosure document used by the Depositor in connection with
the offer and sale of such Certificate. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Securities Administrator, the
Depositor promptly shall inform the Securities Administrator of such event and
shall deliver to the Securities Administrator ten copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Securities Administrator shall maintain at its office as set
forth in Section 12.05 hereof and shall make available free of charge during
normal business hours for review by any Holder of a Certificate or any Person
identified to the Securities Administrator as a prospective transferee of a
Certificate, originals or copies of the following items: (i) in the case of a
Holder or prospective transferee of a Class B Certificate, Class CE-1
Certificate, Class CE-2 Certificate, Class P Certificate or Residual
Certificate, the related private placement memorandum or other disclosure
document relating to such Class of Certificates, in the form most recently
provided to the Securities Administrator; and (ii) in all cases, (A) this
Agreement and any amendments hereof entered into pursuant to Section 11.01, (B)
all monthly statements required to be delivered to Certificateholders of the
relevant Class pursuant to Section 4.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date and (C) any copies of all Officers' Certificates of the Servicers
since the Closing Date delivered to the Master Servicer to evidence such
Person's determination that any P&I Advance or Servicing Advance was, or if
made, would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance.
Copies and mailing of any and all of the foregoing items will be available from
the Securities Administrator upon request at the expense of the Person
requesting the same.
ARTICLE VII
THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER
SECTION 7.01. Liability of the Depositor, the Servicers and
the Master Servicer.
The Depositor, each Servicer and the Master Servicer each
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement upon them in their respective capacities
as Depositor, a Servicer and Master Servicer and undertaken hereunder by the
Depositor, each Servicer and the Master Servicer herein.
SECTION 7.02. Merger or Consolidation of the Depositor, the
Servicers or the Master Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
Countrywide will keep in full effect its existence, rights and franchises as a
limited partnership under the laws of the jurisdiction of its formation. Subject
to the following paragraph, Saxon will keep in full effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation. Subject to the following paragraph, Ocwen will keep in full
effect its existence, rights and franchises as a federally chartered savings
bank. Subject to the following paragraph, the Master Servicer will keep in full
effect its existence, rights and franchises as a national banking association.
The Depositor, each Servicer and the Master Servicer each will obtain and
preserve its qualification to do business as a foreign entity in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
The Depositor, any Servicer or the Master Servicer may be
merged or consolidated with or into any Person, or transfer all or substantially
all of its assets to any Person, in which case any Person resulting from any
merger or consolidation to which the Depositor, a Servicer or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, such Servicer or the Master Servicer, shall be the successor of the
Depositor, such Servicer or the Master Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that any successor to a Servicer or the Master Servicer shall
meet the eligibility requirements set forth in clauses (i) and (iii) of the last
paragraph of Section 8.02(a) or Section 7.06, as applicable. In accordance with
the foregoing, effective on or about July 1, 2005, Ocwen Federal Bank FSB will
transfer all of its servicing functions to Ocwen Loan Servicing, LLC ("OLS") and
OLS will assume Ocwen Federal Bank FSB's responsibilities, duties, liabilities
and obligations under this Agreement so long as OLS satisfies the requirements
for a successor servicer set forth in Section 7.04 hereof at the time of such
transfer.
SECTION 7.03. Limitation on Liability of the Depositor, the
Servicers, the Master Servicer and Others.
None of the Depositor, the Servicers, the Securities
Administrator, the Master Servicer or any of the directors, officers, employees
or agents of the Depositor, the Servicer or the Master Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, a Servicer, the Securities Administrator, the
Master Servicer or any such person against any breach of warranties,
representations or covenants made herein or against any specific liability
imposed on any such Person pursuant hereto or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer, the Securities
Administrator, the Master Servicer and any director, officer, employee or agent
of the Depositor, each Servicer, the Securities Administrator and the Master
Servicer may rely in good faith on any document of any kind which, prima facie,
is properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, each Servicer, the Securities Administrator, the
Master Servicer and any director, officer, employee or agent of the Depositor,
each Servicer, the Securities Administrator or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement,
the Certificates or any Credit Risk Management Agreement or any loss, liability
or expense incurred (including, without limitation, the acts or omissions of the
Interim Servicer or the Interim Subservicer or the failure of the Interim
Servicer or the Interim Subservicer to perform in accordance with the Interim
Servicing Agreement; provided, however, that the Trust Fund shall have no
obligation to indemnify any Servicer for any such acts or omissions of the
Interim Servicer or the Interim Subservicer unless and until the related
Servicer has first sought (employing commercially reasonable efforts)
indemnification from the Interim Servicer or the Interim Subservicer, as
applicable) other than by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, any
Servicer, the Securities Administrator or the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and, in its opinion,
does not involve it in any expense or liability; provided, however, that each of
the Depositor, each Servicer, the Securities Administrator and the Master
Servicer may in its discretion undertake any such action which it may deem
necessary or desirable with 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 (except any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the related Servicer, the Securities Administrator and the Master
Servicer shall be entitled to be reimbursed therefor from the related Collection
Account or the Distribution Account as and to the extent provided in Article III
and Article IV, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the related Collection Account and
the Distribution Account.
Notwithstanding anything to the contrary contained herein, no
Servicer shall be liable for any actions or inactions prior to the Cut-off Date
of any prior servicer of the related Mortgage Loans and the Master Servicer
shall not be liable for any action or inaction of any Servicer or the Interim
Servicer, except to the extent expressly provided herein, or the Credit Risk
Management Agreement.
SECTION 7.04. Limitation on Resignation of the Servicers.
(a) Except as expressly provided herein, no Servicer shall
neither assign all or substantially all of its rights under this Agreement or
the servicing hereunder nor delegate all or substantially all of its duties
hereunder nor sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Master Servicer, which consent shall not be unreasonably withheld; provided,
that in each case, there must be delivered to the Trustee and the Master
Servicer a letter from each Rating Agency to the effect that such transfer of
servicing or sale or disposition of assets will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates.
Notwithstanding the foregoing, each Servicer, without the consent of the Trustee
or the Master Servicer, may retain third-party contractors to perform certain
servicing and loan administration functions, including without limitation hazard
insurance administration, tax payment and administration, flood certification
and administration, collection services and similar functions, provided,
however, that the retention of such contractors by a Servicer shall not limit
the obligation of such Servicer to service the related Mortgage Loans pursuant
to the terms and conditions of this Agreement. No Servicer shall resign from the
obligations and duties hereby imposed on it except (i) upon determination that
its duties hereunder are no longer permissible under applicable law, (ii) upon
the related Servicer's written proposal of a successor servicer reasonably
acceptable to each of the Seller, the Depositor and the Master Servicer or (iii)
as provided in Section 7.04(c). No such resignation under clause (i) above shall
become effective unless evidenced by an Opinion of Counsel to such effect
obtained at the expense of such Servicer and delivered to the Trustee and the
Rating Agencies. No such resignation of a Servicer under clause (ii) shall be
effective unless:
(i) the proposed successor Servicer is (1) an affiliate of the
Master Servicer that services mortgage loans similar to the Mortgage
Loans in the jurisdictions in which the related Mortgaged Properties
are located or (2) the proposed successor Servicer has a rating of at
least "Above Average" by S&P and either a rating of at least "RPS2" by
Fitch or a rating of at least "SQ2" by Moody's;
(ii) the Rating Agencies have confirmed to the Trustee that
the appointment of the proposed successor servicer as the servicer
under this Agreement will not result in the reduction or withdrawal of
the then current ratings of any of the Certificates; and
(iii) the proposed successor Servicer has a net worth of at
least $25,000,000.
Notwithstanding anything to the contrary, no resignation of a Servicer
shall become effective until the Master Servicer or a successor Servicer shall
have assumed such Servicer's responsibilities, duties, liabilities (other than
those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
(b) Except as expressly provided herein, no Servicer shall
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by such Servicer hereunder. The foregoing prohibition on assignment
shall not prohibit a Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to such Servicer hereunder; provided, however,
that as provided in Section 3.02, no Sub-Servicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Sub-Servicer as an indemnitee under this Agreement.
(c) Notwithstanding anything to the contrary herein, each
Servicer may pledge or assign as collateral all its rights, title and interest
under this Agreement to a lender (the "Servicing Rights Lender"), provided,
that:
(i) upon a Servicer Event of Default and receipt of a notice
of termination by such Servicer, the Servicing Rights Lender may direct
such Servicer or its designee to appoint a successor Servicer pursuant
to the provisions, and subject to the conditions, set forth in Section
8.02 regarding such appointment of a successor Servicer;
(ii) the Servicing Rights Lender's rights are subject to this
Agreement; and
(iii) such Servicer shall remain subject to termination as
servicer under this Agreement pursuant to the terms hereof.
SECTION 7.05. Limitation on Resignation of the Master
Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination pursuant
to the preceding sentence permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect obtained at the
expense of the Master Servicer and delivered to the Trustee and the Rating
Agencies. No resignation of the Master Servicer shall become effective until the
Trustee or a successor Master Servicer meeting the criteria specified in Section
7.06 shall have assumed the Master Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.
SECTION 7.06. Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and
delegate its duties and obligations in its entirety as Master Servicer under
this Agreement; provided, however, that: (i) the purchaser or transferee accept
in writing such assignment and delegation and assume the obligations of the
Master Servicer hereunder (a) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (b) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (c) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an officer's certificate and
an Opinion of Independent counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising out of
acts or omissions prior to the effective date thereof.
SECTION 7.07. Rights of the Depositor in Respect of the
Servicers and the Master Servicer.
Each of the Master Servicer and the Servicers shall afford
(and any Sub-Servicing Agreement shall provide that each Sub-Servicer shall
afford) the Depositor and the Trustee, upon reasonable notice, during normal
business hours, access to all records maintained by the Master Servicer or the
related Servicer (and any such Sub-Servicer) in respect of the related
Servicer's rights and obligations hereunder and access to officers of the Master
Servicer or the related Servicer (and those of any such Sub-Servicer)
responsible for such obligations, and the Master Servicer shall have access to
all such records maintained by the related Servicer and any Sub-Servicers. Upon
request, each of the Master Servicer and such Servicer shall furnish to the
Depositor and the Trustee its (and any such Sub-Servicer's) most recent
financial statements and such other information relating to the Master
Servicer's or such Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any such Sub-Servicer possesses). To the
extent such information is not otherwise available to the public, the Depositor
and the Trustee shall not disseminate any information obtained pursuant to the
preceding two sentences without the Master Servicer's or the related Servicer's
written consent, except as required pursuant to this Agreement or to the extent
that it is appropriate to do so (i) to its legal counsel, auditors, taxing
authorities or other governmental agencies and the Certificateholders, (ii)
pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor and the Trustee or the Trust Fund, and in any case, the Depositor or
the Trustee, (iii) disclosure of any and all information that is or becomes
publicly known, or information obtained by the Trustee from sources other than
the Depositor, the related Servicer or the Master Servicer, (iv) disclosure as
required pursuant to this Agreement or (v) disclosure of any and all information
(A) in any preliminary or final offering circular, registration statement or
contract or other document pertaining to the transactions contemplated by the
Agreement approved in advance by the Depositor, the related Servicer or the
Master Servicer or (B) to any affiliate, independent or internal auditor, agent,
employee or attorney of the Trustee having a need to know the same, provided
that the Trustee advises such recipient of the confidential nature of the
information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing in this
Section 7.07 shall limit the obligation of the Servicer to comply with any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the related Servicer to provide access as provided in this
Section 7.07 as a result of such obligation shall not constitute a breach of
this Section. Nothing in this Section 7.07 shall require the related Servicer to
collect, create, collate or otherwise generate any information that it does not
generate in its usual course of business. No Servicer shall be required to make
copies of or ship documents to any party unless provisions have been made for
the reimbursement of the costs thereof. The Depositor may, but is not obligated
to, enforce the obligations of the Master Servicer and the Servicers under this
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer or any Servicer under
this Agreement or exercise the rights of the Master Servicer or any Servicer
under this Agreement; provided that neither the Master Servicer nor the Servicer
shall be relieved of any of its obligations under this Agreement by virtue of
such performance by the Depositor or its designee. The Depositor shall not have
any responsibility or liability for any action or failure to act by the Master
Servicer or the Servicer and is not obligated to supervise the performance of
the Master Servicer or any Servicer under this Agreement or otherwise.
SECTION 7.08. Duties of the Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager
will provide reports and recommendations concerning certain delinquent and
defaulted Mortgage Loans, and as to the collection of any Prepayment Charges
with respect to the Mortgage Loans. Such reports and recommendations will be
based upon information provided to the Credit Risk Manager pursuant to the
Credit Risk Management Agreements, and the Credit Risk Manager shall look solely
to the Servicers and/or Master Servicer for all information and data (including
loss and delinquency information and data) relating to the servicing of the
related Mortgage Loans. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the Servicer, the Master Servicer, the Securities
Administrator, the Trustee, and each Rating Agency. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to this Section
shall not become effective until the appointment of a successor Credit Risk
Manager.
SECTION 7.09. Limitation Upon Liability of the Credit Risk
Manager.
