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Popular ABS, Inc.
Depositor
Equity One, Inc., a Delaware corporation
Servicer
Popular Financial Funding, LLC
and
Popular Financial Services, LLC
Sellers
and
JPMorgan Chase Bank, N.A.
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2005
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MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-5
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT.............................................................................................1
ARTICLE I DEFINITIONS............................................................................................8
60+ DAY DELINQUENT LOAN.......................................................................................8
ADJUSTABLE RATE CERTIFICATES..................................................................................8
ADJUSTED MORTGAGE RATE........................................................................................8
ADJUSTED NET MORTGAGE RATE....................................................................................8
ADVANCE.......................................................................................................8
AGGREGATE CLASS BF EARLY DISTRIBUTION AMOUNT..................................................................8
AGGREGATE CLASS BV EARLY DISTRIBUTION AMOUNT..................................................................8
AGREEMENT.....................................................................................................8
AMOUNT HELD FOR FUTURE DISTRIBUTION...........................................................................8
APPLIED REALIZED LOSS AMOUNT..................................................................................9
AVAILABLE FUNDS...............................................................................................9
BALLOON LOANS.................................................................................................9
BANKRUPTCY CODE...............................................................................................9
BENEFICIAL OWNER..............................................................................................9
BOOK-ENTRY CERTIFICATES.......................................................................................9
BUSINESS DAY..................................................................................................9
CERTIFICATES..................................................................................................9
CERTIFICATE ACCOUNT...........................................................................................9
CERTIFICATE BALANCE...........................................................................................9
CERTIFICATEHOLDER OR HOLDER..................................................................................10
CERTIFICATE REGISTER.........................................................................................10
CERTIFICATE REGISTRAR........................................................................................10
CLASS........................................................................................................10
CLASS AF CERTIFICATES........................................................................................10
CLASS AF-1 CERTIFICATE.......................................................................................10
CLASS AF-2 CERTIFICATE.......................................................................................10
CLASS AF-3 CERTIFICATE.......................................................................................10
CLASS AF-4 CERTIFICATE.......................................................................................10
CLASS AF-5 CERTIFICATE.......................................................................................10
CLASS AF-6 CERTIFICATE.......................................................................................11
CLASS AF-6 LOCKOUT DISTRIBUTION AMOUNT.......................................................................11
CLASS AF-6 LOCKOUT PERCENTAGE................................................................................11
CLASS AF-6 PRO RATA DISTRIBUTION AMOUNT......................................................................11
CLASS AV CERTIFICATES........................................................................................11
CLASS AV-1 CERTIFICATE.......................................................................................11
CLASS AV-1 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................11
CLASS AV-2 CERTIFICATES......................................................................................12
CLASS AV-2 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................12
CLASS AV-2A CERTIFICATE......................................................................................12
CLASS AV-2B CERTIFICATE......................................................................................12
CLASS AV-2C CERTIFICATE......................................................................................12
CLASS BF CERTIFICATES........................................................................................12
CLASS BF-1 APPLIED REALIZED LOSS AMOUNT......................................................................12
CLASS BF-1 CERTIFICATE.......................................................................................12
CLASS BF-1 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................12
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CLASS BF-1 REALIZED LOSS AMORTIZATION AMOUNT.................................................................13
CLASS BF-2 APPLIED REALIZED LOSS AMOUNT......................................................................13
CLASS BF-2 CERTIFICATE.......................................................................................13
CLASS BF-2 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................13
CLASS BF-2 REALIZED LOSS AMORTIZATION AMOUNT.................................................................14
CLASS BF-3 APPLIED REALIZED LOSS AMOUNT......................................................................14
CLASS BF-3 CERTIFICATE.......................................................................................14
CLASS BF-3 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................14
CLASS BF-3 REALIZED LOSS AMORTIZATION AMOUNT.................................................................14
CLASS BV CERTIFICATES........................................................................................15
CLASS BV-1 APPLIED REALIZED LOSS AMOUNT......................................................................15
CLASS BV-1 CERTIFICATE.......................................................................................15
CLASS BV-1 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................15
CLASS BV-1 REALIZED LOSS AMORTIZATION AMOUNT.................................................................15
CLASS BV-2 APPLIED REALIZED LOSS AMOUNT......................................................................15
CLASS BV-2 CERTIFICATE.......................................................................................16
CLASS BV-2 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................16
CLASS BV-2 REALIZED LOSS AMORTIZATION AMOUNT.................................................................16
CLASS BV-3 APPLIED REALIZED LOSS AMOUNT......................................................................16
CLASS BV-3 CERTIFICATE.......................................................................................17
CLASS BV-3 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................17
CLASS BV-3 REALIZED LOSS AMORTIZATION AMOUNT.................................................................17
CLASS BV-4 APPLIED REALIZED LOSS AMOUNT......................................................................17
CLASS BV-4 CERTIFICATE.......................................................................................17
CLASS BV-4 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................17
CLASS BV-4 REALIZED LOSS AMORTIZATION AMOUNT.................................................................18
CLASS CERTIFICATE BALANCE....................................................................................18
CLASS INTEREST SHORTFALL.....................................................................................18
CLASS MF CERTIFICATES........................................................................................18
CLASS MF-1 APPLIED REALIZED LOSS AMOUNT......................................................................18
CLASS MF-1 CERTIFICATE.......................................................................................19
CLASS MF-1 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................19
CLASS MF-1 REALIZED LOSS AMORTIZATION AMOUNT.................................................................19
CLASS MF-2 APPLIED REALIZED LOSS AMOUNT......................................................................19
CLASS MF-2 CERTIFICATE.......................................................................................19
CLASS MF-2 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................19
CLASS MF-2 REALIZED LOSS AMORTIZATION AMOUNT.................................................................20
CLASS MF-3 APPLIED REALIZED LOSS AMOUNT......................................................................20
CLASS MF-3 CERTIFICATE.......................................................................................20
CLASS MF-3 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................20
CLASS MF-3 REALIZED LOSS AMORTIZATION AMOUNT.................................................................20
CLASS MF-4 APPLIED REALIZED LOSS AMOUNT......................................................................20
CLASS MF-4 CERTIFICATE.......................................................................................21
CLASS MF-4 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................21
CLASS MF-4 REALIZED LOSS AMORTIZATION AMOUNT.................................................................21
CLASS MF-5 APPLIED REALIZED LOSS AMOUNT......................................................................21
CLASS MF-5 CERTIFICATE.......................................................................................21
CLASS MF-5 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................21
CLASS MF-5 REALIZED LOSS AMORTIZATION AMOUNT.................................................................22
CLASS MF-6 APPLIED REALIZED LOSS AMOUNT......................................................................22
CLASS MF-6 CERTIFICATE.......................................................................................22
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CLASS MF-6 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................22
CLASS MF-6 REALIZED LOSS AMORTIZATION AMOUNT.................................................................23
CLASS MV CERTIFICATES........................................................................................23
CLASS MV-1 APPLIED REALIZED LOSS AMOUNT......................................................................23
CLASS MV-1 CERTIFICATE.......................................................................................23
CLASS MV-1 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................23
CLASS MV-1 REALIZED LOSS AMORTIZATION AMOUNT.................................................................23
CLASS MV-2 APPLIED REALIZED LOSS AMOUNT......................................................................23
CLASS MV-2 CERTIFICATE.......................................................................................24
CLASS MV-2 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................24
CLASS MV-2 REALIZED LOSS AMORTIZATION AMOUNT.................................................................24
CLASS MV-3 APPLIED REALIZED LOSS AMOUNT......................................................................24
CLASS MV-3 CERTIFICATE.......................................................................................24
CLASS MV-3 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................24
CLASS MV-3 REALIZED LOSS AMORTIZATION AMOUNT.................................................................25
CLASS MV-4 APPLIED REALIZED LOSS AMOUNT......................................................................25
CLASS MV-4 CERTIFICATE.......................................................................................25
CLASS MV-4 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................25
CLASS MV-4 REALIZED LOSS AMORTIZATION AMOUNT.................................................................25
CLASS MV-5 APPLIED REALIZED LOSS AMOUNT......................................................................26
CLASS MV-5 CERTIFICATE.......................................................................................26
CLASS MV-5 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................26
CLASS MV-5 REALIZED LOSS AMORTIZATION AMOUNT.................................................................26
CLASS MV-6 APPLIED REALIZED LOSS AMOUNT......................................................................26
CLASS MV-6 CERTIFICATE.......................................................................................27
CLASS MV-6 PRINCIPAL DISTRIBUTION AMOUNT.....................................................................27
CLASS MV-6 REALIZED LOSS AMORTIZATION AMOUNT.................................................................27
CLASS R CERTIFICATES.........................................................................................27
CLASS UNPAID INTEREST AMOUNTS................................................................................27
CLASS X CERTIFICATE..........................................................................................27
CLOSING DATE.................................................................................................27
CLOSING PLACE................................................................................................27
CODE.........................................................................................................28
COLLATERAL...................................................................................................28
COLLATERAL VALUE.............................................................................................28
COMBINED LOAN-TO-VALUE RATIO.................................................................................28
CORPORATE TRUST OFFICE.......................................................................................28
CORRESPONDING CLASS..........................................................................................28
COUNTERPARTY.................................................................................................28
CUSTODIAL AGREEMENT..........................................................................................28
CUSTODIAN....................................................................................................28
CUT-OFF DATE.................................................................................................28
CUT-OFF DATE GROUP I PRINCIPAL BALANCE.......................................................................29
CUT-OFF DATE GROUP II PRINCIPAL BALANCE......................................................................29
CUT-OFF DATE GROUP II-A PRINCIPAL BALANCE....................................................................29
CUT-OFF DATE GROUP II-B PRINCIPAL BALANCE....................................................................29
CUT-OFF DATE POOL PRINCIPAL BALANCE..........................................................................29
CUT-OFF DATE PRINCIPAL BALANCE...............................................................................29
DEFECTIVE LOAN...............................................................................................29
DEFICIENT VALUATION..........................................................................................29
DEFINITIVE CERTIFICATES......................................................................................29
DELETED LOAN.................................................................................................29
DENOMINATION.................................................................................................29
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DEPOSITOR....................................................................................................29
DEPOSITORY...................................................................................................29
DEPOSITORY PARTICIPANT.......................................................................................30
DETERMINATION DATE...........................................................................................30
DISTRIBUTION ACCOUNT.........................................................................................30
DISTRIBUTION ACCOUNT DEPOSIT DATE............................................................................30
DISTRIBUTION DATE............................................................................................30
DUE DATE.....................................................................................................30
DUE PERIOD...................................................................................................30
ELIGIBLE ACCOUNT.............................................................................................30
EQUITY ONE-DELAWARE..........................................................................................31
ERISA........................................................................................................31
ERISA QUALIFYING UNDERWRITING................................................................................31
ERISA-RESTRICTED CERTIFICATE.................................................................................31
ESCROW ACCOUNT...............................................................................................31
EVENT OF DEFAULT.............................................................................................31
EXCESS PROCEEDS..............................................................................................31
EXPENSE RATE.................................................................................................31
FDIC.........................................................................................................31
FHLMC........................................................................................................31
FIRREA.......................................................................................................31
FIXED RATE CERTIFICATES......................................................................................32
FNMA.........................................................................................................32
GROUP........................................................................................................32
GROUP PRINCIPAL BALANCE......................................................................................32
GROUP I APPLIED REALIZED LOSS AMOUNT.........................................................................32
GROUP I BASIC PRINCIPAL DISTRIBUTION AMOUNT..................................................................32
GROUP I CERTIFICATES.........................................................................................32
GROUP I EXTRA PRINCIPAL DISTRIBUTION AMOUNT..................................................................32
GROUP I INTEREST REMITTANCE AMOUNT...........................................................................32
GROUP I LOANS................................................................................................32
GROUP I MONTHLY EXCESS CASHFLOW AMOUNT.......................................................................32
GROUP I MONTHLY EXCESS INTEREST AMOUNT.......................................................................33
GROUP I OVERCOLLATERALIZATION AMOUNT.........................................................................33
GROUP I OVERCOLLATERALIZATION DEFICIENCY.....................................................................33
GROUP I OVERCOLLATERALIZATION RELEASE AMOUNT.................................................................33
GROUP I PRINCIPAL BALANCE....................................................................................33
GROUP I PRINCIPAL DISTRIBUTION AMOUNT........................................................................33
GROUP I REALIZED LOSS AMORTIZATION AMOUNT....................................................................33
GROUP I REALIZED LOSS AMOUNT.................................................................................34
GROUP I RECOVERY.............................................................................................34
GROUP I REMAINING INTEREST REMITTANCE AMOUNT.................................................................34
GROUP I REMAINING PRINCIPAL DISTRIBUTION AMOUNT..............................................................34
GROUP I SENIOR ENHANCEMENT PERCENTAGE........................................................................34
GROUP I SENIOR PRINCIPAL DISTRIBUTION AMOUNT.................................................................34
GROUP I SENIOR SPECIFIED ENHANCEMENT PERCENTAGE..............................................................34
GROUP I STEPDOWN DATE........................................................................................34
GROUP I SUBORDINATE CERTIFICATES.............................................................................35
GROUP I TARGETED OVERCOLLATERALIZATION AMOUNT................................................................35
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GROUP I TRIGGER EVENT........................................................................................35
GROUP I UNPAID REALIZED LOSS AMOUNT..........................................................................36
GROUP II APPLIED REALIZED LOSS AMOUNT........................................................................36
GROUP II BASIC PRINCIPAL DISTRIBUTION AMOUNT.................................................................36
GROUP II CERTIFICATES........................................................................................36
GROUP II EXTRA PRINCIPAL DISTRIBUTION AMOUNT.................................................................36
GROUP II LOANS...............................................................................................36
GROUP II MONTHLY EXCESS CASHFLOW AMOUNT......................................................................36
GROUP II MONTHLY EXCESS INTEREST AMOUNT......................................................................36
GROUP II OVERCOLLATERALIZATION AMOUNT........................................................................37
GROUP II OVERCOLLATERALIZATION DEFICIENCY....................................................................37
GROUP II OVERCOLLATERALIZATION RELEASE AMOUNT................................................................37
GROUP II PRINCIPAL BALANCE...................................................................................37
GROUP II PRINCIPAL DISTRIBUTION AMOUNT.......................................................................37
GROUP II REALIZED LOSS AMORTIZATION AMOUNT...................................................................37
GROUP II REALIZED LOSS AMOUNT................................................................................37
GROUP II RECOVERY............................................................................................38
GROUP II REMAINING INTEREST REMITTANCE AMOUNT................................................................38
GROUP II REMAINING PRINCIPAL DISTRIBUTION AMOUNT.............................................................38
GROUP II SENIOR ENHANCEMENT PERCENTAGE.......................................................................38
GROUP II SENIOR PRINCIPAL DISTRIBUTION AMOUNT................................................................38
GROUP II SENIOR SPECIFIED ENHANCEMENT PERCENTAGE.............................................................38
GROUP II STEPDOWN DATE.......................................................................................38
GROUP II SUBORDINATE CERTIFICATES............................................................................38
GROUP II TARGETED OVERCOLLATERALIZATION AMOUNT...............................................................38
GROUP II TRIGGER EVENT.......................................................................................39
GROUP II UNPAID REALIZED LOSS AMOUNT.........................................................................40
GROUP II-A ALLOCATION PERCENTAGE.............................................................................40
GROUP II-A BASIC PRINCIPAL DISTRIBUTION AMOUNT...............................................................40
GROUP II-A INTEREST REMITTANCE AMOUNT........................................................................40
GROUP II-A LOANS.............................................................................................40
GROUP II-A PRINCIPAL DISTRIBUTION AMOUNT.....................................................................40
GROUP II-B ALLOCATION PERCENTAGE.............................................................................40
GROUP II-B BASIC PRINCIPAL DISTRIBUTION AMOUNT...............................................................40
GROUP II-B INTEREST REMITTANCE AMOUNT........................................................................41
GROUP II-B LOANS.............................................................................................41
GROUP II-B PRINCIPAL DISTRIBUTION AMOUNT.....................................................................41
HEDGED CERTIFICATES..........................................................................................41
INDIRECT PARTICIPANT.........................................................................................41
INITIAL CERTIFICATE ACCOUNT DEPOSIT..........................................................................41
INSURANCE POLICY.............................................................................................41
INSURANCE PROCEEDS...........................................................................................41
INSURED EXPENSES.............................................................................................41
INTEREST ACCRUAL PERIOD......................................................................................41
INTEREST DISTRIBUTION AMOUNT.................................................................................41
INVESTMENT LETTER............................................................................................42
LATEST POSSIBLE MATURITY DATE................................................................................42
LAST SCHEDULED DISTRIBUTION DATE.............................................................................42
LIBOR........................................................................................................42
LIBOR DETERMINATION DATE.....................................................................................42
LIQUIDATED LOAN..............................................................................................42
LIQUIDATION PROCEEDS.........................................................................................42
LOANS........................................................................................................43
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LOAN SCHEDULE................................................................................................43
MAJORITY IN INTEREST.........................................................................................43
MERS (R).....................................................................................................43
MERS (R) SYSTEM..............................................................................................43
MIN..........................................................................................................43
MOM LOAN.....................................................................................................44
MONTHLY STATEMENT............................................................................................44
XXXXX'X......................................................................................................44
MORTGAGE.....................................................................................................44
MORTGAGED PROPERTY...........................................................................................44
MORTGAGE FILE................................................................................................44
MORTGAGE NOTE................................................................................................44
MORTGAGE RATE................................................................................................44
MORTGAGOR....................................................................................................44
NET PREPAYMENT INTEREST SHORTFALLS...........................................................................44
NET REALIZED LOSSES:.........................................................................................44
NET RECOVERY REALIZED LOSSES.................................................................................44
NET WAC CAP..................................................................................................45
NET WAC CAP ACCOUNT..........................................................................................45
NET WAC CAP CARRYOVER........................................................................................45
NET WAC CAP DEPOSIT AMOUNT...................................................................................45
NONRECOVERABLE ADVANCE.......................................................................................45
NOTICE OF FINAL DISTRIBUTION.................................................................................45
OFFERED CERTIFICATES.........................................................................................46
OFFICER'S CERTIFICATE........................................................................................46
OPINION OF COUNSEL...........................................................................................46
OPTIONAL TERMINATION DATE....................................................................................46
OPTIONAL TERMINATION.........................................................................................46
ORIGINAL LOAN................................................................................................46
OTS..........................................................................................................46
OUTSTANDING..................................................................................................46
OUTSTANDING LOAN.............................................................................................46
OWNERSHIP INTEREST...........................................................................................46
PASS-THROUGH RATE............................................................................................47
PAYING AGENT.................................................................................................47
PERCENTAGE INTEREST..........................................................................................47
PERMITTED INVESTMENTS........................................................................................47
PERMITTED TRANSFEREE.........................................................................................48
PERSON.......................................................................................................48
POOL PRINCIPAL BALANCE.......................................................................................48
POPULAR FINANCIAL............................................................................................48
POPULAR FUNDING..............................................................................................49
POST-STEPDOWN GROUP I REMAINING PRINCIPAL DISTRIBUTION AMOUNT................................................49
POST-STEPDOWN GROUP II CROSS-COLLATERALIZATION PRINCIPAL DISTRIBUTION AMOUNT.................................49
POST-STEPDOWN GROUP II REMAINING PRINCIPAL DISTRIBUTION AMOUNT...............................................49
PRE-STEPDOWN GROUP I REMAINING PRINCIPAL DISTRIBUTION AMOUNT.................................................49
PRE-STEPDOWN GROUP II CROSS-COLLATERALIZATION PRINCIPAL DISTRIBUTION AMOUNT..................................49
PRE-STEPDOWN GROUP II REMAINING PRINCIPAL DISTRIBUTION AMOUNT................................................49
PREPAYMENT INTEREST EXCESS...................................................................................49
PREPAYMENT INTEREST SHORTFALL................................................................................49
PREPAYMENT PERIOD............................................................................................49
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PRIMARY MORTGAGE INSURANCE POLICY............................................................................50
PRINCIPAL PREPAYMENT.........................................................................................50
PRINCIPAL PREPAYMENT IN FULL.................................................................................50
PRINCIPAL REMITTANCE AMOUNT..................................................................................50
PROSPECTUS SUPPLEMENT........................................................................................50
PUBLICLY OFFERED CERTIFICATES................................................................................50
PURCHASE PRICE...............................................................................................50
PTCE 95-60...................................................................................................50
RATING AGENCY................................................................................................51
REALIZED LOSSES..............................................................................................51
REALIZED LOSS AMORTIZATION AMOUNTS...........................................................................51
RECORD DATE..................................................................................................51
RECOVERY.....................................................................................................51
REFERENCE BANKS..............................................................................................51
REFINANCE LOAN...............................................................................................51
RELIEF ACT...................................................................................................51
RELIEF ACT REDUCTIONS........................................................................................51
REMIC........................................................................................................51
REMIC 1......................................................................................................51
REMIC 2......................................................................................................52
REMIC CHANGE OF LAW..........................................................................................52
REMIC PROVISIONS.............................................................................................52
REO PROPERTY.................................................................................................52
REQUEST FOR RELEASE..........................................................................................52
REQUIRED INSURANCE POLICY....................................................................................52
RESERVE FUND.................................................................................................52
RESPONSIBLE OFFICER..........................................................................................52
RULE 144A LETTER.............................................................................................52
SCHEDULED PAYMENT............................................................................................52
SECOND LIEN LOAN.............................................................................................52
SECURITIES ACT...............................................................................................52
SELLERS......................................................................................................52
SENIOR CERTIFICATES..........................................................................................53
SERVICER.....................................................................................................53
SERVICER ADVANCE DATE........................................................................................53
SERVICING ADVANCES...........................................................................................53
SERVICING AMOUNT.............................................................................................53
SERVICING FEE................................................................................................53
SERVICING FEE RATE...........................................................................................53
SERVICING OFFICER............................................................................................53
S&P..........................................................................................................53
STARTUP DAY..................................................................................................53
STATED PRINCIPAL BALANCE.....................................................................................54
SUBORDINATE CERTIFICATES.....................................................................................54
SUBSERVICER..................................................................................................54
SUBSTITUTE LOAN..............................................................................................54
SUBSTITUTION ADJUSTMENT AMOUNT...............................................................................54
TAX MATTERS PERSON...........................................................................................54
TAX MATTERS PERSON CERTIFICATE...............................................................................54
TERMINATION PRICE............................................................................................54
TRANSFER.....................................................................................................54
TRANSFER AFFIDAVIT...........................................................................................54
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TRANSFEROR CERTIFICATE.......................................................................................55
TRUSTEE......................................................................................................55
TRUSTEE FEE..................................................................................................55
TRUSTEE FEE RATE.............................................................................................55
TRUST FUND...................................................................................................55
TRUSTEE PERMITTED WITHDRAWAL AMOUNT..........................................................................55
UNDERWRITER EXEMPTION........................................................................................55
UNDERWRITERS.................................................................................................55
VOTING RIGHTS................................................................................................55
YIELD MAINTENANCE AGREEMENT..................................................................................56
YIELD MAINTENANCE STATED TERMINATION.........................................................................56
ARTICLE II CONVEYANCE OF LOANS; REPRESENTATIONS AND WARRANTIES...................................................56
SECTION 2.01. CONVEYANCE OF LOANS...........................................................................56
SECTION 2.02. ACCEPTANCE BY TRUSTEE OF THE TRUST FUND.......................................................59
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS AND THE SERVICER.....................61
SECTION 2.03A. ADDITIONAL OBLIGATIONS OF EQUITY ONE-DELAWARE................................................63
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AS TO THE LOANS...............................63
SECTION 2.05. DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS...............................63
SECTION 2.06. EXECUTION AND DELIVERY OF CERTIFICATES........................................................64
SECTION 2.07. REMIC MATTERS.................................................................................64
SECTION 2.08. COVENANTS OF THE SERVICER.....................................................................64
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS................................................................65
SECTION 3.01. SERVICER TO SERVICE LOANS.....................................................................65
SECTION 3.02. SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF SERVICERS.....................................65
SECTION 3.03. RIGHTS OF THE DEPOSITOR AND THE TRUSTEE IN RESPECT OF THE SERVICER............................66
SECTION 3.04. TRUSTEE TO ACT AS SERVICER....................................................................66
SECTION 3.05. COLLECTION OF LOAN PAYMENTS; CERTIFICATE ACCOUNT; DISTRIBUTION ACCOUNT........................67
SECTION 3.06. PAYMENT OF TAXES, ASSESSMENTS, HAZARD INSURANCE PREMIUMS AND SIMILAR ITEMS; ESCROW ACCOUNTS...69
SECTION 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE LOANS...........................69
SECTION 3.08. PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT AND DISTRIBUTION ACCOUNT...................70
SECTION 3.09. MAINTENANCE OF HAZARD INSURANCE; MAINTENANCE OF PRIMARY INSURANCE POLICIES....................71
SECTION 3.10. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.....................................72
SECTION 3.11. REALIZATION UPON DEFAULTED LOANS; REPURCHASE AND SALE OF CERTAIN LOANS........................73
SECTION 3.12. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF SERVICER TO BE HELD FOR THE TRUSTEE.............75
SECTION 3.13. SERVICING COMPENSATION........................................................................75
SECTION 3.14. ACCESS TO CERTAIN DOCUMENTATION...............................................................76
SECTION 3.15. ANNUAL STATEMENT AS TO COMPLIANCE.............................................................76
SECTION 3.16. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING STATEMENT; FINANCIAL STATEMENTS..............76
viii
SECTION 3.17. ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS................................................76
SECTION 3.18. RESERVED......................................................................................77
SECTION 3.19. DELINQUENT LOANS..............................................................................77
ARTICLE IIIA RESERVE FUND AND NET WAC CAP ACCOUNT...............................................................77
SECTION 3A.01 RESERVED......................................................................................77
SECTION 3A.02 RESERVE FUND AND YIELD MAINTENANCE AGREEMENT..................................................77
SECTION 3A.03. NET WAC CAP ACCOUNT...........................................................................78
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER............................................................79
SECTION 4.01. ADVANCES......................................................................................79
SECTION 4.02. PRIORITIES OF DISTRIBUTION AND ALLOCATION.....................................................79
SECTION 4.02A. RECOVERIES...................................................................................102
SECTION 4.03. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.....................................................104
SECTION 4.04. REPORTING....................................................................................107
SECTION 5.01. THE CERTIFICATES.............................................................................107
SECTION 5.02. CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES..................108
SECTION 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES............................................112
SECTION 5.04. PERSONS DEEMED OWNERS........................................................................112
SECTION 5.05. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES....................................112
SECTION 5.06. MAINTENANCE OF OFFICE OR AGENCY..............................................................112
ARTICLE VI THE DEPOSITOR AND THE SERVICER.......................................................................112
SECTION 6.01. RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE SERVICER.....................................112
SECTION 6.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER.....................................113
SECTION 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLERS, THE SERVICER AND OTHERS...............113
SECTION 6.04. LIMITATION ON RESIGNATION OF SERVICER........................................................114
SECTION 6.05. INDEMNIFICATION..............................................................................114
ARTICLE VII DEFAULT.............................................................................................114
SECTION 7.01. EVENTS OF DEFAULT............................................................................114
SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.....................................................116
SECTION 7.03. NOTIFICATION TO CERTIFICATEHOLDERS...........................................................117
SECTION 7.04. SURVIVABILITY OF SERVICER LIABILITIES........................................................117
ARTICLE VIII CONCERNING THE TRUSTEE............................................................................117
SECTION 8.01. DUTIES OF TRUSTEE............................................................................117
SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.........................................................118
SECTION 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS.................................................120
SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES.................................................................120
SECTION 8.05. TRUSTEE'S FEES AND EXPENSES..................................................................120
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.........................................................121
SECTION 8.07. RESIGNATION AND REMOVAL OF TRUSTEE...........................................................121
SECTION 8.08. SUCCESSOR TRUSTEE............................................................................122
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE...........................................................122
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE................................................122
SECTION 8.11. TAX MATTERS..................................................................................124
ix
SECTION 8.12. PERIODIC FILINGS.............................................................................125
SECTION 8.13. APPOINTMENT OF CUSTODIANS....................................................................125
SECTION 8.14. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES................................126
SECTION 8.15. SUITS FOR ENFORCEMENT........................................................................126
SECTION 8.16. DERIVATIVE TRANSACTIONS......................................................................126
ARTICLE IX TERMINATION..........................................................................................127
SECTION 9.01. TERMINATION UPON LIQUIDATION OR PURCHASE OF ALL LOANS........................................127
SECTION 9.02. FINAL DISTRIBUTION ON THE CERTIFICATES.......................................................127
SECTION 9.03. ADDITIONAL TERMINATION REQUIREMENTS..........................................................128
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................129
SECTION 10.01. AMENDMENT...................................................................................129
SECTION 10.02. RECORDATION OF AGREEMENT; COUNTERPARTS......................................................130
SECTION 10.03. GOVERNING LAW...............................................................................130
SECTION 10.04. INTENTION OF PARTIES........................................................................130
SECTION 10.05. NOTICES.....................................................................................132
SECTION 10.06. SEVERABILITY OF PROVISIONS..................................................................133
SECTION 10.07. ASSIGNMENT..................................................................................133
SECTION 10.08. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS..................................................133
SECTION 10.09. INSPECTION AND AUDIT RIGHTS.................................................................134
SECTION 10.10. CERTIFICATES NONASSESSABLE AND FULLY PAID...................................................134
SECTION 10.11. THE CLOSING.................................................................................134
SECTION 10.12. INTERPRETATION..............................................................................134
SECTION 10.13. RESERVED....................................................................................135
SECTION 10.14. NO PARTNERSHIP..............................................................................135
SECTION 10.15. PROTECTION OF ASSETS........................................................................135
SECTION 10.16. EXECUTION OF YIELD MAINTENANCE AGREEMENT....................................................135
SCHEDULE I...............................................................................................S-I-1
SCHEDULE IIA...........................................................................................S-IIA-1
SCHEDULE IIB...........................................................................................S-IIB-1
SCHEDULE IIC...........................................................................................S-IIC-1
SCHEDULE IID...........................................................................................S-IID-1
SCHEDULE IIE...........................................................................................S-IIE-1
SCHEDULE IIF...........................................................................................S-IIF-1
SCHEDULE IIX...........................................................................................S-IIX-1
SCHEDULE IIIA.........................................................................................S-IIIA-1
SCHEDULE IIIB.........................................................................................S-IIIB-1
SCHEDULE IIIC.........................................................................................S-IIIC-1
x
SCHEDULE IIID.........................................................................................S-IIID-1
SCHEDULE IIIE........................................................................................S-IIIE-1
SCHEDULE IIIF.........................................................................................S-IIIF-1
SCHEDULE IV...............................................................................................IV-1
SCHEDULE V.................................................................................................V-1
SCHEDULE VI...............................................................................................VI-1
SCHEDULE VII.............................................................................................VII-1
EXHIBIT A-1..............................................................................................A-1-1
EXHIBIT A-2..............................................................................................A-2-1
EXHIBIT A-3 .............................................................................................A-3-1
EXHIBIT A-4 .............................................................................................A-4-1
EXHIBIT B-1..............................................................................................B-1-1
EXHIBIT B-2 .............................................................................................B-2-1
EXHIBIT C..................................................................................................C-1
EXHIBIT D..................................................................................................D-1
EXHIBIT E..................................................................................................E-1
EXHIBIT F..................................................................................................F-1
EXHIBIT G..................................................................................................G-1
EXHIBIT H..................................................................................................H-1
EXHIBIT I..................................................................................................I-1
EXHIBIT J..................................................................................................J-1
EXHIBIT K..................................................................................................K-1
EXHIBIT L..................................................................................................L-1
EXHIBIT M..................................................................................................M-1
xi
THIS POOLING AND SERVICING AGREEMENT, dated as of October 1, 2005, by and among
Popular ABS, Inc., a Delaware corporation, as depositor (the "DEPOSITOR"),
Equity One, Inc., a Delaware corporation, as servicer (the "SERVICER"), Popular
Financial Funding, LLC, a Delaware limited liability company ("POPULAR FUNDING")
and Popular Financial Services, LLC, a Delaware limited liability company
("POPULAR FINANCIAL" and, together with Popular Funding, the "SELLERS"), and
JPMorgan Chase Bank, National Association, a banking association organized under
the laws of the United States, as trustee (the "TRUSTEE").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (exclusive of the Net
WAC Cap Account, the Reserve Fund and the Yield Maintenance Agreement) for
federal income tax purposes will consist of two REMICs ("REMIC 1" and "REMIC
2"). The Certificates will represent the entire beneficial ownership interest in
the Trust Fund. The assets of the Trust Fund (exclusive of the Net WAC Cap
Account, the Reserve Fund and the Yield Maintenance Agreement) will constitute
the assets of REMIC 1 and REMIC 1 will issue nineteen uncertificated regular
interests that will be held as the sole assets of REMIC 2. The Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class AV-1, Class AV-2A,
Class AV-2B, Class AV-2C, Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class
MF-5, Class MF-6, Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5,
Class MV-6, Class BF-1, Class BF-2, Class BF-3, Class BV-1, Class BV-2, Class
BV-3 and Class BV-4 Certificates (exclusive of any associated rights to receive
payments in the form of Net WAC Cap Carryover) and the Class X Certificates
(exclusive of any associated rights to receive payments from the Net WAC Cap
Account and the Reserve Fund) will represent the "regular interests" in REMIC 2.
The Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class MF-5, Class
MF-6, Class BF-1, Class BF-2 and Class BF-3 Certificates are subordinate to and
provide credit enhancement for the Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5 and Class AF-6 Certificates. The Class MF-2, Class MF-3, Class
MF-4, Class MF-5, Class MF-6, Class BF-1, Class BF-2 and Class BF-3 Certificates
are subordinate to and provide credit enhancement for the Class MF-1
Certificates. The Class MF-3, Class MF-4, Class MF-5, Class MF-6, Class BF-1,
Class BF-2 and Class BF-3 Certificates are subordinate to and provide credit
enhancement for the Class MF-2 Certificates. The Class MF-4, Class MF-5, Class
MF-6, Class BF-1, Class BF-2 and Class BF-3 Certificates are subordinate to and
provide credit enhancement for the Class MF-3 Certificates. The Class MF-5,
Class MF-6, Class BF-1, Class BF-2 and Class BF-3 Certificates are subordinate
to and provide credit enhancement for the Class MF-4 Certificates. The Class
MF-6, Class BF-1, Class BF-2 and Class BF-3 Certificates are subordinate to and
provide credit enhancement for the Class MF-5 Certificates. The Class BF-1,
Class BF-2 and Class BF-3 Certificates are subordinate to and provide credit
enhancement for the Class MF-6 Certificates. The Class BF-2 and Class BF-3
Certificates are subordinate to and provide credit enhancement for the Class
BF-1 Certificates. The Class BF-3 Certificates are subordinate to and provide
credit enhancement for the Class BF-2 Certificates.
The Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5, Class
MV-6, Class BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates are
subordinate to and provide credit enhancement for the Class AV-1, Class AV-2A,
Class AV-2B and Class AV-2C Certificates. The Class MV-2, Class MV-3, Class
MV-4, Class MV-5, Class MV-6, Class BV-1, Class BV-2, Class BV-3 and Class BV-4
Certificates are subordinate to and provide credit enhancement for the Class
MV-1 Certificates. The Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class
BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates are subordinate to and
provide credit enhancement for the Class MV-2 Certificates. The Class MV-4,
Class MV-5, Class MV-6, Class BV-1, Class BV-2, Class BV-3 and Class BV-4
Certificates are subordinate to and provide credit enhancement for the Class
MV-3 Certificates. The Class MV-5, Class MV-6, Class BV-1, Class BV-2, Class
BV-3 and Class BV-4 Certificates are subordinate to and provide credit
enhancement for the Class MV-4 Certificates. The Class MV-6, Class BV-1, Class
BV-2, Class BV-3 and Class BV-4 Certificates are subordinate to and provide
credit enhancement for the Class MV-5 Certificates. The Class BV-1, Class BV-2,
Class BV-3 and Class BV-4 Certificates are subordinate to and provide credit
enhancement for the Class MV-6 Certificates. The Class BV-2, Class BV-3 and
Class BV-4 Certificates are subordinate to and provide credit enhancement for
the Class BV-1 Certificates. The Class BV-3 and Class BV-4 Certificates are
subordinate to and provide credit enhancement for the Class BV-2 Certificates.
The Class BV-4 Certificates are subordinate to and provide credit enhancement
for the Class BV-3 Certificates.
The Class R-1 and Class R-2 Interests will be the residual interests in
each of REMIC 1 and REMIC 2. All interests created hereby will be retired on or
before the Latest Possible Maturity Date.
REMIC 1
REMIC 1 will be evidenced by a single uncertificated residual interest,
ownership of which shall be evidenced by the Class R Certificate, and by the
Group I Accrual Class, the Group II Accrual Class, the Class 1-Group II-A
Interest, the Class 1-Group II-B Interest and the Class 1-AF1, Class 1-AF2,
Class 1-AF3, Class 1-AF4, Class 1-AF5, Class 1-AF6, Class 1-AV1, Class 1-AV2A,
Class 1-AV2B, Class 1-AV2C, Class 1-MF1, Class 1-MF2, Class 1-MF3, Class 1-MF4,
Class 1-MF5, Class 1-MF6, Class 1-MV1, Class 1-MV2, Class 1-MV3, Class 1-MV4,
Class 1-MV5, Class 1-MV6, Class 1-BV1, Class 1-BV2 and Class 1-BV3, Class 1-BV4
Class 1-BF1, Class 1-BF2 and Class 1-BF3 Interests, which will be uncertificated
and non-transferable and are hereby designated as the "regular interests" in
REMIC 1 for federal income tax purposes and will have the following
designations, initial principal balances, pass-through rates, and corresponding
Classes of REMIC 2 certificates ("CORRESPONDING CLASSES"):
=======================================================================================================================
Corresponding
REMIC 1 Interests Initial Balance Pass-Through Rate Class
-----------------------------------------------------------------------------------------------------------------------
Class 1-AF1 (1/4 Corresponding Class' initial Class (1) AF-1
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AF2 (1/4 Corresponding Class' initial Class (1) AF-2
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AF3 (1/4 Corresponding Class' initial Class (1) AF-3
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AF4 (1/4 Corresponding Class' initial Class (1) AF-4
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AF5 (1/4 Corresponding Class' initial Class (1) AF-5
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AF6 (1/4 Corresponding Class' initial Class (1) AF-6
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AV1 (1/4 Corresponding Class' initial Class (2) AV-1
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AV2A (1/4 Corresponding Class' initial Class (2) AV-2A
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-AV2B (1/4 Corresponding Class' initial Class (2) AV-2B
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
2
=======================================================================================================================
Corresponding
REMIC 1 Interests Initial Balance Pass-Through Rate Class
-----------------------------------------------------------------------------------------------------------------------
Class 1-AV2C (1/4 Corresponding Class' initial Class (2) AV-2C
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MF1 (1/4 Corresponding Class' initial Class (1) MF-1
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MF2 (1/4 Corresponding Class' initial Class (1) MF-2
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MF3 (1/4 Corresponding Class' initial Class (1) MF-3
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MF4 (1/4 Corresponding Class' initial Class (1) MF-4
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MF5 (1/4 Corresponding Class' initial Class (1) MF-5
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MF6 (1/4 Corresponding Class' initial Class (1) MF-6
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MV1 (1/4 Corresponding Class' initial Class (2) MV-1
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MV2 (1/4 Corresponding Class' initial Class (2) MV-2
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MV3 (1/4 Corresponding Class' initial Class (2) MV-3
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MV4 (1/4 Corresponding Class' initial Class (2) MV-4
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MV5 (1/4 Corresponding Class' initial Class (2) MV-5
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-MV6 (1/4 Corresponding Class' initial Class (2) MV-6
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BF1 (1/4 Corresponding Class' initial Class (1) BF-1
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BF2 (1/4 Corresponding Class' initial Class (1) BF-2
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BF3 (1/4 Corresponding Class' initial Class (1) BF-3
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BV1 (1/4 Corresponding Class' initial Class (2) BV-1
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BV2 (1/4 Corresponding Class' initial Class (2) BV-2
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BV3 (1/4 Corresponding Class' initial Class (2) BV-3
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-BV4 (1/4 Corresponding Class' initial Class (2) BV-4
Certificate Balance)
-----------------------------------------------------------------------------------------------------------------------
Class 1-Group II-A (1/4 Cut-off Date Group Principal Balance of (3) N/A
the Group II-A Loans)
-----------------------------------------------------------------------------------------------------------------------
Class 1-Group II-B (1/4 Cut-off Date Group Principal Balance of (4) N/A
the Group II-B Loans)
-----------------------------------------------------------------------------------------------------------------------
Group I Accrual Class (3/4 Cut-off Date Group I Principal Balance) (1) N/A
-----------------------------------------------------------------------------------------------------------------------
Group II Accrual Class (1/2 Cut-off Date Group II Principal Balance) (2)
=======================================================================================================================
3
(1) For any Distribution Date and the related Interest Accrual Period,
each of these interests in REMIC 1 shall accrue interest at a per annum rate
equal to the weighted average of the Adjusted Net Mortgage Rates of the Group I
Loans as of the first day of the related Due Period, weighted on the basis of
their principal balances as of the first day of the related Due Period.
(2) For any Distribution Date and the related Interest Accrual Period,
each of these interests in REMIC 1 shall accrue interest at a per annum rate
equal to the weighted average of the Adjusted Net Mortgage Rates of the Group II
Loans as of the first day of the related Due Period, weighted on the basis of
their principal balances as of the first day of the related Due Period.
(3) For any Distribution Date and the related Interest Accrual Period,
the Class 1-Group II-A Interest shall accrue interest at a per annum rate equal
to the weighted average of the Adjusted Net Mortgage Rates of the Group II-A
Loans as of the first day of the related Due Period, weighted on the basis of
their principal balances as of the first day of the related Due Period.
(4) For any Distribution Date and the related Interest Accrual Period,
the Class 1-Group II-B Interest shall accrue interest at a per annum rate equal
to the weighted average of the Adjusted Net Mortgage Rates of the Group II-B
Loans as of the first day of the related Due Period, weighted on the basis of
their principal balances as of the first day of the related Due Period.
On each Distribution Date, the Interest Remittance Amount for Group I
shall be distributed as interest on the Group I Accrual Class and each regular
interest in REMIC 1 whose Corresponding Class is a Group I Certificate at the
Pass-Through Rates shown above, provided, however, that the interest that
accrues on the Group I Accrual Class for any Interest Accrual Period shall be
deferred and added to the balance of the Group I Accrual Class in an amount
equal to 75% of the increase, if any, in the Group I Overcollateralization
Amount on such Distribution Date.
On each Distribution Date, Available Funds for Group I remaining after
the distributions described in the immediately preceding paragraph have been
made, shall be distributed in the following order and priority:
1. Concurrently, to the Class 1-AF1, Class 1-AF2, Class 1-AF3, Class
1-AF4, Class 1-AF5, Class 1-AF6, Class 1-MF1, Class 1-MF2, Class
1-MF3, Class 1-MF4, Class 1-MF5, Class 1-MF6, Class 1-BF1, Class
1-BF2 and Class 1-BF3 Interests until the balance of each such
interest equals 25% of the Class Certificate Balance of the
Corresponding Class of Certificates immediately after such
Distribution Date;
2. To the Group I Accrual Class until its balance is reduced to
zero.
4
On each Distribution Date, after making the distributions described
above, the Group I Realized Loss Amount shall be allocated among the Group I
Accrual Class and each regular interest in REMIC 1 whose Corresponding Class is
a Group I Certificate in the same manner in which principal is distributed.
On each Distribution Date, the Interest Remittance Amount for Group II
shall be distributed as interest on the Group II Accrual Class, the Class
1-Group II-A Interest, the Class 1-Group II-B Interest, and each regular
interest in REMIC 1 whose Corresponding Class is a Group II Certificate at the
Pass-Through Rates shown above, provided, however, that the interest that
accrues on the Group II Accrual Class for any Interest Accrual Period shall be
deferred and added to the balance of the Group II Accrual Class in an amount
equal to 50% of the increase, if any, in the Group II Overcollateralization
Amount on such Distribution Date.
1. Concurrently, to the Class 1-AV1, Class 1-AV2A, Class 1-AV2B,
Class 1-AV2C, Class 1-MV1, Class 1-MV2, Class 1-MV3, Class 1-MV4,
Class 1-MV5, Class 1-MV6, Class 1-BV1, Class 1-BV2 and Class
1-BV3, and Class 1-BV4 Interests until the balance of each such
interest equals 25% of the Class Certificate Balance of the
Corresponding Class of Certificates immediately after such
Distribution Date;
2. Concurrently, to the Class 1-Group II-A and Class 1-Group II-B
Interests, until
a. the balance of the Class 1-Group II-A Interest equals 25% of
the Cut-off Date Group Principal Balance of the Group II-A
Loans, determined as of the first day of the related Due
Period; and
b. the balance of the Class 1-Group II-B Interest equals 25% of
the Cut-off Date Group Principal Balance of the Group II-B
Loans, determined as of the first day of the related Due
Period.
3. To the Group II Accrual Class until its balance is reduced to
zero.
REMIC 2
The following table sets forth characteristics of the Certificates,
each of which, except for the Class R Certificates, is hereby designated a
"regular interest" in REMIC 2, together with the minimum denominations and
integral multiples in excess thereof in which such Classes shall be issuable
(except that one Certificate of each Class of Certificates may be issued in a
different amount and, in addition, one Class R Certificate representing the Tax
Matters Person Certificate may be issued in a different amount):
====================================================================================================================
Class Initial Class Minimum Integral Multiples in
Certificate Balance Pass-Through Rate(1) Denomination Excess of Minimum
--------------------------------------------------------------------------------------------------------------------
AF-1 $ 118,750,000 5.097% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AF-2 $ 39,170,000 4.973% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AF-3 $ 40,130,000 5.086% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AF-4 $ 39,290,000 5.297% (2) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AF-5 $ 25,970,000 5.715% (3) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AF-6 $ 29,260,000 5.331% (4) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AV-1 $ 160,250,000 LIBOR + 0.260% (5) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AV-2A $ 122,040,000 LIBOR + 0.130% (6) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
5
====================================================================================================================
Class Initial Class Minimum Integral Multiples in
Certificate Balance Pass-Through Rate(1) Denomination Excess of Minimum
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
AV-2B $30,580,000 LIBOR + 0.260% (7) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
AV-2C $14,189,000 LIBOR + 0.330% (8) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MF-1 $24,100,000 5.672% (9) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MF-2 $19,100,000 6.000% (10) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MF-3 $ 4,820,000 6.000% (11) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MF-4 $ 5,380,000 5.750% (12) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MF-5 $ 3,340,000 6.000% (13) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MF-6 $ 3,710,000 5.750% (14) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MV-1 $35,472,000 LIBOR + 0.440% (15) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MV-2 $29,672,000 LIBOR + 0.630% (16) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MV-3 $ 7,585,000 LIBOR + 0.680% (17) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MV-4 $ 8,255,000 LIBOR + 1.130% (18) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MV-5 $ 5,800,000 LIBOR + 1.300% (19) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
MV-6 $ 6,024,000 LIBOR + 1.700% (20) $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BF-1 $ 6,120,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BF-2 $ 5,190,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BF-3 $ 6,480,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BV-1 $ 5,354,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BV-2 $ 3,793,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BV-3 $ 4,462,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
BV-4 $12,715,000 LIBOR + 2.250% $25,000 $1
--------------------------------------------------------------------------------------------------------------------
Class X (21) (22) N/A N/A
--------------------------------------------------------------------------------------------------------------------
Class R $0 N/A N/A N/A
====================================================================================================================
(1) As to any Distribution Date, this rate shall equal the lesser of (a)
the lesser of (i) the rate per annum set forth above and (ii) 14.00%,
and (b) the applicable Net WAC Cap.
(2) After the Optional Termination Date, this rate will increase to 5.797%.
(3) After the Optional Termination Date, this rate will increase to 6.215%.
(4) After the Optional Termination Date, this rate will increase to 5.831%.
(5) After the Optional Termination Date, this rate will increase to LIBOR +
0.520%.
(6) After the Optional Termination Date, this rate will increase to LIBOR +
0.260%.
(7) After the Optional Termination Date, this rate will increase to LIBOR +
0.520%.
(8) After the Optional Termination Date, this rate will increase to LIBOR +
0.660%.
(9) After the Optional Termination Date, this rate will increase to 6.172%.
(10) After the Optional Termination Date, this rate will increase to 6.500%.
(11) After the Optional Termination Date, this rate will increase to 6.500%.
6
(12) After the Optional Termination Date, this rate will increase to 6.250%.
(13) After the Optional Termination Date, this rate will increase to 6.500%.
(14) After the Optional Termination Date, this rate will increase to 6.250%.
(15) After the Optional Termination Date, this rate will increase to LIBOR +
0.660%.
(16) After the Optional Termination Date, this rate will increase to LIBOR +
0.945%.
(17) After the Optional Termination Date, this rate will increase to LIBOR +
1.020%.
(18) After the Optional Termination Date, this rate will increase to LIBOR +
1.695%.
(19) After the Optional Termination Date, this rate will increase to LIBOR +
1.950%.
(20) After the Optional Termination Date, this rate will increase to LIBOR +
2.550%.
(21) On each Distribution Date, the Class X Certificates will have a
notional balance equal to the Pool Principal Balance.
(22) As to any Distribution Date for the Class X Certificates shall equal
the excess, if any, of: (a) the weighted average of the Pass-Through
Rates on the regular interests in REMIC 1 immediately after the
preceding Distribution Date weighted on the basis of their relative
principal balances after taking into account distributions and
allocations of Realized Loss Amounts on such Distribution Date, over
(b) the weighted average of the Pass-Through Rates on the regular
interests in REMIC 1 immediately after the preceding Distribution Date
weighted on the basis of their relative principal balances after taking
into account distributions and allocations of Realized Loss Amounts on
such Distribution Date and computed for this purpose by subjecting the
Pass-Through Rates on each of the Group I Accrual Class, the Group II
Accrual Class, the Class 1-Group II-A, and the Class 1-Group II-B
Interests to a cap of 0.00%, and by subjecting the Pass-Through Rate on
each other regular interest in REMIC 1 to a cap equal to the
Pass-Through Rate for its Corresponding Class for such Distribution
Date.
All fixed interest rates set forth in this Agreement are calculated
based on a 360-day year consisting of twelve 30-day months (30/360). All
adjustable interest rates set forth in this Agreement are calculated based on a
360-day year and the actual number of days elapsed in the related Interest
Accrual Period. Interest accruals on the regular interests in REMIC 1, however,
shall be calculated based on a 360-day year consisting of twelve 30-day months
(30/360).
7
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
60+ Day Delinquent Loan
As of any Distribution Date, each Loan with respect to which
any portion of a Scheduled Payment is, as of the last day of the calendar month
immediately preceding that Distribution Date, 60 days or more contractually past
due (assuming 30 day months), each Loan in foreclosure, all REO Property and
each Loan for which the Mortgagor has filed for bankruptcy after the Closing
Date.
Adjustable Rate Certificates
The Class AV Certificates, the Class BF Certificates, the
Class MV Certificates and the Class BV Certificates.
Adjusted Mortgage Rate
As to each Loan, and at any time, the per annum rate equal to
the Mortgage Rate less the Servicing Fee Rate.
Adjusted Net Mortgage Rate
As to each Loan, and at any time, the per annum rate equal to
the Mortgage Rate less the related Expense Rate.
Advance
The payment required to be made by the Servicer with respect
to any Distribution Date pursuant to Section 4.01, the amount of any such
payment being equal to the aggregate of payments of principal and interest (net
of the Servicing Fee) on the Loans that were due on such Loans' respective Due
Dates in the related Due Period and not received as of the close of business on
the Determination Date in the month of such Distribution Date, other than the
aggregate amount of any such delinquent payments that the Servicer, in its good
faith judgment, has determined would not be recoverable out of Insurance
Proceeds, Liquidation Proceeds or otherwise from the related Loans.
Aggregate Class BF Early Distribution Amount
As of any Distribution Date, the aggregate sum of all amounts
paid to the Class BF-3, Class BF-2 and Class BF-1 Certificates on prior
Distribution Dates pursuant to clauses (66), (67) and (68) of Section 4.02(f)
and clauses (70), (71) and (72) of Section 4.02(g).
Aggregate Class BV Early Distribution Amount
As of any Distribution Date, the aggregate sum of all amounts
paid to the Class BV-4, Class BV-3, Class BV-2 and Class BV-1 Certificates on
prior Distribution Dates pursuant to clauses (66), (67), (68) and (69) of
Section 4.02(g) and clauses (69), (70), (71) and (72) of Section 4.02(f).
Agreement
This Pooling and Servicing Agreement, together with all of the
exhibits and schedules hereto, and all amendments or supplements of any of the
foregoing.
Amount Held for Future Distribution
As to any Distribution Date and the Offered Certificates, the
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date on account of (a) Principal Prepayments, Liquidation
Proceeds and Recoveries received after the Prepayment Period corresponding to
such Distribution Date and (b) all Scheduled Payments due after the Loans'
respective Due Dates in the related Due Period.
8
Applied Realized Loss Amount
Either a Group I Applied Realized Loss Amount or Group II
Applied Realized Loss Amount, as the case may be.
Available Funds
As to any Distribution Date, the sum of (a) the aggregate
amount held in the Certificate Account at the close of business on the related
Determination Date net of the Amount Held for Future Distribution and net of
amounts permitted to be withdrawn from the Certificate Account pursuant to
clauses (i)-(viii), inclusive, of Section 3.08(a) and amounts permitted to be
withdrawn from the Distribution Account pursuant to clauses (i) and (ii) of
Section 3.08(b), (b) the amount of the related Advance, if any, and (c) the
aggregate of the Purchase Prices and Substitution Adjustment Amounts received on
or before the related Distribution Account Deposit Date and (d) with respect to
the initial Distribution Date, the Initial Certificate Account Deposit.
Balloon Loans
Loans with balloon payments.
Bankruptcy Code
The United States Bankruptcy Reform Act of 1978, as amended,
and related rules promulgated thereunder.
Beneficial Owner
With respect to any Book-Entry Certificate, the Person who is
the beneficial owner of such Book-Entry Certificate.
Book-Entry Certificates
The Offered Certificates.
Business Day
Any day other than (a) a Saturday or a Sunday or (b) a day on
which banking institutions in New York City, or in the city where the chief
executive office of the Servicer is located, are authorized or obligated by law
or executive order to be closed.
Certificates
The Offered Certificates, the Class R Certificates and the
Class X Certificates.
Certificate Account
The separate Eligible Account created and maintained by the
Servicer pursuant to Section 3.05 with a depository institution in the name of
the Servicer for the benefit of the Trustee on behalf of the Certificateholders
and designated "Certificate Account, Equity One, Inc., as trustee for the
registered holders of Popular ABS, Inc., Mortgage Pass-Through Certificates
Series 2005-5."
Certificate Balance
With respect to any Offered Certificate at any time, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof reduced by the
sum of (a) all amounts previously distributed to that Offered Certificate as
payments of principal, and (b) with respect to any Subordinate Certificate, that
Subordinate Certificate's pro rata share of the cumulative amount of Applied
Realized Loss Amounts with respect to such Class for all prior Distribution
Dates.
9
Certificateholder or Holder
The person in whose name a Certificate is registered in the
Certificate Register, except that, solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
Certificate Register
The register maintained pursuant to Section 5.02.
Certificate Registrar
JPMorgan Chase Bank, N.A. and its successors and, if a
successor certificate registrar is appointed hereunder, such successor.
Class
All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class AF Certificates
The Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5
and Class AF-6 Certificates.
Class AF-1 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class AF-1 Certificate.
Class AF-2 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class AF-2 Certificate.
Class AF-3 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class AF-3 Certificate.
Class AF-4 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class AF-4 Certificate.
Class AF-5 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class AF-5 Certificate.
10
Class AF-6 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class AF-6 Certificate.
Class AF-6 Lockout Distribution Amount
For any Distribution Date (a) prior to the November 2014
Distribution Date, will be the lesser of (1) the product of (i) the applicable
Class AF-6 Lockout Percentage for such Distribution Date and (ii) the Class AF-6
Pro Rata Distribution Amount for such Distribution Date and (2) the Class
Certificate Balance of the Class AF-6 Certificates immediately prior to that
Distribution Date, and (b) on or after the November 2014 Distribution Date, will
be (1) if the Group I Stepdown Date has occurred and a Group I Trigger Event is
not in effect, the Group I Senior Principal Distribution Amount or (2) if the
Group I Stepdown Date has not occurred or a Group I Trigger Event is in effect,
the Group I Principal Distribution Amount, each for such Distribution Date.
Class AF-6 Lockout Percentage
For each Distribution Date shall be as follows:
DISTRIBUTION DATE CLASS AF-6 LOCKOUT PERCENTAGE
----------------- -----------------------------
November 2005 - October 2008 0%
November 2008 - October 2010 45%
November 2010 - October 2011 80%
November 2011 - October 2012 100%
November 2012 - October 2014 300%
Class AF-6 Pro Rata Distribution Amount
For any Distribution Date will be an amount equal to the
product of (a) a fraction, the numerator of which is the Class Certificate
Balance of the Class AF-6 Certificates immediately prior to that Distribution
Date and the denominator of which is an amount equal to the sum of the Class
Certificate Balances of all Classes of the Class AF Certificates immediately
prior to that Distribution Date and (b) (1) if the Group I Stepdown Date has
occurred and a Group I Trigger Event is not in effect, the Group I Senior
Principal Distribution Amount or (2) if the Group I Stepdown Date has not
occurred or a Group I Trigger Event is in effect, the Group I Principal
Distribution Amount, each for such Distribution Date.
Class AV Certificates
The Class AV-1 and Class AV-2 Certificates.
Class AV-1 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-2 and designated as a
Class AV-1 Certificate.
Class AV-1 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the lesser of (a)
the Class Certificate Balance of the Class AV-1 Certificates immediately prior
to that Distribution Date and (b) the product of (1) the Group II-A Allocation
Percentage and (2) the Group II Senior Principal Distribution Amount.
11
Class AV-2 Certificates
The Class AV-2A, Class AV-2B and Class AV-2C Certificates.
Class AV-2 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the lesser of (a)
the sum of (1) the Class Certificate Balance of the Class AV-2A Certificates,
(2) the Class Certificate Balance of the Class AV-2B Certificates and (3) the
Class Certificate Balance of the Class AV-2C Certificates, each immediately
prior to that Distribution Date and (b) the product of (1) the Group II-B
Allocation Percentage and (2) the Group II Senior Principal Distribution Amount.
Class AV-2A Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-2 and designated as a
Class AV-2A Certificate.
Class AV-2B Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-2 and designated as a
Class AV-2B Certificate.
Class AV-2C Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-2 and designated as a
Class AV-2C Certificate.
Class BF Certificates
The Class BF-1, Class BF-2 and Class BF-3 Certificates.
Class BF-1 Applied Realized Loss Amount
As to the Class BF-1 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class BF-1 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class BF-2 Applied Realized Loss Amount and the Class BF-3 Applied
Realized Loss Amount, in each case as of that Distribution Date.
Class BF-1 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BF-1 Certificate.
Class BF-1 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MF-3
Certificates (after taking into account the payment of the Class MF-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MF-4 Certificates (after taking into account the payment of
the Class MF-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MF-5 Certificates (after taking into
account the payment of the Class MF-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MF-6
Certificates (after taking into account the payment of the Class MF-6 Principal
Distribution Amount on that Distribution Date) and (viii) the Class Certificate
Balance of the Class BF-1 Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) 90.10% and (B) the Group I
Principal Balance as of the last day of the related Due Period and (ii) the
Group I Principal Balance as of the last day of the related Due Period minus the
product of (A) 0.50% and (B) the Cut-off Date Group I Principal Balance.
12
Class BF-1 Realized Loss Amortization Amount
As to the Class BF-1 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
BF-1 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (26) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (56) of Section
4.02(g) for that Distribution Date.
Class BF-2 Applied Realized Loss Amount
As to the Class BF-2 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class BF-2 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
Class BF-3 Applied Realized Loss Amount as of that Distribution Date.
Class BF-2 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BF-2 Certificate.
Class BF-2 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MF-3
Certificates (after taking into account the payment of the Class MF-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MF-4 Certificates (after taking into account the payment of
the Class MF-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MF-5 Certificates (after taking into
account the payment of the Class MF-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MF-6
Certificates (after taking into account the payment of the Class MF-6 Principal
Distribution Amount on that Distribution Date), (viii) the Class Certificate
Balance of the Class BF-1 Certificates (after taking into account the payment of
the Class BF-1 Principal Distribution Amount on that Distribution Date) and (ix)
the Class Certificate Balance of the Class BF-2 Certificates immediately prior
to that Distribution Date over (b) the lesser of (i) the product of (A) 92.90%
and (B) the Group I Principal Balance as of the last day of the related Due
Period and (ii) the Group I Principal Balance as of the last day of the related
Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Group I
Principal Balance.
13
Class BF-2 Realized Loss Amortization Amount
As to the Class BF-2 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
BF-2 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (29) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (59) of Section
4.02(g) for that Distribution Date.
Class BF-3 Applied Realized Loss Amount
As to the Class BF-3 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class BF-3 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the Group I
Realized Loss Amount as of that Distribution Date.
Class BF-3 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BF-3 Certificate.
Class BF-3 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MF-3
Certificates (after taking into account the payment of the Class MF-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MF-4 Certificates (after taking into account the payment of
the Class MF-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MF-5 Certificates (after taking into
account the payment of the Class MF-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MF-6
Certificates (after taking into account the payment of the Class MF-6 Principal
Distribution Amount on that Distribution Date), (viii) the Class Certificate
Balance of the Class BF-1 Certificates (after taking into account the payment of
the Class BF-1 Principal Distribution Amount on that Distribution Date), (viii)
the Class Certificate Balance of the Class BF-2 Certificates (after taking into
account the payment of the Class BF-2 Principal Distribution Amount on that
Distribution Date) and (x) the Class Certificate Balance of the Class BF-3
Certificates immediately prior to that Distribution Date over (b) the lesser of
(i) the product of (A) 96.40% and (B) the Group I Principal Balance as of the
last day of the related Due Period and (ii) the Group I Principal Balance as of
the last day of the related Due Period minus the product of (A) 0.50% and (B)
the Cut-off Date Group I Principal Balance.
Class BF-3 Realized Loss Amortization Amount
As to the Class BF-3 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
BF-3 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (32) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (62) of Section
4.02(g) for that Distribution Date.
14
Class BV Certificates
The Class BV-1, Class BV-2, Class BV-3 and Class BV-4
Certificates.
Class BV-1 Applied Realized Loss Amount
As to the Class BV-1 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class BV-1 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class BV-2 Applied Realized Loss Amount, the Class BV-3 Applied
Realized Loss Amount and the Class BV-4 Applied Realized Loss Amount, in each
case as of that Distribution Date.
Class BV-1 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BV-1 Certificate.