Neither the Credit Risk Manager, nor any of its directors,
officers, employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the related Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance or
bad faith in its performance of its duties. The Credit Risk Manager and any
director, officer, employee, or agent of the Credit Risk Manager may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder, and may rely
in good faith upon the accuracy of information furnished by the Servicer
pursuant to the related Credit Risk Management Agreement in the performance of
its duties thereunder and hereunder.
SECTION 7.10. Removal of the Credit Risk Manager.
The Credit Risk Manager may be removed as Credit Risk Manager
by Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager, with a copy to
the Securities Administrator and the Master Servicer.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Events of Default.
(a) "Servicer Event of Default," wherever used herein, means
any one of the following events:
(i) any failure by a Servicer to remit to the Securities
Administrator for distribution to the Certificateholders any payment
(other than a P&I Advance required to be made from its own funds on any
Servicer Remittance Date pursuant to Section 5.03) required to be made
by such Servicer under the terms of the Certificates and this Agreement
which continues unremedied for a period of one Business Day after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to such Servicer by the Depositor or
the Trustee (in which case notice shall be provided by telecopy), or to
such Servicer, the Depositor, the Trustee and by the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of a Servicer duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of such Servicer contained in this Agreement, or
the material breach by a Servicer of any representation and warranty
contained in Section 2.05, which continues unremedied for a period of
thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
such Servicer by the Depositor or the Trustee or to such Servicer, the
Depositor and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; provided, however, that in the case of
a failure that cannot be cured within thirty (30) days, the cure period
may be extended for an additional thirty (30) days if such Servicer can
demonstrate to the reasonable satisfaction of the Trustee that the
Servicer is diligently pursuing remedial action; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer
and such decree or order shall have remained in force undischarged or
unstayed for a period of ninety (90) days; or
(iv) a Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to it or of or relating to all or substantially all of
its property; or
(v) a 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;
(vi) failure by a Servicer to duly perform, within the
required time period, its obligations under Section 3.17, 3.18 or 3.19
which failure continues unremedied for a period of ten (10) days after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by any party to this
Agreement; or
(vii) any failure of a Servicer to make any P&I Advance on any
Servicer Remittance Date required to be made from its own funds
pursuant to Section 5.03 which continues unremedied until 3:00 p.m. New
York time on the Business Day immediately following the Servicer
Remittance Date; or
(viii) failure of a Servicer (other than Countrywide) to
maintain at least an "average" rating from the Rating Agencies.
If a Servicer Event of Default described in clauses (i)
through (vi) or (viii) of this Section shall occur, then, and in each and every
such case, so long as such Servicer Event of Default shall not have been
remedied, the Depositor or the Trustee may, and at the written direction of the
Holders of Certificates entitled to at least 51% of Voting Rights, the Trustee
shall, by notice in writing to the defaulting Servicer (and to the Depositor if
given by the Trustee or to the Trustee if given by the Depositor) with a copy to
the Master Servicer and each Rating Agency, terminate all of the rights and
obligations of the defaulting Servicer in its capacity as a Servicer under this
Agreement, to the extent permitted by law, and in and to the related Mortgage
Loans and the proceeds thereof. If a Servicer Event of Default described in
clause (vii) hereof shall occur, the Trustee shall, by notice in writing to the
defaulting Servicer, the Depositor and the Master Servicer, terminate all of the
rights and obligations of the defaulting Servicer in its capacity as a Servicer
under this Agreement and in and to the related Mortgage Loans and the proceeds
thereof. Subject to Section 8.02, on or after the receipt by the defaulting
Servicer of such written notice, all authority and power of the defaulting
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the related Mortgage Loans or otherwise,
shall pass to and be vested in the Master Servicer pursuant to and under this
Section, and, without limitation, the Master Servicer is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the defaulting Servicer, 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 related Mortgage
Loans and related documents, or otherwise. The defaulting Servicer agrees
promptly (and in any event no later than ten (10) Business Days subsequent to
such notice) to provide the Master Servicer with all documents and records
requested by it to enable it to assume the defaulting Servicer's functions under
this Agreement, and to cooperate with the Master Servicer in effecting the
termination of the defaulting Servicer's responsibilities and rights under this
Agreement, including, without limitation, the transfer within one (1) Business
Day to the Master Servicer for administration by it of all cash amounts which at
the time shall be or should have been credited by the defaulting Servicer to the
related Collection Account held by or on behalf of the defaulting Servicer or
thereafter be received with respect to the related Mortgage Loans or any related
REO Property (provided, however, that the defaulting Servicer shall continue to
be entitled to receive all amounts accrued or owing to it under this Agreement
on or prior to the date of such termination, whether in respect of P&I Advances,
Servicing Advances, accrued and unpaid Servicing Fees or otherwise, and shall
continue to be entitled to the benefits of Section 7.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
Reimbursement of xxxxxxxxxxxx X&X Advances, Servicing Advances and accrued and
unpaid Servicing Fees shall be made on a first in, first out ("FIFO") basis no
later than the Servicer Remittance Date. For purposes of this Section 8.01(a),
the Trustee shall not be deemed to have knowledge of a Servicer Event of Default
unless a Responsible Officer of the Trustee assigned to and working in the
Trustee's Corporate Trust Office has actual knowledge thereof or unless written
notice of any event which is in fact such a Servicer Event of Default is
received by the Trustee at its Corporate Trust Office and such notice references
the Certificates, the Trust or this Agreement. The Trustee shall promptly notify
the Master Servicer and the Rating Agencies of the occurrence of a Servicer
Event of Default of which it has knowledge as provided above.
The Master Servicer shall be entitled to be reimbursed by the
defaulting Servicer (or from amounts on deposit in the Distribution Account if
the defaulting Servicer is unable to fulfill its obligations hereunder) for all
reasonable out-of-pocket or third party costs associated with the transfer of
servicing from the defaulting Servicer, including without limitation, any
reasonable out-of-pocket or third party costs or expenses associated with the
complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Master Servicer to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Master Servicer to service the related Mortgage Loans properly and
effectively, upon presentation of reasonable documentation of such costs and
expenses.
(b) "Master Servicer Event of Default," wherever used herein,
means any one of the following events:
(i) 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 on the part of the Master Servicer contained in this
Agreement, or the breach by the Master Servicer of any representation
and warranty contained in Section 2.04, which continues unremedied for
a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Master Servicer by the Depositor or the Trustee or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least 25% of the Voting Rights; or
(ii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, 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 90 days; or
(iii) the Master Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to it or of or relating to all or substantially all of
its property; or
(iv) 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.
If a Master Servicer Event of Default shall occur, then, and
in each and every such case, so long as such Master Servicer Event of Default
shall not have been remedied, the Depositor or the Trustee may, and at the
written direction of the Holders of Certificates entitled to at least 51% of
Voting Rights, the Trustee shall, by notice in writing to the Master Servicer
(and to the Depositor if given by the Trustee or to the Trustee if given by the
Depositor) with a copy to each Rating Agency, terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, 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 under this
Agreement, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the Mortgage Loans or otherwise including, without
limitation, the compensation payable to the Master Servicer under this
Agreement, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees promptly (and in any
event no later than ten Business Days subsequent to such notice) to provide the
Trustee with all documents and records requested by it to enable it to assume
the Master Servicer's functions under this Agreement, and to cooperate with the
Trustee in effecting the termination of the Master Servicer's responsibilities
and rights under this Agreement (provided, however, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination and shall
continue to be entitled to the benefits of Section 7.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 8.01(b), the Trustee shall not be deemed to have
knowledge of a Master Servicer Event of Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Event of Default is received by the Trustee and such
notice references the Certificates, the Trust or this Agreement. The Trustee
shall promptly notify the Rating Agencies of the occurrence of a Master Servicer
Event of Default of which it has knowledge as provided above.
To the extent that the costs and expenses of the Trustee
related to the termination of the Master Servicer, appointment of a successor
Master Servicer or the transfer and assumption of the master servicing by the
Trustee (including, without limitation, (i) all legal costs and expenses and all
due diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Event of
Default and (ii) all costs and expenses associated with the complete transfer of
the master servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor Master Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
Master Servicer to master service the Mortgage Loans in accordance with this
Agreement) are not fully and timely reimbursed by the terminated Master
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.
SECTION 8.02. Master Servicer to Act; Appointment of
Successor.
(a) On and after the time a Servicer receives a notice of
termination, the Master Servicer shall be the successor in all respects to such
Servicer in its capacity as a Servicer under this Agreement and the transactions
set forth or provided for herein, and all the responsibilities, duties and
liabilities relating thereto and arising thereafter shall be assumed by the
Master Servicer (except for any representations or warranties of such Servicer
under this Agreement, the responsibilities, duties and liabilities contained in
Section 2.03 and the obligation to deposit amounts in respect of losses pursuant
to Section 3.10(b)) by the terms and provisions hereof including, without
limitation, such Servicer's obligations to make P&I Advances pursuant to Section
5.03 of this Agreement; provided, however, that if the Master Servicer is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Master Servicer shall not be
obligated to make P&I Advances pursuant to Section 5.03 of this Agreement; and
provided further, that any failure to perform such duties or responsibilities
caused by such Servicer's failure to provide information required by Section
8.01 shall not be considered a default by the Master Servicer as successor to
such Servicer hereunder; provided, however, that (1) it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 120 days) before the actual servicing functions can be fully
transferred to the Master Servicer or any successor Servicer appointed in
accordance with the following provisions and (2) any failure to perform such
duties or responsibilities caused by such Servicer's failure to provide
information required by Section 8.01 of this Agreement shall not be considered a
default by the Master Servicer as successor to such Servicer. As compensation
therefor, the Master Servicer shall be entitled to the Servicing Fee and all
funds relating to the related Mortgage Loans to which the terminated Servicer
would have been entitled if it had continued to act hereunder. Notwithstanding
the above and subject to the immediately following paragraph, the Master
Servicer may, if it shall be unwilling to so act, or shall, if it is unable to
so act promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth below as the
successor to the terminated Servicer under this Agreement in the assumption of
all or any part of the responsibilities, duties or liabilities of the terminated
Servicer under this Agreement.
Notwithstanding any provision in this Agreement to the
contrary, for a period of 30 days following the date on which Ocwen shall have
received a notice of termination pursuant to Section 8.01 of this Agreement,
Ocwen or its designee may appoint a successor Servicer that satisfies the
eligibility criteria of a successor Servicer set forth below, which appointment
shall be subject to the consent of the Depositor, the Seller, the Master
Servicer, and the Trustee, which consent shall not be unreasonably withheld or
delayed; provided that such successor Servicer agrees to fully effect the
servicing transfer within 120 days following the termination of Ocwen and to
make all P&I Advances that would otherwise be made by the Master Servicer under
Section 8.01 as of the date of such appointment, and to reimburse the Master
Servicer for any xxxxxxxxxxxx X&X Advances they have made and any reimbursable
expenses that they may have incurred in connection with this Section 8.02. Any
proceeds received in connection with the appointment of such successor Servicer
shall be the property of Ocwen or its designee. This 30-day period shall
terminate immediately (i) at the close of business on the second Business Day of
such 30-day period if (A) Ocwen was terminated because of an Event of Default
described in Section 8.01(a)(vii) for failing to make a required P&I Advance,
and (B) Ocwen shall have failed to make (or cause to be made) such P&I Advance,
or shall fail to reimburse (or cause to be reimbursed) the Master Servicer for a
P&I Advance made by the Master Servicer, by the close of business on such second
Business Day, or (ii) at the close of business on the second Business Day
following the date (if any) during such 30-day period on which a P&I Advance is
due to be made, if Ocwen shall have failed to make (or caused to be made) such
P&I Advance, or Ocwen shall have failed to reimburse (or cause to be reimbursed)
the Master Servicer for such P&I Advance, by the close of business on such
second Business Day; provided, that such 30-day period shall only be terminated
to the extent that the Lender has received notice of such failure from the
Master Servicer and the Lender has not cured or caused the cure of such failure
within two (2) Business Days following receipt of notice, provided, however,
that such notice requirement shall only be applicable to the extent that the
Master Servicer has been provided with the written address and contact
information for the lender.
Notwithstanding anything herein to the contrary, in no event
shall the Trustee or the Master Servicer be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement and the transactions set forth or provided for herein.
Any successor Servicer appointed under this Agreement must (i)
be an established mortgage loan servicing institution that is a Xxxxxx Xxx and
Xxxxxxx Mac approved seller/servicer, (ii) be approved by each Rating Agency by
a written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates, (iii) have a net worth
of not less than $15,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the related Servicer (other than liabilities of the related
Servicer hereunder incurred prior to termination of the related Servicer under
Section 8.01 herein) under this Agreement as if originally named as a party to
this Agreement.
In addition, (i) until Countrywide purchases the servicing
rights with respect to the New Century Mortgage Loans, the Depositor shall have
the right to appoint a qualified successor servicer in accordance with the terms
and conditions set forth herein to service the New Century Mortgage Loans, and
(ii) unless Ocwen purchase the servicing rights with respect to the Ocwen
Mortgage Loans, the Depositor shall have the right to appoint a qualified
successor servicer in accordance with the terms and conditions set forth herein
to service the Ocwen Mortgage Loans.
(b) (1) All servicing transfer costs (including, without
limitation, servicing transfer costs of the type described in Section 8.02(a)
and incurred by the Trustee, the Master Servicer and any successor Servicer
under paragraph (b)(2) below) shall be paid by the terminated Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
or initial Servicer, as applicable, defaults in its obligation to pay such
costs, the successor Servicer, the Master Servicer and the Trustee shall be
entitled to reimbursement therefor from the assets of the Trust Fund.
(2) No appointment of a successor to a Servicer under this
Agreement shall be effective until the assumption by the successor of all of
such Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trustee
may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
related Servicer as such hereunder. The Depositor, the Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Pending appointment of a successor
to the related Servicer under this Agreement, the Master Servicer shall act in
such capacity as hereinabove provided.
SECTION 8.03. Notification to Certificateholders.
(a) Upon any termination of a Servicer or the Master Servicer
pursuant to Section 8.01(a) or (b) or any appointment of a successor to a
Servicer or the Master Servicer pursuant to Section 8.02, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register.
(b) Not later than the later of sixty (60) days after the
occurrence of any event, which constitutes or which, with notice or lapse of
time or both, would constitute a Servicer Event of Default or a Master Servicer
Event of Default or five (5) days after a Responsible Officer of the Trustee
becomes aware of the occurrence of such an event, the Trustee shall transmit by
mail to all Holders of Certificates notice of each such occurrence, unless such
default or Servicer Event of Default or Master Servicer Event of Default shall
have been cured or waived.
SECTION 8.04. Waiver of Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default, Servicer Event
of Default or Master Servicer Event of Default hereunder may waive such default,
Servicer Event of Default or Master Servicer Event of Default; provided,
however, that a Servicer Event of Default under clause (i) or (vii) of Section
8.01(a) may be waived only by all of the Holders of the Regular Certificates.
Upon any such waiver of a default, Servicer Event of Default or Master Servicer
Event of Default, such default, Servicer Event of Default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default, Servicer Event of Default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.
ARTICLE IX
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 9.01. Duties of Trustee and Securities Administrator.
The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing or waiver of all Master Servicer Events of
Default which may have occurred, and the Securities Administrator each undertake
to perform such duties and only such duties as are specifically set forth in
this Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of a Master Servicer Event of Default, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
Each of the Trustee and the Securities Administrator, upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to it, which are specifically
required to be furnished pursuant to any provision of this Agreement, shall
examine them to determine whether they conform to the requirements of this
Agreement. If any such instrument is found not to conform to the requirements of
this Agreement in a material manner, the Trustee or the Securities
Administrator, as the case may be, shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to its satisfaction, the Securities Administrator will provide notice
to the Trustee thereof and the Trustee will provide notice to the
Certificateholders.
The Trustee shall promptly remit to the related Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.
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 misconduct; provided,
however, that:
(i) Prior to the occurrence of a Master Servicer Event of
Default, and after the curing or waiver of all such Master Servicer
Events of Default which may have occurred with respect to the Trustee
and at all times with respect to the Securities Administrator, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, neither the Trustee nor the
Securities Administrator shall be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee or the Securities Administrator and, in
the absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, that conform to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee or an
officer or officers of the Securities Administrator, respectively,
unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the
pertinent facts; and
(iii) Neither the Trustee nor the Securities Administrator
shall be 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
Holders of Certificates entitled to at least 25% of the Voting Rights
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee or the Securities Administrator or
exercising any trust or power conferred upon the Trustee or the
Securities Administrator under this Agreement.
SECTION 9.02. Certain Matters Affecting Trustee and Securities
Administrator.
(a) Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may request
and rely upon and shall be protected in acting or refraining from
acting upon any resolution, Officers' Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel of its selection and any advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto 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 the case may be,
reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of a Master Servicer Event of Default
(which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to 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;
(iv) Neither the Trustee nor the Securities Administrator
shall be liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of
Default hereunder and after the curing or waiver of all Master Servicer
Events of Default which may have occurred with respect to the Trustee
and at all times with respect to the Securities Administrator, 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 Certificates entitled
to at least 25% of the Voting Rights; provided, however, that if the
payment within a reasonable time to the Trustee or the Securities
Administrator of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee or the Securities Administrator, as applicable, not
reasonably assured to the Trustee or the Securities Administrator by
such Certificateholders, the Trustee or the Securities Administrator,
as applicable, may require reasonable indemnity satisfactory to it
against such expense, or liability from such Certificateholders as a
condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(vii) The Trustee shall not be liable for any loss resulting
from the investment of funds held in the Collection Account, for any
loss resulting from the investment of funds held in the Reserve Fund or
for any loss resulting from the redemption or sale of any such
investment as therein authorized;
(viii) The Trustee shall not be deemed to have notice of any
default, Master Servicer Event of Default or Servicer Event of Default
unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by a Responsible Officer of the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Certificates and this Agreement; and
(ix) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, each
agent, custodian and other Person employed to act hereunder.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(c) The Trustee is hereby directed by the Depositor to execute
the Cap Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
Contracts, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contracts at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.
(d) None of the Securities Administrator, the Master Servicer,
the Servicer, the Seller, the Depositor, the Custodians or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.
SECTION 9.03. Trustee and Securities Administrator not Liable
for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Securities Administrator, the authentication of the
Securities Administrator on the Certificates, the acknowledgments of the Trustee
contained in Article II and the representations and warranties of the Trustee in
Section 9.12) shall be taken as the statements of the Depositor and neither the
Trustee nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from any Collection Account
by the related Servicer, other than with respect to the Securities Administrator
any funds held by it or on behalf of the Trustee in accordance with Section 3.23
and 3.24.
SECTION 9.04. Trustee and Securities Administrator May Own
Certificates.
Each of the Trustee and the Securities Administrator in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates and may transact business with other interested parties and their
Affiliates with the same rights it would have if it were not Trustee or the
Securities Administrator.
SECTION 9.05. Fees and Expenses of Trustee and Securities
Administrator.
The fees of the Trustee and the Securities Administrator
hereunder, of Xxxxx Fargo as the Custodian under the Xxxxx Fargo Custodial
Agreement or of DBNT as the Custodian under the DBNT Custodial Agreement shall
be paid in accordance with a side letter agreement with the Master Servicer and
at the sole expense of the Master Servicer. In addition, the Trustee, the
Securities Administrator, the Custodians and any director, officer, employee or
agent of the Trustee, the Securities Administrator and the Custodians shall be
indemnified by the Trust and held harmless against any loss, liability or
expense (including reasonable attorney's fees and expenses) incurred by the
Trustee, the Custodians or the Securities Administrator in connection with any
claim or legal action or any pending or threatened claim or legal action arising
out of or in connection with the acceptance or administration of its respective
obligations and duties under this Agreement, including the Cap Contracts and any
and all other agreements related hereto, other than any loss, liability or
expense (i) for which the Trustee is indemnified by the Master Servicer or any
Servicer, (ii) that constitutes a specific liability of the Trustee or the
Securities Administrator pursuant to Section 11.01(g) or (iii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder by the Trustee or the
Securities Administrator or by reason of reckless disregard of obligations and
duties hereunder. In no event shall the Trustee or the Securities Administrator
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the
Custodians. Any payment hereunder made by the Master Servicer to the Trustee
shall be from the Master Servicer's own funds, without reimbursement from REMIC
I therefor.
SECTION 9.06. Eligibility Requirements for Trustee and
Securities Administrator.
The Trustee and the Securities Administrator shall at all
times be a corporation or an association (other than the Depositor, the Seller,
the Master Servicer or any Affiliate of the foregoing) 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 at least $50,000,000 (or a member of a bank holding company whose
capital and surplus is at least $50,000,000) and subject to supervision or
examination by federal or state authority. If such corporation or association
publishes reports of conditions 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
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In case at any time the
Trustee or the Securities Administrator, as applicable, shall cease to be
eligible in accordance with the provisions of this Section, the Trustee or the
Securities Administrator, as applicable, shall resign immediately in the manner
and with the effect specified in Section 9.07.
SECTION 9.07. Resignation and Removal of Trustee and
Securities Administrator.
The Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Depositor, to the Master Servicer, to the Securities
Administrator (or the Trustee, if the Securities Administrator resigns) and to
the Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee or successor securities administrator
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee or Securities Administrator, as applicable, and to the
successor trustee or successor securities administrator, as applicable. A copy
of such instrument shall be delivered to the Certificateholders, the Trustee,
the Securities Administrator and the Master Servicer by the Depositor. If no
successor trustee or successor securities administrator shall have been so
appointed and have accepted appointment within thirty (30) days after the giving
of such notice of resignation, the resigning Trustee or Securities
Administrator, as the case may be, may, at the expense of the Trust Fund,
petition any court of competent jurisdiction for the appointment of a successor
trustee, successor securities administrator, Trustee or Securities
Administrator, as applicable.
If at any time the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 9.06 and
shall fail to resign after written request therefor by the Depositor, or if at
any time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or the Securities Administrator or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee or the Securities Administrator
and appoint a successor trustee or successor securities administrator by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 9.08.
Notwithstanding anything to the contrary contained herein, the
Master Servicer and the Securities Administrator shall at all times be the same
Person.
SECTION 9.08. Successor Trustee or Securities Administrator.
Any successor trustee or successor securities administrator
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents and
statements to the extent held by it hereunder, as well as all monies, held by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee or successor securities administrator
all such rights, powers, duties and obligations.
No successor trustee or successor securities administrator
shall accept appointment as provided in this Section unless at the time of such
acceptance such successor trustee or successor securities administrator shall be
eligible under the provisions of Section 9.06 and the appointment of such
successor trustee or successor securities administrator shall not result in a
downgrading of any Class of Certificates by any Rating Agency, as evidenced by a
letter from each Rating Agency.
Upon acceptance of appointment by a successor trustee or
successor securities administrator as provided in this Section, the Depositor
shall mail notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.
SECTION 9.09. Merger or Consolidation of Trustee or Securities
Administrator.
Any corporation or association into which the Trustee or the
Securities Administrator may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities Administrator
shall be a party, or any corporation or association succeeding to the business
of the Trustee or the Securities Administrator shall be the successor of the
Trustee or the Securities Administrator hereunder, provided such corporation or
association shall be eligible under the provisions of Section 9.06, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
SECTION 9.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the REMIC I or property securing the same may at the time be located,
the Trustee shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 9.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10 all 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 or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
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 or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trust 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.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee or co-trustee.
SECTION 9.11. Appointment of Office or Agency.
The Certificates may be surrendered for registration of
transfer or exchange at the Securities Administrator's office located at Sixth
and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator where
notices and demands to or upon the Securities Administrator in respect of the
Certificates and this Agreement may be served.
SECTION 9.12. Representations and Warranties.
The Trustee hereby represents and warrants to the Master
Servicer, the Securities Administrator, the Servicers and the Depositor as
applicable, as of the Closing Date, that:
(i) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America.
(ii) The execution and delivery of this Agreement by it, and
the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association or bylaws or 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 agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) It is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order
or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority,
which violation, in its good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of it to perform
its obligations under this Agreement or its financial condition.
(vi) No litigation is pending or, to the best of its
knowledge, threatened against it, which would prohibit it from entering
into this Agreement or, in its good faith reasonable judgment, is
likely to materially and adversely affect either the ability of it to
perform its obligations under this Agreement or its financial
condition.
ARTICLE X
TERMINATION
XXXXXXX 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx or Liquidation of
All Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicer to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC II Regular Interests or the Classes of Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Terminator (as defined
below) of all Mortgage Loans and each REO Property remaining in REMIC I and (ii)
the final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or REO Property remaining in REMIC I; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof and (ii) the Last Scheduled
Distribution Date. The purchase by the Terminator of all Mortgage Loans and each
REO Property remaining in REMIC I shall be at a price (the "Termination Price")
equal to the sum of (i) the greater of (A) the aggregate Purchase Price of all
the Mortgage Loans included in REMIC I, plus the appraised value of each REO
Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Master Servicer and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Master Servicer and the Trustee, as of
the close of business on the third Business Day next preceding the date upon
which notice of any such termination is furnished to Certificateholders pursuant
to the third paragraph of this Section 10.01) plus (ii) any amounts due the
Servicer and the Master Servicer in respect of unpaid Servicing Fees and
outstanding P&I Advances and Servicing Advances.