Class BV-1 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MV-4 Certificates (after taking into account the payment of
the Class MV-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MV-5 Certificates (after taking into
account the payment of the Class MV-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MV-6
Certificates (after taking into account the payment of the Class MV-6 Principal
Distribution Amount on that Distribution Date) and (viii) the Class Certificate
Balance of the Class BV-1 Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) 88.20% and (B) the Group II
Principal Balance as of the last day of the related Due Period and (ii) the
Group II Principal Balance as of the last day of the related Due Period minus
the product of (A) 0.50% and (B) the Cut-off Date Group II Principal Balance.
Class BV-1 Realized Loss Amortization Amount
As to the Class BV-1 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
BV-1 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (26) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (53) of Section
4.02(f) for that Distribution Date.
15
Class BV-2 Applied Realized Loss Amount
As to the Class BV-2 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class BV-2 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class BV-3 Applied Realized Loss Amount and the Class BV-4 Applied
Realized Loss Amount, in each case as of that Distribution Date.
Class BV-2 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BV-2 Certificate.
Class BV-2 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MV-4 Certificates (after taking into account the payment of
the Class MV-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MV-5 Certificates (after taking into
account the payment of the Class MV-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MV-6
Certificates (after taking into account the payment of the Class MV-6 Principal
Distribution Amount on that Distribution Date), (viii) the Class Certificate
Balance of the Class BV-1 Certificates (after taking into account the payment of
the Class BV-1 Principal Distribution Amount on that Distribution Date) and (ix)
the Class Certificate Balance of the Class BV-2 Certificates immediately prior
to that Distribution Date over (b) the lesser of (i) the product of (A) 89.90%
and (B) the Group II Principal Balance as of the last day of the related Due
Period and (ii) the Group II Principal Balance as of the last day of the related
Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Group II
Principal Balance.
Class BV-2 Realized Loss Amortization Amount
As to the Class BV-2 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
BV-2 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (29) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (56) of Section
4.02(f) for that Distribution Date.
Class BV-3 Applied Realized Loss Amount
As to the Class BV-3 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class BV-3 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
Class BV-4 Applied Realized Loss Amount as of that Distribution Date.
Class BV-3 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BV-3 Certificate.
16
Class BV-3 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MV-4 Certificates (after taking into account the payment of
the Class MV-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MV-5 Certificates (after taking into
account the payment of the Class MV-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MV-6
Certificates (after taking into account the payment of the Class MV-6 Principal
Distribution Amount on that Distribution Date), (viii) the Class Certificate
Balance of the Class BV-1 Certificates (after taking into account the payment of
the Class BV-1 Principal Distribution Amount on that Distribution Date), (ix)
the Class Certificate Balance of the Class BV-2 Certificates (after taking into
account the payment of the Class BV-2 Principal Distribution Amount on that
Distribution Date) and (x) the Class Certificate Balance of the Class BV-3
Certificates immediately prior to that Distribution Date over (b) the lesser of
(i) the product of (A) 91.90% and (B) the Group II Principal Balance as of the
last day of the related Due Period and (ii) the Group II Principal Balance as of
the last day of the related Due Period minus the product of (A) 0.50% and (B)
the Cut-off Date Group II Principal Balance.
Class BV-3 Realized Loss Amortization Amount
As to the Class BV-3 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
BV-3 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (32) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (59) of Section
4.02(f) for that Distribution Date.
Class BV-4 Applied Realized Loss Amount
As to the Class BV-4 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class BV-4 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the Group II
Realized Loss Amount as of that Distribution Date.
Class BV-4 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class BV-4 Certificate.
17
Class BV-4 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MV-4 Certificates (after taking into account the payment of
the Class MV-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MV-5 Certificates (after taking into
account the payment of the Class MV-5 Principal Distribution Amount on that
Distribution Date), (vii) the Class Certificate Balance of the Class MV-6
Certificates (after taking into account the payment of the Class MV-6 Principal
Distribution Amount on that Distribution Date), (viii) the Class Certificate
Balance of the Class BV-1 Certificates (after taking into account the payment of
the Class BV-1 Principal Distribution Amount on that Distribution Date), (ix)
the Class Certificate Balance of the Class BV-2 Certificates (after taking into
account the payment of the Class BV-2 Principal Distribution Amount on that
Distribution Date), (x) the Class Certificate Balance of the Class BV-3
Certificates (after taking into account the payment of the Class BV-3 Principal
Distribution Amount on that Distribution Date) and (xi) the Class Certificate
Balance of the Class BV-4 Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) 97.60% and (B) the Group II
Principal Balance as of the last day of the related Due Period and (ii) the
Group II Principal Balance as of the last day of the related Due Period minus
the product of (A) 0.50% and (B) the Cut-off Date Group II Principal Balance.
Class BV-4 Realized Loss Amortization Amount
As to the Class BV-4 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
BV-4 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (35) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (62) of Section
4.02(f) for that Distribution Date.
Class Certificate Balance
With respect to any Class of Offered Certificates and as to
any Distribution Date, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date. The Class Certificate Balance of the
Class R Certificates shall be zero.
Class Interest Shortfall
As to any Distribution Date and any Class of Offered
Certificates, the amount by which the amount described in the definition of
Interest Distribution Amount for such Class exceeds the amount of interest
actually distributed on such Class on such Distribution Date.
Class MF Certificates
The Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class MF-5
and Class MF-6 Certificates.
Class MF-1 Applied Realized Loss Amount
As to the Class MF-1 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class MF-1 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MF-2 Applied Realized Loss Amount, the Class MF-3 Applied
Realized Loss Amount, the Class MF-4 Applied Realized Loss Amount, the Class
MF-5 Applied Realized Loss Amount, the Class MF-6 Applied Realized Loss Amount,
the Class BF-1 Applied Realized Loss Amount, the Class BF-2 Applied Realized
Loss Amount and the Class BF-3 Applied Realized Loss Amount, in each case as of
that Distribution Date.
18
Class MF-1 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MF-1 Certificate.
Class MF-1 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date) and (ii) the Class
Certificate Balance of the Class MF-1 Certificates immediately prior to that
Distribution Date over (b) the lesser of (i) the product of (A) 67.20% and (B)
the Group I Principal Balance as of the last day of the related Due Period and
(ii) the Group I Principal Balance as of the last day of the related Due Period
minus the product of (A) 0.50% and (B) the Cut-off Date Group I Principal
Balance.
Class MF-1 Realized Loss Amortization Amount
As to the Class MF-1 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
MF-1 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (8) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (38) of Section
4.02(g) for that Distribution Date.
Class MF-2 Applied Realized Loss Amount
As to the Class MF-2 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class MF-2 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MF-3 Applied Realized Loss Amount, the Class MF-4 Applied
Realized Loss Amount, the Class MF-5 Applied Realized Loss Amount, the Class
MF-6 Applied Realized Loss Amount, the Class BF-1 Applied Realized Loss Amount,
the Class BF-2 Applied Realized Loss Amount and the Class BF-3 Applied Realized
Loss Amount, in each case as of that Distribution Date.
Class MF-2 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MF-2 Certificate.
Class MF-2 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date) and (iii) the Class Certificate Balance of the Class MF-2 Certificates
immediately prior to that Distribution Date over (b) the lesser of (i) the
product of (A) 77.50% and (B) the Group I Principal Balance as of the last day
of the related Due Period and (ii) the Group I Principal Balance as of the last
day of the related Due Period minus the product of (A) 0.50% and (B) the Cut-off
Date Group I Principal Balance.
19
Class MF-2 Realized Loss Amortization Amount
As to the Class MF-2 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
MF-2 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (11) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (41) of Section
4.02(g) for that Distribution Date.
Class MF-3 Applied Realized Loss Amount
As to the Class MF-3 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class MF-3 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MF-4 Applied Realized Loss Amount, the Class MF-5 Applied
Realized Loss Amount, the Class MF-6 Applied Realized Loss Amount, the Class
BF-1 Applied Realized Loss Amount, the Class BF-2 Applied Realized Loss Amount
and the Class BF-3 Applied Realized Loss Amount, in each case as of that
Distribution Date.
Class MF-3 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MF-3 Certificate.
Class MF-3 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date) and (iv) the Class Certificate Balance of the Class
MF-3 Certificates immediately prior to that Distribution Date over (b) the
lesser of (i) the product of (A) 80.10% and (B) the Group I Principal Balance as
of the last day of the related Due Period and (ii) the Group I Principal Balance
as of the last day of the related Due Period minus the product of (A) 0.50% and
(B) the Cut-off Date Group I Principal Balance.
Class MF-3 Realized Loss Amortization Amount
As to the Class MF-3 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
MF-3 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (14) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (44) of Section
4.02(g) for that Distribution Date.
20
Class MF-4 Applied Realized Loss Amount
As to the Class MF-4 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class MF-4 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MF-5 Applied Realized Loss Amount, the Class MF-6 Applied
Realized Loss Amount, the Class BF-1 Applied Realized Loss Amount, the Class
BF-2 Applied Realized Loss Amount and the Class BF-3 Applied Realized Loss
Amount, in each case as of that Distribution Date.
Class MF-4 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MF-4 Certificate.
Class MF-4 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MF-3
Certificates (after taking into account the payment of the Class MF-3 Principal
Distribution Amount on that Distribution Date) and (v) the Class Certificate
Balance of the Class MF-4 Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) 83.00% and (B) the Group I
Principal Balance as of the last day of the related Due Period and (ii) the
Group I Principal Balance as of the last day of the related Due Period minus the
product of (A) 0.50% and (B) the Cut-off Date Group I Principal Balance.
Class MF-4 Realized Loss Amortization Amount
As to the Class MF-4 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
MF-4 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (17) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (47) of Section
4.02(g) for that Distribution Date.
Class MF-5 Applied Realized Loss Amount
As to the Class MF-5 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class MF-5 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MF-6 Applied Realized Loss Amount, the Class BF-1 Applied
Realized Loss Amount, the Class BF-2 Applied Realized Loss Amount and the Class
BF-3 Applied Realized Loss Amount, in each case as of that Distribution Date.
Class MF-5 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MF-5 Certificate.
21
Class MF-5 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MF-3
Certificates (after taking into account the payment of the Class MF-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MF-4 Certificates (after taking into account the payment of
the Class MF-4 Principal Distribution Amount on that Distribution Date) and (vi)
the Class Certificate Balance of the Class MF-5 Certificates immediately prior
to that Distribution Date over (b) the lesser of (i) the product of (A) 84.80%
and (B) the Group I Principal Balance as of the last day of the related Due
Period and (ii) the Group I Principal Balance as of the last day of the related
Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Group I
Principal Balance.
Class MF-5 Realized Loss Amortization Amount
As to the Class MF-5 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
MF-5 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (20) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (50) of Section
4.02(g) for that Distribution Date.
Class MF-6 Applied Realized Loss Amount
As to the Class MF-6 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group I Certificates on that
Distribution Date, but prior to the application of the Class MF-6 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group I Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class BF-1 Applied Realized Loss Amount, the Class BF-2 Applied
Realized Loss Amount and the Class BF-3 Applied Realized Loss Amount, in each
case as of that Distribution Date.
Class MF-6 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MF-6 Certificate.
Class MF-6 Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AF
Certificates (after taking into account the payment of the Group I Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MF-1 Certificates (after taking into account
the payment of the Class MF-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account the payment of the Class MF-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MF-3
Certificates (after taking into account the payment of the Class MF-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MF-4 Certificates (after taking into account the payment of
the Class MF-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MF-5 Certificates (after taking into
account the payment of the Class MF-5 Principal Distribution Amount on that
Distribution Date) and (vii) the Class Certificate Balance of the Class MF-6
Certificates immediately prior to that Distribution Date over (b) the lesser of
(i) the product of (A) 86.80% and (B) the Group I Principal Balance as of the
last day of the related Due Period and (ii) the Group I Principal Balance as of
the last day of the related Due Period minus the product of (A) 0.50% and (B)
the Cut-off Date Group I Principal Balance.
22
Class MF-6 Realized Loss Amortization Amount
As to the Class MF-6 Certificates and as of any Distribution
Date, the lesser of (a) the Group I Unpaid Realized Loss Amount for the Class
MF-6 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group I Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (23) of Section 4.02(f) for that Distribution
Date and (ii) the excess of (A) the Group II Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (53) of Section
4.02(g) for that Distribution Date.
Class MV Certificates
The Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5
and Class MV-6 Certificates.
Class MV-1 Applied Realized Loss Amount
As to the Class MV-1 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class MV-1 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MV-2 Applied Realized Loss Amount, the Class MV-3 Applied
Realized Loss Amount, the Class MV-4 Applied Realized Loss Amount, the Class
MV-5 Applied Realized Loss Amount, the Class MV-6 Applied Realized Loss Amount,
the Class BV-1 Applied Realized Loss Amount, the Class BV-2 Applied Realized
Loss Amount, the Class BV-3 Applied Realized Loss Amount and the Class BV-4
Applied Realized Loss Amount, in each case as of that Distribution Date.
Class MV-1 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MV-1 Certificate.
Class MV-1 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date) and (ii) the Class
Certificate Balance of the Class MV-1 Certificates immediately prior to that
Distribution Date over (b) the lesser of (i) the product of (A) 60.10% and (B)
the Group II Principal Balance as of the last day of the related Due Period and
(ii) the Group II Principal Balance as of the last day of the related Due Period
minus the product of (A) 0.50% and (B) the Cut-off Date Group II Principal
Balance.
Class MV-1 Realized Loss Amortization Amount
As to the Class MV-1 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
MV-1 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (8) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (35) of Section
4.02(f) for that Distribution Date.
23
Class MV-2 Applied Realized Loss Amount
As to the Class MV-2 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class MV-2 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MV-3 Applied Realized Loss Amount, the Class MV-4 Applied
Realized Loss Amount, the Class MV-5 Applied Realized Loss Amount, the Class
MV-6 Applied Realized Loss Amount, the Class BV-1 Applied Realized Loss Amount,
the Class BV-2 Applied Realized Loss Amount, the Class BV-3 Applied Realized
Loss Amount and the Class BV-4 Applied Realized Loss Amount, in each case as of
that Distribution Date.
Class MV-2 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MV-2 Certificate.
Class MV-2 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date) and (iii) the Class Certificate Balance of the Class MV-2 Certificates
immediately prior to that Distribution Date over (b) the lesser of (i) the
product of (A) 73.40% and (B) the Group II Principal Balance as of the last day
of the related Due Period and (ii) the Group II Principal Balance as of the last
day of the related Due Period minus the product of (A) 0.50% and (B) the Cut-off
Date Group II Principal Balance.
Class MV-2 Realized Loss Amortization Amount
As to the Class MV-2 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
MV-2 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (11) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (38) of Section
4.02(f) for that Distribution Date.
Class MV-3 Applied Realized Loss Amount
As to the Class MV-3 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class MV-3 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MV-4 Applied Realized Loss Amount, the Class MV-5 Applied
Realized Loss Amount, the Class MV-6 Applied Realized Loss Amount, the Class
BV-1 Applied Realized Loss Amount, the Class BV-2 Applied Realized Loss Amount,
the Class BV-3 Applied Realized Loss Amount and the Class BV-4 Applied Realized
Loss Amount, in each case as of that Distribution Date.
Class MV-3 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MV-3 Certificate.
24
Class MV-3 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date) and (iv) the Class Certificate Balance of the Class
MV-3 Certificates immediately prior to that Distribution Date over (b) the
lesser of (i) the product of (A) 76.80% and (B) the Group II Principal Balance
as of the last day of the related Due Period and (ii) the Group II Principal
Balance as of the last day of the related Due Period minus the product of (A)
0.50% and (B) the Cut-off Date Group II Principal Balance.
Class MV-3 Realized Loss Amortization Amount
As to the Class MV-3 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
MV-3 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (14) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (41) of Section
4.02(f) for that Distribution Date.
Class MV-4 Applied Realized Loss Amount
As to the Class MV-4 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class MV-4 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MV-5 Applied Realized Loss Amount, the Class MV-6 Applied
Realized Loss Amount, the Class BV-1 Applied Realized Loss Amount, the Class
BV-2 Applied Realized Loss Amount, the Class BV-3 Applied Realized Loss Amount
and the Class BV-4 Applied Realized Loss Amount, in each case as of that
Distribution Date.
Class MV-4 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MV-4 Certificate.
Class MV-4 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date) and (v) the Class Certificate
Balance of the Class MV-4 Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) 80.50% and (B) the Group II
Principal Balance as of the last day of the related Due Period and (ii) the
Group II Principal Balance as of the last day of the related Due Period minus
the product of (A) 0.50% and (B) the Cut-off Date Group II Principal Balance.
25
Class MV-4 Realized Loss Amortization Amount
As to the Class MV-4 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
MV-4 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (17) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (44) of Section
4.02(f) for that Distribution Date.
Class MV-5 Applied Realized Loss Amount
As to the Class MV-5 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class MV-5 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class MV-6 Applied Realized Loss Amount, the Class BV-1 Applied
Realized Loss Amount, the Class BV-2 Applied Realized Loss Amount, the Class
BV-3 Applied Realized Loss Amount and the Class BV-4 Applied Realized Loss
Amount, in each case as of that Distribution Date.
Class MV-5 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MV-5 Certificate.
Class MV-5 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MV-4 Certificates (after taking into account the payment of
the Class MV-4 Principal Distribution Amount on that Distribution Date) and (vi)
the Class Certificate Balance of the Class MV-5 Certificates immediately prior
to that Distribution Date over (b) the lesser of (i) the product of (A) 83.10%
and (B) the Group II Principal Balance as of the last day of the related Due
Period and (ii) the Group II Principal Balance as of the last day of the related
Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Group II
Principal Balance.
Class MV-5 Realized Loss Amortization Amount
As to the Class MV-5 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
MV-5 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (20) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (47) of Section
4.02(f) for that Distribution Date.
26
Class MV-6 Applied Realized Loss Amount
As to the Class MV-6 Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account all distributions of principal on the Group II Certificates on that
Distribution Date, but prior to the application of the Class MV-6 Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Group II Realized Loss Amount as of that Distribution Date over (ii) the
sum of the Class BV-1 Applied Realized Loss Amount, the Class BV-2 Applied
Realized Loss Amount, the Class BV-3 Applied Realized Loss Amount and the Class
BV-4 Applied Realized Loss Amount, in each case as of that Distribution Date.
Class MV-6 Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class MV-6 Certificate.
Class MV-6 Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the excess of (a)
the sum of (i) the sum of the Class Certificate Balances of the Class AV
Certificates (after taking into account the payment of the Group II Senior
Principal Distribution Amount on that Distribution Date), (ii) the Class
Certificate Balance of the Class MV-1 Certificates (after taking into account
the payment of the Class MV-1 Principal Distribution Amount on that Distribution
Date), (iii) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account the payment of the Class MV-2 Principal Distribution Amount
on that Distribution Date), (iv) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account the payment of the Class MV-3 Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class MV-4 Certificates (after taking into account the payment of
the Class MV-4 Principal Distribution Amount on that Distribution Date), (vi)
the Class Certificate Balance of the Class MV-5 Certificates (after taking into
account the payment of the Class MV-5 Principal Distribution Amount on that
Distribution Date) and (vii) the Class Certificate Balance of the Class MV-6
Certificates immediately prior to that Distribution Date over (b) the lesser of
(i) the product of (A) 85.80% and (B) the Group II Principal Balance as of the
last day of the related Due Period and (ii) the Group II Principal Balance as of
the last day of the related Due Period minus the product of (A) 0.50% and (B)
the Cut-off Date Group II Principal Balance.
Class MV-6 Realized Loss Amortization Amount
As to the Class MV-6 Certificates and as of any Distribution
Date, the lesser of (a) the Group II Unpaid Realized Loss Amount for the Class
MV-6 Certificates as of that Distribution Date and (b) the sum of (i) excess of
(A) the Group II Monthly Excess Cashflow Amount over (B) the sum of the amounts
described in clauses (1) through (23) of Section 4.02(g) for that Distribution
Date and (ii) the excess of (A) the Group I Monthly Excess Cashflow Amount over
(B) the sum of the amounts described in clauses (1) through (50) of Section
4.02(f) for that Distribution Date.
Class R Certificates
The certificates representing the single "residual interest"
in each of REMIC 1 and REMIC 2, substantially in the form attached hereto as
Exhibit B-1.
Class Unpaid Interest Amounts
As to any Distribution Date and any Class of Offered
Certificates, the amount by which the aggregate Class Interest Shortfalls for
such Class on prior Distribution Dates exceeds the amount of Class Unpaid
Interest Amounts distributed on such Class on prior Distribution Dates plus
interest on such amount at the related Pass-Through Rate.
Class X Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit B-2 and designated as a
Class X Certificate.
27
Closing Date
October 21, 2005.
Closing Place
The offices of Stradley, Ronon, Xxxxxxx & Xxxxx, LLP, 0000 Xxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
Code
The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral
The assets constituting the Loans, Mortgage Files and the
Trust Fund, and any and all contractual, legal, equitable or other rights in
connection therewith, and all proceeds thereof (but not including payments of
interest and principal due and payable with respect to the Loans on or before
the Cut-off Date).
Collateral Value
With respect to any Loan, other than Refinance Loans, an
amount equal to the lesser of (a) the appraised value of the related Mortgaged
Property based on an appraisal obtained by the originator from an independent
fee appraiser at the time of the origination of such Loan, and (b) if the Loan
was originated either in connection with the acquisition of the Mortgaged
Property by the borrower or within one year after acquisition of the Mortgaged
Property by the borrower, the purchase price paid by such borrower for the
Mortgaged Property. In the case of Refinance Loans, the Collateral Value is the
appraised value of the Mortgaged Property based upon the appraisal obtained at
the time of refinancing.
Combined Loan-to-Value Ratio
With respect to any Loan and as to any date of determination,
the fraction, expressed as a percentage, the numerator of which is the principal
balance of such Loan at the date of origination plus, in the case of a Second
Lien Loan, the outstanding principal balance of the related first lien mortgage
loan on the date of origination of such Second Lien Loan, and the denominator of
which is the Collateral Value of the related Mortgaged Property.
Corporate Trust Office
The designated office of the Trustee in the State of New York
at which (a) its corporate trust business shall be administered is located at
JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004,
Attention: Worldwide Securities Services/Global Debt, Popular ABS 2005-5 and (b)
Certificates may be presented for transfer and exchange and for purposes of
presentment and surrender for the final distributions thereon is located at 0000
Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxxx 00000 Attention: Structured Finance
Transfer Department Popular ABS 2005-5, or such other address as the Trustee
shall notify the Depositor, the Servicer, the Sellers and the
Certificateholders.
Corresponding Class
As defined in the Preliminary Statement.
Counterparty
The Bank of New York.
Custodial Agreement
As defined in Section 8.13.
28
Custodian
As defined in Section 8.13.
Cut-off Date
October 1, 2005.
Cut-off Date Group I Principal Balance
The aggregate of the Cut-off Date Principal Balances of the
Group I Loans ($370,876,589.63).
Cut-off Date Group II Principal Balance
The aggregate of the Cut-off Date Principal Balances of the
Group II Loans ($446,193,722.29).
Cut-off Date Group II-A Principal Balance
The aggregate of the Cut-off Date Principal Balances of the
Group II-A Loans ($216,375,699.63).
Cut-off Date Group II-B Principal Balance
The aggregate of the Cut-off Date Principal Balances of the
Group II-B Loans ($229,818,022.66).
Cut-off Date Pool Principal Balance
The sum of the Cut-off Date Group I Principal Balance and the
Cut-off Date Group II Principal Balance ($817,070,311.92).
Cut-off Date Principal Balance
As to any Loan, the Stated Principal Balance thereof as of the
close of business on September 30, 2005 giving effect to scheduled payments of
principal and interest due on October 1, 2005, whether or not those scheduled
payments have been made.
Defective Loan
Any Loan which is required to be repurchased pursuant to
Section 2.02 or 2.03.
Deficient Valuation
With respect to any 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 Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code.
Definitive Certificates
Any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Loan
As defined in Section 2.03(c).
Denomination
With respect to each Offered Certificate, Class X Certificate
or Class R Certificate, the amount set forth on the face thereof as the "Initial
Certificate Balance of this Certificate" or the "Percentage Interest."
29
Depositor
Popular ABS, Inc., a Delaware corporation, or its successor
in interest.
Depository
The initial Depository shall be The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
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
As to any Distribution Date, the 21st day of each month or, if
such day is not a Business Day, the next preceding Business Day; provided,
however, that the Determination Date in each month will be at least two Business
Days preceding the related Distribution Date.
Distribution Account
The separate Eligible Account created and maintained by the
Trustee pursuant to Section 3.05 in the name of the Trustee for the benefit of
the Certificateholders and designated "Distribution Account, JPMorgan Chase
Bank, N.A., as trustee for the registered holders of Popular ABS, Inc. Mortgage
Pass-Through Certificates, Series 2005-5." Funds in the Distribution Account
shall be held uninvested in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date
As to any Distribution Date, 9:00 a.m. New York City time on
the Business Day immediately preceding such Distribution Date.
Distribution Date
The 25th day of each calendar month after the initial issuance
of the Certificates, or if such day is not a Business Day, the next succeeding
Business Day, commencing on November 25, 2005.
Due Date
With respect to any Loan, the date on which scheduled payments
of interest and/or principal are due thereon, which date is a set day, but not
necessarily the first day, of each month.
Due Period
With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which that
Distribution Date occurs and ending at the close of business on the first day of
the month in which that Distribution Date occurs.
30
Eligible Account
Any of (a) an account or accounts maintained with a federal or
state chartered depository institution or trust company, the short-term
unsecured debt obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding company, the debt
obligations of such holding company) have the highest short-term ratings of each
Rating Agency at the time any amounts are held on deposit therein, or (b) an
account or accounts in a depository institution or trust company in which such
accounts are insured by the FDIC (to the limits established by the FDIC) and the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating
Agency, the Certificateholders have a claim with respect to the funds in such
account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution or trust company in which such account is maintained, or (c) a trust
account or accounts maintained with (i) the trust department of a federal or
state chartered depository institution or (ii) a trust company, acting in its
fiduciary capacity or (d) any other account acceptable to each Rating Agency, as
evidenced by a letter from such Rating Agency to the Trustee, without reduction
or withdrawal of the then current ratings of the Certificates. Eligible Accounts
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
Equity One-Delaware
Equity One, Inc., a Delaware corporation.
ERISA
The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Qualifying Underwriting
A best efforts or firm commitment underwriting or private
placement that meets the requirements (without regard to the ratings requirement
or other requirements that the securities or the investor must satisfy) of the
Underwriter Exemption, or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate
Any of the Class BF Certificates, Class BV Certificates, Class
X Certificates or Class R Certificates; any Certificate of a Class that ceases
to satisfy the applicable rating requirements of the Underwriter Exemption.
Escrow Account
The Eligible Account or Eligible Accounts established and
maintained by the Servicer pursuant to Section 3.06(a).
Event of Default
As defined in Section 7.01.
Excess Proceeds
With respect to any Liquidated Loan, the amount, if any, by
which the sum of any Liquidation Proceeds of such Loan received in the calendar
month in which such Loan became a Liquidated Loan, net of any amounts previously
reimbursed to the Servicer as Nonrecoverable Advance(s) with respect to such
Loan pursuant to Section 3.08(a)(iii), exceeds (a) the unpaid principal balance
of such Liquidated Loan as of the Due Date in the calendar month in which such
Loan became a Liquidated Loan plus (b) accrued interest at the Mortgage Rate
from the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Certificateholders up to the Due Date in the calendar month in
which such Loan became a Liquidated Loan.
Expense Rate
As to each Loan, the sum of (a) the Servicing Fee Rate and (b)
the Trustee Fee Rate.
31
FDIC
The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC
The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA
The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fixed Rate Certificates
The Class AF Certificates and the Class MF Certificates.
FNMA
Xxxxxx Xxx, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
Group
Either the Group I Loans, the Group II Loans, the Group II-A
Loans or the Group II-B Loans, as the case may be.
Group Principal Balance
With respect to any Distribution Date and any Group, the
aggregate of the Stated Principal Balances of the Loans in such Group that were
Outstanding Loans (including Loans in foreclosure and REO Properties) on their
Due Dates in the related Due Period.
Group I Applied Realized Loss Amount
With respect to (a) the Class MF-1 Certificates, the Class
MF-1 Applied Realized Loss Amount, (b) the Class MF-2 Certificates, the Class
MF-2 Applied Realized Loss Amount, (c) the Class MF-3 Certificates, the Class
MF-3 Applied Realized Loss Amount, (d) the Class MF-4 Certificates, the Class
MF-4 Applied Realized Loss Amount, (e) the Class MF-5 Certificates, the Class
MF-5 Applied Realized Loss Amount, (f) the Class MF-6 Certificates, the Class
MF-6 Applied Realized Loss Amount (g) the Class BF-1 Certificates, the Class
BF-1 Applied Realized Loss Amount, (h) the Class BF-2 Certificates, the Class
BF-2 Applied Realized Loss Amount and (i) the Class BF-3 Certificates, the Class
BF-3 Applied Realized Loss Amount.
Group I Basic Principal Distribution Amount
With respect to any Distribution Date and the Group I Loans,
the amount by which (a) the Principal Remittance Amount for the Group I Loans
for that Distribution Date exceeds (b) the Group I Overcollateralization Release
Amount, if any, for that Distribution Date.
Group I Certificates
The Class AF Certificates, the Class MF Certificates and the
Class BF Certificates.
Group I Extra Principal Distribution Amount
As of any Distribution Date, the lesser of (a) the Group I
Monthly Excess Cashflow Amount remaining after giving effect to the
distributions pursuant to clauses (1) and (2) of Section 4.02(f) for that
Distribution Date and (b) the Group I Overcollateralization Deficiency for that
Distribution Date.
32
Group I Interest Remittance Amount
With respect to any Determination Date, the sum, without
duplication, of (a) all interest collected or advanced on the Group I Loans
during the related Due Period and (b) the portion of any Substitution Adjustment
Amount, Termination Price, Purchase Price, or Liquidation Proceeds, relating to
interest with respect to the Group I Loans and received during the related
Prepayment Period.
Group I Loans
The mortgage loans identified as such on the Loan Schedule as
of the Closing Date.
Group I Monthly Excess Cashflow Amount
The sum of the Group I Monthly Excess Interest Amount, the
Group I Overcollateralization Release Amount and the Group I Remaining Principal
Distribution Amount.
Group I Monthly Excess Interest Amount
As to any Distribution Date, an amount equal to any Group I
Remaining Interest Remittance Amount remaining after the distributions set forth
in clauses (iv)(A) through (iv)(I) of Section 4.02(a).
Group I Overcollateralization Amount
As of any Distribution Date, (a) the Group I Principal Balance
as of the last day of the immediately preceding Due Period minus (b) the
aggregate Class Certificate Balance of all Classes of Group I Certificates
(after taking into account all distributions of principal on that Distribution
Date).
Group I Overcollateralization Deficiency
As of any Distribution Date, the excess, if any, of (a) the
Group I Targeted Overcollateralization Amount for that Distribution Date over
(b) the Group I Overcollateralization Amount for that Distribution Date,
calculated for this purpose after taking into account the reduction on that
Distribution Date of the Class Certificate Balances of all Classes of Group I
Certificates resulting from the distribution of the Group I Basic Principal
Distribution Amount on that Distribution Date, but prior to taking into account
any Group I Applied Realized Loss Amounts on that Distribution Date.
Group I Overcollateralization Release Amount
With respect to any Distribution Date on or after the Group I
Stepdown Date on which a Group I Trigger Event is not in effect, the lesser of
(a) the Principal Remittance Amount for the Group I Loans for that Distribution
Date and (b) the excess, if any, of (i) the Group I Overcollateralization Amount
for that Distribution Date, assuming that 100% of the Principal Remittance
Amount for the Group I Loans is applied as a principal payment on the Group I
Certificates on that Distribution Date, over (ii) the Group I Targeted
Overcollateralization Amount for that Distribution Date. With respect to any
Distribution Date before the Group I Stepdown Date or on which a Group I Trigger
Event is in effect, the Group I Overcollateralization Release Amount will be
zero.
Group I Principal Balance
With respect to any Distribution Date and the Group I Loans,
the aggregate of the Stated Principal Balances of the Group I Loans that were
Outstanding Loans (including Group I Loans in foreclosure and REO Properties) on
their Due Dates in the related Due Period.
Group I Principal Distribution Amount
With respect to any Distribution Date and the Group I Loans,
the sum of (a) the Group I Basic Principal Distribution Amount for that
Distribution Date and (b) the Group I Extra Principal Distribution Amount for
that Distribution Date.
33
Group I Realized Loss Amortization Amount
With respect to (a) the Class MF-1 Certificates, the Class
MF-1 Realized Loss Amortization Amount, (b) the Class MF-2 Certificates, the
Class MF-2 Realized Loss Amortization Amount, (c) the Class MF-3 Certificates,
the Class MF-3 Realized Loss Amortization Amount, (d) the Class MF-4
Certificates, the Class MF-4 Realized Loss Amortization Amount, (e) the Class
MF-5 Certificates, the Class MF-5 Realized Loss Amortization Amount, (f) the
Class MF-6 Certificates, the Class MF-6 Realized Loss Amortization Amount, (g)
the Class BF-1 Certificates, the Class BF-1 Realized Loss Amortization Amount,
(h) the Class BF-2 Certificates, the Class BF-2 Realized Loss Amortization
Amount and (i) the Class BF-3 Certificates, the Class BF-3 Realized Loss
Amortization Amount.
Group I Realized Loss Amount
With respect to each Distribution Date, the excess, if any, of
(a) the aggregate of the Class Certificate Balances of the Group I Certificates
(after giving effect to all distributions on such Distribution Date) over (b)
the Group I Principal Balance at the end of the related Due Period.
Group I Recovery
With respect to any Distribution Date and Group I Loan that
became a Liquidated Loan in a month preceding the month prior to the
Distribution Date, an amount received in respect of principal on such Group I
Loan which has previously been allocated as a Realized Loss to a Class or
Classes of Group I Certificates, net of reimbursable expenses.
Group I Remaining Interest Remittance Amount
With respect to any Distribution Date, an amount equal to the
Group I Interest Remittance Amount remaining after giving effect to the
distributions set forth in clause (i) of Section 4.02(a).
Group I Remaining Principal Distribution Amount
With respect to any Distribution Date, the sum of (a) the
Pre-Stepdown Group I Remaining Principal Distribution Amount remaining after the
distributions set forth in clauses (ii)(A) through (ii)(I) of Section 4.02(b)
and (b) the Post-Stepdown Group I Remaining Principal Distribution Amount
remaining after the distributions set forth in clauses (ii)(A) through (ii)(I)
of Section 4.02(d), each for that Distribution Date.
Group I Senior Enhancement Percentage
With respect to any Distribution Date, the percentage obtained
by dividing (a) the sum of (i) the aggregate Class Certificate Balance of the
Group I Subordinate Certificates and (ii) the Group I Overcollateralization
Amount, in each case before taking into account the distribution of the Group I
Principal Distribution Amount on that Distribution Date by (b) the Group I
Principal Balance as of the last day of the related Due Period.
Group I Senior Principal Distribution Amount
As of any Distribution Date on or after the Group I Stepdown
Date and as long as a Group I Trigger Event is not in effect, the lesser of (i)
the Group I Principal Distribution Amount for that Distribution Date and (ii)
the excess, if any, of (A) the sum of the Class Certificate Balances of the
Class AF Certificates immediately prior to that Distribution Date over (B) the
lesser of (1) the product of (x) 54.20% and (y) the Group I Principal Balance as
of the last day of the related Due Period and (2) the Group I Principal Balance
as of the last day of the related Due Period minus the product of (x) 0.50% and
(y) the Cut-off Date Group I Principal Balance.
34
Group I Senior Specified Enhancement
Percentage As of any date of determination thereof, 45.80%.
Group I Stepdown Date
The earlier of (a) the Distribution Date on which the Class
Certificate Balances of the Class AF Certificates have been reduced to zero or
(b) the later to occur of (i) the Distribution Date in November 2008 (the 37th
Distribution Date) or (ii) the first Distribution Date on which the Group I
Senior Enhancement Percentage is greater than or equal to the Group I Senior
Specified Enhancement Percentage.
Group I Subordinate Certificates
The Class MF Certificates and the Class BF Certificates.
Group I Targeted Overcollateralization Amount
As of any Distribution Date, (a) prior to the Group I Stepdown
Date, the sum of (i) 1.80% of the Cut-off Date Group I Principal Balance and
(ii) the Aggregate Class BF Early Distribution Amount, and (b) on and after the
Group I Stepdown Date, the lesser of (i) the sum of (A) 1.80% of the Cut-off
Date Group I Principal Balance and (B) the Aggregate Class BF Early Distribution
Amount and (ii) the greater of (A) the excess of (I) 13.20% of the Group I
Principal Balance as of the last day of the related Due Period over (II) the
excess of (x) the sum of the Class Certificate Balances of the Class BF-1, Class
BF-2 and Class BF-3 Certificates as of the Closing Date over (y) the aggregate
of distributions made in respect of principal to the Class BF-1, Class BF-2 and
Class BF-3 Certificates on all prior Distribution Dates and (B) 0.50% of the
Cut-off Date Group I Principal Balance. With respect to any Distribution Date on
which a Group I Trigger Event is in effect, the Group I Targeted
Overcollateralization Amount will be equal to the Group I Targeted
Overcollateralization Amount for the immediately preceding Distribution Date
(after taking into account any distributions of the Aggregate Class BF Early
Distribution Amount on the immediately preceding Distribution Date).
Group I Trigger Event
With respect to any Distribution Date, if (a) the six-month
rolling average of 60+ Day Delinquent Loans equals or exceeds 35.00% of the
Group I Senior Enhancement Percentage or (b) the aggregate amount of Realized
Losses on the Group I Loans incurred since the Cut-off Date through the last day
of the calendar month immediately preceding that Distribution Date divided by
the Cut-off Date Group I Principal Balance exceeds the applicable percentages
set forth below with respect to that Distribution Date:
---------------------------------------------------------------------------------------------------------------------
Distribution Date Occurring In Percentage
---------------------------------------------------------------------------------------------------------------------
November 2007 -- October 2008 1.00% for the first month plus an additional 1/12th of 1.30%
for each month thereafter
---------------------------------------------------------------------------------------------------------------------
November 2008 -- October 2009 2.30% for the first month plus an additional 1/12th of 0.95%
for each month thereafter
---------------------------------------------------------------------------------------------------------------------
35
---------------------------------------------------------------------------------------------------------------------
Distribution Date Occurring In Percentage
---------------------------------------------------------------------------------------------------------------------
November 2009 -- October 2010 3.25% (or 3.90% if the Class Certificate Balances of the Class
BF-1, Class BF-2 and Class BF-3 Certificates have been reduced
to zero and no part of that reduction was due to the
application of Group I Realized Loss Amounts) for the first
month plus an additional 1/12th of 0.50% (or 1/12th of 1.30% if
the Class Certificate Balances of the Class BF-1, Class BF-2
and Class BF-3 Certificates have been reduced to zero and no
part of that reduction was due to the application of Group I
Realized Loss Amounts) for each month thereafter
---------------------------------------------------------------------------------------------------------------------
November 2010 -- October 2011 3.75% (or 5.20% if the Class Certificate Balances of the Class
BF-1, Class BF-2 and Class BF-3 Certificates have been reduced
to zero and no part of that reduction was due to the
application of Group I Realized Loss Amounts) for the first
month plus an additional 1/12th of 0.15% (or 1/12th of 0.95% if
the Class Certificate Balances of the Class BF-1, Class BF-2
and Class BF-3 Certificates have been reduced to zero and no
part of that reduction was due to the application of Group I
Realized Loss Amounts) for each month thereafter
---------------------------------------------------------------------------------------------------------------------
November 2011 and thereafter 3.90% (or 6.15% if the Class Certificate Balances of the Class
BF-1, Class BF-2 and Class BF-3 Certificates have been reduced
to zero and no part of that reduction was due to the
application of Group I Realized Loss Amounts)
---------------------------------------------------------------------------------------------------------------------
Group I Unpaid Realized Loss Amount
For any Class of Group I Subordinate Certificates and as to
any Distribution Date, the excess of (a) the cumulative amount of Group I
Applied Realized Loss Amounts with respect to that Class for all prior
Distribution Dates over (b) the cumulative amount of Group I Realized Loss
Amortization Amounts with respect to that Class for all prior Distribution
Dates.
Group II Applied Realized Loss Amount
With respect to (a) the Class MV-1 Certificates, the Class
MV-1 Applied Realized Loss Amount, (b) the Class MV-2 Certificates, the Class
MV-2 Applied Realized Loss Amount, (c) the Class MV-3 Certificates, the Class
MV-3 Applied Realized Loss Amount, (d) the Class MV-4 Certificates, the Class
MV-4 Applied Realized Loss Amount, (e) the Class MV-5 Certificates, the Class
MV-5 Applied Realized Loss Amount, (f) the Class MV-6 Certificates, the Class
MV-6 Applied Realized Loss Amount (g) the Class BV-1 Certificates, the Class
BV-1 Applied Realized Loss Amount, (h) the Class BV-2 Certificates, the Class
BV-2 Applied Realized Loss Amount, (i) the Class BV-3 Certificates, the Class
BV-3 Applied Realized Loss Amount and (j) the Class BV-4 Certificates, the Class
BV-4 Applied Realized Loss Amount.
Group II Basic Principal Distribution Amount
With respect to any Distribution Date, the sum of (a) the
Group II-A Basic Principal Distribution Amount for that Distribution Date and
(b) the Group II-B Basic Principal Distribution Amount for that Distribution
Date.
Group II Certificates
The Class AV Certificates, the Class MV Certificates and the
Class BV Certificates.
36
Group II Extra Principal Distribution Amount
As of any Distribution Date, the lesser of (a) the Group II
Monthly Excess Cashflow Amount remaining after giving effect to the
distributions pursuant to clauses (1) and (2) of Section 4.02(g) for that
Distribution Date and (b) the Group II Overcollateralization Deficiency for that
Distribution Date.
Group II Loans
The Group II-A Loans and the Group II-B Loans.
Group II Monthly Excess Cashflow Amount
The sum of the Group II Monthly Excess Interest Amount, the
Group II Overcollateralization Release Amount and the Group II Remaining
Principal Distribution Amount.
Group II Monthly Excess Interest Amount
As to any Distribution Date, an amount equal to any Group II
Remaining Interest Remittance Amount remaining after the distributions set forth
in clauses (v)(A) through (v)(J) of Section 4.02(a).
Group II Overcollateralization Amount
As of any Distribution Date, (a) the Group II Principal
Balance as of the last day of the immediately preceding Due Period minus (b) the
aggregate Class Certificate Balance of all Classes of Group II Certificates
(after taking into account all distributions of principal on that Distribution
Date).
Group II Overcollateralization Deficiency
As of any Distribution Date, the excess, if any, of (a) the
Group II Targeted Overcollateralization Amount for that Distribution Date over
(b) the Group II Overcollateralization Amount for that Distribution Date,
calculated for this purpose after taking into account the reduction on that
Distribution Date of the Class Certificate Balances of all Classes of Group II
Certificates resulting from the distribution of the Group II Basic Principal
Distribution Amount on that Distribution Date, but prior to taking into account
any Group II Applied Realized Loss Amounts on that Distribution Date.
Group II Overcollateralization Release Amount
With respect to any Distribution Date on or after the Group II
Stepdown Date on which a Group II Trigger Event is not in effect, the lesser of
(a) the Principal Remittance Amount for the Group II Loans for that Distribution
Date and (b) the excess, if any, of (i) the Group II Overcollateralization
Amount for that Distribution Date, assuming that 100% of the Principal
Remittance Amount for the Group II Loans is applied as a principal payment on
the Group II Certificates on that Distribution Date, over (ii) the Group II
Targeted Overcollateralization Amount for that Distribution Date. With respect
to any Distribution Date before the Group II Stepdown Date or on which a Group
II Trigger Event is in effect, the Group II Overcollateralization Release Amount
will be zero.
Group II Principal Balance
With respect to any Distribution Date and the Group II Loans,
the aggregate of the Stated Principal Balances of the Group II Loans that were
Outstanding Loans (including Group II Loans in foreclosure and REO Properties)
on their Due Dates in the related Due Period.
Group II Principal Distribution Amount
With respect to any Distribution Date, the sum of (a) the
Group II-A Principal Distribution Amount for that Distribution Date and (b) the
Group II-B Principal Distribution Amount for that Distribution Date.
37
Group II Realized Loss Amortization Amount
With respect to (a) the Class MV-1 Certificates, the Class
MV-1 Realized Loss Amortization Amount, (b) the Class MV-2 Certificates, the
Class MV-2 Realized Loss Amortization Amount, (c) the Class MV-3 Certificates,
the Class MV-3 Realized Loss Amortization Amount, (d) the Class MV-4
Certificates, the Class MV-4 Realized Loss Amortization Amount, (e) the Class
MV-5 Certificates, the Class MV-5 Realized Loss Amortization Amount, (f) the
Class MV-6 Certificates, the Class MV-6 Realized Loss Amortization Amount, (g)
the Class BV-1 Certificates, the Class BV-1 Realized Loss Amortization Amount,
(h) the Class BV-2 Certificates, the Class BV-2 Realized Loss Amortization
Amount, (i) the Class BV-3 Certificates, the Class BV-3 Realized Loss
Amortization Amount and (j) the Class BV-4 Certificates, the Class BV-4 Realized
Loss Amortization Amount.
Group II Realized Loss Amount
With respect to each Distribution Date, the excess, if any, of
(a) the aggregate of the Class Certificate Balances of the Group II Certificates
(after giving effect to all distributions on such Distribution Date) over (b)
the Group II Principal Balance at the end of the related Due Period.
Group II Recovery
With respect to any Distribution Date and Group II Loan that
became a Liquidated Loan in a month preceding the month prior to the
Distribution Date, an amount received in respect of principal on such Group II
Loan which has previously been allocated as a Realized Loss to a Class or
Classes of Group II Certificates, net of reimbursable expenses.
Group II Remaining Interest Remittance Amount
With respect to any Distribution Date, an amount equal to the
sum of the Group II-A Interest Remittance Amount and the Group II-B Interest
Remittance Amount remaining after giving effect to the distributions set forth
in clauses (ii) and (iii) of Section 4.02(a).
Group II Remaining Principal Distribution Amount
With respect to any Distribution Date, the sum of (a) the
Pre-Stepdown Group II Remaining Principal Distribution Amount remaining after
the distributions set forth in clauses (iv)(A) through (iv)(J) of Section
4.02(c) and (b) the Post-Stepdown Group II Remaining Principal Distribution
Amount remaining after the distributions set forth in clauses (iv)(A) through
(iv)(J) of Section 4.02(e), each for that Distribution Date.
Group II Senior Enhancement Percentage
With respect to any Distribution Date, the percentage obtained
by dividing (a) the sum of (i) the aggregate Class Certificate Balance of the
Group II Subordinate Certificates and (ii) the Group II Overcollateralization
Amount, in each case before taking into account the distribution of the Group II
Principal Distribution Amount on that Distribution Date by (b) the Group II
Principal Balance as of the last day of the related Due Period.
Group II Senior Principal Distribution Amount
As of any Distribution Date on or after the Group II Stepdown
Date and as long as a Group II Trigger Event is not in effect, the lesser of (i)
the Group II Principal Distribution Amount for that Distribution Date and (ii)
the excess, if any, of (A) the sum of the Class Certificate Balances of the
Class AV Certificates immediately prior to that Distribution Date over (B) the
lesser of (1) the product of (x) 44.20% and (y) the Group II Principal Balance
as of the last day of the related Due Period and (2) the Group II Principal
Balance as of the last day of the related Due Period minus the product of (x)
0.50% and (y) the Cut-off Date Group II Principal Balance.
38
Group II Senior Specified Enhancement Percentage
As of any date of determination thereof, 55.80%.
Group II Stepdown Date
The earlier of (a) the Distribution Date on which the Class
Certificate Balances of the Class AV Certificates have been reduced to zero or
(b) the later to occur of (i) the Distribution Date in November 2008 (the 37th
Distribution Date) or (ii) the first Distribution Date on which the Group II
Senior Enhancement Percentage is greater than or equal to the Group II Senior
Specified Enhancement Percentage.
Group II Subordinate Certificates
The Class MV Certificates and the Class BV Certificates.
Group II Targeted Overcollateralization Amount
As of any Distribution Date, (a) prior to the Group II
Stepdown Date, the sum of (i) 1.20% of the Cut-off Date Group I Principal
Balance and (ii) the Aggregate Class BF Early Distribution Amount, and (b) on
and after the Group I Stepdown Date, the lesser of (i) the sum of (A) 1.20% of
the Cut-off Date Group I Principal Balance and (B) the Aggregate Class BF Early
Distribution Amount and (ii) the greater of (A) the excess of (I) 14.20% of the
Group I Principal Balance as of the last day of the related Due Period over (II)
the excess of (x) the sum of the Class Certificate Balances of the Class BF-1,
Class BF-2 and Class BF-3 Certificates as of the Closing Date over (y) the
aggregate of distributions made in respect of principal to the Class BF-1, Class
BF-2 and Class BF-3 Certificates on all prior Distribution Dates and (B) 0.50%
of the Cut-off Date Group I Principal Balance. With respect to any Distribution
Date on which a Group I Trigger Event is in effect, the Group I Targeted
Overcollateralization Amount will be equal to the Group I Targeted
Overcollateralization Amount for the immediately preceding Distribution Date
(after taking into account any distributions of the Aggregate Class BV Early
Distribution Amount on the immediately preceding Distribution Date).
Group II Trigger Event
With respect to any Distribution Date, if (a) the six-month
rolling average of 60+ Day Delinquent Loans equals or exceeds 29.00% of the
Group II Senior Enhancement Percentage or (b) the aggregate amount of Realized
Losses on the Group II Loans incurred since the Cut-off Date through the last
day of the calendar month immediately preceding that Distribution Date divided
by the Cut-off Date Group II Principal Balance exceeds the applicable
percentages set forth below with respect to that Distribution Date:
---------------------------------------------------------------------------------------------------------------------
Distribution Date Occurring In Percentage
---------------------------------------------------------------------------------------------------------------------
November 2007 -- October 2008 1.50% (or 1.85% if the Class Certificate Balances for the
Class BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates
have been reduced to zero and no part of that reduction was
due to the application of Realized Losses) for the first month
plus an additional 1/12th of 1.25% (or 1/12th of 1.90% if the
Class Certificate Balances for the Class BV-1, Class BV-2,
Class BV-3 and Class BV-4 Certificates have been reduced to
zero and no part of that reduction was due to the application
of Realized Losses) for each month thereafter
---------------------------------------------------------------------------------------------------------------------
November 2008 -- October 2009 2.75% (or 3.75% if the Class Certificate Balances of the Class
BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates have
been reduced to zero and no part of that reduction was due to
the application of Group II Realized Loss Amounts) for the
first month plus an additional 1/12th of 1.25% (or 1/12th of
1.75% if the Class Certificate Balances of the Class BV-1,
Class BV-2, Class BV-3 and Class BV-4 Certificates have been
reduced to zero and no part of that reduction was due to the
application of Group II Realized Loss Amounts) for each month
thereafter
---------------------------------------------------------------------------------------------------------------------
39
---------------------------------------------------------------------------------------------------------------------
Distribution Date Occurring In Percentage
---------------------------------------------------------------------------------------------------------------------
November 2009 -- October 2010 4.00% (or 5.50% if the Class Certificate Balances of the Class
BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates have
been reduced to zero and no part of that reduction was due to
the application of Group II Realized Loss Amounts) for the
first month plus an additional 1/12th of 1.00% (or 1/12th of
1.50% if the Class Certificate Balances of the Class BV-1,
Class BV-2, Class BV-3 and Class BV-4 Certificates have been
reduced to zero and no part of that reduction was due to the
application of Group II Realized Loss Amounts) for each month
thereafter
---------------------------------------------------------------------------------------------------------------------
November 2010 -- October 2011 5.00% (or 7.00% if the Class Certificate Balances of the Class
BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates have
been reduced to zero and no part of that reduction was due to
the application of Group II Realized Loss Amounts) for the
first month plus an additional 1/12th of 0.50% (or 1/12th of
0.75% if the Class Certificate Balances of the Class BV-1,
Class BV-2, Class BV-3 and Class BV-4 Certificates have been
reduced to zero and no part of that reduction was due to the
application of Group II Realized Loss Amounts) for each month
thereafter
---------------------------------------------------------------------------------------------------------------------
November 2011 and thereafter 5.50% (or 5.75% if the Class Certificate Balances of the Class
BV-1, Class BV-2, Class BV-3 and Class BV-4 Certificates have
been reduced to zero and no part of that reduction was due to
the application of Group II Realized Loss Amounts)
---------------------------------------------------------------------------------------------------------------------
Group II Unpaid Realized Loss Amount
For any Class of Group II Subordinate Certificates and as to
any Distribution Date, the excess of (a) the cumulative amount of Group II
Applied Realized Loss Amounts with respect to that Class for all prior
Distribution Dates over (b) the cumulative amount of Group II Realized Loss
Amortization Amounts with respect to that Class for all prior Distribution
Dates.
Group II-A Allocation Percentage
With respect to any Distribution Date and the Group II-A
Loans, the percentage equivalent of a fraction, the numerator of which is (a)
the Principal Remittance Amount for the Group II-A Loans for that Distribution
Date, and the denominator of which is (b) the aggregate Principal Remittance
Amount for the Group II Loans for that Distribution Date.
Group II-A Basic Principal Distribution Amount
With respect to any Distribution Date and the Group II-A
Loans, the amount by which (a) the Principal Remittance Amount for the Group
II-A Loans for that Distribution Date exceeds (b) the product of the Group II
Overcollateralization Release Amount, if any, for that Distribution Date and the
Group II-A Allocation Percentage for that Distribution Date.
Group II-A Interest Remittance Amount
With respect to any Determination Date, the sum, without
duplication, of (a) all interest collected or advanced on the Group II-A Loans
during the related Due Period and (b) the portion of any Substitution Adjustment
Amount, Termination Price, Purchase Price, or Liquidation Proceeds, relating to
interest with respect to the Group II-A Loans and received during the related
Prepayment Period.
40
Group II-A Loans
The mortgage loans identified as such on the Loan Schedule as
of the Closing Date.
Group II-A Principal Distribution Amount
With respect to any Distribution Date and the Group II-A
Loans, the sum of (a) the Group II-A Basic Principal Distribution Amount for
that Distribution Date and (b) the product of the Group II Extra Principal
Distribution Amount for that Distribution Date and the Group II-A Allocation
Percentage for that Distribution Date.
Group II-B Allocation Percentage
With respect to any Distribution Date and the Group II-B
Loans, the percentage equivalent of a fraction, the numerator of which is (a)
the Principal Remittance Amount for the Group II-B Loans for that Distribution
Date, and the denominator of which is (b) the aggregate Principal Remittance
Amount for the Group II Loans for that Distribution Date.
Group II-B Basic Principal Distribution Amount
With respect to any Distribution Date and the Group II-B
Loans, the amount by which (a) the Principal Remittance Amount for the Group
II-B Loans for that Distribution Date exceeds (b) the product of the Group II
Overcollateralization Release Amount, if any, for that Distribution Date and the
Group II-B Allocation Percentage for that Distribution Date.
Group II-B Interest Remittance Amount
With respect to any Determination Date, the sum, without
duplication, of (a) all interest collected or advanced on the Group II-B Loans
during the related Due Period and (b) the portion of any Substitution Adjustment
Amount, Termination Price, Purchase Price, or Liquidation Proceeds, relating to
interest with respect to the Group II-B Loans and received during the related
Prepayment Period.
Group II-B Loans
The mortgage loans identified as such on the Loan Schedule as
of the Closing Date.
Group II-B Principal Distribution Amount
With respect to any Distribution Date and the Group II-B
Loans, the sum of (a) the Group II-B Basic Principal Distribution Amount for
that Distribution Date and (b) the product of the Group II Extra Principal
Distribution Amount for that Distribution Date and the Group II-B Allocation
Percentage for that Distribution Date.
Hedged Certificates
The Adjustable Rate Certificates.
Indirect Participant
A broker, dealer, bank or other financial institution or other
Person that clears through or maintains a custodial relationship with a
Depository Participant.
Initial Certificate Account Deposit
As defined in Section 2.01(a).
Insurance Policy
With respect to any Loan included in the Trust Fund, any
insurance policy, and including all riders and endorsements thereto in effect,
including any replacement policy or policies for any Insurance Policies.
41
Insurance Proceeds
Proceeds paid by an insurer pursuant to any Insurance Policy,
in each case other than any amount included in such Insurance Proceeds in
respect of Insured Expenses.
Insured Expenses
Expenses covered by an Insurance Policy.
Interest Accrual Period
With respect to the Adjustable Rate Certificates and with
respect to the interests in REMIC 1 and REMIC 2, and any Distribution Date, the
period commencing on the Distribution Date in the calendar month prior to the
month of such Distribution Date (or on the Closing Date with respect to the
first Distribution Date) and ending on the day preceding such Distribution Date.
With respect to the Fixed Rate Certificates and any Distribution Date, the
calendar month preceding the month of such Distribution Date.
Interest Distribution Amount
With respect to any Distribution Date and each Class of the
Offered Certificates, the amount of interest accrued during the related Interest
Accrual Period at the Pass-Through Rate for such Class on the related Class
Certificate Balance, reduced by such Class' pro rata share of the amount of (a)
Net Prepayment Interest Shortfalls on the related Loans and (b) Relief Act
Reductions incurred on the related Loans during the related Due Period (each
such Class' pro rata share to be based on the amount of interest to which such
Class would have been entitled notwithstanding such Net Prepayment Interest
Shortfalls and Relief Act Reductions).
Investment Letter
As defined in Section 5.02(b).
Latest Possible Maturity Date
The Distribution Date following the third anniversary of the
scheduled maturity date of the Loan having the latest scheduled maturity date as
of the Cut-off Date.
Last Scheduled Distribution Date
The Distribution Date in November 2035.
LIBOR
As of any LIBOR Determination Date, the London interbank
offered rate for one-month United States dollar deposits which appears in the
Moneyline Telerate Page 3750 as of 11:00 a.m., London time, on that date. If the
rate does not appear on Moneyline Telerate Page 3750, the rate for that day will
be determined on the basis of the rates at which deposits in United States
dollars are offered by the Reference Banks at approximately 11:00 a.m. (London
time), on that day to prime banks in the London interbank market. The Trustee
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two quotations are provided, the
rate for that day will be the arithmetic mean of the quotations (rounded upwards
if necessary to the nearest whole multiple of 1/16%). If fewer than two
quotations are provided as requested, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Trustee in consultation with the Servicer, at approximately 11:00 a.m. (New
York City time) on that day for loans in United States dollars to leading
European banks.
LIBOR Determination Date
With respect to any Interest Accrual Period for the Adjustable
Rate Certificates, the second London business day preceding the commencement of
such Interest Accrual Period. For purposes of determining LIBOR, a "London
business day" is any day on which dealings in deposits of United States dollars
are transacted in the London interbank market.
42
Liquidated Loan
With respect to any Distribution Date, a defaulted Loan
(including any REO Property) that was liquidated in the related Prepayment
Period Date and as to which the Servicer has determined (in accordance with this
Agreement) that it has received all amounts it expects to receive in connection
with the liquidation of such Loan, including the final disposition of an REO
Property.
Liquidation Proceeds
Amounts, including Insurance Proceeds, received in connection
with the partial or complete liquidation of defaulted Loans, whether through
trustee's sale, foreclosure sale or otherwise or amounts received in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received in connection with an REO Property other than Recoveries, less
the Servicing Amount applicable to such defaulted Loans.
Loans
The Group I Loans and the Group II Loans.
Loan Schedule
As of any date, the list of Loans included in the Trust Fund
on such date, attached hereto as Schedule I (as from time to time amended by the
Servicer to reflect the addition of Substitute Loans and the deletion of Deleted
Loans pursuant to the provisions of this Agreement), setting forth the following
information with respect to each Loan:
(a) an indication that such Loan is a Group I Loan, Group
II-A Loan or Group II-B Loan;
(b) the loan number;
(c) the Mortgagor's name and the state in which the
Mortgaged Property is located, including the zip
code;
(d) the maturity date;
(e) the Cut-off Date Principal Balance;
(f) the first payment date of the Loan;
(g) lien position (either first or second);
(h) the Scheduled Payment in effect as of the Cut-off
Date;
(i) the current Mortgage Rate;
(j) the principal balance of the Loan at origination; and
(k) if applicable, the MIN assigned to such Loan.
Such schedule shall also set forth the total of the amounts
described under (e) above for the Group I Loans, the Group II-A Loans, the Group
II-B Loans and all of the Loans.
43
Majority in Interest
As to each Class of Offered Certificates, the Holders of
Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
MERS (R)
Mortgage Electronic Registration Systems, Inc., or its
successors in interest.
MERS (R) System
That certain electronic registry system maintained by
MERSCORP, Inc., or its successors in interest.
MIN
The Mortgage Identification Number assigned by MERS (R) to a
MOM Loan.
MOM Loan
Any Loan as to which MERS (R) is acting as mortgagee solely as
nominee for the originator of such Loan and its successors and assigns.
Monthly Statement
The statement prepared by the Trustee pursuant to
Section 4.03.
Moody's
Xxxxx'x Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05(b) the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Monitoring Department, or such other address as Moody's may
hereafter furnish to the Depositor or the Servicer.
Mortgage
The mortgage, deed of trust or other instrument creating a
lien on an estate in fee simple or leasehold interest in real property securing
a Mortgage Note.
Mortgaged Property
The underlying property securing a Loan.
Mortgage File
The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Loan and any additional documents delivered to the
Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Note
The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Loan, together with any
amendment or modification thereto.
Mortgage Rate
The annual rate of interest borne by a Mortgage Note as set
forth therein.
Mortgagor
The obligor(s) on a Mortgage Note.
44
Net Prepayment Interest Shortfalls
As to any Distribution Date, the amount by which the aggregate
of Prepayment Interest Shortfalls during the related Prepayment Period exceeds
an amount equal to the aggregate Servicing Fee for such Distribution Date before
reduction of the Servicing Fee in respect of such Prepayment Interest
Shortfalls.
Net Realized Losses:
For any Class of Subordinated Certificates and any
Distribution Date, the excess of (a) the amount of unreimbursed Realized Losses
previously allocated to that Class over (b) the sum of (i) the amount of any
increases to the Class Certificate Balance of that Class pursuant to Section
4.02A due to Recoveries and (ii) Realized Loss Amortization Amounts previously
distributed to such Class.
Net Recovery Realized Losses
For any Class of Subordinated Certificates and any
Distribution Date, the excess of Net Realized Losses for such Distribution Date
over the Realized Loss Amortization Amount distributed to that Class on that
Distribution Date.