(b) The Master Servicer or, if the Master Servicer fails to
exercise such optional termination right, the first of either Countrywide, Saxon
or Ocwen to fulfill the requirements set forth in this paragraph (either the
Master Servicer, Countrywide, Saxon or Ocwen, the "Terminator") shall have the
right to purchase all of the Mortgage Loans and each REO Property remaining in
REMIC I pursuant to clause (i) of the preceding paragraph no later than the
Determination Date in the month immediately preceding the Distribution Date on
which the Certificates will be retired; provided, however, that the Terminator
may elect to purchase all of the Mortgage Loans and each REO Property remaining
in REMIC I pursuant to clause (i) above only if the aggregate Scheduled
Principal Balance of the Mortgage Loans and each REO Property remaining in the
Trust Fund at the time of such election is reduced to less than or equal to 10%
of the sum of the aggregate Scheduled Principal Balance of the Mortgage Loans as
of the Cut-off Date plus the Original Pre-Funded Amount. By acceptance of the
Residual Certificates, the Holder of the Residual Certificates agrees, in
connection with any termination hereunder, to assign and transfer any portion of
the Termination Price in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class CE-1
Certificates. Notwithstanding the foregoing, the optional termination right may
only be exercised by one of the Servicers if (1) such Servicer receives written
notification from the Master Servicer that the Master Servicer will not exercise
such optional termination right or (2) such Servicer does not receive such
written notification from the Master Servicer, and the Master Servicer fails to
exercise its optional termination right by the third Distribution Date following
the date such right became exercisable; provided, however, in no event shall a
Servicer exercise its optional termination right under (1) or (2) above unless
it first provides written notice to the Authorized Officers of the Seller that
it intends to exercise such optional termination right and such notice is
received by the Seller prior to the Seller's receipt of such notice from the
other Servicers.
(c) Notice of the liquidation of the Certificates shall be
given promptly by the Securities Administrator by letter to the
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Master
Servicer, not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of the final distribution on the Certificates or
(b) otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and the final payment in respect
of the REMIC I Regular Interests, REMIC II Regular Interests or the Certificates
will be made upon presentation and surrender of the related Certificates at the
office of the Securities Administrator therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests, REMIC II Regular Interests or Certificates from and
after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Securities Administrator. In the event
such notice is given in connection with the purchase of all of the Mortgage
Loans and each REO Property remaining in REMIC I by the Master Servicer, the
Master Servicer shall deliver to the Securities Administrator for deposit in the
Distribution Account not later than the Business Day prior to the Distribution
Date on which the final distribution on the Certificates an amount in
immediately available funds equal to the above-described Termination Price. The
Securities Administrator shall remit to the Servicer, the Master Servicer, the
Trustee and the applicable Custodian from such funds deposited in the
Distribution Account (i) any amounts which the Servicer would be permitted to
withdraw and retain from the Collection Account pursuant to Section 3.09 as if
such funds had been deposited therein (including all unpaid Servicing Fees,
Master Servicing Fees and all outstanding P&I Advances and Servicing Advances)
and (ii) any other amounts otherwise payable by the Securities Administrator to
the Master Servicer, the Trustee, the applicable Custodian and the Servicer from
amounts on deposit in the Distribution Account pursuant to the terms of this
Agreement prior to making any final distributions pursuant to Section 10.01(d)
below. Upon certification to the Trustee by the Securities Administrator of the
making of such final deposit, the Trustee shall promptly release or cause to be
released to the Master Servicer the Mortgage Files for the remaining Mortgage
Loans, and Trustee shall execute all assignments, endorsements and other
instruments delivered to it and necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Securities Administrator
shall distribute to each Certificateholder so presenting and surrendering its
Certificates the amount otherwise distributable on such Distribution Date in
accordance with Section 5.01 in respect of the Certificates so presented and
surrendered. Any funds not distributed to any Holder or Holders of Certificates
being retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 10.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Securities Administrator shall mail
a second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within one (1) year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall pay to the Depositor all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Securities Administrator as a result of such Certificateholder's
failure to surrender its Certificate(s) on the final Distribution Date for final
payment thereof in accordance with this Section 10.01. Any such amounts held in
trust by the Securities Administrator shall be held uninvested in an Eligible
Account.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to each Trust REMIC's final
Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
satisfy all requirements of a qualified liquidation under Section 860F
of the Code and any regulations thereunder, as evidenced by an Opinion
of Counsel obtained by and at the expense of the Terminator;
(ii) During such 90-day liquidation period and, at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of REMIC I to the Terminator for
cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit,
or cause to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand in the Trust Fund (other than cash
retained to meet claims), and the Trust Fund shall terminate at that
time.
(b) At the expense of the Terminator (or, if the Trust Fund is
being terminated as a result of the occurrence of the event described in clause
(ii) of the first paragraph of Section 10.01, at the expense of the Trust Fund),
the Terminator shall prepare or cause to be prepared the documentation required
in connection with the adoption of a plan of liquidation of each Trust REMIC
pursuant to this Section 10.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.
ARTICLE XI
REMIC PROVISIONS
SECTION 11.01. REMIC Administration.
(a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Securities Administrator on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. For the purposes of the REMIC election in respect
of REMIC II, the REMIC II Regular Interests shall be designated as the Regular
Interests in REMIC II and the Class R-II Interest shall be designated as the
Residual Interests in REMIC II. The Class A Certificates, the Mezzanine
Certificates, the Class B Certificates, the Class P Certificates, the Class CE-1
Certificates and the Class CE-2 Certificates (exclusive of any right to receive
payments from the Reserve Fund) shall be designated as the Regular Interests in
REMIC III and the Class R-III Interest shall be designated as the Residual
Interests in REMIC III. The Trustee shall not permit the creation of any
"interests" in each Trust REMIC (within the meaning of Section 860G of the Code)
other than the REMIC I Regular Interests, the REMIC II Regular Interests and the
interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Securities Administrator shall be reimbursed for any
and all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each Trust REMIC that involve the Internal Revenue Service or
state tax authorities), including the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Securities Administrator, as
agent for each Trust REMIC's tax matters person shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving any Trust
REMIC and (ii) 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 holder of the largest Percentage Interest of
each Class of Residual Certificates shall be designated, in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.
(d) The Securities Administrator shall prepare and file and
the Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.
(e) The Securities Administrator shall perform on behalf of
each Trust 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, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Securities Administrator shall
provide (i) to any Transferor of a Residual Certificate such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not a Permitted Transferee upon receipt of
additional reasonable compensation, (ii) to the Certificateholders such
information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The
Depositor shall provide or cause to be provided to the Securities Administrator,
within ten (10) days after the Closing Date, all information or data that the
Securities Administrator reasonably determines to be relevant for tax purposes
as to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.
(f) To the extent in the control of the Trustee or the
Securities Administrator, each such Person (i) shall take such action and shall
cause each REMIC created hereunder to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions,
(ii) shall not take any action, cause the Trust Fund 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 (A) endanger the
status of each Trust REMIC as a REMIC or (B) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless such action or inaction is permitted
under this Agreement or the Trustee and the Securities Administrator have
received an Opinion of Counsel, addressed to the them (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee
or the Securities Administrator) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor (iii) shall the Securities Administrator take or
fail to take any action (whether or not authorized hereunder) as to which the
Trustee has advised it in writing that it has received an Opinion of Counsel to
the effect that an Adverse REMIC Event could occur with respect to such action;
provided that the Securities Administrator may conclusively rely on such Opinion
of Counsel and shall incur no liability for its action or failure to act in
accordance with such Opinion of Counsel. In addition, prior to taking any action
with respect to any Trust REMIC or the respective assets of each, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Securities Administrator will consult with the Trustee or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any Trust REMIC, and the Securities
Administrator shall not take any such action or cause any Trust REMIC to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be home by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee.
(g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 11.03, if such
tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article XI, (ii) to the Securities Administrator pursuant
to Section 11.03, if such tax arises out of or results from a breach by the
Securities Administrator of any of its obligations under this Article XI, (iii)
to the Master Servicer pursuant to Section 11.03, if such tax arises out of or
results from a breach by the Master Servicer of any of its obligations under
Article IV or under this Article XI, (iv) to the related Servicer pursuant to
Section 11.03, if such tax arises out of or results from a breach by such
Servicer of any of its obligations under Article III or under this Article XI,
or (v) in all other cases, against amounts on deposit in the Distribution
Account and shall be paid by withdrawal therefrom.
(h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.
(i) Following the Startup Day, neither the Securities
Administrator nor the Trustee shall accept any contributions of assets to any
Trust REMIC other than in connection with any Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03 unless it shall have received an
Opinion of Counsel to the effect that the inclusion of such assets in the Trust
Fund will not cause the related REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.
SECTION 11.02. Prohibited Transactions and Activities.
None of the Depositor, the Servicer, the Securities
Administrator, the Master Servicer or the Trustee shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of REMIC I, (iii) the termination of REMIC I pursuant to Article X of
this Agreement, (iv) a substitution pursuant to Article II of this Agreement or
(v) a purchase of Mortgage Loans pursuant to Article II of this Agreement), nor
acquire any assets for any Trust REMIC (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Securities
Administrator (at the expense of the party seeking to cause such sale,
disposition, substitution, acquisition or contribution but in no event at the
expense of the Trustee) that such sale, disposition, substitution, acquisition
or contribution will not (a) affect adversely the status of any Trust REMIC as a
REMIC or (b) cause any Trust REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
SECTION 11.03. Indemnification.
(a) The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicers including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or the Servicer as a result of the
Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.
(b) Countrywide agrees to indemnify the Trust Fund, the
Depositor, Ocwen, Saxon, the Master Servicer, the Securities Administrator and
the Trustee for any taxes and costs including any reasonable attorneys' fees
imposed on or incurred by the Trust Fund, the Depositor, the Master Servicer,
the Securities Administrator or the Trustee, as a result of a Countrywide's
failure to perform its covenants set forth in Article III in accordance with the
standard of care of Countrywide set forth in this Agreement.
(c) Saxon agrees to indemnify the Trust Fund, the Depositor,
Countrywide, Ocwen, the Master Servicer, the Securities Administrator and the
Trustee for any taxes and costs including any reasonable attorneys' fees imposed
on or incurred by the Trust Fund, the Depositor, the Master Servicer, the
Securities Administrator or the Trustee, as a result of a Saxon's failure to
perform its covenants set forth in Article III in accordance with the standard
of care of Saxon set forth in this Agreement.
(d) Ocwen agrees to indemnify the Trust Fund, the Depositor,
Countrywide, Saxon, the Master Servicer, the Securities Administrator and the
Trustee for any taxes and costs including any reasonable attorneys' fees imposed
on or incurred by the Trust Fund, the Depositor, the Master Servicer, the
Securities Administrator or the Trustee, as a result of a Ocwen's failure to
perform its covenants set forth in Article III in accordance with the standard
of care of Ocwen set forth in this Agreement.
(e) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor, the Servicers and the Trustee for any taxes and costs including
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicers or the Trustee, as a result of the Master Servicer's
failure to perform its covenants set forth in Article IV in accordance with the
standard of care of the Master Servicer set forth in this Agreement.
(f) The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor, the Servicers or the
Trustee including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, the Servicers or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, each Servicer, the Master Servicer, the Securities Administrator and
the Trustee, but without the consent of any of the Certificateholders, (i) to
cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement and that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates. No amendment shall be deemed to adversely affect in any material
respect the interests of any Certificateholder who shall have consented thereto,
and no Opinion of Counsel shall be required to address the effect of any such
amendment on any such consenting Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, each Servicer, the Master Servicer, the Securities Administrator and
the Trustee with the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner, other than as described in
(i), without the consent of the Holders of Certificates of such Class evidencing
at least 66% of the Voting Rights allocated to such Class, or (iii) modify the
consents required by the immediately preceding clauses (i) and (ii) without the
consent of the Holders of all Certificates then outstanding. Notwithstanding any
other provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 12.01, Certificates registered in the name of
the Depositor or a Servicer or any Affiliate thereof shall be entitled to Voting
Rights with respect to matters affecting such Certificates. Without limiting the
generality of the foregoing, any amendment to this Agreement required in
connection with the compliance with or the clarification of any reporting
obligations described in Section 5.06 hereof shall not require the consent of
any Certificateholder and without the need for any Opinion of Counsel or Rating
Agency confirmation.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment is
permitted hereunder and will not result in the imposition of any tax on any
Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding and that
such amendment is authorized or permitted by this Agreement.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Depositor at the expense of the Certificateholders, but only
upon direction of the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any 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.
No Certificateholder shall have any right by virtue 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 default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights 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 costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder. and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue 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 equal,
ratable and common 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 12.04. 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
conflicts of laws principles thereof.
SECTION 12.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if sent by
facsimile, receipt confirmed, if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service or delivered in any
other manner specified herein, to (a) in the case of the Depositor, ACE
Securities Corp., AMACAR GROUP, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx (telecopy number: (704)
365-1362), or such other address or telecopy number as may hereafter be
furnished to the Servicers, the Master Servicer, the Securities Administrator
and the Trustee in writing by the Depositor, (b) in the case of the Ocwen, Ocwen
Federal Bank FSB, 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx
Xxxxx, Xxxxxxx 00000, Attention: Secretary (telecopy number: (000) 000-0000), or
such other address or telecopy number as may hereafter be furnished to Saxon,
Countrywide, the Trustee, the Master Servicer, the Securities Administrator and
the Depositor in writing by Ocwen, (c) in the case of Countrywide, Countrywide
Home Loans Servicing LP, 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, or such
other address or telecopy number as may hereafter be furnished to Ocwen, Saxon,
the Trustee, the Master Servicer, the Securities Administrator and the Depositor
in writing by Countrywide, (d) in the case of Saxon, Saxon Mortgage Services,
Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxx 00000, Attention: Mr. Xxxxx Xxxx,
President (telecopy number: (000) 000-0000) or such other address or telecopy
number as may hereafter be furnished to Ocwen, Countrywide, the Trustee, the
Master Servicer, the Securities Administrator and the Depositor in writing by
Saxon, (e) in the case of the Master Servicer and the Securities Administrator,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 and for overnight delivery to 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Ace Securities Corp.,
2005-HE4 (telecopy number: (000) 000-0000), or such other address or telecopy
number as may hereafter be furnished to the Trustee, the Depositor and the
Servicers in writing by the Master Servicer or the Securities Administrator and
(f) in the case of the Trustee, at the Corporate Trust Office or such other
address or telecopy number as the Trustee may hereafter be furnish to the
Servicers, the Master Servicer, the Securities Administrator and the Depositor
in writing by the Trustee. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.