Net WAC Cap
As to any Distribution Date, the per annum rate equal to: (a)
with respect to the Fixed Rate Certificates, the weighted average Adjusted Net
Mortgage Rate of the Group I Loans as of the first day of the Due Period
relating to that Distribution Date, weighted on the basis of the aggregate
principal balance of the Group I Loans as of the first day of the related Due
Period (calculated on the basis of a 360-day year made up of twelve 30-day
months); (b) with respect to the Class BF Certificates, the weighted average
Adjusted Net Mortgage Rate of the Group I Loans as of the first day of the Due
Period relating to that Distribution Date, weighted on the basis of the
aggregate principal balance of the Group I Loans as of the first day of the
related Due Period (calculated on the basis of a 360-day year and the actual
number of days elapsed in the related Interest Accrual Period), (c) with respect
to the Class AV-1 Certificates, the weighted average Adjusted Net Mortgage Rate
of the Group II-A Loans as of the first day of the Due Period relating to that
Distribution Date, weighted on the basis of the aggregate principal balance of
the Group II-A Loans as of the first day of the related Due Period (calculated
on the basis of a 360-day year and the actual number of days elapsed in the
related Interest Accrual Period), (d) with respect to the Class AV-2
Certificates, the weighted average Adjusted Net Mortgage Rate of the Group II-B
Loans as of the first day of the Due Period relating to that Distribution Date,
weighted on the basis of the aggregate principal balance of the Group II-B Loans
as of the first day of the related Due Period (calculated on the basis of a
360-day year and the actual number of days elapsed in the related Interest
Accrual Period), and (e) with respect to the Group II Subordinate Certificates,
the lesser of (1) the Net WAC Cap for the Class AV-1 Certificates or (2) the Net
WAC Cap for the Class AV-2 Certificates.
Net WAC Cap Account
The account established and maintained pursuant to Section
3A.03.
Net WAC Cap Carryover
With respect to any Class of the Offered Certificates and any
Distribution Date, the sum of (a) the excess, if any, of the Interest
Distribution Amount for such Class for such Distribution Date, calculated at its
Pass-Through Rate (without regard to the applicable Net WAC Cap), over the
actual Interest Distribution Amount for such Class for such Distribution Date,
and (b) any related Net WAC Cap Carryover remaining unpaid from the prior
Distribution Date, together with interest accrued thereon at its Pass-Through
Rate (without regard to the applicable Net WAC Cap) during the related Interest
Accrual Period.
45
Net WAC Cap Deposit Amount
As to any Distribution Date, an amount equal to the sum of (a)
the aggregate Net WAC Cap Carryover for such Distribution Date plus (b) the
amount, if any, needed to increase the aggregate amount on deposit in the Net
WAC Cap Account (after giving effect to all payments to be made pursuant to
Section 4.02(j)) to $10,000.
Nonrecoverable Advance
Any portion of an Advance previously made or proposed to be
made by the Servicer that, in the good faith judgment of the Servicer, will not
be ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Notice of Final Distribution
The notice to be provided pursuant to Section 9.02 to the
effect that final distribution on any of the Certificates shall be made only
upon presentation and surrender thereof.
Offered Certificates
The certificates representing "regular interests" in REMIC 2,
which are designated as the Senior Certificates and the Subordinate
Certificates.
Officer's Certificate
A certificate (a) signed by the Chairman of the Board, the
Vice Chairman of the Board, the President, a Managing Director, a Vice President
(however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the
Depositor or the Servicer, or (b), if provided for in this Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the Depositor and the
Trustee, as the case may be, as required by this Agreement.
Opinion of Counsel
A written opinion of counsel, who may be counsel for the
Depositor or the Servicer, including, in-house counsel, reasonably acceptable to
the Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (a) in fact be
independent of the Depositor and the Servicer, (b) not have any direct financial
interest in the Depositor or the Servicer or in any affiliate of either, and (c)
not be connected with the Depositor or the Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination Date
The first Distribution Date following the date on which the
Optional Termination may be exercised by the Servicer.
Optional Termination
The termination of the trust created hereunder in connection
with the purchase of the Loans pursuant to Section 9.01(a) hereof.
Original Loan
The mortgage loan refinanced in connection with the
origination of a Refinance Loan.
OTS
The Office of Thrift Supervision.
Outstanding
With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except (a) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (b) Certificates in exchange for
which or in lieu of which other Certificates have been executed and delivered by
the Trustee pursuant to this Agreement.
46
Outstanding Loan
As of any Due Date, a Loan with a Stated Principal Balance
greater than zero, which was not the subject of a Principal Prepayment in Full
prior to such Due Date and which did not become a Liquidated Loan prior to such
Due Date.
Ownership Interest
As to any Class R Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate
With respect to each Class of Certificates and each regular
interest in REMIC 1 and REMIC 2, as set forth in the Preliminary Statement.
Paying Agent
JPMorgan Chase Bank, N.A. and its successors and, if a
successor paying agent is appointed hereunder, such successor.
Percentage Interest
As to any Offered Certificate, the percentage interest
evidenced thereby in distributions required to be made to such Offered
Certificate, such percentage interest being set forth on the face thereof or
equal to the percentage obtained by dividing the Denomination of such
Certificate by the aggregate of the Denominations of all Certificates of the
same Class. With respect to the Class X Certificates and the Class R
Certificates, the "Percentage Interest" specified on the face thereof.
Permitted Investments
(a) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the United
States; (b) general obligations of or obligations guaranteed by any state of the
United States or the District of Columbia receiving the highest long-term debt
rating of each Rating Agency rating the Offered Certificates, or such lower
rating as will not result in the downgrading or withdrawal of the ratings then
assigned to the Offered Certificates by each such Rating Agency; (c) commercial
or finance company paper which is then receiving the highest commercial or
finance company paper rating of each such Rating Agency, or such lower rating as
will not result in the downgrading or withdrawal of the ratings then assigned to
the Offered Certificates by each such Rating Agency; (d) certificates of
deposit, demand or time deposits, or bankers' acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if Xxxxx'x is not a Rating Agency)
are then rated one of the two highest long-term and the highest short-term
ratings of each such Rating Agency for such securities, or such lower ratings as
47
will not result in the downgrading or withdrawal of the rating then assigned to
the Offered Certificates by any such Rating Agency; (e) demand or time deposits
or certificates of deposit issued by any bank or trust company or savings
institution to the extent that such deposits are fully insured by the FDIC; (f)
guaranteed reinvestment agreements issued by any bank, insurance company or
other corporation containing, at the time of the issuance of such agreements,
such terms and conditions as will not result in the downgrading or withdrawal of
the rating then assigned to the Offered Certificates by any such Rating Agency;
(g) repurchase obligations with respect to any security described in clauses (a)
and (b) above, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (d) above; (h)
securities (other than stripped bonds, stripped coupons or instruments sold at a
purchase price in excess of 115% of the face amount thereof) bearing interest or
sold at a discount issued by any corporation incorporated under the laws of the
United States or any state thereof which, at the time of such investment, have
one of the two highest ratings of each such Rating Agency (except if the Rating
Agency is Moody's or S&P, the rating shall be the highest commercial paper
rating of Moody's or S&P, as applicable, for such securities), or such lower
rating as will not result in the downgrading or withdrawal of the rating then
assigned to the Offered Certificates by any such Rating Agency, as evidenced by
a signed writing delivered by each such Rating Agency; (i) interests in any
money market fund which at the date of acquisition of the interests in the fund
and throughout the time those interests are held in the fund has the highest
applicable rating of each such Rating Agency or such lower rating as will not
result in the downgrading or withdrawal of the ratings then assigned to the
Offered Certificates by each such Rating Agency; (j) short term investment funds
sponsored by any trust company or national banking association incorporated
under the laws of the United States or any state thereof which on the date of
acquisition has been rated by each such Rating Agency in its highest applicable
rating category or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Offered Certificates by each such
Rating Agency; and (k) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to each such Rating Agency
as will not result in the downgrading or withdrawal of the rating then assigned
to the Offered Certificates by any Rating Agency, as evidenced by a signed
writing to such effect delivered by each such Rating Agency; provided that no
such instrument shall be a Permitted Investment if such instrument evidences the
right to receive interest only payments with respect to the obligations
underlying such instrument.
Permitted Transferee
Any person other than (a) the United States, any State or
political subdivision thereof, or any agency or instrumentality of any of the
foregoing, (b) a foreign government, International Organization or any agency or
instrumentality of either of the foregoing, (c) an organization (except certain
farmers' cooperatives described in section 521 of the Code) which is exempt from
tax imposed by Chapter 1 of the Code (including the tax imposed by section 511
of the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(l) of the Code) with respect to any Class R
Certificate, (d) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (e) a Person that is not (i) a citizen or resident of
the United States, (ii) a corporation or partnership (or other entity properly
treated as a corporation or partnership for U.S. federal income tax purposes)
created or organized in or under the laws of the United States or any political
subdivision thereof, (iii) an estate whose income from sources without the
United States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or (iv) a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States Persons have authority to control all substantial
decisions of the trust, unless such Person listed in clause (i), (ii), (iii) or
(iv) above has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI and (f) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Class R Certificate to such Person may cause any REMIC hereunder
to fail to qualify as one or more REMICs at any time that the Certificates are
outstanding. The terms "United States," "State" and "International Organization"
shall have the meanings set forth in section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
48
Person
Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Principal Balance
With respect to any Distribution Date, the sum of the Group
Principal Balances for the Group I Loans and the Group II Loans.
Popular Financial
Popular Financial Services, LLC, a Delaware limited liability
company.
Popular Funding
Popular Financial Funding, LLC, a Delaware limited liability
company.
Post-Stepdown Group I Remaining Principal Distribution Amount
With respect to any Distribution Date is an amount equal to
the Group I Principal Distribution Amount remaining after giving effect to the
distributions set forth in clause (i) of Section 4.02(d) hereof.
Post-Stepdown Group II Cross-collateralization Principal
Distribution Amount With respect to any Distribution Date is
an amount equal to the Group II Principal Distribution Amount remaining after
the distributions set forth in clauses (i) and (ii) of Section 4.02(e).
Post-Stepdown Group II Remaining Principal Distribution Amount
With respect to any Distribution Date is an amount equal to
the Group II Principal Distribution Amount remaining after giving effect to the
distributions set forth in clauses (i), (ii) and (iii) of Section 4.02(e)
hereof.
Pre-Stepdown Group I Remaining Principal Distribution Amount
With respect to any Distribution Date is an amount equal to
the Group I Principal Distribution Amount remaining after giving effect to the
distributions set forth in clause (i) of Section 4.02(b) hereof.
Pre-Stepdown Group II Cross-collateralization Principal
Distribution Amount With respect to any Distribution Date is
an amount equal to the Group II Principal Distribution Amount remaining after
the distributions set forth in clauses (i) and (ii) of Section 4.02(c).
Pre-Stepdown Group II Remaining Principal Distribution Amount
With respect to any Distribution Date is an amount equal to
the Group II Principal Distribution Amount remaining after giving effect to the
distributions set forth in clauses (i), (ii) and (iii) of Section 4.02(c)
hereof.
Prepayment Interest Excess
As to any Principal Prepayment on a Loan received by the
Servicer subsequent to its Due Date in the related Prepayment Period, all
amounts paid by the related Mortgagor in respect of interest on such Principal
Prepayment that are intended to cover the period on and after the Due Date. All
Prepayment Interest Excess shall be paid to the Servicer as additional servicing
compensation.
49
Prepayment Interest Shortfall
As to any Distribution Date and any Principal Prepayment on a
Loan received by the Servicer on or before its Due Date in the related
Prepayment Period, the amount, if any, by which one month's interest at the
related Adjusted Mortgage Rate on such Principal Prepayment, exceeds the amount
of interest paid in connection with such Principal Prepayment.
Prepayment Period
With respect to the first Distribution Date, the calendar
month prior to the month of that Distribution Date and with respect to all
subsequent Distribution Dates, the related Due Period.
Primary Mortgage Insurance Policy
Each policy of primary mortgage guaranty insurance or any
replacement policy therefor with respect to any Loan.
Principal Prepayment
Any payment of principal by a Mortgagor on a Loan that is
received in advance of its scheduled Due Date and is not accompanied by an
amount representing scheduled interest due on any date or dates in any month or
months subsequent to the month of prepayment. Partial Principal Prepayments
shall be applied by the Servicer in accordance with the terms of the related
Mortgage Note.
Principal Prepayment in Full
Any Principal Prepayment made by a Mortgagor of the entire
principal balance of a Loan.
Principal Remittance Amount
As to any Distribution Date and any Group, the sum of (a) the
principal portion of each Scheduled Payment due on each Loan in that Group on
such Loan's Due Date in the related Due Period and received by the Servicer on
or prior to the related Determination Date, including any Advances with respect
thereto, (b) the Stated Principal Balance of each Loan in that Group that was
sold or repurchased by a Seller or the Servicer pursuant to this Agreement as of
such Distribution Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Loan in that Group received with respect to such Distribution
Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries
of principal of Loans in that Group that are not yet Liquidated Loans received
during the related Prepayment Period, (e) with respect to each Loan in that
Group that became a Liquidated Loan during the related Prepayment Period, the
amount of Liquidation Proceeds allocable to principal received during the
related Prepayment Period with respect to such Loan, (f) all Principal
Prepayments on Loans in that Group received during the related Prepayment
Period, (g) on the Distribution Date on which the Trust Fund is to be terminated
in accordance with Section 9.01 hereof that portion of the Termination Price
allocable to principal of Loans in that Group, and (h) all Recoveries relating
to Liquidated Loans from that Group received during the related Prepayment
Period, if any.
Prospectus Supplement
The Prospectus Supplement dated October 17, 2005 relating to
the Publicly Offered Certificates.
Publicly Offered Certificates
The Senior Certificates, the Class MF Certificates and the
Class MV Certificates.
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Purchase Price
With respect to any Loan required to be repurchased by a
Seller pursuant to Section 2.02 or 2.03 hereof, or purchased at the option of
the Servicer pursuant to Section 3.11 hereof, an amount equal to the sum of (a)
100% of the Stated Principal Balance of the Loan on the date of such purchase,
(b) accrued interest thereon at the applicable Mortgage Rate (or at the
applicable Adjusted Mortgage Rate if (i) the purchaser is the Servicer or (ii)
the purchaser is a Seller and Equity One-Delaware is the Servicer) from the date
through which interest was last paid by the Mortgagor or advanced (and not
reimbursed) by the Servicer to the Determination Date in the month in which the
Purchase Price is to be distributed to Certificateholders, and (c) any costs and
damages incurred by the Trust Fund in connection with such Loan.
PTCE 95-60
As defined in Section 5.02(b).
Rating Agency
Moody's and S&P. If any of these organizations or a successor
thereof is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Losses
With respect to any Distribution Date, the sum of (a) the
aggregate amount, if any, by which (i) the outstanding principal balance of each
Loan that became a Liquidated Loan during the related Prepayment Period (such
principal balance determined immediately before such Loan became a Liquidated
Loan) exceeds (ii) the Liquidation Proceeds allocable to principal received
during the related Prepayment Period in connection with the liquidation of such
Loan which have not theretofore been used to reduce the Stated Principal Balance
of such Loan, and (b) any Deficient Valuations.
Realized Loss Amortization Amounts
Group I Realized Loss Amortization Amounts or Group II
Realized Loss Amortization Amounts, as applicable.
Record Date
With respect to the Fixed Rate Certificates and any
Distribution Date, the close of business on the last Business Day of the
calendar month immediately preceding such Distribution Date. With respect to the
Adjustable Rate Certificates and any Distribution Date, the close of business on
the Business Day immediately preceding such Distribution Date.
Recovery
A Group I Recovery or Group II Recovery, as applicable.
Reference Banks
Any three (3) major banks engaged in transactions in
Eurodollar deposits in the international Eurocurrency market selected by the
Trustee after consultation with the Servicer.
Refinance Loan
Any Loan originated for the purpose of refinancing an existing
mortgage loan.
Relief Act
The Servicemembers Civil Relief Act, as amended.
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Relief Act Reductions
With respect to any Distribution Date and any Loan as to which
there has been a reduction in the amount of interest collectible thereon for the
most recently ended calendar month as a result of the application of the Relief
Act, the amount, if any, by which (a) interest collectible on such Loan for the
most recently ended calendar month is less than (b) interest accrued thereon for
such month pursuant to the Mortgage Note without taking into account the
application of the Relief Act.
REMIC
A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code. REMIC 1 As defined in the
Preliminary Statement.
REMIC 2
As defined in the Preliminary Statement.
REMIC Change of Law
Any proposed, temporary or final regulation, revenue ruling,
revenue procedure or other official announcement or interpretation relating to
REMICs and the REMIC Provisions issued after the Closing Date.
REMIC Provisions
Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of part IV of subchapter M of chapter 1 of subtitle A of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time, as well as provisions of applicable state laws.
REO Property
A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Loan.
Request for Release
The Request for Release submitted by the Servicer to the
Trustee, substantially in the form of Exhibit J.
Required Insurance Policy
With respect to any Loan, any insurance policy that is
required to be maintained from time to time under this Agreement.
Reserve Fund
The account established and maintained by the Trustee pursuant
to Section 3A.02. Responsible Officer When used with respect to the Trustee, any
officer assigned to the Corporate Trust Division of the Trustee (or any
successor thereto), including any Vice President, any Assistant Vice President,
the Secretary, any Assistant Secretary, any Trust Officer or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
administration of this Agreement.
Rule 144A Letter
As defined in Section 5.02(b).
52
Scheduled Payment
The scheduled monthly payment on a Loan due on any Due Date
allocable to principal and/or interest on such Loan.
Second Lien Loan
Any Loan secured by a mortgage that is second in lien
priority.
Securities Act
The Securities Act of 1933, as amended.
Sellers
Collectively, the following entities, their successors and
assigns, each in its capacity as a Seller of the Loans to the Depositor: Popular
Funding and Popular Financial.
Senior Certificates
The Class AF Certificates and the Class AV Certificates.
Servicer
Equity One, Inc., a Delaware corporation, and its successors
and assigns, in its capacity as servicer hereunder.
Servicer Advance Date
As to any Distribution Date, the 18th day of the month in
which such Distribution Date occurs, or if such day is not a Business Day, the
next succeeding Business Day.
Servicing Advances
All customary, reasonable and necessary "out of pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of a Mortgaged Property, (b) the foreclosure,
trustee's sale, or other liquidation of any Mortgage or Mortgaged Property, (c)
any expenses reimbursable to the Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (d) the management
and liquidation of any REO Property, (e) compliance with the obligations
described in Section 3.06 and (f) any payments made by the Servicer pursuant to
Section 3.09.
Servicing Amount
The sum of (a) the Servicing Fee, (b) unreimbursed Advances
and (c) unreimbursed Servicing Advances.
Servicing Fee
As to each Loan and any Distribution Date, an amount payable
out of each full payment of interest received on such Loan and equal to
one-twelfth of the Servicing Fee Rate multiplied by the Stated Principal Balance
of such Loan as of the Due Date in the month of such Distribution Date (prior to
giving effect to any Scheduled Payments due on such Loan on such Due Date),
subject to reduction as provided in Section 3.13.
Servicing Fee Rate
With respect to each Loan, 0.50% per annum.
Servicing Officer
Any officer of the Servicer involved in, or responsible for,
the administration and servicing of the Loans whose name and facsimile signature
appear on a list of servicing officers furnished to the Trustee by the Servicer
on the Closing Date pursuant to this Agreement, as such list may from time to
time be amended.
53
S&P
Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. For purposes of Section 10.05(b) the address for
notices to S&P shall be Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance, or such other address as S&P may hereafter furnish to the
Depositor and the Servicer.
Startup Day
The Closing Date.
Stated Principal Balance
As to any Loan, the unpaid principal balance of such Loan as
of its most recent Due Date as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period) after giving effect
to any previous partial Principal Prepayments and Liquidation Proceeds allocable
to principal (other than with respect to any Liquidated Loan) and to the payment
of principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Subordinate Certificates
The Group I Subordinate Certificates and the Group II
Subordinate Certificates.
Subservicer
Any person to whom the Servicer has contracted for the
servicing of all or a portion of the Loans pursuant to Section 3.02.
Substitute Loan
A Loan substituted by a Seller for a Deleted Loan(s) which
must, on the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal Balance not
in excess of, and not more than 10% less than, the Stated Principal Balance(s)
of the Deleted Loans (such Stated Principal Balances to be measured as of the
respective Due Dates in the month of substitution); (b) have an interest rate
that is determined in the same manner as that of the Deleted Loans(s); (c) have
a Mortgage Rate not lower than, and not more than 1% per annum higher than, that
of the Deleted Loan(s); (d) have a Combined Loan-to-Value Ratio not higher than
that of the Deleted Loan(s); (e) have a debt to income ratio not higher than
that of the Deleted Loan(s); (f) have been originated pursuant to the same
underwriting standards as the Deleted Loan(s); (g) have a remaining term to
maturity not greater than, and not more than one year less than, that of the
Deleted Loan(s); and (h) comply, as of the date of substitution, with each
representation and warranty set forth or referred to in Section 2.03.
Substitution Adjustment Amount
The meaning ascribed to such term pursuant to Section 2.03.
Tax Matters Person
The person designated as "tax matters person" in the manner
provided under Treasury regulation ss.1.860F-4(d) and temporary Treasury
regulation ss.301.6231(a)(7)-1T. Initially, the Tax Matters Person shall be the
Trustee.
Tax Matters Person Certificate
The Class R Certificate with a Denomination of .00001%.
54
Termination Price
As defined in Section 9.01.
Transfer
Any direct or indirect transfer or sale of any Ownership
Interest in a Class R Certificate.
Transfer Affidavit
As defined in Section 5.02(c).
Transferor Certificate
As defined in Section 5.02(b).
Trustee
JPMorgan Chase Bank, N.A. and its successors and, if a
successor trustee is appointed hereunder, such successor.
Trustee Fee
As to any Distribution Date, an amount equal to one-twelfth of
the Trustee Fee Rate multiplied by the Pool Principal Balance as of such
Distribution Date.
Trustee Fee Rate
With respect to each Loan, 0.02% per annum.
Trust Fund
The corpus of the trust created hereunder consisting of (a)
the Loans (including, without limitation, the Mortgage Files relating thereto),
and all interest, principal and other amounts received, or receivable, on or
with respect thereto on and after the Cut-off Date to the extent not applied in
computing the Cut-off Date Principal Balance thereof and all interest and
principal payments on such Loans received prior to the Cut-off Date in respect
of installments of interest and principal due thereafter; (b) the Certificate
Account, the Distribution Account, the Net WAC Cap Account, the Reserve Fund and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (c) property that secured a Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (d) the Yield Maintenance
Agreement; (e) such other rights and property as are held in trust hereunder by
the Trustee for the benefit of the Certificateholders; and (f) all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing.
Trustee Permitted Withdrawal Amount
Means an aggregate amount not to exceed (a) with respect to
costs associated with the transitioning of servicing, $75,000 per servicing
transition event and (b) with respect to amounts (other than the Trustee Fee)
which are payable to the Trustee pursuant to Section 8.05 hereof, $150,000 per
annum.
Underwriter Exemption
Prohibited Transaction Exemption 2002-41, 67 Fed Reg. 54487
(August 22, 2002), or any successor thereto.
Underwriters
Friedman, Billings, Xxxxxx & Co., Inc. and Greenwich Capital
Markets, Inc.
55
Voting Rights
The portion of the voting rights of all of the Certificates,
which is allocated to any Certificate. With respect to any date of
determination, the Offered Certificates shall be allocated 100% of all Voting
Rights. The Voting Rights allocated to each Class of the Offered Certificates
shall be the fraction, expressed as a percentage, the numerator of which is the
Class Certificate Balance of such Class then outstanding and the denominator of
which is the aggregate Stated Principal Balance of the Loans then outstanding.
The Voting Rights allocated to each Class of Certificates shall be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests. The Class X and the Class R Certificates will not have any
Voting Rights.
Yield Maintenance Agreement
The Master Agreement (including the Schedule thereto and the
Transactions thereunder each evidenced by a Confirmation (each as defined in the
Yield Maintenance Agreement)) dated as of October 21, 2005, by and between the
Counterparty and the Trustee not in its individual capacity, but solely as
trustee for the benefit of the Certificateholders of the Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5.
Yield Maintenance Stated Termination
July 25, 2009, subject to the Following Business Day
Convention (as such term is defined in the Yield Maintenance Agreement).
ARTICLE II
CONVEYANCE OF LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Loans.
(a) Subject to its substitution and repurchase obligations
hereunder, each Seller, concurrently with the execution and delivery hereof,
hereby irrevocably sells, transfers, grants, bargains, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to that portion of the Loans (including, without
limitation, the Mortgage Files relating thereto) listed on the Loan Schedule
that pertains to such Seller, including (i) all interest and principal received
or receivable by such Seller on or with respect to such Loans after the Cut-off
Date and all interest and principal payments on such Loans received on or prior
to the Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and payable
on such Loans on or before the Cut-off Date, and (ii) all Principal Prepayments,
Liquidation Proceeds and other unscheduled payments received or receivable on
the Loans on the Cut-off Date. On or prior to the Closing Date, each Seller
shall deliver to the Depositor or, at the Depositor's direction, to the Trustee
or other designee of the Depositor, the Mortgage File for each Loan listed in
that portion of the Loan Schedule that pertains to such Seller. Such delivery of
the Mortgage Files shall be made against payment by the Depositor of the
purchase price, previously agreed to by such Seller and the Depositor, for the
Loans listed on the Loan Schedule that pertain to such Seller. With respect to
any Loan that does not require the first payment of principal or interest
thereon to be made on or before such Loan's Due Date in the month prior to the
first Distribution Date, such Seller shall deposit into the Certificate Account
on the Closing Date, an amount equal to one month's interest at the related
Mortgage Rate on the Cut-off Date Principal Balance of such Loan (the "INITIAL
CERTIFICATE ACCOUNT DEPOSIT"). The Sellers, for the benefit of the Depositor,
shall, in connection with the conveyance described in this Section 2.01(a),
deliver to the Depositor on or prior to the Closing Date the financing
statements described in Schedule VI. The Sellers shall also arrange for the
delivery to the Depositor or its assignee, as applicable, of any appropriate
Uniform Commercial Code continuation statements as may be necessary in
connection with the financing statements referenced in the foregoing sentence.
56
(b) The Depositor, concurrently with the execution and
delivery hereof, hereby irrevocably sells, transfers, grants, bargains, assigns,
sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund together with the Depositor's right to
require the Sellers (and Equity One-Delaware) to cure any breach of a
representation or warranty made herein by the Sellers or to repurchase or
substitute for any affected Loan in accordance with the provisions hereof. In
addition, the Depositor, for the benefit of the Trustee and the
Certificateholders, shall, in connection with the conveyance described in this
Section 2.01(b), deliver to the Trustee on or prior to the Closing Date the
financing statements described in Schedule VII. The Depositor shall also arrange
for the delivery to the Trustee of any appropriate Uniform Commercial Code
continuation statements as may be necessary in connection with the financing
statements referenced in the foregoing sentence.
(c) In connection with the sale, transfer and assignment set
forth in clause (b) above, the Depositor has delivered or caused to be delivered
to the Trustee or a Custodian for the Trustee on or before the Closing Date, or
shall deliver or cause to be delivered to the Trustee or a Custodian for the
Trustee on or before such later date as is set forth below, for the benefit of
the Certificateholders the following documents or instruments with respect to
each Loan so sold, transferred and assigned:
(i) the original Mortgage Note endorsed (by manual or
facsimile signature) as follows: "Pay to the order of JPMorgan
Chase Bank, N.A. as trustee for the benefit of the
Certificateholders of Popular ABS, Inc. Mortgage Pass-Through
Certificates Series 2005-5 without recourse," with all
intervening endorsements and all riders and modifications
showing a complete chain of endorsement from the originator to
the Person endorsing it to the Trustee (each such endorsement
being sufficient to transfer all right, title and interest of
the party so endorsing, as noteholder or assignee thereof, in
and to that Mortgage Note);
(ii) except as provided below, the original recorded
Mortgage;
(iii) an original recorded assignment of the Mortgage
(which may be included in a blanket assignment or
assignments), duly executed by the appropriate Seller and the
Depositor, which assignment will not be delivered on or before
the Closing Date, but shall be delivered within the time
period set forth in this Section 2.01, together with, except
as provided below, all interim recorded assignments of such
Mortgage, if any, all riders or modifications to such
Mortgage, if any, (each such assignment to be in recordable
form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which the
assignment relates, with the original to be recorded by the
Servicer as follows: the Servicer shall promptly send such
assignments for recording, and shall return the original
recorded assignment to the Trustee once returned as recorded
by the applicable recording office);
(iv) the original of each assumption, modification,
written assurance or substitution agreement, if any; and
(v) except as provided below, the original or
duplicate original lender's title policy and all riders
thereto.
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Notwithstanding the foregoing, in lieu of providing the
documents described in clause (iii) above, the Depositor may at its discretion
provide evidence that the related Mortgage is held through the MERS (R) System.
With respect to any MOM Loan, the original recorded Mortgage that is provided
shall note the MIN of such MOM Loan. Certain Mortgages were or may be, at the
sole discretion of the Servicer, originally recorded in the name of MERS (R),
solely as nominee for the applicable Seller and its successors or assigns;
furthermore, subsequent assignments of such Mortgages were or may be, at the
sole discretion of the Servicer, registered electronically through the MERS (R)
System. For certain other Loans, (i) the Mortgage was recorded in the name of
the Seller, (ii) record ownership was later assigned to MERS (R), solely as
nominee for that Seller, and (iii) subsequent assignments of the Mortgage were
or may be, at the sole discretion of the Servicer, registered electronically
through the MERS (R) System. For each of these Loans, MERS (R) serves as
mortgagee of record on the Mortgage solely as a nominee in an administrative
capacity on behalf of the Trustee, and does not have any beneficial interest in
the Loan.
In the event that in connection with any Loan the Depositor
cannot deliver (a) the original recorded Mortgage, (b) all interim recorded
assignments, if any, or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office in the case of clause (ii) or (iii) above, or because the title
policy has not been delivered to either the Servicer or the Depositor by the
applicable title insurer in the case of clause (v) above, and, in the case of
the assignments, if any, of the Mortgage to the Trustee as required under (iii)
above, the Depositor shall promptly deliver to the Trustee, in the case of
clause (ii) or (iii) above, such original recorded Mortgage or such original
recorded assignment, if any, as the case may be, with evidence of recording
indicated thereon upon receipt thereof from the public recording office, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery of the original recorded Mortgage and each
such original recorded assignment, if any, or a copy thereof, certified, if
appropriate, by the relevant recording office, and each title policy as required
by clause (v) above be made later than one year following the Closing Date;
provided, however, in the event the Depositor is unable to deliver within one
year following the Closing Date, each original recorded Mortgage, and each such
original recorded assignment, if any, or each such title policy by reason of the
fact that any such documents have not been returned by the appropriate recording
office, or, in the case of each such assignment, if any, because the related
original recorded Mortgage or any related interim recorded assignment have not
been returned by the appropriate recording office or, in the case of each title
policy, because the title insurer has not received the recording information
from the appropriate recording office for such original recorded Mortgage or
original recorded assignment, if any, has not been returned by the appropriate
recording office, the Depositor shall deliver such documents to the Trustee as
promptly as possible upon receipt thereof and, in any event, within 720 days
following the Closing Date. The Depositor shall forward or cause to be forwarded
to the Trustee (a) from time to time additional original documents evidencing an
assumption or modification of a Loan and (b) any other documents required to be
delivered by the Depositor or the Servicer to the Trustee. In the event that the
original recorded Mortgage is not delivered and, in connection with the payment
in full of the related Loan, the public recording office requires the
presentation of a "lost instruments affidavit and indemnity" or any equivalent
document, because only a copy of the Mortgage can be delivered with the
instrument of satisfaction or reconveyance, the Servicer shall execute and
deliver or cause to be executed and delivered such a document to the public
recording office. In the case where a public recording office retains the
original recorded Mortgage or in the case where an original recorded Mortgage is
lost after recordation in a public recording office, the appropriate Seller
shall deliver to the Trustee a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage.
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As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Servicer
shall (i) affix the Trustee's name to each assignment of Mortgage, if any, as
the assignee thereof as Trustee for the benefit of the Certificateholders, (ii)
cause such assignment, if any, to be in proper form for recording in the
appropriate public office for real property records and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the assignments, if any, of the Mortgages to the Trustee, except that,
with respect to any assignments of Mortgages as to which the information
required to prepare such assignment in recordable form has not yet been
received, the Servicer's obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information and
in any event within thirty (30) days after receipt thereof.
In the case of Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee, will deposit in the Certificate Account the portion of such payment
that is required to be deposited in the Certificate Account pursuant to Section
3.05 hereof.
(d) The Depositor, the Sellers, the Servicer and the Trustee
understand and agree that it is not intended that any Loan be included in the
Trust Fund that is a "High-Cost Home Loan" as defined by the Homeownership and
Equity Protection Act of 1994 or any other applicable predatory or abusive
lending laws.
SECTION 2.02. Acceptance by Trustee of the Trust Fund.
The Trustee acknowledges receipt of the documents identified
in the initial certification in the form annexed hereto as Exhibit D and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets as are included in the Trust Fund, in trust for the exclusive
use and benefit of all present and future Certificateholders. The Trustee
acknowledges that it will maintain possession of the Mortgage Notes in the State
of Texas, unless otherwise permitted by the Rating Agencies. In the event that
the Trustee desires to maintain possession of the Mortgage Notes in a state
(other than the State of Texas) constituting one of the United States of
America, the Trustee shall, at least thirty (30) days prior to discontinuing
possession of the Mortgage Notes in the State of Texas, provide (i) a notice of
such intention to the Rating Agencies and the Sellers and (ii) an Opinion of
Counsel stating that such relocation of the Mortgage Notes and the possession by
the Trustee of the Mortgage Notes in such other state will not (a) destroy or
impair the perfection by the Trustee of the security interests assigned and
granted to the Trustee pursuant to the provisions of Section 10.04 or (b)
subject any REMIC to any state tax.
The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Servicer and the Sellers an initial certification in the
form annexed hereto as Exhibit D. Based on its review and examination, and only
as to the documents identified in such initial certification, the Trustee shall
acknowledge that such documents appear regular on their face and relate to the
Loans listed in the Loan Schedule or shall indicate any noted deviations. The
Trustee, at the time of delivery of the initial certification, shall be under no
duty or obligation (i) to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face or (ii) to determine whether the
Mortgage File shall include any of the documents listed in Section 2.01(c),
except for the Mortgage Note. Should there be any exceptions to the Trustee's
initial certification as to the Mortgage Notes, the appropriate Seller shall
have thirty (30) days from the Closing Date to cure such exception or deliver a
Mortgage File or Mortgage Files for a Substitute Loan or Substitute Loans in
accordance with Section 2.03(c). A Seller may cure an exception based on absence
of a Mortgage Note for a Loan by delivering an executed copy of an Affidavit of
Lost Note in the form attached as Annex I to Exhibit D hereto to the Trustee.
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Not later than 90 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Servicer and the Sellers a final
certification in the form annexed hereto as Exhibit E, with any applicable
exceptions noted thereon. At any time upon request (but not more frequently than
once per calendar month), the Trustee shall deliver to the Depositor, the
Servicer and the Sellers, an updated schedule of open exceptions in electronic
or written format.
If the Trustee finds any document constituting a part of a
Mortgage File which does not meet the requirements of Section 2.01, the Trustee
shall list such as an exception in the final certification; provided, however
that the Trustee shall not make any determination as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates. In performing any such review, the Trustee may
conclusively rely on the Depositor as to the purported genuineness of any such
document and any signature thereon. It is understood that the scope of the
Trustee's review of the Mortgage Files is limited solely to confirming that the
documents listed in Section 2.01(c) have been received and further confirming
that any and all documents delivered pursuant to Section 2.01(c) have been
executed and relate to the Loans identified in the Loan Schedule. The Trustee
shall have no responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or
recordable form, whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, or whether a blanket assignment is
permitted in any applicable jurisdiction. The appropriate Seller shall promptly
correct or cure such defect within 90 days from the date it was so notified of
such defect and, if such Seller does not correct or cure such defect within such
period, such Seller shall either (a) substitute for the related Loan a
Substitute Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03, or (b) purchase such Loan
from the Trustee within 90 days from the date such Seller was notified of such
defect in writing at the Purchase Price of such Loan; provided, however, that in
no event shall such substitution or purchase occur more than 540 days from the
Closing Date, except that if the substitution or purchase of a Loan pursuant to
this provision is required by reason of a delay in delivery of any comments by
the appropriate recording office, and there is a dispute between either the
Servicer or such Seller and the Trustee over the location or status of the
recorded document, then such substitution or purchase shall occur within 720
days from the Closing Date; provided, that any Loan that does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code shall
be subject to a substitution or repurchase as provided in Section 2.05(b) of
this Agreement. The Trustee shall deliver a report to each Rating Agency within
720 days from the Closing Date indicating a list of all documents in each
Mortgage File in the possession of the Trustee. Any such substitution pursuant
to (a) above or purchase pursuant to (b) above shall not be effected prior to
the delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof, if any, and any substitution pursuant to (a) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit J. No substitution is permitted to be made
in any calendar month after the Determination Date for such month. The Purchase
Price for any such Loan shall be deposited by such Seller in the Certificate
Account on or prior to the Distribution Account Deposit Date for the
Distribution Date in the month following the month of repurchase and, upon
receipt of such deposit and certification with respect thereto in the form of
Exhibit J, the Trustee shall release the related Mortgage File to such Seller
and shall execute and deliver at such Seller's request such instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to vest in such Seller, or a designee, the Trustee's
interest in any Loan released pursuant hereto.
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If, pursuant to the foregoing provisions, a Seller repurchases
a Loan that is registered on the MERS (R) System, the Servicer shall cause MERS
(R) to execute and deliver an assignment of the related Mortgage in recordable
form to transfer the Mortgage from MERS (R) to such Seller and shall cause such
Mortgage to be removed from registration on the MERS (R) System in accordance
with MERS' (R) rules and regulations or (ii) cause MERS (R) to designate on the
MERS (R) System the Seller as the beneficial holder of such Loan.
The Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File as come into the possession of the
Servicer from time to time.
It is understood and agreed that the obligation of the
appropriate Seller to substitute for or to purchase any Loan which does not meet
the requirements of Section 2.01 above shall constitute the sole and exclusive
remedy respecting such defect available to the Trustee, the Depositor and any
Certificateholder against any Seller.
SECTION 2.03. Representations, Warranties and Covenants of the
Sellers and the Servicer.
(a) (i) Popular Financial and Popular Funding, in their
capacities as Sellers, hereby make the representations and
warranties set forth in Schedules IIE and IIF respectively,
and by this reference incorporated herein, to the Depositor
and the Trustee, as of the Closing Date or if so specified
therein, as of the Cut-off Date; and
(ii) The Servicer hereby makes the representations
and warranties set forth in Schedule IIX, and by this
reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date or if so specified therein, as
of the Cut-off Date.
(b) Popular Financial and Popular Funding, in their capacities
as Sellers, hereby make the representations and warranties set forth in
Schedules IIIE and IIIF respectively, and by this reference incorporated herein,
to the Depositor and the Trustee, as of the Closing Date or if so specified
therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Loan, the
party discovering such breach shall give prompt notice thereof to the other
parties. Each Seller, for itself and not jointly and severally for all other
Sellers, hereby covenants that within 90 days of the earlier of its discovery or
its receipt of written notice from any party of a breach of any representation
or warranty made pursuant to Section 2.03(b) with respect to any Loan listed on
the Loan Schedule that pertains to such Seller, such Seller may, and if such
breach materially and adversely affects the interests of the Certificateholders
such Seller shall, cure such breach in all material respects, and if such breach
is not so cured, may or shall, as the case may be, (i) if such 90-day period
expires prior to the second anniversary of the Closing Date, remove such Loan (a
"DELETED LOAN") from the Trust Fund and substitute in its place a Substitute
Loan, in the manner and subject to the conditions set forth in this Section or
(ii) repurchase the affected Loan or Loans from the Trustee at the Purchase
Price in the manner set forth below; provided, however, that any such
61
substitution pursuant to (i) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05 hereof, if
any, and any such substitution pursuant to (i) above shall not be effected prior
to the additional delivery to the Trustee of a Request for Release substantially
in the form of Exhibit J and the Mortgage File for any such Substitute Loan.
Notwithstanding the preceding sentence, any Loan that does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code shall
be subject to substitution or repurchase as provided in Section 2.05(b) of this
Agreement. The appropriate Seller shall promptly reimburse the Servicer and the
Trustee for any expenses reasonably incurred by the Servicer or the Trustee in
respect of enforcing the remedies for such breach. With respect to the
representations and warranties described in this Section which are made to the
best of a Seller's knowledge, if it is discovered by either the Depositor, the
appropriate Seller or the Trustee that the substance of such representation and
warranty is inaccurate and such inaccuracy materially and adversely affects the
value of the related Loan or the interests of the Certificateholders therein,
notwithstanding such Seller's lack of knowledge with respect to the substance of
such representation or warranty, such inaccuracy shall be deemed a breach by
such Seller of the applicable representation or warranty.
With respect to any Substitute Loan or Loans, such Seller
shall deliver to the Trustee for the benefit of the Certificateholders, the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, if any, and
such other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Loans in the month of substitution shall not be part of the Trust
Fund and will be retained by the appropriate Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to the relevant
Class will include the monthly payment due on any Deleted Loan for such month
and thereafter the appropriate Seller shall be entitled to retain all amounts
received in respect of such Deleted Loan. The Servicer shall amend the Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Loan and the substitution of the Substitute Loan or Loans and the
Servicer shall deliver the amended Loan Schedule to the Trustee. Upon such
substitution, the Substitute Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the appropriate Seller shall be deemed to have
made with respect to such Substitute Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b). Upon any such substitution and the deposit to the Certificate Account
of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
the Mortgage File held for the benefit of the Certificateholders relating to
such Deleted Loan to the appropriate Seller and shall execute and deliver at the
appropriate Seller's direction such instruments of transfer or assignment
prepared by such Seller, in each case without recourse, as shall be necessary to
vest title in such Seller, or its designee, with respect to the Trustee's
interest in any Deleted Loan substituted for pursuant to this Section 2.03.
For any month in which the appropriate Seller substitutes one
or more Substitute Loans for one or more Deleted Loans, the Servicer will
determine the amount (if any) by which the aggregate Stated Principal Balance of
all such Substitute Loans is less than the aggregate Stated Principal Balance of
all such Deleted Loans (such Stated Principal Balances to be measured as of the
respective Due Dates in the month of substitution). The amount of such shortage
(the "SUBSTITUTION ADJUSTMENT AMOUNT") plus an amount equal to the sum of (a)
the aggregate of any unreimbursed Advances with respect to such Deleted Loans
and (b) any costs and damages incurred by the Trust Fund in connection with such
Deleted Loan prior to the date of such substitution shall be deposited in the
Certificate Account by such Seller on or before the Distribution Account Deposit
Date for the Distribution Date in the month following the month during which the
related Loan became required to be purchased or replaced hereunder.
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In the event that the appropriate Seller shall have
repurchased a Loan, the Purchase Price therefor shall be deposited in the
Certificate Account pursuant to Section 3.05 on or before the Distribution
Account Deposit Date for the Distribution Date in the month following the month
during which such Seller became obligated hereunder to repurchase or replace
such Loan and upon such deposit of the Purchase Price, the delivery of the
Opinion of Counsel required by Section 2.05 and receipt of a Request for Release
in the form of Exhibit J, the Trustee shall release the related Mortgage File
held for the benefit of the Certificateholders to such Seller, and the Trustee
shall execute and deliver at such Seller's direction such instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Seller to cure,
repurchase or replace any Loan as to which a breach of a representation or
warranty has occurred and is continuing shall constitute the sole and exclusive
remedy against such Sellers respecting such breach of a representation and
warranty available to Certificateholders, the Depositor or the Trustee on their
behalf.
(d) The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
SECTION 2.03A. Additional Obligations of Equity One-Delaware.
(a) In addition to the representations and warranties made by
Equity One-Delaware in its capacity as Servicer, as described in Section 2.03
and set forth in Schedule IIX, Equity One-Delaware hereby represents and
warrants to the Depositor and the Trustee that all of the representations and
warranties of the Sellers described in Section 2.03 and set forth in Schedules
IIE and IIF and IIIE and IIIF are true and accurate in all respects.
(b) Equity One-Delaware hereby covenants that it shall comply
with the repurchase and substitution obligations described in Section 2.02 and
2.03 in the event that (i) a breach of any of the representations and warranties
set forth in Schedule IIIE or IIIF occurs and (ii) the related Seller defaults
on its repurchase and substitution obligations under Sections 2.02 and 2.03.
SECTION 2.04. Representations and Warranties of the Depositor
as to the Loans
The Depositor hereby represents and warrants to the Trustee
with respect to each Loan that as of the Closing Date, and following the
transfer of the Loans to it by the Sellers, the Depositor had good title to the
Loans and the Mortgage Notes were subject to no offsets, defenses or
counterclaims.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee. Upon discovery by the Depositor or the Trustee of a breach
of any of the foregoing representations and warranties set forth in this Section
2.04, which breach materially and adversely affects the interest of the
Certificateholders, the party discovering such breach shall give prompt written
notice to the other parties and to each Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions.
(a) Notwithstanding any contrary provision of this Agreement,
no substitution pursuant to Section 2.02 or Section 2.03 shall be made more than
90 days after the Closing Date unless the appropriate Seller delivers to the
Trustee an Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of either the Trustee or the Trust Fund, addressed to the Trustee, to
the effect that such substitution will not (i) result in the imposition of the
tax on "prohibited transactions" on the Trust Fund or contributions after the
Startup Day, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively, and/or (ii) cause the Trust Fund to fail to qualify as one or more
REMICs at any time that any Certificates are outstanding.
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(b) Upon discovery by the Depositor, the appropriate Seller,
the Servicer or the Trustee that any Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the appropriate Seller, at such
Seller's option, to either (i) substitute, if the conditions in Section 2.03(c)
with respect to substitutions are satisfied, a Substitute Loan for the affected
Loan within 90 days from the discovery or (ii) repurchase the affected Loan
within 90 days of such discovery in the same manner as it would repurchase a
Loan for a breach of representation or warranty made pursuant to Section 2.03.
The Trustee shall reconvey to such Seller the Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would
release a Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
SECTION 2.06. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment and in
payment therefor, has executed and delivered to or upon the order of the
Depositor, the Certificates in authorized denominations evidencing directly or
indirectly the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the rights referred to above for the benefit of all
present and future Certificateholders and to perform the duties set forth in
this Agreement to the best of its ability, to the end that the interests of the
Certificateholders may be adequately and effectively protected.
SECTION 2.07. REMIC Matters.
The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. The "tax matters person" with respect to each REMIC created
hereunder shall be the Trustee and the Trustee shall hold the Tax Matters Person
Certificate. The Trust Fund's fiscal year shall be the calendar year and, for
purposes of section 860C of the Code, the taxable income of each REMIC created
hereunder shall be computed under an accrual method of accounting.
The Trustee shall treat each of the Net WAC Cap Account and
the Reserve Fund as a separate and distinct outside reserve fund within the
meaning of ss.1.860G-2(h) of the Income Tax Regulations. None of the Net WAC Cap
Account, the Reserve Fund or the Yield Maintenance Agreement shall be treated as
an asset of any REMIC. The Trustee shall treat the rights of the Holders of the
Offered Certificates to receive payments in respect of Net WAC Cap Carryover as
rights in a limited recourse interest rate cap contract. The Holders of the
Class X Certificates will own each of the Net WAC Cap Account and the Reserve
Fund. The Offered Certificates shall be treated as representing ownership of not
only a regular interest in a REMIC but also ownership of an interest in an
interest rate cap contract.
The Trustee shall treat the payment of any Net WAC Cap
Carryover as paid first to the Holders of the Class X Certificates, deposited by
the Holders of the Class X Certificates in the Net WAC Cap Account and then paid
from the Net WAC Cap Account to the relevant Offered Certificates. The Trustee
shall treat the Offered Certificates as "contractual rights coupled with regular
interests" within the meaning of ss.1.860G-2(i) of the Income Tax Regulations.
In determining the issue price of the regular interests issued to Holders of
Offered Certificates, the Trustee shall assume that each interest rate cap
contract has a value of $10,000.
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SECTION 2.08. Covenants of the Servicer.
The Servicer hereby covenants to the Depositor and the Trustee
as follows:
(a) the Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by the Servicer pursuant
to this Agreement will contain any untrue statement of a material fact or omit
to state a material fact necessary to make such information, certificate,
statement or report not misleading.
ARTICLE III
ADMINISTRATION AND SERVICING
OF LOANS
SECTION 3.01. Servicer to Service Loans.
For and on behalf of the Certificateholders, the Servicer
shall service and administer the Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage loan
servicers. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof, (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and Recoveries and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Loan; provided that the Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Loan or the rights and interests of the Depositor, the
Trustee and the Certificateholders under this Agreement. The Servicer shall
represent and protect the interests of the Trust Fund in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Loan, and shall not make or permit any
modification, waiver or amendment of any Loan which would cause the Trust Fund
to fail to qualify as one or more REMICs or result in the imposition of any tax
under Section 860F(a) or Section 860G(d) of the Code. Without limiting the
generality of the foregoing, the Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor and/or the Trustee such
documents requiring execution and delivery by either or both of them as are
necessary or appropriate to enable the Servicer to service and administer the
Loans to the extent that the Servicer is not permitted to execute and deliver
such documents pursuant to the preceding sentence. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer. In addition, upon the request of the Servicer from
time to time the Trustee shall execute and deliver to the Servicer one or more
powers of attorney in the form attached hereto as Exhibit M.
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SECTION 3.02. Subservicing; Enforcement of the Obligations of
Servicers.
(a) The Servicer may arrange for the subservicing of any Loan
by a Subservicer pursuant to a subservicing agreement; provided, however, that
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Unless the context
otherwise requires, references in this Agreement to actions taken or to be taken
by the Servicer in servicing the Loans include actions taken or to be taken by a
Subservicer on behalf of the Servicer. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders
for the servicing and administration of the Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such subservicing agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Loans. All actions of each Subservicer performed pursuant to the related
subservicing agreement shall be performed as an agent of the Servicer with the
same force and effect as if performed directly by the Servicer. Each
subservicing agreement, if any, shall provide that any successor servicer
(including, without limitation, the Trustee acting in such capacity) shall have
the right to terminate such subservicing agreement without the payment of any
fees or other amounts to the subservicer.
(b) For purposes of this Agreement, the Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Loans that are received by a Subservicer regardless of whether such payments
are remitted by the Subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in
Respect of the Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of the Servicer hereunder and may, but is not obligated to, perform,
or cause a designee to perform, any defaulted obligation of the Servicer
hereunder and in connection with any such defaulted obligation to exercise the
related rights of the Servicer hereunder; provided that the Servicer shall not
be relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by the Servicer
nor shall the Trustee or the Depositor be obligated to supervise the performance
of the Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer
be the Servicer hereunder (including by reason of an Event of Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Servicer pursuant to Section
3.09 hereof or any acts or omissions of the predecessor Servicer hereunder, (ii)
obligated to make Advances if it is prohibited from doing so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of Loans hereunder
including, but not limited to, repurchases or substitutions of Loans pursuant to
Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the Servicer
pursuant to Section 2.03 or (v) deemed to have made any representations and
warranties of the Servicer hereunder). Any such assumption shall be subject to
Section 7.02 hereof. If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee or its
successor shall succeed to any rights and obligations of the Servicer under each
subservicing agreement.
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The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement and
the Loans then being serviced thereunder and an accounting of amounts collected
or held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the substitute subservicing agreement to the assuming
party.
SECTION 3.05. Collection of Loan Payments; Certificate
Account; Distribution Account.
(a) The Servicer shall make reasonable efforts in accordance
with the customary and usual standards of practice of prudent mortgage servicers
to collect all payments called for under the terms and provisions of the Loans
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related Required Insurance Policy. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or any prepayment charge or penalty interest in connection with the
prepayment of a Loan and (ii) extend the due dates for payments due on a
Mortgage Note for a period not greater than 180 days; provided, however, that
the Servicer cannot extend the maturity of any such Loan past the date on which
the final payment is due on the latest maturing Loan as of the Cut-off Date. In
the event of any such arrangement, the Servicer shall make Advances on the
related Loan in accordance with the provisions of Section 4.01 during the
scheduled period in accordance with the amortization schedule of such Loan
without modification thereof by reason of such arrangements. The Servicer shall
not be required to institute or join in litigation with respect to collection of
any payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Servicer shall establish and maintain a Certificate
Account into which the Servicer shall deposit or cause to be deposited within
one Business Day of receipt, except as otherwise specifically provided herein,
the following payments and collections remitted by Subservicers or received by
it in respect of the Loans subsequent to the Cut-off Date (other than in respect
of principal and interest due on the Loans on or before the Cut-off Date) and
the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the
Loans, including Principal Prepayments;
(ii) all payments on account of interest on the
Loans, net of the related Servicing Fee;
(iii) all Insurance Proceeds and Liquidation
Proceeds, other than proceeds to be applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's normal servicing procedures, and all
Recoveries;
(iv) any amount required to be deposited by the
Servicer pursuant to Section 3.05(d) in connection with any losses on
Permitted Investments;
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(v) any amounts required to be deposited by the
Servicer pursuant to Section 3.09(c) and, in respect of net monthly
rental income from REO Property, pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to
Section 4.01;
(viii) all Principal Prepayments, Liquidation
Proceeds and other unscheduled payments on the Loans received on the
Cut-off Date; and
(ix) any other amounts required to be deposited
hereunder.
The foregoing requirements for remittance by the Servicer
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted by
the Servicer. In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time withdraw or direct the institution
maintaining the Certificate Account to withdraw such amount from the Certificate
Account, any provision herein to the contrary notwithstanding. Such withdrawal
or direction may be accomplished by delivering written notice thereof to the
Trustee or such other institution maintaining the Certificate Account which
describes the amounts deposited in error in the Certificate Account. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Certificate Account shall
be held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08.
(c) The Trustee shall establish and maintain, for the benefit
of the Certificateholders, the Distribution Account. The Trustee shall, promptly
upon receipt, deposit in the Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Servicer to
the Trustee pursuant to Section 3.08(a)(ix); and
(ii) any other amounts deposited hereunder which are
required to be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee uninvested in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals from
the Distribution Account at the direction of the Servicer.
(d) The Servicer may direct, in writing, each institution at
which the Certificate Account is maintained to invest the funds therein in
specified Permitted Investments, which shall mature not later than, the second
Business Day next preceding the Distribution Account Deposit Date (except that
if such Permitted Investment is an obligation of the institution that maintains
such account or a fund for which such institution or affiliate thereof serves as
an investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, then such Permitted Investment shall mature not later
than the Business Day next preceding such Distribution Account Deposit Date) and
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. So long as no Event of Default shall have occurred and be
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continuing, all income earned on funds on deposit in the Certificate Account,
net of any losses realized from any Permitted Investments made with such funds,
shall be for the benefit of the Servicer as servicing compensation and shall be
remitted to it monthly as provided herein. If an Event of Default has occurred
and is continuing, all income earned on funds on deposit in the Certificate
Account, net of any losses realized from any Permitted Investments made with
such funds, shall be deposited into the Certificate Account without right of
reimbursement. The amount of any realized losses in the Certificate Account in
respect of any such Permitted Investments shall promptly be deposited by the
Servicer (from its own funds) in the Certificate Account. The Trustee in its
fiduciary capacity shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Certificate
Account and made in accordance with this Section 3.05.
(e) The Servicer shall give notice to the Trustee, each
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account prior to any change thereof. The Trustee
shall give notice to the Servicer, each Seller, each Rating Agency and the
Depositor of any proposed change of the location of the Distribution Account
prior to any change thereof.
SECTION 3.06. Payment of Taxes, Assessments, Hazard Insurance
Premiums and Similar Items; Escrow Accounts.
(a) The Servicer shall require Mortgagors to pay all taxes,
assessments, hazard insurance premiums, flood insurance premiums, condominium
association dues or comparable items for the account of the Mortgagors. To the
extent required by the Seller at the time the related Loan was originated and
not violative of current law, the Servicer shall establish and maintain one or
more accounts (each, an "ESCROW ACCOUNT") and deposit and retain therein all
collections from the Mortgagors (or advances by the Servicer) for the payment of
taxes, assessments, hazard insurance premiums, condominium association dues or
comparable items for the account of the Mortgagors. Nothing herein shall require
the Servicer to compel a Mortgagor to establish an Escrow Account in violation
of applicable law or if the Seller of the related Loan did not require the
establishment of an Escrow Account at the time the Loan was originated.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium association dues, or comparable items, to
reimburse the Servicer out of related collections for any payments made pursuant
to Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.09 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums determined to be overages, to pay interest, if required by
law or the terms of the related Mortgage or Mortgage Note, to Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow Account at
the termination of this Agreement in accordance with Section 9.01 hereof. The
Escrow Accounts shall not be a part of the Trust Fund.
(b) The Servicer shall advance any payments referred to in
Section 3.06(a) that are not timely paid by the Mortgagors on the date when the
tax, premium or other cost for which such payment is intended is due, but the
Servicer shall be required so to advance only to the extent that such advances,
in the good faith judgment of the Servicer, are required to be made to protect
the lien of the Mortgage and will be recoverable by the Servicer out of
Insurance Proceeds, Liquidation Proceeds or otherwise. The amount of any such
advances made by the Servicer for the purpose of maintaining any hazard or flood
insurance shall not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trustee for their benefit, be added to
the principal balance of the related Loan, notwithstanding that the terms of the
Loan so permit. Any advance made by the Servicer pursuant to this Section 3.06
shall be recoverable as a Servicing Advance to the extent permitted by Section
3.08.
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SECTION 3.07. Access to Certain Documentation and Information
Regarding the Loans.
(a) The Servicer shall afford the Depositor, the Trustee and each Rating Agency
reasonable access to all records and documentation regarding the Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Servicer.
(b) Upon reasonable advance notice in writing, the Servicer will provide to each
Certificateholder which is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Loans sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Servicer shall be entitled
to be reimbursed by each such Certificateholder for actual expenses incurred by
the Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate
Account and Distribution Account.
(a) The Servicer may from time to time make withdrawals from
the Certificate Account for the following purposes:
(i) to pay to the Servicer (to the extent not
previously retained by the Servicer) the servicing compensation to
which it is entitled pursuant to Section 3.13, and, subject to Section
3.05(d), to pay to the Servicer, as additional servicing compensation,
earnings on or investment income with respect to funds in or credited
to the Certificate Account;
(ii) to reimburse the Servicer for unreimbursed
Advances made by it, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on the Loan(s) in
respect of which any such Advance was made, excluding any Purchase
Price proceeds received from the Servicer pursuant to Section 3.11 and
subject to Section 9.01;
(iii) to reimburse the Servicer for any
Nonrecoverable Advance previously made, except that the Servicer shall
no longer be entitled to reimbursement for any Nonrecoverable Advance
on a Loan as of the date the Servicer purchases such Loan from the
Trust Fund pursuant to Section 3.11 or Section 9.01;
(iv) to reimburse the Servicer for Insured Expenses
from the related Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed
Servicing Advances, the Servicer's right to reimbursement pursuant to
this clause (a) with respect to any Loan being limited to amounts
received on such Loan(s) which represent late recoveries of the
payments for which such Servicing Advances were made pursuant to
Section 3.01 or Section 3.06 and (b) for unpaid Servicing Fees as
provided in Section 3.11 hereof;
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(vi) to pay to the purchaser, with respect to each
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vii) to (A) reimburse the Sellers, the Servicer or
the Depositor for expenses incurred by any of them that are
reimbursable pursuant to Section 6.03 hereof or (B) to pay to the
Trustee any Trustee Permitted Withdrawal Amounts;
(viii) to withdraw any amount deposited in the
Certificate Account and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit
Date, to withdraw an amount equal to the Available Funds for such
Distribution Date and remit such amounts to the Trustee for deposit in
the Distribution Account; and
(x) to clear and terminate the Certificate Account
upon termination of this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
Loan by Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such subclauses (i), (ii), (iv), (v) and (vi).
Prior to making any withdrawal from the Certificate Account pursuant to
subclause (iii), the Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
determined by the Servicer to be a Nonrecoverable Advance and identifying the
related Loans(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account to make the distributions specified in this Agreement (and to withhold
from the amounts so withdrawn, the amount of any taxes that it is authorized to
withhold pursuant to the last paragraph of Section 8.11). In addition, the
Trustee may from time to time make withdrawals from the Distribution Account for
the following purposes:
(i) to the extent not remitted by the Servicer
pursuant to Section 3.08(a)(vii)(B) above within a reasonable period of
time after request by the Trustee, to remit (prior to making any other
distributions from amounts held in the Distribution Account) to itself
any Trustee Permitted Withdrawal Amounts;
(ii) to withdraw and return to the Servicer any
amount deposited in the Distribution Account and not required to be
deposited therein; and
(iii) to clear and terminate the Distribution Account
upon termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Servicer shall require Mortgagors to maintain, for
each Loan, hazard insurance with extended coverage (i) in the case of a Loan
secured by a Mortgage creating a first lien on the related Mortgaged Property,
in an amount that is at least equal to the original principal balance of such
Loan or the maximum insurable value of the improvements on such Mortgaged
Property, whichever is less, and (ii) in the case of a Second Lien Loan, in an
amount equal to the lesser of the combined principal balance of such Second Lien
Loan and the related first lien mortgage loan or the maximum insurable value of
the improvements on the related Mortgaged Property. Each such policy of standard
hazard insurance shall contain, or have an accompanying endorsement that
contains, a standard mortgagee clause. Any amounts collected by the Servicer
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under any such policies (other than the amounts to be applied to the restoration
or repair of the improvements on the related Mortgaged Property or amounts
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. It is understood and
agreed that no earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a Mortgage 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
is located at the time of origination of the Loan in a federally designated
special flood hazard area and such area is participating in the national flood
insurance program, the Servicer shall require the related Mortgagor to maintain
flood insurance with respect to such Loan. Such flood insurance shall be in an
amount equal to the original principal balance of the related Loan.
(b) The Servicer shall not be required to have Mortgagors
maintain any Primary Mortgage Insurance Policy with respect to any Loan, but may
do so as allowed by law, and shall allow the cancellation of any such Primary
Mortgage Insurance Policy as required by law. The Servicer shall not take any
action which would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder. If any Mortgagor fails to pay the premiums for its
Primary Mortgage Insurance Policy, if any, the Servicer may, but shall not be
required to, pay such premiums. Any payment made by the Servicer pursuant to
this Section 3.09(b) shall be recoverable as a Servicing Advance to the extent
permitted by Section 3.08.
(c) In connection with its activities as Servicer of the
Loans, the Servicer agrees to present on behalf of itself, 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 Loans. Any amounts collected by the Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Certificate
Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) When any property subject to a Mortgage has been conveyed
by the Mortgagor, the Servicer, to the extent that it has knowledge of such
conveyance, may, at its discretion, but is not required to, enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. The Servicer is authorized, subject to
Section 3.10(b), to take or enter into an assumption and modification agreement
from or with the Person to whom such property has been or is about to be
conveyed, pursuant to which such Person becomes liable under the Mortgage Note
and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Loan shall continue to be covered (if so covered
before the Servicer enters such agreement) by the applicable Required Insurance
Policies. The Servicer, subject to Section 3.10(b), is also authorized with the
prior approval of the insurers under any Required Insurance Policies to enter
into a substitution of liability agreement with such Person, pursuant to which
the original Mortgagor is released from liability and such Person is substituted
as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
by reason of any transfer or assumption which the Servicer reasonably believes
it is restricted by law from preventing, for any reason whatsoever.