SECTION 12.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 12.07. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which a
Responsible Officer has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicer Event of Default or Master
Servicer Event of Default that has not been cured or waived;
3. The resignation or termination of a Servicer, the Master
Servicer or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant
to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Distribution Account; and
7. Any event that would result in the inability of the Trustee
as successor Servicer to make advances regarding delinquent Mortgage
Loans.
In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.
The Servicer shall make available to each Rating Agency copies
of the following:
8. Each annual statement as to compliance described in Section
3.17; and
9. Each annual independent public accountants' servicing
report described in Section 3.18.
Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's, a division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; to Fitch, Fitch Ratings, Xxx Xxxxx Xxxxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and to Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other addresses as the
Rating Agencies may designate in writing to the parties hereto.
SECTION 12.08. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
SECTION 12.09. Grant of Security Interest.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, on behalf of
the Trust and for the benefit of the Certificateholders, be, and be construed
as, a sale of the Mortgage Loans by the Depositor and not a pledge of the
Mortgage Loans to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and for
the benefit of the Certificateholders, to secure a debt or other obligation of
the Depositor and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 shall be deemed to be a grant by the Depositor to
the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
and for the benefit of the Certificateholders, a security interest in the
Mortgage Loans and all other property described in clause (2) of the preceding
sentence, for the purpose of securing to the Trustee the performance by the
Depositor of the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.01 to be a true, absolute and unconditional sale of the Mortgage
Loans and assets constituting the Trust Fund by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders.
SECTION 12.10. Survival of Indemnification.
Any and all indemnities to be provided by any party to this
Agreement shall survive the termination and resignation of any party hereto and
the termination of this Agreement.
IN WITNESS WHEREOF, the Depositor, the Servicers, the Master
Servicer, the Securities Administrator and the Trustee have caused their names
to be signed hereto by their respective officers thereunto duly authorized, in
each case as of the day and year first above written.
ACE SECURITIES CORP.,
as Depositor
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB
as a Servicer
By:
------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP
as a Servicer
By:
------------------------------
Name:
Title:
SAXON MORTGAGE SERVICES, INC.
as a Servicer
By:
------------------------------
Name:
Title:
HSBC BANK USA, NATIONAL ASSOCIATION
not in its individual capacity but
solely as Trustee
By:
------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.
as Master Servicer and Securities
Administrator
By:
------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED FOR PURPOSES OF
SECTION 9.05:
DB STRUCTURED PRODUCTS, INC
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED FOR PURPOSES OF
SECTION 7.08 AND 7.09:
THE MURRAYHILL COMPANY
By:
------------------------------
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Ocwen Federal Bank FSB, one of the federal chartered
savings banks that executed the within instrument, and also known to me to be
the person who executed it on behalf of said federally chartered savings bank,
and acknowledged to me that such federally chartered savings bank executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Countrywide Home Loans Servicing LP, one of the limited
partnerships that executed the within instrument, and also known to me to be the
person who executed it on behalf of said limited partnership, and acknowledged
to me that such limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Saxon Mortgage Services, Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Xxxxx Fargo Bank, N.A., one of the national banking
associations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of June 2005, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of HSBC Bank USA, National Association, one of the
national banking associations that executed the within instrument, and also
known to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
[Notarial Seal]___ My commission expires
EXHIBIT A-1
FORM OF CLASS A-[1A][1B][2A][2B][2C] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Series 2005-HE4, Class A-[1A][1B][2A][2B][2C] Aggregate Certificate Principal Balance of the Class
A-[1A][1B][2A][2B][2C] Certificates as of the Issue
Date: $
Pass-Through Rate: Variable Denomination: $
Date of Pooling and Servicing Agreement and Cut-off Date: Master Servicer: Xxxxx Fargo Bank, N.A.
June 1, 2005
First Distribution Date: July 25, 2005 Trustee: HSBC Bank USA, National Association
No.__ Issue Date: June 29, 2005
CUSIP:________________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE4
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
A-[1A][1B][2A][2B][2C] Certificates as of the Issue Date) in that certain
beneficial ownership interest evidenced by all the Class A-[1A][1B][2A][2B][2C]
Certificates in REMIC II created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among ACE Securities Corp., as
depositor (hereinafter called the "Depositor", which term includes any successor
entity under the Agreement), Xxxxx Fargo Bank, N.A. as master servicer (the
"Master Servicer") and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB as a servicer ("Ocwen"), Saxon Mortgage
Services, Inc. as a servicer ("Saxon"), Countrywide Home Loans Servicing LP as a
servicer ("Countrywide"; and together with Ocwen and Saxon, the "Servicers") and
HSBC Bank USA, National Association as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class A-[1A][1B][2A][2B][2C]
Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-[1A][1B][2A][2B][2C] Certificates the aggregate initial Certificate Principal
Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial Certificate Principal Balance of the Class
A-[1A][1B][2A][2B][2C] Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Securities
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be a rate per annum equal to the lesser of (i) One-Month LIBOR plus [_____]%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans), or
One-Month LIBOR plus [_____]%, in the case of any Distribution Date thereafter
and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contracts, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Accounts and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicers nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans).
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated: June __, 2005
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
-------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[1A][1B][2A][2B][2C] Certificates
referred to in the within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
--------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
----------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS M-[1][2][3][4][5][6][7][8][9][10] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND]
CLASS M-1 CERTIFICATES [,/AND] CLASS M-2 CERTIFICATES[,/AND] CLASS M-3
CERTIFICATES [,/AND] CLASS M-4 CERTIFICATES [,/AND] CLASS M-5
CERTIFICATES] [,/AND] CLASS M-6 CERTIFICATES] [,/AND] CLASS M-7
CERTIFICATES] [,/AND] CLASS M-8 CERTIFICATES] [,/AND] CLASS M-9
CERTIFICATES] TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 6.02(C) OF THE AGREEMENT REFERRED
TO HEREIN.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE
SECURITIES ADMINISTRATOR NAMED HEREIN.
cSeries 2005-HE4, Class Aggregate Certificate Principal Balance of the
M-[1][2][3][4][5][6][7][8][9][10] Class M-[1][2][3][4][5][6][7][8][9][10]
Certificates as of the Issue Date: $______________
Pass-Through Rate: Variable Denomination: $______________
Date of Pooling and Servicing Agreement Master Servicer: Xxxxx Fargo Bank, N.A.
and Cut-off Date: June 1, 2005
First Distribution Date: July 25, 2005 Trustee: HSBC Bank USA, National Association
No.___ Issue Date: June 29, 2005
CUSIP:_________________
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE4
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
M-[1][2][3][4][5][6][7][8][9][10] Certificates as of the Issue Date) in that
certain beneficial ownership interest evidenced by all the Class
M-[1][2][3][4][5][6][7][8][9][10] Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A. as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB as a servicer
("Ocwen"), Saxon Mortgage Services, Inc. as a servicer ("Saxon"), Countrywide
Home Loans Servicing LP as a servicer ("Countrywide"; and together with Ocwen
and Saxon, the "Servicers") and HSBC Bank USA, National Association, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class
M-[1][2][3][4][5][6][7][8][9][10] Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
M-[1][2][3][4][5][6][7][8][9][10] Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-[1][2][3][4][5][6][7][8][9][10] Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus [____]% ,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than or equal to 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date (which includes the Identified Subsequent Mortgage
Loans), or One-Month LIBOR plus [____]%, in the case of any Distribution Date
thereafter and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contracts, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Accounts and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicers nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans).
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated: June __, 2005
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-[1][2][3][4][5][6][7][8][9][10]
Certificates referred to in the within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
----------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS B-[1][2][3] CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [,/AND] THE MEZZANINE CERTIFICATES [,/AND THE CLASS B-1
CERTIFICATES] [,/AND THE CLASS B-2 CERTIFICATES], AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE
SECURITIES ADMINISTRATOR NAMED HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF "REGULATION D" UNDER THE ACT.
[THIS CERTIFICATE IS A REGULATION S TEMPORARY GLOBAL CERTIFICATE FOR
PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF THE
OFFERED CERTIFICATES AND (II) THE CLOSING DATE, THIS CERTIFICATE MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED
STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]
[NO BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE
SHALL BE ENTITLED TO RECEIVE PAYMENTS OF PRINCIPAL OR INTEREST HEREIN
UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE
TERMS OF THE AGREEMENT (AS DEFINED HEREIN).]
[THE HOLDER OF THIS REGULATION S PERMANENT GLOBAL CERTIFICATE BY ITS
ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
CERTIFICATE WITHIN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) PRIOR TO THE DATE WHICH IS THE
LATER OF (I) 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND (II) THE
DATE ON WHICH THE REQUISITE CERTIFICATIONS ARE DUE TO AND PROVIDED TO
THE TRUSTEE AND SECURITIES ADMINISTRATOR PURSUANT TO THE AGREEMENT (AS
DEFINED BELOW), EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.]
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
AGREEMENT.
Series ACE 2005-HE4, Class B-[1][2][3] Aggregate Certificate Principal Balance
of the Class B-[1][2][3] Certificates as
of the Issue Date: $
Pass-Through Rate: Variable Denomination: $
Date of Pooling and Servicing Agreement Master Servicer: Xxxxx Fargo Bank, N.A.
and Cut-off Date: June 1, 2005
First Distribution Date: July 25, 2005 Trustee: HSBC Bank USA, National Association
No. ______ Issue Date: June 29, 2005
CUSIP:
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE4
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-[1][2][3]
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A., as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB as a servicer
("Ocwen"), Saxon Mortgage Services, Inc. as a servicer ("Saxon"), Countrywide
Home Loans Servicing LP as a servicer ("Countrywide"; and together with Ocwen
and Saxon, the "Servicers") and HSBC Bank USA, National Association, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-[1][2][3] Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-[1][2][3]
Certificates the aggregate initial Certificate Principal Balance of which is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class B-[1][2][3] Certificates, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) One Month LIBOR plus _____%, in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust Fund is reduced to less than or equal to
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date (which includes the Identified Subsequent Mortgage Loans), or One-Month
LIBOR plus _____%, in the case of any Distribution Date thereafter and (ii) the
applicable Net WAC Pass-Through Rate for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as Asset Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans and payments received pursuant to
the Cap Contracts, all as more specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Collection
Accounts and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator, the
Servicers and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicers with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A or Regulation S under the 1933 Act, written certifications from the Holder
of the Certificate desiring to effect the transfer, and from such Holder's
prospective transferee, substantially in the forms attached to the Agreement as
Exhibit B-1, (ii) if such transfer is purportedly being made in reliance upon
Rule 501(a) under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer and from such Holder's prospective
transferee, substantially in the form attached to the Agreement as Exhibit B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate shall be made to any person unless the
Transferee provides a certification pursuant to Section 6.02(c) of the
Agreement.
The Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and any agent of the Depositor, the Master
Servicer, the Trustee, the Securities Administrator or the Servicers may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Securities Administrator and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans).
The recitals contained herein shall be taken as statements of the
Depositor and neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: June __, 2005
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-[1][2][3] Certificates referred to
in the within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-4
FORM OF CLASS CE-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
MEZZANINE CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF "REGULATION D" UNDER THE ACT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
AGREEMENT.
Series 2005-HE4, Class CE-[1][2] [Aggregate Certificate Principal Balance of
the Class CE-1 Certificates as of the Issue Date:
$____________]
[Aggregate Notional Balance of the Class CE-2
Certificates as of the Issue Date: $_____________]
Pass-Through Rate: Variable Denomination: $_________________
Cut-off Date and date of Pooling and Servicing Agreement: Master Servicer: Xxxxx Fargo Bank, N.A.
June 1, 2005
First Distribution Date: July 25, 2005 Trustee: HSBC Bank USA, National Association
No. __ Issue Date: June 29, 2005
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE4
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate [Certificate Principal Balance] [Notional Balance]
of the Class CE-[1][2] Certificates as of the Issue Date) in that certain
beneficial ownership interest evidenced by all the Class CE-[1][2] Certificates
in REMIC II created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ACE Securities Corp., as depositor
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Xxxxx Fargo Bank, N.A., as master servicer (the "Master
Servicer") and securities administrator (the "Securities Administrator"), Ocwen
Federal Bank FSB as a servicer ("Ocwen"), Saxon Mortgage Services, Inc. as a
servicer ("Saxon"), Countrywide Home Loans Servicing LP as a servicer
("Countrywide"; and together with Ocwen and Saxon, the "Servicers") and HSBC
Bank USA, National Association, as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Notional Balance hereof at a per annum rate equal to the Pass-Through
Rate as set forth in the Agreement. Pursuant to the terms of the Agreement,
distributions will be made on the 25th day of each month or, if such 25th day is
not a Business Day, the Business Day immediately following such 25th day (a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE-[1][2] Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
CE-[1][2] Certificates the aggregate initial [Certificate Principal Balance]
[Notional Balance] of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial [Certificate Principal Balance] [Notional
Balance] of the Class CE-[1][2] Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
[Certificate Principal Balance] [Notional Balance] of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer and from such Holder's prospective transferee,
substantially in the form attached to the Agreement as Exhibit B-2 and (iii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder of
the Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicers nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans).