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(b) In any case in which a Mortgaged Property has been
conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the Loan, the Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to whom
the Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection with any such
assumption, no material term of the Mortgage Note may be changed. In addition,
the substitute Mortgagor and the Mortgaged Property must be acceptable to the
Servicer in accordance with its underwriting standards as then in effect.
Together with each such substitution, assumption or other agreement or
instrument delivered to the Trustee for execution by it, the Servicer shall
deliver an Officer's Certificate signed by a Servicing Officer stating that the
requirements of this subsection have been met in connection therewith. The
Servicer shall notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original of such
substitution or assumption agreement, which in the case of the original 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. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation.
SECTION 3.11. Realization Upon Defaulted Loans; Repurchase
and Sale of Certain Loans.
The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable, in its sole
discretion, and as shall be normal and usual in its general mortgage servicing
activities and meet the requirements of the insurer under any Required Insurance
Policy; provided, however, that the Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account). The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the liquidation proceeds with respect to the related Mortgaged
Property, as provided in the definition of Liquidation Proceeds. If the Servicer
has knowledge that a Mortgaged Property which the Servicer is contemplating
acquiring in foreclosure or by deed in lieu of foreclosure is located within a
one mile radius of any site with environmental or hazardous waste risks known to
the Servicer, the Servicer will, prior to acquiring the Mortgaged Property,
consider such risks and only take action in accordance with its established
environmental review procedures.
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder. As described more fully below, the Servicer shall have the
sole discretion to determine whether an immediate sale of an REO Property or
continued management of such REO Property is in the best interest of the
Certificateholders. In order to facilitate sales of REO Properties by the
Servicer, upon the Servicer's request, the Trustee shall promptly provide the
Servicer with appropriate limited durable powers of attorney or such other
documentation as may reasonably be required by the Servicer or purchasers of REO
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Properties to consummate such sales. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer, in its
sole discretion, deems to be in the best interest of the Certificateholders for
the period prior to the sale of such REO Property. The Servicer shall prepare
for and deliver to the Trustee a statement with respect to each REO Property
that has been rented showing the aggregate rental income received and all
expenses incurred in connection with the management and maintenance of such REO
Property at such times as is necessary to enable the Trustee to comply with the
reporting requirements of the REMIC Provisions. The net monthly income, if any,
from such REO Property shall be deposited in the Certificate Account no later
than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding required by Sections 1445 and 6050J of
the Code with respect to foreclosures and abandonments, the tax reporting
required by Section 6050H of the Code with respect to the receipt of mortgage
interest from individuals and any tax reporting required by Section 6050P of the
Code with respect to the cancellation of indebtedness by certain financial
entities, by preparing such tax and information returns as may be required, in
the form required, and delivering the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Loan, the Servicer shall dispose of such Mortgaged Property prior
to the close of the third taxable year of the Trust Fund following the taxable
year of the Trust Fund in which the Trust Fund acquired such Mortgaged Property,
unless the Trustee shall have been supplied with an Opinion of Counsel (which
Opinion of Counsel shall not be at the expense of the Trustee) to the effect
that the holding by the Trust Fund of such Mortgaged 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 to fail to qualify as one or more REMICs at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC to the
imposition of any federal, state or local income taxes on the income earned from
such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless
the Servicer has agreed, in its sole discretion, to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Loan
shall be subject to a determination by the Servicer, in its sole discretion,
that the proceeds of such foreclosure would exceed the costs and expenses of
bringing such a proceeding.
The proceeds from any liquidation of a Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Servicer for any related unreimbursed Servicing Advances
and Servicing Fees related to such Liquidated Loan; second, to reimburse the
Servicer for any unreimbursed Advances; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount or any such Advance has
been reimbursed) on the Loan or related REO Property, at the Adjusted Net
Mortgage Rate to the Due Date occurring in the calendar month preceding the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Loan. Excess Proceeds, if any, from the liquidation
of a Liquidated Loan will be retained by the Servicer as additional servicing
compensation pursuant to Section 3.13.
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The Servicer, in its sole discretion, shall have the right to
sell any Loan in the Trust Fund as to which the Servicer reasonably believes
that default in payment is imminent at a price equal to the Purchase Price. In
addition, the Servicer, in its sole discretion, shall have the right to purchase
for its own account or for resale as set forth herein from the Trust Fund any
Loan that is 91 days or more delinquent at a price equal to the Purchase Price.
The Purchase Price for any Loan purchased or sold hereunder shall be deposited
in the Certificate Account and the Trustee, upon receipt of a Request for
Release from the Servicer substantially in the form of Exhibit J, shall release
or cause to be released to the Servicer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
purchaser, in each case without recourse, as shall be necessary to vest in the
purchaser any Loan released pursuant hereto and the purchaser shall succeed to
all the Trustee's right, title and interest in and to such Loan and all security
and documents related thereto. Such assignment shall be a sale and assignment
outright and not for security. The purchaser shall thereupon own such Loan, and
all security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
SECTION 3.12. Documents, Records and Funds in Possession of
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Loan coming into the possession of the
Servicer from time to time and shall account fully to the Trustee for any funds
received by the Servicer or which otherwise are collected by the Servicer as
Liquidation Proceeds, Insurance Proceeds or Recoveries in respect of any Loan.
All Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds or Recoveries, including but not
limited to, any funds on deposit in the Certificate Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Certificate
Account, Distribution Account, or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Loan, except, however, that the Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable to
the Servicer under this Agreement.
SECTION 3.13. Servicing Compensation.
As compensation for its activities hereunder, the Servicer
shall be entitled to retain or withdraw from the Certificate Account an amount
equal to the Servicing Fee for each Loan, provided that the aggregate Servicing
Fee for the Loans with respect to any Distribution Date shall be reduced (i) by
an amount equal to the aggregate of the Prepayment Interest Shortfalls, if any,
with respect to such Distribution Date, up to the full amount of the aggregate
Servicing Fee, and (ii) with respect to the first Distribution Date, an amount
equal to any amount to be deposited into the Certificate Account by the Sellers
pursuant to Section 2.01(a) and not so deposited.
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Additional servicing compensation in the form of Excess
Proceeds, Prepayment Interest Excess, prepayment penalties, assumption fees,
late payment charges and all income earned on funds on deposit in the
Certificate Account, net of any losses realized from any Permitted Investments
made with such funds, shall be retained by the Servicer to the extent not
required to be deposited in the Certificate Account pursuant to Section 3.05
hereof. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided in this Agreement.
SECTION 3.14. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising certain Certificateholders and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices designated by the Servicer. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
SECTION 3.15. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor and the Trustee on
or before 120 days after the end of the Servicer's fiscal year, commencing with
the fiscal year in which the Cut-off Date occurs, an Officer's Certificate
stating, as to the signer thereof, that (i) a review of the activities of the
Servicer during the preceding fiscal year and of the performance of the Servicer
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all 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. The
Trustee shall forward a copy of each such statement to each Rating Agency.
SECTION 3.16. Annual Independent Public Accountants'
Servicing Statement; Financial Statements.
On or before 120 days after the end of the Servicer's fiscal
year, commencing with the fiscal year in which the Cut-off Date occurs, the
Servicer at its expense shall cause a nationally or regionally recognized firm
of independent public accountants (who may also render other services to the
Servicer, the Seller or any affiliate thereof) which is a member of the American
Institute of Certified Public Accountants to furnish a statement to the Trustee
and the Depositor to the effect that such firm has examined certain documents
and records relating to the servicing of the Loans under this Agreement and
that, on the basis of such examination, conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC, such servicing has been
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conducted in compliance with this Agreement except for such significant
exceptions or errors in records that, in the opinion of such firm, the Uniform
Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FNMA and FHLMC requires it to report. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC (rendered within one year of such statement) of independent
public accountants with respect to the related Subservicer. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Servicer's expense, provided such statement is delivered by the Servicer
to the Trustee.
SECTION 3.17. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
Servicer hereunder and (b) a fidelity bond in respect of its officers, employees
and agents. Each such policy or policies and bond shall, together, comply with
the requirements from time to time of FNMA or FHLMC for persons performing
servicing for mortgage loans purchased by FNMA or FHLMC. In the event that any
such policy or bond ceases to be in effect, the Servicer shall obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.
SECTION 3.18. RESERVED.
SECTION 3.19. Delinquent Loans.
For all purposes in this Agreement and the Exhibits and
Schedules attached hereto, the determination as to whether a Loan is delinquent
shall be based on the number of days that payments on such Loan are
contractually past due, assuming 30-day months. For example, a payment due on
the first day of a month is not 30 days delinquent until the first day of the
following month.
ARTICLE IIIA
RESERVE FUND AND NET WAC CAP ACCOUNT
SECTION 3A.01 RESERVED.
SECTION 3A.02 Reserve Fund and Yield Maintenance Agreement.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the Hedged
Certificates, the Reserve Fund to cover certain payments to the Hedged
Certificates. The Reserve Fund shall be an Eligible Account, and funds on
deposit in such fund shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement. The Reserve Fund shall be
treated as an "outside reserve fund" under applicable Treasury regulations and
will not be part of any REMIC. Any investment earnings on funds on deposit in
the Reserve Fund will be treated as owned by the Holders of the Class X
Certificates and will be taxable to the Holders of the Class X Certificates.
Distributions made to the Reserve Fund under this document shall be treated as
made to the Holders of the Class X Certificates.
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(b) In addition, on the Closing Date, the Yield Maintenance
Agreement will be entered into by the Counterparty and the Trustee, for the
benefit of the Holders of the Hedged Certificates. On each Distribution Date,
the Trustee will deposit into the Reserve Fund any amounts received pursuant to
the Yield Maintenance Agreement. Pursuant to the terms of the Yield Maintenance
Agreement, amounts received thereunder will be allocable to the applicable Class
of Hedged Certificates and the Trustee shall maintain records tracking such
allocation. The Trustee shall collect payments due under and otherwise enforce
the terms of the Yield Maintenance Agreement. The Trustee shall make withdrawals
from the Reserve Fund to make distributions pursuant to Section 4.02(i).
Notwithstanding anything to the contrary contained herein, in no event shall the
Trustee in its fiduciary capacity be liable to the Holders of the Hedged
Certificates, be required to make any deposit from its own funds into the
Reserve Fund, or be required to take any action against the Counterparty in
connection with any delay in payment of amounts due under the Yield Maintenance
Agreement caused by any government action as further described in clause (j) of
Part I of the Schedule to the Yield Maintenance Agreement during the grace
period specified therein.
(c) The Holders of the Class X Certificates may direct the
Trustee, in writing, to invest the funds in the Reserve Fund in Permitted
Investments, which shall mature not later than, the second Business Day
preceding each Distribution Date (except that if such Permitted Investment is an
obligation of the institution that maintains such account or a fund for which
such institution or affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent and/or custodian or subcustodian,
then such Permitted Investment shall mature not later than the Business Day next
preceding such Distribution Date) and shall not be sold or disposed of prior to
their maturity. All investments made with funds from the Reserve Fund shall be
made in the name of the Trustee, for the benefit of the Holders of the Hedged
Certificates. All income earned on funds on deposit in the Reserve Fund, net of
any losses realized from any Permitted Investments made with such funds, shall
be deposited in the Reserve Fund. The Trustee in its fiduciary capacity shall
not be liable for the amount of any loss incurred in respect of any investment
or lack of investment of funds held in the Reserve Fund and made in accordance
with this Section 3A.02.
(d) Upon termination of the Trust Fund, any amounts remaining
in the Reserve Fund shall be distributed to the Holders of the Class X
Certificates.
(e) In the event that the Yield Maintenance Agreement is
terminated prior to the Yield Maintenance Stated Termination and the
Counterparty has not obtained a replacement counterparty to assume its
obligations thereunder pursuant to the terms of the Yield Maintenance Agreement,
the Trustee shall obtain a replacement yield maintenance agreement acceptable to
the Servicer and shall apply any amounts received from the Counterparty under
the Yield Maintenance Agreement in connection with its termination, to the
extent necessary, to obtain such replacement. In no event whatsoever shall the
Trustee be responsible for costs and expenses incurred in connection with
obtaining a replacement yield maintenance agreement or for any fees, costs or
expenses payable thereunder.
(f) If, upon termination of the Trust Fund pursuant to the
provisions of Article IX hereof, the "Notional Amount," as set forth in Appendix
A to any of the Confirmations relating to the Yield Maintenance Agreement, is
greater than zero, the Trustee shall, as of the date of such termination, assign
to Equity One, Inc. all of its right, title and interest in and to the Yield
Maintenance Agreement and any payments thereunder (subject to applicable
regulations and account opening procedures).
(g) For any Distribution Date on which there is a payment
under the Yield Maintenance Agreement based on a notional balance in excess of
the aggregate Class Certificate Balance of a Class of Hedged Certificates, the
amount representing such excess payment, to the extent not otherwise distributed
pursuant to Section 4.02(i)(i), shall not be an asset of the Trust Fund and,
instead, shall be paid into and distributed out of a separate trust created by
this Agreement for the benefit of the Holders of the Class X Certificates and
shall be distributed to the Holders of the Class X Certificates pursuant to
Section 4.02(i)(ii).
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SECTION 3A.03. Net WAC Cap Account
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the Offered
Certificates, the Net WAC Cap Account and deposit therein the amount of $10,000
paid to the Trustee by the Depositor. The Net WAC Cap Account shall be an
Eligible Account, and funds on deposit therein shall be held separate and apart
from, and shall not be commingled with, any other moneys, including without
limitation, other moneys held by the Trustee pursuant to this Agreement. The Net
WAC Cap Account shall be treated as an "outside reserve fund" under applicable
Treasury regulations and will not be part of any REMIC. Any investment earnings
on the Net WAC Cap Account will be treated as owned by the Holders of the Class
X Certificates and will be taxable to the Holders of the Class X Certificates.
Distributions made to the Net WAC Cap Account under this document shall be
treated as made to the Class X Certificateholders.
(b) On each Distribution Date, the Trustee shall deposit
amounts in the Net WAC Cap Account pursuant to Sections 4.02(f)(64),
4.02(f)(65), 4.02(g)(64) and 4.02(g)(65). The amount required to be deposited
into the Net WAC Cap Account on any Distribution Date will equal the aggregate
Net WAC Cap Deposit Amount for the Offered Certificates. The Trustee shall make
withdrawals from the Net WAC Cap Account to make distributions pursuant to
Section 4.02(j).
(c) The Trustee shall invest the funds in the Net WAC Cap
Account as directed in writing by the Holders of the Class X Certificates in
Permitted Investments, which shall mature not later than the second Business Day
preceding each Distribution Date (except that if such Permitted Investment is an
obligation of the institution that maintains such account or a fund for which
such institution or affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent and/or custodian or subcustodian,
then such Permitted Investment shall mature not later than the Business Day next
preceding such Distribution Date) and shall not be sold or disposed of prior to
their maturity. Any investment earnings on such amounts shall be payable to the
Holders of the Class X Certificates. The Holders of the Class X Certificates
shall be treated as the owners of the Net WAC Cap Account for federal tax
purposes. The Trustee in its fiduciary capacity shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Net WAC Cap Account and made in accordance with this
Section 3A.03(c).
(d) Upon termination of the Trust Fund, any amounts remaining
in the Net WAC Cap Account shall be distributed to the Holders of the Class X
Certificates.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01. Advances.
The Servicer shall determine on or before each Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Servicer determines it is required to make an
Advance, it shall, on or before the Servicer Advance Date, either (i) deposit
into the Certificate Account an amount equal to the Advance or (ii) make an
appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Servicer in discharge
of its obligation to make any such Advance. Any funds so applied shall be
replaced by the Servicer by deposit in the Certificate Account no later than the
close of business on the next Servicer Advance Date. The Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Loan shall continue if such Loan
has been foreclosed or otherwise terminated and the Mortgaged Property has not
been liquidated.
SECTION 4.02. Priorities of Distribution and Allocation.
(a) Interest. On each Distribution Date, the Trustee will distribute:
(i) from the Group I Interest Remittance Amount for that
Distribution Date, in the following order of priority, to the
extent available:
(A) first, to the Trustee, any amounts then due and owing
representing fees of the Trustee based on the
aggregate Stated Principal Balance of the Group I
Loans and, to the extent not paid by Trustee
Permitted Withdrawal Amounts, expenses and indemnity
amounts due and owing to the Trustee relating to the
Group I Loans;
(B) second, to the Servicer, an amount equal to the sum
of (1) the Servicing Fee relating to the Group I
Loans, except to the extent previously paid with
permitted withdrawals from the Certificate Account,
and (2) any other amounts expended by the Servicer in
connection with the Group I Loans and reimbursable
thereto under this Agreement but not previously
reimbursed;
(C) third, concurrently, to the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5 and Class AF-6
Certificates, pro rata, the applicable Interest
Distribution Amounts for that Distribution Date; and
(D) fourth, concurrently, to the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5 and Class AF-6
Certificates, pro rata, the applicable Class Unpaid
Interest Amounts, if any.
(ii) from the Group II-A Interest Remittance Amount for that
Distribution Date, in the following order of priority, to the
extent available:
(A) first, to the Trustee, any amounts then due and owing
representing fees of the Trustee based on the
aggregate Stated Principal Balance of the Group II-A
Loans and, to the extent not paid by Trustee
Permitted Withdrawal Amounts, expenses and indemnity
amounts due and owing to the Trustee relating to the
Group II-A Loans;
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(B) second, to the Servicer, an amount equal to the sum
of (1) the Servicing Fee relating to the Group II-A
Loans, except to the extent previously paid with
permitted withdrawals from the Certificate Account,
and (2) any other amounts expended by the Servicer in
connection with the Group II-A Loans and reimbursable
thereto under this Agreement but not previously
reimbursed;
(C) third, to the Class AV-1 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(D) fourth, to the Class AV-1 Certificates, the
applicable Class Unpaid Interest Amount, if any; and
(E) fifth, concurrently, to the Class AV-2A, Class AV-2B
and Class AV-2C Certificates, pro rata, an amount
equal to the excess, if any, of (1) the amount
required to be distributed pursuant to clause
(a)(iii)(C) and clause (a)(iii)(D) below for that
Distribution Date over (2) the amount actually
distributed pursuant to those clauses from the Group
II-B Interest Remittance Amount, to the extent not
otherwise paid.
(iii) from the Group II-B Interest Remittance Amount for that
Distribution Date, in the following order of priority, to the
extent available:
(A) first, to the Trustee, any amounts then due and owing
representing fees of the Trustee based on the
aggregate Stated Principal Balance of the Group II-B
Loans and, to the extent not paid by Trustee
Permitted Withdrawal Amounts, expenses and indemnity
amounts due and owing to the Trustee relating to the
Group II-B Loans;
(B) second, to the Servicer, an amount equal to the sum
of (1) the Servicing Fee relating to the Group II-B
Loans, except to the extent previously paid with
permitted withdrawals from the Certificate Account,
and (2) any other amounts expended by the Servicer in
connection with the Group II-B Loans and reimbursable
thereto under this Agreement but not previously
reimbursed;
(C) third, concurrently, to the Class AV-2A, Class AV-2B
and Class AV-2C Certificates, pro rata, the
applicable Interest Distribution Amounts for that
Distribution Date;
(D) fourth, concurrently, to the Class AV-2A, Class AV-2B
and Class AV-2C Certificates, pro rata, the
applicable Class Unpaid Interest Amounts, if any; and
(E) fifth, to the Class AV-1 Certificates, an amount
equal to the excess, if any, of (1) the amount
required to be distributed pursuant to clause
(a)(ii)(C) and clause (a)(ii)(D) above for that
Distribution Date over (2) the amount actually
distributed pursuant to those clauses from the Group
II-A Interest Remittance Amount, to the extent not
otherwise paid.
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(iv) from the Group I Remaining Interest Remittance Amount for that
Distribution Date, in the following order of priority, to the
extent available:
(A) first, to the Class MF-1 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(B) second, to the Class MF-2 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(C) third, to the Class MF-3 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(D) fourth, to the Class MF-4 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(E) fifth, to the Class MF-5 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(F) sixth, to the Class MF-6 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(G) seventh, to the Class BF-1 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(H) eighth, to the Class BF-2 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(I) ninth, to the Class BF-3 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date; and
(J) tenth, the Group I Monthly Excess Interest Amount for
that Distribution Date will be applied as described
under Section 4.02(f) hereof.
(v) from the Group II Remaining Interest Remittance Amount for
that Distribution Date, in the following order of priority, to
the extent available:
(A) first, to the Class MV-1 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(B) second, to the Class MV-2 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(C) third, to the Class MV-3 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
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(D) fourth, to the Class MV-4 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(E) fifth, to the Class MV-5 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(F) sixth, to the Class MV-6 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(G) seventh, to the Class BV-1 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(H) eighth, to the Class BV-2 Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(I) ninth, to the Class BV-3 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date;
(J) tenth, to the Class BV-4 Certificates, the applicable
Interest Distribution Amount for that Distribution
Date; and
(K) eleventh, the Group II Monthly Excess Interest Amount
for that Distribution Date will be applied as
described under Section 4.02(g) hereof.
(b) Group I Principal (pre-Stepdown Date or Trigger Event). On each
Distribution Date before the Group I Stepdown Date or with respect to
which a Group I Trigger Event is in effect, the Trustee shall
distribute:
(i) from the Group I Principal Distribution Amount, in the
following order of priority, to the extent available:
(A) first, the Class AF-6 Lockout Distribution Amount to
the Class AF-6 Certificates, until the Class
Certificate Balance thereof has been reduced to zero;
and
(B) second, sequentially, to the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5 and Class AF-6
Certificates, in that order, until the respective
Class Certificate Balances thereof have been reduced
to zero;
provided, however, that notwithstanding any provision
to the contrary set forth herein, on any Distribution
Date on which the aggregate Class Certificate Balance
of the Group I Subordinate Certificates is zero, all
distributions of principal to the Class AF
Certificates will be made concurrently, on a pro rata
basis, based on their respective Class Certificate
Balances.
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(ii) from the Pre-Stepdown Group I Remaining Principal Distribution
Amount:
(A) first, to the Class MF-1 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(B) second, to the Class MF-2 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(C) third, to the Class MF-3 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(D) fourth, to the Class MF-4 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(E) fifth, to the Class MF-5 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(F) sixth, to the Class MF-6 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(G) seventh, to the Class BF-1 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(H) eighth, to the Class BF-2 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(I) ninth, to the Class BF-3 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero; and
(J) tenth, any amount of the Group I Pre-Stepdown
Remaining Principal Distribution Amount remaining
after making all of the distributions in clauses
(b)(ii)(A) through (b)(ii)(I) above will be applied
as described in Section 4.02(f) hereof.
(c) Group II Principal (pre-Stepdown Date or Trigger Event). On each
Distribution Date before the Group II Stepdown Date or with respect to
which a Group II Trigger Event is in effect, the Trustee shall
distribute:
(i) from the Group II-A Principal Distribution Amount:
(A) to the Class AV-1 Certificates, until the Class
Certificate Balance thereof has been reduced to zero.
(ii) from the Group II-B Principal Distribution Amount:
(A) sequentially, to the Class AV-2A, Class AV-2B and
Class AV-2C Certificates, in that order, until the
respective Class Certificate Balances thereof have
been reduced to zero;
84
provided, however, that notwithstanding any provision
to the contrary set forth herein, on any Distribution
Date on which the aggregate Class Certificate Balance
of the Group II Subordinate Certificates is zero, all
distributions of principal to the Class AV-2A, Class
AV-2B and Class AV-2C Certificates will be made
concurrently, on a pro rata basis, based on their
respective Class Certificate Balances.
(iii) from the Pre-Stepdown Group II Cross-collateralization Principal
Distribution Amount:
(A) concurrently, to (i) the Class AV-1 Certificates, and
(ii) the Class AV-2A, Class AV-2B and Class AV-2C
Certificates, in the order set forth in clause
(c)(ii) above, pro rata based on their respective
Class Certificate Balances outstanding after giving
effect to the distributions in clauses (c)(i) and
(c)(ii) above, until their respective Class
Certificate Balances have been reduced to zero.
(iv) from the Pre-Stepdown Group II Remaining Principal Distribution
Amount:
(A) first, to the Class MV-1 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(B) second, to the Class MV-2 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(C) third, to the Class MV-3 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(D) fourth, to the Class MV-4 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(E) fifth, to the Class MV-5 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(F) sixth, to the Class MV-6 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(G) seventh, to the Class BV-1 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(H) eighth, to the Class BV-2 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(I) ninth, to the Class BV-3 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero;
(J) tenth, to the Class BV-4 Certificates, until the
Class Certificate Balance thereof has been reduced to
zero; and
(K) eleventh, any amount of the Group II Pre-Stepdown
Remaining Principal Distribution Amount remaining
after making all of the distributions in clauses
(c)(iv)(A) through (c)(iv)(J) above will be applied
as described in Section 4.02(g) hereof.
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(d) Group I Principal (post-Stepdown Date and no Trigger Event). On each
Distribution Date on or after the Group I Stepdown Date and as long as
a Group I Trigger Event is not in effect, the Trustee shall distribute:
(i) from the Group I Principal Distribution Amount, in the
following order of priority, to the extent available:
(A) first, the Class AF-6 Lockout Distribution Amount, up
to a maximum not to exceed the Group I Senior
Principal Distribution Amount, to the Class AF-6
Certificates, until the Class Certificate Balance
thereof has been reduced to zero; and
(B) second, the Group I Senior Principal Distribution
Amount after giving effect to the payment of the
Class AF-6 Lockout Distribution Amount, sequentially,
to the Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5 and Class AF-6 Certificates, in that
order, until the respective Class Certificate
Balances thereof have been reduced to zero;
provided, however, that notwithstanding any provision
to the contrary set forth herein, on any Distribution
Date on which the aggregate Class Certificate Balance
of the Group I Subordinate Certificates is zero, all
distributions of principal to the Class AF
Certificates will be made concurrently, on a pro rata
basis, based on their respective Class Certificate
Balances.
(ii) from the Post-Stepdown Group I Remaining Principal Distribution
Amount:
(A) first, to the Class MF-1 Certificates, the Class MF-1
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(B) second, to the Class MF-2 Certificates, the Class
MF-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(C) third, to the Class MF-3 Certificates, the Class MF-3
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(D) fourth, to the Class MF-4 Certificates, the Class
MF-4 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(E) fifth, to the Class MF-5 Certificates, the Class MF-5
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
86
(F) sixth, to the Class MF-6 Certificates, the Class MF-6
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(G) seventh, to the Class BF-1 Certificates, the Class
BF-1 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(H) eighth, to the Class BF-2 Certificates, the Class
BF-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(I) ninth, to the Class BF-3 Certificates, the Class BF-3
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
and
(J) tenth, any amount of the Group I Post-Stepdown
Remaining Principal Distribution Amount remaining
after making all of the distributions in clauses
(d)(ii)(A) through (d)(ii)(I) above will be applied
as described in Section 4.02(f) hereof.
(e) Group II Principal (post-Stepdown Date and no Trigger Event). On each
Distribution Date on or after the Group II Stepdown Date and as long as
a Group II Trigger Event is not in effect, the Trustee shall
distribute:
(i) from the Group II-A Principal Distribution Amount:
(A) the Class AV-1 Principal Distribution Amount to the
Class AV-1 Certificates, until the Class Certificate
Balance thereof has been reduced to zero.
(ii) from the Group II-B Principal Distribution Amount:
(A) the Class AV-2 Principal Distribution Amount,
sequentially, to the Class AV-2A, Class AV-2B and
Class AV-2C Certificates, in that order, until the
respective Class Certificate Balances thereof have
been reduced to zero;
provided, however, that notwithstanding any provision
to the contrary set forth herein, on any Distribution
Date on which the aggregate Class Certificate Balance
of the Group II Subordinate Certificates is zero, all
distributions of principal to the Class AV-2A, Class
AV-2B and Class AV-2C Certificates will be made
concurrently, on a pro rata basis, based on their
respective Class Certificate Balances.
87
(iii) from the Post-Stepdown Group II Cross-collateralization Principal
Distribution Amount:
(A) concurrently, to (i) the Class AV-1 Certificates, and
(ii) the Class AV-2A, Class AV-2B and Class AV-2C
Certificates, in the order set forth in clause
(e)(ii) above, pro rata based on their respective
Class Certificate Balances outstanding after giving
effect to the distributions in clauses (e)(i) and
(e)(ii) above, until their respective Class
Certificate Balances have been reduced to zero.
(iv) from the Post-Stepdown Group II Remaining Principal Distribution
Amount:
(A) first, to the Class MV-1 Certificates, the Class MV-1
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(B) second, to the Class MV-2 Certificates, the Class
MV-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(C) third, to the Class MV-3 Certificates, the Class MV-3
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(D) fourth, to the Class MV-4 Certificates, the Class
MV-4 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(E) fifth, to the Class MV-5 Certificates, the Class MV-5
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(F) sixth, to the Class MV-6 Certificates, the Class MV-6
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(G) seventh, to the Class BV-1 Certificates, the Class
BV-1 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(H) eighth, to the Class BV-2 Certificates, the Class
BV-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(I) ninth, to the Class BV-3 Certificates, the Class BV-3
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(J) tenth, to the Class BV-4 Certificates, the Class BV-4
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
and
88
(K) eleventh, any amount of the Group II Post-Stepdown
Remaining Principal Distribution Amount remaining
after making all of the distributions in clauses
(e)(iv)(A) through (e)(iv)(J) above will be applied
as described in Section 4.02(g) hereof.