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class CE-[1][2] Certificates referred to in
the within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
----------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-5
CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF "REGULATION D" UNDER THE ACT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
AGREEMENT.
Series 2005-HE4, Class P Aggregate Certificate Principal Balance of the Class
P Certificates as of the Issue Date: $100.00
Cut-off Date and date of Pooling and Denomination: $100.00
Servicing Agreement: June 1, 2005
First Distribution Date: July 25, 2005 Master Servicer: Xxxxx Fargo Bank, N.A.
No. __ Trustee: HSBC Bank USA, National Association
Issue Date: June 29, 2005
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE4
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A., as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB as a servicer
("Ocwen"), Saxon Mortgage Services, Inc. as a servicer ("Saxon"), Countrywide
Home Loans Servicing LP as a servicer ("Countrywide"; and together with Ocwen
and Saxon, the "Servicers") and HSBC Bank USA, National Association, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class P Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class P Certificates, or otherwise
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer and from such Holder's prospective transferee,
substantially in the form attached to the Agreement as Exhibit B-2 and (iii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder of
the Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicers nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans).
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
----------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-6
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS THE SOLE "RESIDUAL INTEREST" IN EACH "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3)
SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
(4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL
BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 6.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY
PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 2005-HE4, Class R Aggregate Percentage Interest of the Class R
Certificates as of the Issue Date: 100.00%
Date of Pooling and Servicing Agreement Master Servicer: Xxxxx Fargo Bank, N.A.
and Cut-off Date: June 1, 2005
First Distribution Date: July 25, 2005 Trustee: HSBC Bank USA, National Association
No __ Issue Date: June 29, 2005
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE4
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
THE SERVICERS, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Xxxxx Fargo Bank, N.A., as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB as a servicer ("Ocwen"), Saxon Mortgage
Services, Inc. as a servicer ("Saxon"), Countrywide Home Loans Servicing LP as a
servicer ("Countrywide"; and together with Ocwen and Saxon, the "Servicers") and
HSBC Bank USA, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicers with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02 of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Securities Administrator (i) an affidavit to the effect that such transferee is
any Person other than a Disqualified Organization or the agent (including a
broker, nominee or middleman) of a Disqualified Organization, and (ii) a
certificate that acknowledges that (A) the Class R Certificates have been
designated as representing the beneficial ownership of the residual interests in
each of REMIC I and REMIC II, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 6.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicers nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date (which includes the Identified Subsequent Mortgage Loans).
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Securities Administrator
By:
---------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
----------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
TEN ENT - as tenants by the entireties ________________
(State)
JT TEN - as joint tenants with right
if survivorship and not as
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT B-1
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-HE4
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4
Asset Backed Pass-Through Certificates
Class B-1, Class B-2, Class B-3, Class CE-1, Class CE-2, Class
P and Class R Certificates
--------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ______________________ (the
"Transferor") to ___________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of June
1, 2005, among ACE Securities Corp. as Depositor, Ocwen Federal Bank FSB as a
Servicer, Saxon Mortgage Services, Inc. as a Servicer, Countrywide Home Loans
Servicing LP as a Servicer, Xxxxx Fargo Bank, N.A. as Master Servicer and
Securities Administrator and HSBC Bank USA, National Association as trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:
---------------------------------
Name:
Title:
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-HE4
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4
Asset Backed Pass-Through Certificates
Class B-1, Class B-2, Class B-3, Class CE-1, Class
CE-2, Class P and Class R Certificates
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from _________________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional
buyer" as that term is defined in Rule 144A ("Rule 144A")
under the Securities Act of 1933 (the "1933 Act") and has
completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. The Transferee is aware
that the sale to it is being made in reliance on Rule 144A.
The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer,
and understands that such Certificate may be resold, pledged
or transferred only (i) to a person reasonably believed to be
a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer
to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
2. The Transferee has been furnished with all
information regarding (a) the Certificates and distributions
thereon, (b) the nature, performance and servicing of the
Mortgage Loans, (c) the Pooling and Servicing Agreement
referred to below, and (d) any credit enhancement mechanism
associated with the Certificates, that it has requested.
3. The Transferee: (a) is not an employee benefit or other plan subject to the
prohibited transaction provisions 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") (each, a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss. 2510.3-101 or (b) [[for Class CE-[1][2], Class P and
Class R] has provided the Securities Administrator with an opinion of counsel on
which the Trustee, the Depositor, the Master Servicer, the Securities
Administrator and the Servicers may rely, acceptable to and in form and
substance satisfactory to the Trustee to the effect that the purchase of
Certificates is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Trust Fund, the Trustee, the Depositor, the Master
Servicer, the Securities Administrator or the Servicers to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Pooling and Servicing
Agreement.] [[for Class B-1, Class B-2, Class B-3] either (i) in the case of the
Class B-1 Certificates, represents and warrants that it has acquired and is
holding such certificate in reliance on Prohibited Transaction Exemption ("PTE")
2002-41, and that it understands that there are certain conditions to the
availability of PTE 2002-41, including that such certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or
Xxxxx'x Investors Service, Inc., and such certificate is so rated, and that it
is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D issued
under the Securities Act and will obtain a representation from any transferee
that such transferee is an accredited investor so long as it is required to
obtain a representation regarding compliance with the Securities Act or (ii) (A)
it is an insurance company, (B) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (C) the conditions in Sections I and III of PTCE 95-60 have been satisfied.]
In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicers that the Transferee will
not transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 3 above.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of June 1, 2005, among ACE Securities Corp. as Depositor,
Xxxxx Fargo Bank, N.A. as Master Servicer and Securities Administrator, Ocwen
Federal Bank FSB as a Servicer, Saxon Mortgage Services, Inc. as a Servicer,
Countrywide Home Loans Servicing LP as a Servicer and HSBC Bank USA, National
Association as Trustee, pursuant to which the Certificates were issued.
[TRANSFEREE]
By:
---------------------------------
Name:
Title:
ANNEX 1 TO EXHIBIT B-1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Xxxxx Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $________________(1) in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
----------------
(1) Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
Print Name of Transferee
By:
---------------------------------
Name:
Title:
ANNEX 2 TO EXHIBIT B-1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Xxxxx Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
___ The Transferee owned $________________________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
___ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $_______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
-------------------------------------
Print Name of Transferee or Advisor
By:
---------------------------------
Name:
Title:
IF AN ADVISER:
-------------------------------------
Print Name of Transferee
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
as amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on
a discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser
-------------------------------------------------------------
By: (Signature)
---------------------------------------------------------------
Name of Signatory
-------------------------------------------------------------
Title
-------------------------------------------------------------------------
Date of this certificate
------------------------------------------------------
Date of information provided in paragraph 3
-----------------------------------
FORM OF REGULATION S TRANSFER CERTIFICATE
[Date]
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-HE4
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4
Asset Backed Pass-Through Certificates, Class B-1, Class B-2
and Class B-3 Certificates
------------------------------------------------------------
Ladies and Gentlemen:
Reference is hereby made to the Pooling and Servicing
Agreement (the "Agreement"), dated as of June 1, 2005, among ACE Securities
Corp. (the "Depositor"), Xxxxx Fargo Bank, N.A., as master servicer and
securities administrator (the "Master Servicer"), Ocwen Federal Bank FSB as a
servicer ("Ocwen"), Saxon Mortgage Services, Inc. as a servicer ("Saxon"),
Countrywide Home Loans Servicing LP as a servicer ("Countrywide"; and together
with Ocwen and Saxon, the "Servicers") and HSBC Bank USA, National Association,
as trustee (the "Trustee"). Capitalized terms used herein but not defined herein
shall have the meanings assigned thereto in the Agreement.
This letter relates to U.S. $[__________] Certificate
Principal Balance of Class B-[1][2][3] Certificates (the "Certificates") which
are held in the name of [name of transferor] (the "Transferor") to effect the
transfer of the Certificates to a person who wishes to take delivery thereof in
the form of an equivalent beneficial interest [name of transferee] (the
"Transferee").
In connection with such request, the Transferor hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the private placement memorandum
dated June 23, 2005 relating to the Certificates and that the following
additional requirements (if applicable) were satisfied:
(a) the offer of the Certificates was not made to a person in
the United States;
(b) at the time the buy order was originated, the Transferee
was outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the Transferee was outside the United States;
(c) no directed selling efforts were made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(d) the transfer or exchange is not part of a plan or scheme
to evade the registration requirements of the Securities Act;
(e) the Transferee is not a U.S. Person, as defined in
Regulation S under the Securities Act;
(f) the transfer was made in accordance with the applicable
provisions of Rule 903(b)(2) or (3) or Rule 904(b)(1), as the case may be; and
(g) the Transferee understands that the Certificates have not
been and will not be registered under the Securities Act, that any offers, sales
or deliveries of the Certificates purchased by the Transferee in the United
States or to U.S. persons prior to the date that is 40 days after the later of
(i) the commencement of the offering of the Certificates and (ii) the Closing
Date, may constitute a violation of United States law, and that (x)
distributions of principal and interest and (y) the exchange of beneficial
interests in a Temporary Regulation S Global Certificate for beneficial
interests in the related Permanent Regulation S Global Certificate, in each
case, will be made in respect of such Certificates only following the delivery
by the Holder of a certification of non-U.S. beneficial ownership, at the times
and in the manner set forth in the Agreement.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
[Name of Transferor]
By:
---------------------------------
Name:
Title:
EXHIBIT B-2
FORM OF TRANSFEROR REPRESENTATION LETTER
____________, 20__
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-HE4
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4
Asset Backed Pass-Through Certificates, Class B-1, Class B-2,
Class B-3, Class CE-1, Class CE-2, Class P and Class R
Certificates
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act'), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
Very truly yours,
(Transferor)
By:
---------------------------------
Name:
Title:
FORM OF TRANSFEREE LETTER
_______________, 20__
Xxxxx Fargo Bank, N.A.
Sixth and Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust ACE 2005-HE4
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE4
Asset Backed Pass-Through Certificates, Class B-1, Class B-2,
Class B-3, Class CE-1, Class CE-2, Class P and Class R
Certificates
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:
1. The Transferee understands that (a) the Certificates have
not been and will not be registered or qualified under the Securities
Act of 1933, as amended (the "Act") or any state securities law, (b)
the Depositor is not required to so register or qualify the
Certificates, (c) the Certificates may be resold only if registered and
qualified pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. The Transferee is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Transferee is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an investment
and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Act.
4. The Transferee has been furnished with, and has had an
opportunity to review (a) a copy of the Pooling and Servicing Agreement
and (b) such other information concerning the Certificates, the
Mortgage Loans and the Depositor as has been requested by the
Transferee from the Depositor or the Transferor and is relevant to the
Transferee's decision to purchase the Certificates. The Transferee has
had any questions arising from such review answered by the Depositor or
the Transferor to the satisfaction of the Transferee.
5. The Transferee has not and will not nor has it authorized
or will it authorize any person to (a) offer, pledge, sell, dispose of
or otherwise transfer any Certificate, any interest in any Certificate
or any other similar security to any person in any manner, (b) solicit
any offer to buy or to accept a pledge, disposition of other transfer
of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approach
or negotiate with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any
manner, (d) make any general solicitation by means of general
advertising or in any other manner or (e) take any other action, that
(as to any of (a) through (e) above) would constitute a distribution of
any Certificate under the Act, that would render the disposition of any
Certificate a violation of Section 5 of the 1933 Act or any state
securities law, or that would require registration or qualification
pursuant thereto. The Transferee will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
6. The Transferee: (a) is not an employee benefit or other
plan subject to the prohibited transaction provisions 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") (each, a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor
("DOL") regulation at 29 C.F.R. ss. 2510.3-101 or (b) [[for Class CE-1,
Class CE-2, Class P and Class R] has provided the Trustee with an
opinion of counsel on which the Depositor, the Master Servicer, the
Securities Administrator, the Trustee and the Servicers may rely,
acceptable to and in form and substance satisfactory to the Trustee to
the effect that the purchase of Certificates is permissible under
applicable law, will not constitute or result in any non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Trust Fund, the Trustee, the Master Servicer, the
Securities Administrator, the Depositor or the Servicers to any
obligation or liability (including obligations or liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken in
the Pooling and Servicing Agreement.] [[for Class B-1, Class B-2, Class
B-3] either (i) in the case of the Class B-1 Certificates, represents
and warrants that it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption ("PTE") 2002-41, and that
it understands that there are certain conditions to the availability of
PTE 2002-41, including that such certificate must be rated, at the time
of purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or
Xxxxx'x Investors Service, Inc., and such certificate is so rated, and
that it is an "accredited investor" as defined in Rule 501(a)(1) of
Regulation D issued under the Securities Act and will obtain a
representation from any transferee that such transferee is an
accredited investor so long as it is required to obtain a
representation regarding compliance with the Securities Act or (ii) (A)
it is an insurance company, (B) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company
general account," as such term is defined in Prohibited Transaction
Class Exemption ("PTCE") 95-60, and (C) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.]
In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicers that the Transferee will
not transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 6 above.
Very truly yours,
By:
---------------------------------
Name:
Title:
EXHIBIT B-3
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
___________________________ being duly sworn, deposes,
represents and warrants as follows:
1. I am a _____________________ of
_______________________________ (the "Owner") a corporation
duly organized and existing under the laws of
_________________________, the record owner of ACE Securities
Corp. Home Equity Loan Trust, Series 2005-HE4 Asset Backed
Pass-Through Certificates, Class R Certificates (the "Class R
Certificates"), on behalf of whom I make this affidavit and
agreement. Capitalized terms used but not defined herein have
the respective meanings assigned thereto in the Pooling and
Servicing Agreement pursuant to which the Class R Certificates
were issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________. ____ and (ii) is acquiring the Class R
Certificates for its own account or for the account of another
Owner from which it has received an affidavit in substantially
the same form as this affidavit. A "Permitted Transferee" is
any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a
"disqualified organization" means the United States, any state
or political subdivision thereof, any agency or
instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to
tax and, except for the Federal Home Loan Mortgage
Corporation, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign
government, international organization or any agency or
instrumentality of such foreign government or organization,
any real electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified
organizations under the Internal Revenue Code of 1986 that
applies to all transfers of the Class R Certificates after
April 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person
includes a broker, nominee or middleman) for a non-Permitted
Transferee, on the agent; (iii) that the person otherwise
liable for the tax shall be relieved of liability for the tax
if the transferee furnishes to such person an affidavit that
the transferee is a Permitted Transferee and, at the time of
transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that each of the Class R
Certificates may be a "noneconomic residual interest" within
the meaning of proposed Treasury regulations promulgated under
the Code and that the transferor of a "noneconomic residual
interest" will remain liable for any taxes due with respect to
the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or
collection of tax.
4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time
during the taxable year of the pass-through entity, a
non-Permitted Transferee is the record holder of an interest
in such entity. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. The Owner is aware that the Securities Administrator will not
register the transfer of any Class R Certificate unless the
transferee, or the transferee's agent, delivers to the
Securities Administrator, among other things, an affidavit in
substantially the same form as this affidavit. The Owner
expressly agrees that it will not consummate any such transfer
if it knows or believes that any of the representations
contained in such affidavit and agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of
counsel to constitute a reasonable arrangement to ensure that
the Class R Certificates will only be owned, directly or
indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is _______________.
8. The Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section
6.02(d) of the Pooling and Servicing Agreement under which the
Class R Certificates were issued (in particular, clauses
(iii)(A) and (iii)(B) of Section 6.02(d) which authorize the
Securities Administrator to deliver payments to a person other
than the Owner and negotiate a mandatory sale by the
Securities Administrator in the event that the Owner holds
such Certificate in violation of Section 6.02(d)); and that
the Owner expressly agrees to be bound by and to comply with
such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection
of any tax.
10. The Owner anticipates that it will, so long as it holds the
Class R Certificates, have sufficient assets to pay any taxes
owed by the holder of such Class R Certificates, and hereby
represents to and for the benefit of the person from whom it
acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class
R Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as
it holds the Class R Certificates.
12. The Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as
any of the Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or
entity that will not have sufficient assets to pay any taxes
owed by the holder of such Class R Certificates, or that may
become insolvent or subject to a bankruptcy proceeding, for so
long as the Class R Certificates remain outstanding.
14. The Owner will, in connection with any transfer that it makes
of the Class R Certificates, obtain from its transferee the
representations required by Section 6.02(d) of the Pooling and
Servicing Agreement under which the Class R Certificate were
issued and will not consummate any such transfer if it knows,
or knows facts that should lead it to believe, that any such
representations are false.
15. The Owner will, in connection with any transfer that it makes
of the Class R Certificates, deliver to the Securities
Administrator an affidavit, which represents and warrants that
it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of
the Class R Certificates; (ii) may become insolvent or subject
to a bankruptcy proceeding for so long as the Class R
Certificates remains outstanding; and (iii) is not a
"Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized
in, or under the laws of, the United States or any political
subdivision thereof, or an estate or trust whose income from
sources without the United States may be included in gross
income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or
business within the United States.
17. The Owner of the Class R Certificate, hereby agrees that in
the event that the Trust Fund created by the Pooling and
Servicing Agreement is terminated pursuant to Section 10.01
thereof, the undersigned shall assign and transfer to the
Holders of the Class CE-[1][2] Certificates and the Class P
Certificates any amounts in excess of par received in
connection with such termination. Accordingly, in the event of
such termination, the Securities Administrator is hereby
authorized to withhold any such amounts in excess of par and
to pay such amounts directly to the Holders of the Class
CE-[1][2] Certificates and the Class P Certificates. This
agreement shall bind and be enforceable against any successor,
transferee or assigned of the undersigned in the Class R
Certificate. In connection with any transfer of the Class R
Certificate, the Owner shall obtain an agreement substantially
similar to this clause from any subsequent owner.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
_________________, ____.
[OWNER]
By:
---------------------------------
Name:
Title: [Vice] President
ATTEST:
By:
----------------------------------------
Name:
Title: [Assistant] Secretary
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 a [Vice] President of the Owner, 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 Owner.
Subscribed and sworn before me this ______________ day of
__________, ____.
-------------------------------------
Notary Public
County of
---------------------------
State of
----------------------------
My Commission expires:
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
_________________________, being duly sworn, deposes,
represents and warrants as follows:
1. I am a ____________________ of _________________________
(the "Owner"), a corporation duly organized and existing under the laws of
_____________, on behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trustee or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit B-2. The Owner does not know or
believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
________________, ____.
[OWNER]
By:
---------------------------------
Name:
Title: [Vice] President
ATTEST:
By:
----------------------------------------
Name:
Title: [Assistant] Secretary
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 a [Vice] President of the Owner, 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 Owner.
Subscribed and sworn before me this ______ day of
_____________, ____.
-------------------------------------
Notary Public
County of
---------------------------
State of
----------------------------
My Commission expires:
EXHIBIT C
FORM OF SERVICER CERTIFICATION
Re: __________ (the "Trust")
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE4
I, [identify the certifying individual], certify to ACE Securities Corp. (the
"Depositor"), HSBC Bank USA, National Association (the "Trustee") and Xxxxx
Fargo Bank, National Association (the "Master Servicer"), and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. Based on my knowledge, the information in the Annual Statement
of Compliance, the Annual Independent Public Accountant's
Servicing Report and all servicing reports, officer's
certificates and other information relating to the servicing
of the Mortgage Loans submitted to the Master Servicer taken
as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact (constituting
information required to be provided by [Ocwen Federal Bank
FSB/Saxon Mortgage Services, Inc./Countrywide Home Loans
Servicing LP] (the "Servicer") under the Agreement) necessary
to make the statements made, in light of the circumstances
under which such statements were made, not misleading as of
the date of this certification.
2. Based on my knowledge, the servicing information required to
be provided to Master Servicer by the Servicer under the
Agreement has been provided to the Master Servicer.
3. I am responsible for reviewing the activities performed by the
Servicer under the Agreement and based upon my knowledge and
the review required by the Agreement, and except as disclosed
in the Annual Statement of Compliance or the Annual
Independent Public Accountant's Servicing Report submitted to
the Master Servicer, the Servicer has fulfilled its
obligations under the Agreement; and
4. I have disclosed to the Master Servicer all significant
deficiencies relating to the Servicer's compliance with the
minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth
in the Pooling and Servicing Agreement.
Capitalized terms used and not otherwise defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement, dated as of June 1,
2005, among ACE Securities Corp., Ocwen Federal Bank FSB, Saxon Mortgage
Services, Inc., Countrywide Home Loans Servicing LP, Xxxxx Fargo Bank, N.A. and
HSBC Bank USA, National Association.
Date:
-------------------------
--------------------------------
[Signature]
--------------------------------
[Title]
EXHIBIT D
FORM OF POWER OF ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
[Ocwen Federal Bank FSB
0000 Xxxxxxxxxxx Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: _________________________________]
[Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
Attn: _________________________]
[Countrywide Home Loans Servicing LP
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: _________________________]
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that , having its principal place of business at
, as Trustee (the "Trustee") pursuant to that Pooling and Servicing Agreement
among (the "Depositor"), Ocwen Federal Bank FSB, Saxon Mortgage Services, Inc.,
Countrywide Home Loans Servicing LP and the Trustee, dated as of June 1, 2005
(the "Pooling and Servicing Agreement"), hereby constitutes and appoints [Ocwen
Federal Bank FSB] [Saxon Mortgage Services, Inc.] [Countrywide Home Loans
Servicing LP] (the "Servicer"), by and through the Servicer's officers, the
Trustee's true and lawful Attorney-in-Fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Pooling and Servicing Agreement for the
purpose of performing all acts and executing all documents in the name of the
Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of the
parties thereto or to correct title errors discovered after such title
insurance was issued and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed of
Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfactions/releases, partial
reconveyances or the execution or requests to trustees to accomplish
same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage loan
secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment of
the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial
or non-judicial foreclosure or termination, cancellation or rescission
of any such foreclosure, including, without limitation, any and all of
the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
IN WITNESS WHEREOF, as Trustee pursuant to that Pooling and Servicing Agreement
among the Depositor, Ocwen Federal Bank FSB, Saxon Mortgage Services, Inc.,
Countrywide Home Loans Servicing LP and the Trustee, dated as of 1, 200__ (
Asset Backed Certificates, Series 200__-___), has caused its corporate seal to
be hereto affixed and these presents to be signed and acknowledged in its name
and behalf by its duly elected and authorized Vice President this day of ,
200__.
as Trustee for _____ Asset
Backed Certificates, Series 200__-___
By __________________________________
STATE OF
------------------
COUNTY OF
-----------------
On , 200__, before me, the undersigned, a Notary Public in and for said state,
personally appeared ___________________, Vice President of _____________________
as Trustee for ______________________ Asset Backed Certificates, Series
200__-___, personally known to me to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed that same in
his/her authorized capacity, and that by his/her signature on the instrument the
entity upon behalf of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
------------------------------------
Notary Public
My Commission Expires ________________________
EXHIBIT E
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated ________, 2005
(the "Instrument"), between ACE Securities Corp. as seller (the "Depositor"),
and HSBC Bank USA, National Association as trustee of the ACE Securities Corp.
Home Equity Loan Trust, Series 2005-HE4, Asset Backed Pass-Through Certificates,
as purchaser (the "Trustee"), and pursuant to the Pooling and Servicing
Agreement, dated as of June 1, 2005 (the "Pooling and Servicing Agreement"),
among the Depositor, Ocwen Federal Bank FSB as a servicer, Saxon Mortgage
Services, Inc. as a servicer, Countrywide Home Loans Servicing LP as a servicer,
Xxxxx Fargo Bank, N.A. as Master Servicer and Securities Administrator and the
Trustee, the Depositor and the Trustee agree to the sale by the Depositor and
the purchase by the Trustee in trust, on behalf of the Trust, of the Mortgage
Loans listed on the attached Schedule of Mortgage Loans (the "Subsequent
Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trustee in trust, on behalf of the Trust, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Trustee and the Certificateholders to constitute
and to be treated as a sale by the Depositor to the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated the date hereof, between the Depositor as purchaser
and the Servicer as seller, to the extent of the Subsequent Mortgage Loans.
(c) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.
(a) The Depositor hereby confirms that each of the conditions and the
representations and warranties set forth in Section 2.09 of the Pooling and
Servicing Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. RECORDATION OF INSTRUMENT.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Depositor
at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. GOVERNING LAW.
This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. COUNTERPARTS.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
Section 6. SUCCESSORS AND ASSIGNS.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
ACE SECURITIES CORP.
By:
---------------------------------
Name:
Title:
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee for ACE Securities Corp.
Home Equity Loan Trust, Series
2005-HE4, Asset Backed Pass-Through
Certificates
By:
---------------------------------
Name:
Title:
ATTACHMENTS
-----------
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
EXHIBIT F
FORM OF ADDITION NOTICE
[Date]
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ACE Securities Corp., 2005-HE4
Re: Pooling and Servicing Agreement dated as of June 1, 2005 among ACE
Securities Corp. as depositor, Ocwen Federal Bank FSB as a servicer,
Saxon Mortgage Services, Inc. as a servicer, Countrywide Home Loans
Servicing LP as a servicer, Xxxxx Fargo Bank, N.A. as Master Servicer
and Securities Administrator and HSBC Bank USA, National Association as
trustee
Ladies and Gentlemen:
Pursuant to Section 2.08 of the referenced Pooling and Servicing Agreement, Ace
Securities Corp. has designated Subsequent Mortgage Loans to be sold to the
Trust on __________, 2005, with an aggregate principal balance of $ .
Capitalized terms not otherwise defined herein have the meaning set forth in the
Pooling and Servicing Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
ACE SECURITIES CORP.
By:
---------------------------------
Name:
Title:
Acknowledged and Agreed:
HSBC BANK USA, NATIONAL ASSOCIATION, as trustee
By:
----------------------------
Name:
Title:
EXHIBIT G
IDENTIFIED SUBSEQUENT MORTGAGE LOANS
SCHEDULE 1
MORTGAGE LOAN SCHEDULE
SCHEDULE 2
PREPAYMENT CHARGE SCHEDULE
[Filed By Paper Submission]
SCHEDULE 3
[RESERVED]
SCHEDULE 4
STANDARD FILE LAYOUT- DELINQUENCY REPORTING
EXHIBIT 1: STANDARD FILE LAYOUT - DELINQUENCY REPORTING
------------------------- -------------------------------------------------------------- ------- ----------------
Column/Header Name Description Decimal Format Comment
------------------------- -------------------------------------------------------------- ------- ----------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
------------------------- -------------------------------------------------------------- ------- ----------------
LOAN_NBR A unique identifier assigned to each loan by the originator.
------------------------- -------------------------------------------------------------- ------- ----------------
CLIENT_NBR Servicer Client Number
------------------------- -------------------------------------------------------------- ------- ----------------
SERV_INVESTOR_NBR Contains a unique number as assigned by an external
servicer to identify a group of loans in their
system.
------------------------- -------------------------------------------------------------- ------- ----------------
BORROWER_FIRST_NAME First Name of the Borrower.
------------------------- -------------------------------------------------------------- ------- ----------------
BORROWER_LAST_NAME Last name of the borrower.
------------------------- -------------------------------------------------------------- ------- ----------------
XXXX_XXXXXXX Xxxxxx Name and Number of Property
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_STATE The state where the property located.
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_ZIP Zip code where the property is located.
------------------------- -------------------------------------------------------------- ------- ----------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the MM/DD/YYYY
servicer at the end of processing cycle, as
reported by Servicer.
------------------------- -------------------------------------------------------------- ------- ----------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
------------------------- -------------------------------------------------------------- ------- ----------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved MM/DD/YYYY
by the courts
------------------------- -------------------------------------------------------------- ------- ----------------
BANKRUPTCY_DCHRG The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
_DISM_DATE Dismissal, Discharged and/or a Motion For Relief Was
Granted.
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with
instructions to begin foreclosure proceedings. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_SALE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
_EXPECTED_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the
MM/DD/YYYY property from the borrower.
------------------------- -------------------------------------------------------------- ------- ----------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
------------------------- -------------------------------------------------------------- ------- ----------------
Column/Header Name Description Decimal Format Comment
------------------------- -------------------------------------------------------------- ------- ----------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the Servicer. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
OCCUPANT_CODE Classification of how the property is occupied.
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
------------------------- -------------------------------------------------------------- ------- ----------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
CURR_PROP_VAL The current "as is" value of the property based on brokers 2
price opinion or appraisal.
------------------------- -------------------------------------------------------------- ------- ----------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs
are 2 completed pursuant to a broker's price opinion
or appraisal.
------------------------- -------------------------------------------------------------- ------- ----------------
If applicable:
------------------------- -------------------------------------------------------------- ------- ----------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
------------------------- -------------------------------------------------------------- ------- ----------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why the
loan is in default for this cycle.
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool MM/DD/YYYY
Insurer
------------------------- -------------------------------------------------------------- ------- ----------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
_FILED_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
_PAID_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_A_CLAIM Amount HUD Paid on Part A Claim 2 No commas(,) or
_PAID_AMT dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
_FILED_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
_PAID_DATE
------------------------- -------------------------------------------------------------- ------- ----------------
FHA_PART_B_CLAIM Amount HUD Paid on Part B Claim 2 No commas(,) or
_PAID_AMT dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
------------------------- -------------------------------------------------------------- ------- ----------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,) or
dollar signs ($)
------------------------- -------------------------------------------------------------- ------- ----------------
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:
------------------------ --------------------------------------------
DELINQUENCY CODE DELINQUENCY DESCRIPTION
------------------------ --------------------------------------------
001 FNMA-Death of principal mortgagor
------------------------ --------------------------------------------
002 FNMA-Illness of principal mortgagor
------------------------ --------------------------------------------
003 FNMA-Illness of mortgagor's family member
------------------------ --------------------------------------------
004 FNMA-Death of mortgagor's family member
------------------------ --------------------------------------------
005 FNMA-Marital difficulties
------------------------ --------------------------------------------
006 FNMA-Curtailment of income
------------------------ --------------------------------------------
007 FNMA-Excessive Obligation
------------------------ --------------------------------------------
008 FNMA-Abandonment of property
------------------------ --------------------------------------------
009 FNMA-Distant employee transfer
------------------------ --------------------------------------------
011 FNMA-Property problem
------------------------ --------------------------------------------
012 FNMA-Inability to sell property
------------------------ --------------------------------------------
013 FNMA-Inability to rent property
------------------------ --------------------------------------------
014 FNMA-Military Service
------------------------ --------------------------------------------
015 FNMA-Other
------------------------ --------------------------------------------
016 FNMA-Unemployment
------------------------ --------------------------------------------
017 FNMA-Business failure
------------------------ --------------------------------------------
019 FNMA-Casualty loss
------------------------ --------------------------------------------
022 FNMA-Energy environment costs
------------------------ --------------------------------------------
023 FNMA-Servicing problems
------------------------ --------------------------------------------
026 FNMA-Payment adjustment
------------------------ --------------------------------------------
027 FNMA-Payment dispute
------------------------ --------------------------------------------
029 FNMA-Transfer of ownership pending
------------------------ --------------------------------------------
030 FNMA-Fraud
------------------------ --------------------------------------------
031 FNMA-Unable to contact borrower
------------------------ --------------------------------------------
INC FNMA-Incarceration
------------------------ --------------------------------------------
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
------------------------ --------------------------------------------
STATUS CODE STATUS DESCRIPTION
------------------------ --------------------------------------------
09 Forbearance
------------------------ --------------------------------------------
17 Pre-foreclosure Sale Closing Plan Accepted
------------------------ --------------------------------------------
24 Government Seizure
------------------------ --------------------------------------------
26 Refinance
------------------------ --------------------------------------------
27 Assumption
------------------------ --------------------------------------------
28 Modification
------------------------ --------------------------------------------
29 Charge-Off
------------------------ --------------------------------------------
30 Third Party Sale
------------------------ --------------------------------------------
31 Probate
------------------------ --------------------------------------------
32 Military Indulgence
------------------------ --------------------------------------------
43 Foreclosure Started
------------------------ --------------------------------------------
44 Deed-in-Lieu Started
------------------------ --------------------------------------------
49 Assignment Completed
------------------------ --------------------------------------------
61 Second Lien Considerations
------------------------ --------------------------------------------
62 Veteran's Affairs-No Bid
------------------------ --------------------------------------------
63 Veteran's Affairs-Refund
------------------------ --------------------------------------------
64 Veteran's Affairs-Buydown
------------------------ --------------------------------------------
65 Chapter 7 Bankruptcy
------------------------ --------------------------------------------
66 Chapter 11 Bankruptcy
------------------------ --------------------------------------------
67 Chapter 13 Bankruptcy
------------------------ --------------------------------------------
EXHIBIT 3: CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
1. The numbers on the form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default
through liquidation breaking out the net interest and
servicing fees advanced is required.
2. The Total Interest Due less the aggregate amount of servicing
fee that would have been earned if all delinquent payments had
been made as agreed. For documentation, an Amortization
Schedule from date of default through liquidation breaking out
the net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal
Balance of the Mortgage Loan as calculated on a monthly basis.
For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
4-12. Complete as applicable. All line entries must be supported by
copies of appropriate statements, vouchers, receipts, bills,
canceled checks, etc., to document the expense. Entries not
properly documented will not be reimbursed to the Servicer.
13. The total of lines 1 through 12.
2. CREDITS:
14-21. Complete as applicable. All line entries must be supported by
copies of the appropriate claims forms, EOBs, HUD-1 and/or
other proceeds verification, statements, payment checks, etc.
to document the credit. If the Mortgage Loan is subject to a
Bankruptcy Deficiency, the difference between the Unpaid
Principal Balance of the Note prior to the Bankruptcy
Deficiency and the Unpaid Principal Balance as reduced by the
Bankruptcy Deficiency should be input on line 20.
22. The total of lines 14 through 21.
PLEASE NOTE: For HUD/VA loans, use line (15) for Part A/Initial
proceeds and line (16) for Part B/Supplemental proceeds.
3. TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
23. The total derived from subtracting line 22 from 13. If the
amount represents a realized gain, show the amount in
parenthesis ( ).
EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS/GAIN
Prepared by:_______________________ Date: ______________________________
Phone:_____________________________ Email Address:_______________________
----------------- ------------- ----------------
Servicer Loan No. Servicer Name Servicer Address
----------------- ------------- ----------------
XXXXX FARGO BANK, N.A. Loan No.___________________________
Borrower's Name:__________________________________________
Property Address:_________________________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of Mortgage Loan $______________ (1)
(2) Interest accrued at Net Rate ________________(2)
(3) Accrued Servicing Fees ________________(3)
(4) Attorney's Fees ________________(4)
(5) Taxes ________________(5)
(6) Property Maintenance ________________(6)
(7) MI/Hazard Insurance Premiums ________________(7)
(8) Utility Expenses ________________(8)
(9) Appraisal/BPO ________________(9)
(10) Property Inspections ________________(10)
(11) FC Costs/Other Legal Expenses ________________(11)
(12) Other (itemize) $_______________(12)
Cash for Keys__________________________ ________________
HOA/Condo Fees_________________________ ________________
_______________________________________ ________________
TOTAL EXPENSES $_______________(13)
CREDITS:
(14) Escrow Balance $_______________(14)
(15) HIP Refund ________________(15)
(16) Rental Receipts ________________(16)
(17) Hazard Loss Proceeds ________________(17)
(18) Primary Mortgage Insurance Proceeds ________________(18)
(19) Pool Insurance Proceeds ________________(19)
(20) Proceeds from Sale of Acquired Property ________________(20)
(21) Other (itemize) ________________(21)
___________________________________________ ________________
___________________________________________ ________________
TOTAL CREDITS $_______________(22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_______________(23)
SCHEDULE 5
STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED
EXHIBIT 1: STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Column Name Description Decimal Format Comment
------------------------------- -------------------------------------------------- ----------- ------------------------------------
LOAN_NBR Loan Number assigned by investor Text up to 10 digits
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SERVICER LOAN_NBR Servicer Loan Number Text up to 10 digits
------------------------------- -------------------------------------------------- ----------- ------------------------------------
BORROWER_NAME Mortgagor name assigned to Note Max length of 30
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_PMT_AMT P&I constant 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NOTE_INT_RATE Gross Interest Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NET_RATE Gross Interest Rate less the Service Fee Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SERV_FEE_RATE Service Fee Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NEW_PAY_AMT ARM loan's forecasted P&I constant 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NEW_LOAN_RATE ARM loan's forecasted Gross Interest Rate 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ARM_INDEX_RATE ARM loan's index Rate used 4 Max length of 6
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ACTL_BEG_BAL Beginning Actual Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ACTL_END_BAL Ending Actual Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NEXT_DUE_DATE Borrower's next due date MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_AMT_1 Curtailment Amount 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_DATE_1 Due date Curtailment was applied to MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_ADJ_ AMT_1 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_AMT_2 Curtailment Amount 2 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_DATE_2 Due date Curtailment was applied to MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_ADJ_ AMT2 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_AMT_3 Curtailment Amount 3 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_DATE_3 Due date Curtailment was applied to MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
CURT_ADJ_AMT3 Curtailment Interest, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_BEG_BAL Beginning Scheduled Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_END_BAL Ending Scheduled Balance 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHED_PRIN_AMT Scheduled Principal portion of P&I 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Scheduled Net Interest (less Service Fee)
SCHED_NET_INT portion of P&I 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Liquidation Principal Amt to bring balance to
LIQ_AMT zero 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
PIF_DATE Liquidation Date MM/DD/YYYY
------------------------------- -------------------------------------------------- ----------- ------------------------------------
ACTION_CODE Either 60 for liquidation or 65 for Repurchase Max length of 2
------------------------------- -------------------------------------------------- ----------- ------------------------------------
PRIN_ADJ_AMT Principal Adjustments made to loan, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
INT_ADJ_AMT Interest Adjustment made to loan, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
PREPAYMENT PENALTY AMT Prepayment penalty amount, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
Soldier and Sailor Adjustment amount, if
SOILDER_SAILOR ADJ AMT applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
NON ADV LOAN AMT Non Recoverable Loan Amount, if applicable 2 No commas(,) or dollar signs ($)
------------------------------- -------------------------------------------------- ----------- ------------------------------------
SCHEDULE 6
SERVICING ADVANCE SCHEDULE
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[LOAN NUMBER] [PRE-CUT-OFF DATE ADVANCE AMOUNT]
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