(f) Group I Excess Cashflow. On each Distribution Date, the Trustee shall
distribute the Group I Monthly Excess Cashflow Amount, to the extent
available, to the parties, in the amounts and in the priorities
indicated:
(1) first, concurrently, to the Class AF-1, Class AF-2, Class
AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates, pro
rata, any remaining applicable Interest Distribution Amount
for that Distribution Date;
(2) second, concurrently, to the Class AF-1, Class AF-2, Class
AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates, pro
rata, any remaining applicable Unpaid Interest Amounts;
(3) third, to fund the Group I Extra Principal Distribution Amount
for that Distribution Date for distribution in accordance with
the priorities set forth under Sections 4.02(b) and 4.02(d);
(4) fourth, concurrently, to the Class AV-1, Class AV-2A, Class
AV-2B and Class AV-2C Certificates, pro rata, any applicable
Interest Distribution Amount for that Distribution Date that
remains unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(1);
(5) fifth, concurrently, to the Class AV-1, Class AV-2A, Class
AV-2B and Class AV-2C Certificates, pro rata, any applicable
Unpaid Interest Amounts that remain unpaid after giving effect
to the distribution made on that Distribution Date pursuant to
Section 4.02(g)(2);
(6) sixth, to make payments in reduction of the Group II
Overcollateralization Deficiency for that Distribution Date
for distribution in accordance with the priorities set forth
under Sections 4.02(c) and 4.02(e), to the extent that the
Group II Overcollateralization Deficiency remains unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(g)(3);
(7) seventh, to the Class MF-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(8) eighth, to the Class MF-1 Certificates, any remaining Unpaid
Interest Amount for the Class MF-1 Certificates;
(9) ninth, to fund the Class MF-1 Realized Loss Amortization
Amount for that Distribution Date;
(10) tenth, to the Class MF-2 Certificates, any remaining Interest
Distribution Amount for that Distribution Date;
89
(11) eleventh, to the Class MF-2 Certificates, any remaining Unpaid
Interest Amount for the Class MF-2 Certificates;
(12) twelfth, to fund the Class MF-2 Realized Loss Amortization
Amount for that Distribution Date;
(13) thirteenth, to the Class MF-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(14) fourteenth, to the Class MF-3 Certificates, any remaining
Unpaid Interest Amount for the Class MF-3 Certificates;
(15) fifteenth, to fund the Class MF-3 Realized Loss Amortization
Amount for that Distribution Date;
(16) sixteenth, to the Class MF-4 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(17) seventeenth, to the Class MF-4 Certificates, any remaining
Unpaid Interest Amount for the Class MF-4 Certificates;
(18) eighteenth, to fund the Class MF-4 Realized Loss Amortization
Amount for that Distribution Date;
(19) nineteenth, to the Class MF-5 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(20) twentieth, to the Class MF-5 Certificates, any remaining
Unpaid Interest Amount for the Class MF-5 Certificates;
(21) twenty-first, to fund the Class MF-5 Realized Loss
Amortization Amount for that Distribution Date;
(22) twenty-second, to the Class MF-6 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(23) twenty-third, to the Class MF-6 Certificates, any remaining
Unpaid Interest Amount for the Class MF-6 Certificates;
(24) twenty-fourth, to fund the Class MF-6 Realized Loss
Amortization Amount for that Distribution Date;
(25) twenty-fifth, to the Class BF-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(26) twenty-sixth, to the Class BF-1 Certificates, any remaining
Unpaid Interest Amount for the Class BF-1 Certificates;
90
(27) twenty-seventh, to fund the Class BF-1 Realized Loss
Amortization Amount for that Distribution Date;
(28) twenty-eighth, to the Class BF-2 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(29) twenty-ninth, to the Class BF-2 Certificates, any remaining
Unpaid Interest Amount for the Class BF-2 Certificates;
(30) thirtieth, to fund the Class BF-2 Realized Loss Amortization
Amount for that Distribution Date;
(31) thirty-first, to the Class BF-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(32) thirty-second, to the Class BF-3 Certificates, any remaining
Unpaid Interest Amount for the Class BF-3 Certificates;
(33) thirty-third, to fund the Class BF-3 Realized Loss
Amortization Amount for that Distribution Date;
(34) thirty-fourth, to the Class MV-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(7);
(35) thirty-fifth, to the Class MV-1 Certificates, any remaining
Unpaid Interest Amount for the Class MV-1 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(8);
(36) thirty-sixth, to fund the Class MV-1 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(9);
(37) thirty-seventh, to the Class MV-2 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(10);
(38) thirty-eighth, to the Class MV-2 Certificates, any remaining
Unpaid Interest Amount for the Class MV-2 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(11);
(39) thirty-ninth, to fund the Class MV-2 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(12);
91
(40) fortieth, to the Class MV-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(13);
(41) forty-first, to the Class MV-3 Certificates, any remaining
Unpaid Interest Amount for the Class MV-3 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(14);
(42) forty-second, to fund the Class MV-3 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(15);
(43) forty-third, to the Class MV-4 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(16);
(44) forty-fourth, to the Class MV-4 Certificates, any remaining
Unpaid Interest Amount for the Class MV-4 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(17);
(45) forty-fifth, to fund the Class MV-4 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(g)(18);
(46) forty-sixth, to the Class MV-5 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(19);
(47) forty-seventh, to the Class MV-5 Certificates, any remaining
Unpaid Interest Amount for the Class MV-5 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(20);
(48) forty-eighth, to fund the Class MV-5 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(21);
(49) forty-ninth, to the Class MV-6 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(22);
92
(50) fiftieth, to the Class MV-6 Certificates, any remaining Unpaid
Interest Amount for the Class MV-6 Certificates to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(23);
(51) fifty-first, to fund the Class MV-6 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(g)(24);
(52) fifty-second, to the Class BV-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(25);
(53) fifty-third, to the Class BV-1 Certificates, any remaining
Unpaid Interest Amount for the Class BV-1 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(26);
(54) fifty-fourth, to fund the Class BV-1 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(27);
(55) fifty-fifth, to the Class BV-2 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(28);
(56) fifty-sixth, to the Class BV-2 Certificates, any remaining
Unpaid Interest Amount for the Class BV-2 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(29);
(57) fifty-seventh, to fund the Class BV-2 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(g)(30);
(58) fifty-eighth, to the Class BV-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(31);
(59) fifty-ninth, to the Class BV-3 Certificates, any remaining
Unpaid Interest Amount for the Class BV-3 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(32);
93
(60) sixtieth, to fund the Class BV-3 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(g)(33);
(61) sixty-first, to the Class BV-4 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(34);
(62) sixty-second, to the Class BV-4 Certificates, any remaining
Unpaid Interest Amount for the Class BV-4 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(g)(35);
(63) sixty-third, to fund the Class BV-4 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(g)(36);
(64) sixty-fourth, for deposit into the Net WAC Cap Account, the
amount equal to (a) the aggregate Net WAC Cap Carryover for
the Group I Certificates for that Distribution Date (the
amount so deposited as limited by available funds) after
taking into account payments of Net WAC Carryover to be made
pursuant to Section 4.02(i) on that Distribution Date, plus
(b) the product of (i) 0.50 and (ii) the amount, if any,
sufficient to increase the aggregate amount on deposit in the
Net WAC Cap Account to $10,000 after giving effect to any
payments of Net WAC Cap Carryover to the Offered Certificates
on that Distribution Date;
(65) sixty-fifth, for deposit into the Net WAC Cap Account, the
amount equal to (a) the aggregate Net WAC Cap Carryover for
the Group II Certificates for that Distribution Date (the
amount so deposited as limited by available funds) after
taking into account payments of Net WAC Carryover to be made
pursuant to Section 4.02(i) on that Distribution Date, plus
(b) the product of (i) 0.50 and (ii) the amount, if any,
sufficient to increase the aggregate amount on deposit in the
Net WAC Cap Account to $10,000 after giving effect to any
payments of Net WAC Cap Carryover to the Offered Certificates
on that Distribution Date, all to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(g)(64);
(66) sixty-sixth, to the Class BF-3 Certificates as principal, any
remaining amounts, until the Class Certificate Balance thereof
has been reduced to zero;
(67) sixty-seventh, to the Class BF-2 Certificates as principal,
any remaining amounts, until the Class Certificate Balance
thereof has been reduced to zero;
94
(68) sixty-eighth, to the Class BF-1 Certificates as principal, any
remaining amounts, until the Class Certificate Balance thereof
has been reduced to zero;
(69) sixty-ninth, to the Class BV-4 Certificates as principal, any
remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(g)(66)), until the Class Certificate Balance thereof has
been reduced to zero;
(70) seventieth, to the Class BV-3 Certificates as principal, any
remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(g)(67)), until the Class Certificate Balance thereof has
been reduced to zero;
(71) seventy-first, to the Class BV-2 Certificates as principal,
any remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(g)(68)), until the Class Certificate Balance thereof has
been reduced to zero;
(72) seventy-second, to the Class BV-1 Certificates as principal,
any remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(g)(69)), until the Class Certificate Balance thereof has
been reduced to zero;
(73) seventy-third, to the Class X, any remaining Monthly Excess
Cashflow Amount; and
(74) seventy-fourth, to the Class R Certificates, any remaining
amounts (which are expected to be zero).
(g) Group II Excess Cashflow. On each Distribution Date, the Trustee shall
distribute the Group II Monthly Excess Cashflow Amount, to the extent
available, to the parties, in the amounts and in the priorities
indicated:
(1) first, concurrently, to the Class AV-1, Class AV-2A, Class
AV-2B and Class AV-2C Certificates, pro rata, any remaining
applicable Interest Distribution Amount for that Distribution
Date;
(2) second, concurrently, to the Class AV-1, Class AV-2A, Class
AV-2B and Class AV-2C Certificates, pro rata, any remaining
applicable Unpaid Interest Amounts;
(3) third, to fund the Group II Extra Principal Distribution
Amount for that Distribution Date for distribution in
accordance with the priorities set forth under Sections
4.02(c) and 4.02(e);
(4) fourth, concurrently, to the Class AF-1, Class AF-2, Class
AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates, pro
rata, any applicable Interest Distribution Amount for that
Distribution Date that remains unpaid after giving effect to
the distribution made on that Distribution Date pursuant to
Section 4.02(f)(1);
95
(5) fifth, concurrently, to the Class AF-1, Class AF-2, Class
AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates, any
applicable Unpaid Interest Amounts that remain unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(f)(2);
(6) sixth, to fund the Group I Overcollateralization Deficiency
for that Distribution Date for distribution in accordance with
the priorities set forth under Sections 4.02(b) and (d), to
the extent that the Group I Overcollateralization Deficiency
remains unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(3);
(7) seventh, to the Class MV-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(8) eighth, to the Class MV-1 Certificates, any remaining Unpaid
Interest Amount for the Class MV-1 Certificates;
(9) ninth, to fund the Class MV-1 Realized Loss Amortization
Amount for that Distribution Date;
(10) tenth, to the Class MV-2 Certificates, any remaining Interest
Distribution Amount for that Distribution Date;
(11) eleventh, to the Class MV-2 Certificates, any remaining Unpaid
Interest Amount for the Class MV-2 Certificates;
(12) twelfth, to fund the Class MV-2 Realized Loss Amortization
Amount for that Distribution Date;
(13) thirteenth, to the Class MV-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(14) fourteenth, to the Class MV-3 Certificates, any remaining
Unpaid Interest Amount for the Class MV-3 Certificates;
(15) fifteenth, to fund the Class MV-3 Realized Loss Amortization
Amount for that Distribution Date;
(16) sixteenth, to the Class MV-4 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(17) seventeenth, to the Class MV-4 Certificates, any remaining
Unpaid Interest Amount for the Class MV-4 Certificates;
(18) eighteenth, to fund the Class MV-4 Realized Loss Amortization
Amount for that Distribution Date;
96
(19) nineteenth, to the Class MV-5 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(20) twentieth, to the Class MV-5 Certificates, any remaining
Unpaid Interest Amount for the Class MV-5 Certificates;
(21) twenty-first, to fund the Class MV-5 Realized Loss
Amortization Amount for that Distribution Date;
(22) twenty-second, to the Class MV-6 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(23) twenty-third, to the Class MV-6 Certificates, any remaining
Unpaid Interest Amount for the Class MV-6 Certificates;
(24) twenty-fourth, to fund the Class MV-6 Realized Loss
Amortization Amount for that Distribution Date;
(25) twenty-fifth, to the Class BV-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(26) twenty-sixth, to the Class BV-1 Certificates, any remaining
Unpaid Interest Amount for the Class BV-1 Certificates;
(27) twenty-seventh, to fund the Class BV-1 Realized Loss
Amortization Amount for that Distribution Date;
(28) twenty-eighth, to the Class BV-2 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(29) twenty-ninth, to the Class BV-2 Certificates, any remaining
Unpaid Interest Amount for the Class BV-2 Certificates;
(30) thirtieth, to fund the Class BV-2 Realized Loss Amortization
Amount for that Distribution Date;
(31) thirty-first, to the Class BV-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
(32) thirty-second, to the Class BV-3 Certificates, any remaining
Unpaid Interest Amount for the Class BV-3 Certificates;
(33) thirty-third, to fund the Class BV-3 Realized Loss
Amortization Amount for that Distribution Date;
(34) thirty-fourth, to the Class BV-4 Certificates, any remaining
Interest Distribution Amount for that Distribution Date;
97
(35) thirty-fifth, to the Class BV-4 Certificates, any remaining
Unpaid Interest Amount for the Class BV-4 Certificates;
(36) thirty-sixth, to fund the Class BV-4 Realized Loss
Amortization Amount for that Distribution Date;
(37) thirty-seventh, to the Class MF-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(7);
(38) thirty-eighth, to the Class MF-1 Certificates, any remaining
Unpaid Interest Amount for the Class MF-1 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(8);
(39) thirty-ninth, to fund the Class MF-1 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(f)(9);
(40) fortieth, to the Class MF-2 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(10);
(41) forty-first, to the Class MF-2 Certificates, any remaining
Unpaid Interest Amount for the Class MF-2 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(11);
(42) forty-second, to fund the Class MF-2 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(f)(12);
(43) forty-third, to the Class MF-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(13);
(44) forty-fourth, to the Class MF-3 Certificates, any remaining
Unpaid Interest Amount for the Class MF-3 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(14);
(45) forty-fifth, to fund the Class MF-3 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(f)(15);
98
(46) forty-sixth, to the Class MF-4 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(16);
(47) forty-seventh, to the Class MF-4 Certificates, any remaining
Unpaid Interest Amount for the Class MF-4 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(17);
(48) forty-eighth, to fund the Class MF-4 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(f)(18);
(49) forty-ninth, to the Class MF-5 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(19);
(50) fiftieth, to the Class MF-5 Certificates, any remaining Unpaid
Interest Amount for the Class MF-5 Certificates to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(f)(20);
(51) fifty-first, to fund the Class MF-5 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(f)(21);
(52) fifty-second, to the Class MF-6 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(22);
(53) fifty-third, to the Class MF-6 Certificates, any remaining
Unpaid Interest Amount for the Class MF-6 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(23);
(54) fifty-fourth, to fund the Class MF-6 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(f)(24);
(55) fifty-fifth, to the Class BF-1 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(25);
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(56) fifty-sixth, to the Class BF-1 Certificates, any remaining
Unpaid Interest Amount for the Class BF-1 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(26);
(57) fifty-seventh, to fund the Class BF-1 Realized Loss
Amortization Amount for that Distribution Date to the extent
unpaid after giving effect to the distribution made on that
Distribution Date pursuant to Section 4.02(f)(27);
(58) fifty-eighth, to the Class BF-2 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(28);
(59) fifty-ninth, to the Class BF-2 Certificates, any remaining
Unpaid Interest Amount for the Class BF-2 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(29);
(60) sixtieth, to fund the Class BF-2 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(f)(30);
(61) sixty-first, to the Class BF-3 Certificates, any remaining
Interest Distribution Amount for that Distribution Date to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(31);
(62) sixty-second, to the Class BF-3 Certificates, any remaining
Unpaid Interest Amount for the Class BF-3 Certificates to the
extent unpaid after giving effect to the distribution made on
that Distribution Date pursuant to Section 4.02(f)(32);
(63) sixty-third, to fund the Class BF-3 Realized Loss Amortization
Amount for that Distribution Date to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(f)(33);
(64) sixty-fourth, for deposit into the Net WAC Cap Account, the
amount equal to (a) the aggregate Net WAC Cap Carryover for
the Group II Certificates for that Distribution Date (the
amount so deposited as limited by available funds) after
taking into account payments of Net WAC Carryover to be made
pursuant to Section 4.02(i) on that Distribution Date, plus
(b) the product of (i) 0.50 and (ii) the amount, if any,
sufficient to increase the aggregate amount on deposit in the
Net WAC Cap Account to $10,000 after giving effect to any
payments of Net WAC Cap Carryover to the Offered Certificates
on that Distribution Date;
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(65) sixty-fifth, for deposit into the Net WAC Cap Account, the
amount equal to (a) the aggregate Net WAC Cap Carryover for
the Group I Certificates for that Distribution Date (the
amount so deposited as limited by available funds) after
taking into account payments of Net WAC Carryover to be made
pursuant to Section 4.02(i) on that Distribution Date, plus
(b) the product of (i) 0.50 and (ii) the amount, if any,
sufficient to increase the aggregate amount on deposit in the
Net WAC Cap Account to $10,000 after giving effect to any
payments of Net WAC Cap Carryover to the Offered Certificates
on that Distribution Date, all to the extent unpaid after
giving effect to the distribution made on that Distribution
Date pursuant to Section 4.02(f)(64);
(66) sixty-sixth, to the Class BV-4 Certificates as principal, any
remaining amounts, until the Class Certificate Balance thereof
has been reduced to zero;
(67) sixty-seventh, to the Class BV-3 Certificates as principal,
any remaining amounts, until the Class Certificate Balance
thereof has been reduced to zero;
(68) sixty-eighth, to the Class BV-2 Certificates as principal, any
remaining amounts, until the Class Certificate Balance thereof
has been reduced to zero;
(69) sixty-ninth, to the Class BV-1 Certificates as principal, any
remaining amounts, until the Class Certificate Balance thereof
has been reduced to zero;
(70) seventieth, to the Class BF-3 Certificates as principal, any
remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(f)(66)), until the Class Certificate Balance thereof has
been reduced to zero;
(71) seventy-first, to the Class BF-2 Certificates as principal,
any remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(f)(67)), until the Class Certificate Balance thereof has
been reduced to zero;
(72) seventy-second, to the Class BF-1 Certificates as principal,
any remaining amounts (after giving effect to the distribution
made on that Distribution Date pursuant to Section
4.02(f)(68)), until the Class Certificate Balance thereof has
been reduced to zero;
(73) seventy-third, to the Class X, any remaining Monthly Excess
Cashflow Amount; and
(74) seventy-fourth, to the Class R Certificates, any remaining
amounts (which are expected to be zero).
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(h) Realized Losses.
Realized Losses on the Group I Loans shall be allocated first against
the Group I Overcollateralization Amount, until the Group I
Overcollateralization Amount has been reduced to zero. If, after giving
effect to all distributions of principal on the Group I Certificates on
any Distribution Date the aggregate Class Certificate Balance of the
Group I Certificates exceeds the Group I Principal Balance as of the
end of the related Due Period, such excess will be allocated against
the Class BF-3, Class BF-2, Class BF-1, Class MF-6, Class MF-5, Class
MF-4, Class MF-3, Class MF-2 and Class MF-1 Certificates, in that order
and until the respective Class Certificate Balances thereof are reduced
to zero.
Realized Losses on the Group II Loans shall be allocated first against
the Group II Overcollateralization Amount, until the Group II
Overcollateralization Amount has been reduced to zero. If, after giving
effect to all distributions of principal on the Group II Certificates
on any Distribution Date the aggregate Class Certificate Balance of the
Group II Certificates exceeds the Group II Principal Balance as of the
end of the related Due Period, such excess will be allocated against
the Class BV-4, Class BV-3, Class BV-2, Class BV-1, Class MV-6, Class
MV-5, Class MV-4, Class MV-3, Class MV-2 and Class MV-1 Certificates,
in that order and until the respective Class Certificate Balances
thereof are reduced to zero.
(i) Reserve Fund. On each Distribution Date, following
all distributions and deposits made pursuant to
subsections (a) through (h) above, the Trustee will
withdraw all funds available in the Reserve Fund to
make the following payments in the following order of
priority:
(i) first, to pay to each Class of Hedged Certificates,
to the extent of amounts available with respect to
that Class, Net WAC Cap Carryover for that Class of
Hedged Certificates (with distributions of Net WAC
Carryover to the Class BF Certificates, the Class
AV-2 Certificates and the Group II Subordinate
Certificates to be made from amounts available with
respect to the Class BF Certificates, the Class AV-2
Certificate and the Group II Subordinate
Certificates, respectively, on a pro rata basis based
on Class Certificate Balance); and
(ii) second, to the Holders of the Class X Certificates,
all remaining amounts.
(j) Net WAC Cap Carryover from Net WAC Cap Account. On each Distribution
Date, following all distributions, deposits and allocations made
pursuant to subsections (a) through (i) above, the Trustee shall
distribute, pro rata, to the Offered Certificates, the applicable Net
WAC Cap Carryover for such Distribution Date, if any, from the Net WAC
Cap Account (to the extent of available funds therein).
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SECTION 4.02A. Recoveries.
(a) With respect to any Class of Group I Subordinate
Certificates to which a Realized Loss has been allocated (including any such
Class for which the related Class Certificate Balance has been reduced to zero),
the Class Certificate Balance of such Class will be increased, up to the amount
of related Group I Recoveries for such Distribution Date as follows:
(i) first, the Class Certificate Balance of the
Class MF-1 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(ii) second, the Class Certificate Balance of the
Class MF-2 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(iii) third, the Class Certificate Balance of the
Class MF-3 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(iv) fourth, the Class Certificate Balance of the
Class MF-4 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(v) fifth, the Class Certificate Balance of the
Class MF-5 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(vi) sixth, the Class Certificate Balance of the
Class MF-6 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(vii) seventh, the Class Certificate Balance of
the Class BF-1 Certificates will be
increased, up to the amount of Net Recovery
Realized Losses for such Class;
(viii) eighth, the Class Certificate Balance of the
Class BF-2 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class; and
(ix) ninth, the Class Certificate Balance of the
Class BF-3 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class.
(b) With respect to any Class of Group II Subordinate
Certificates to which a Realized Loss has been allocated (including any such
Class for which the related Class Certificate Balance has been reduced to zero),
the Class Certificate Balance of such Class will be increased, up to the amount
of related Group II Recoveries for such Distribution Date as follows:
(i) first, the Class Certificate Balance of the
Class MV-1 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
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(ii) second, the Class Certificate Balance of the
Class MV-2 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(iii) third, the Class Certificate Balance of the
Class MV-3 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(iv) fourth, the Class Certificate Balance of the
Class MV-4 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(v) fifth, the Class Certificate Balance of the
Class MV-5 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(vi) sixth, the Class Certificate Balance of the
Class MV-6 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(vii) seventh, the Class Certificate Balance of
the Class BV-1 Certificates will be
increased, up to the amount of Net Recovery
Realized Losses for such Class;
(viii) eighth, the Class Certificate Balance of the
Class BV-2 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class;
(ix) ninth, the Class Certificate Balance of the
Class BV-3 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class; and
(x) tenth, the Class Certificate Balance of the
Class BV-4 Certificates will be increased,
up to the amount of Net Recovery Realized
Losses for such Class.
(c) Any increase to the Class Certificate Balance of a Class
of Certificates shall increase the Certificate Balance of each Certificate in
the related Class pro rata in accordance with each Certificate's Percentage
Interest.
SECTION 4.03. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
post on its website at xxx.xxxxxxxx.xxx/xxx, which posting shall be accessible
to each Certificateholder, the Servicer, the Depositor and each Rating Agency, a
statement setting forth with respect to the related distribution (provided,
however, that each Certificateholder, upon request to the Trustee, shall be
entitled to receive from the Trustee a paper copy of such statement if such
Certificateholder is unable to access the Trustee's website):
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(i) with respect to each Group and in the aggregate,
the amount thereof allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments in full, partial
Principal Prepayments and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any
Class Unpaid Interest Amount included in such distribution and any
remaining Class Unpaid Interest Amount after giving effect to such
distribution;
(iii) if the distribution to the Holders of a Class
of Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds available
therefor, the amount of the shortfall and the allocation thereof as
between principal and interest;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of principal on
such Distribution Date;
(v) the Pool Principal Balance and the Group
Principal Balances for the following Distribution Date;
(vi) the amount of the Servicing Fee paid to or
retained by the Servicer with respect to such Distribution Date;
(vii) the Pass-Through Rate for each Class of Offered
Certificates with respect to such Distribution Date;
(viii) the amount of Advances included in the
distribution on such Distribution Date and the aggregate amount of
Advances outstanding as of the close of business on such Distribution
Date;
(ix) with respect to each Group and in the aggregate,
the number and aggregate principal amounts of Loans (A) contractually
past due (assuming 30 day months) (exclusive of Loans in foreclosure)
(1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more
days and (B) in foreclosure (1) 1 to 30 days (2) 31 to 60 days (3) 61
to 90 days and (4) 91 or more days, as of the close of business on the
last day of calendar month immediately preceding such Distribution
Date;
(x) with respect to each Group and in the aggregate,
and with respect to any Loan that became an REO Property during the
preceding calendar month, the loan number and Stated Principal Balance
of such Loan as of the close of business on the last day of the
Prepayment Period preceding such Distribution Date and the date of
acquisition thereof;
(xi) with respect to each Group and in the aggregate,
(A) the total number and principal balance of any REO Properties (and
market value, if available) as of the close of business on the last day
of the Prepayment Period preceding such Distribution Date and (B) the
total number and cumulative principal balance of any Liquidated Loans
(prior to the reduction of the principal balance of any such Liquidated
Loan to zero);
(xii) with respect to each Group, the amount equal to
the sum of the Stated Principal Balances of the three Loans with the
largest individual Stated Principal Balances;
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(xiii) with respect to each Class of Offered
Certificates, the amount of the Net WAC Cap Carryover to be paid to
such Class from the Net WAC Cap Account and the amount remaining
unpaid;
(xiv) with respect to each Group, the aggregate
principal balance of Balloon Loans with original terms less than or
equal to 36 months which are 60 or more days contractually past due
(assuming 30 day months) (including Loans in foreclosure and REO
Properties) on the last day of the calendar month immediately preceding
such Distribution Date;
(xv) with respect to each Group, the cumulative
aggregate amount of Realized Losses as of the last day of the
Prepayment Period preceding such Distribution Date;
(xvi) the amount of funds withdrawn from the Reserve
Fund (for each Class of Hedged Certificates) and included in such
distribution and the outstanding balance of the Reserve Fund (and the
amounts available for each Class of Hedged Certificates), after giving
effect to such distribution;
(xvii) with respect to each Group, the number of
Loans repurchased by Sellers during the Due Period related to such
Distribution Date;
(xviii) with respect to each Group, the weighted
average Mortgage Rate of the Outstanding Loans, such weighted average
to be calculated based on the principal balances of such Outstanding
Loans on the first day of the Due Period related to such Distribution
Date;
(xix) with respect to each Group, the weighted
average maturity date of the Outstanding Loans;
(xx) the Group I Targeted Overcollateralization
Amount and the Group II Targeted Overcollateralization Amount after
giving effect to such distribution;
(xxi) the amount of any Group I Overcollateralization
Release Amount or Group II Overcollateralization Release Amount
included in the distribution on such Distribution Date;
(xxii) with respect to each Group, the cumulative
amount of Realized Losses from the Cut-off Date through the last day of
the Due Period relating to such Distribution Date;
(xxiii) any Group I Overcollateralization Deficiency
or Group II Overcollateralization Deficiency after giving effect to the
distribution of principal on such Distribution Date;
(xxiv) whether a Group I Trigger Event or Group II
Trigger Event has occurred and is continuing, and the cumulative
Realized Losses on the Group I Loans and the Group II Loans, as a
percentage of the Cut-off Date Group I Principal Balance and the
Cut-off Date Group II Principal Balance, respectively;
(xxv) the aggregate amount of 60+ Day Delinquent
Loans as a percentage of the current Group I Principal Balance and the
current Group II Principal Balance;
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(xxvi) the amount of funds collected by the Trustee
under the Yield Maintenance Agreement during the Due Period relating to
such Distribution Date;
(xxvii) the amount of Group I Recoveries and Group II
Recoveries collected during the Prepayment Period relating to such
Distribution Date; and
(xxviii) the cumulative amount of Group I Recoveries
and Group II Recoveries collected as of such Distribution Date.
(b) The Trustee's responsibility for posting the above
information on its website is limited to the availability, timeliness and
accuracy of the information provided by the Servicer. On or before the 18th day
of each calendar month, commencing in the month of the first Distribution Date
hereunder, or if such day is not a Business Day, the next succeeding Business
Day, the Servicer shall deliver to the Trustee a report, in a form acceptable to
the Trustee, containing all of the necessary information for the Trustee to
complete items (i), (v), (vi), (viii)-(xii), (xiv), (xv), (xvii)-(xix), (xxii),
(xxv), (xxvii) and (xxviii) of the statement described in (a) above. The Trustee
shall be responsible for obtaining the necessary information to complete items
(ii), (iii), (iv), (vii), (xiii), (xvi), (xx), (xxi), (xxiii), (xxiv) and (xxvi)
of the statement described in (a) above.
(c) Within a reasonable period of time after the end of each
calendar year, but in no case later than the time prescribed by the Code and
applicable Treasury regulations, the Trustee shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i), (a)(ii),
(a)(vii) and (a)(xiii) of this Section 4.03 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code as from time to time in effect.
SECTION 4.04. Reporting.
On each Distribution Date, the Servicer shall provide to the
Trustee current information of the type set forth in Schedule I hereto presented
in a format substantially similar to Exhibit K attached hereto and the Trustee
shall then forward such information to a reporting service mutually agreed upon
by the Servicer and the Trustee.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount which must be in excess of the
applicable minimum denomination) and aggregate denominations per Class set forth
in the Preliminary Statement.
Subject to Section 9.02 hereof respecting the final
distribution on the Certificates, on each Distribution Date the Trustee shall
make distributions to each Certificateholder of record on the preceding Record
Date either (a) by wire transfer in immediately available funds to the account
of such Holder at a bank or other entity having appropriate facilities therefor,
if (i) such Holder has so notified the Trustee at least five Business Days prior
to the related Record Date and (ii) such Holder shall hold (A) 100% of the Class
Certificate Balance or Percentage Interest of any Class of Certificates or (B)
Certificates of any Class with an aggregate principal Denomination of not less
than $1,000,000 or (b) by check mailed by first class mail to such
Certificateholder at the address of such Holder appearing in the Certificate
Register.
107
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the countersignature and delivery of
such Certificates or did not hold such offices at the date of such Certificate.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless countersigned by the Trustee by manual signature,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in the form of Exhibit G duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
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(b) Except for the initial transfer of the Class X
Certificates and Class R Certificates, no transfer of a Class X Certificate or
Class R Certificate shall be made unless such transfer is made pursuant to an
effective registration statement under the Securities Act and any applicable
state securities laws or is exempt from the registration requirements under said
Act and such state securities laws. In the event that a transfer is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, (i) the
Certificateholder desiring to effect such transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee in writing the facts
surrounding the transfer, the Certificateholder by delivering a certificate in
substantially the form set forth in Exhibit G (the "TRANSFEROR CERTIFICATE") and
the Certificateholder's prospective transferee by delivering a letter in
substantially the form of either Exhibit H (the "INVESTMENT LETTER") or Exhibit
I (the "RULE 144A Letter") or (ii) there shall be delivered to the Trustee at
the expense of the transferor an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act. The Depositor shall
provide to any Holder of a Class X Certificate or Class R Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee and the Servicer shall cooperate with the Depositor in providing the
Rule 144A information referenced in the preceding sentence, including providing
to the Depositor such information regarding the Certificates, the Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Class X
Certificate or Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee and the Depositor, the Sellers and
the Servicer 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 an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received (i) a representation letter from the
transferee substantially in the form of Exhibit H or Exhibit I, to the effect
that (x) such transferee is not an employee benefit plan or arrangement subject
to Section 406 of ERISA or a plan or arrangement subject to Section 4975 of the
Code, nor a person acting on behalf of any such plan or arrangement, nor using
the assets of any such plan or arrangement to effect such transfer or (y) if the
purchaser is an insurance company and the ERISA-Restricted Certificate is not a
Class R Certificate and has been the subject of an ERISA Qualifying
Underwriting, a representation that the purchaser is an insurance company which
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (ii) in the case of any such ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement, or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee, which
Opinion of Counsel shall not be an expense of either the Trustee or the Trust
Fund, addressed to the Trustee to the effect that the purchase or holding of
such ERISA-Restricted Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA-Restricted Certificate to or on behalf of an employee
benefit plan subject to ERISA or to the Code without the delivery to the Trustee
of an Opinion of Counsel satisfactory to the Trustee as described above shall be
void and of no effect.
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In the case of an ERISA-Restricted Certificate that is a
Book-Entry Certificate, for purposes of clauses (i) or (ii) of the first
sentence of the preceding paragraph, such representations shall be deemed to
have been made to the Certificate Registrar and the Trustee by the transferee's
acceptance of such ERISA-Restricted Certificate.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate
may be registered on the Closing Date or thereafter transferred, and
the Trustee shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "TRANSFER AFFIDAVIT") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
F.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class R Certificate, (B) to obtain
a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Class R Certificate in violation of the
provisions of this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Class R Certificate in violation
of the provisions of this Section 5.02(c), then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section or for making any payments due on such
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long
as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A Letter or
the Investment Letter. The Trustee shall be entitled but not obligated
to recover from any Holder of a Class R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
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(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Sellers
or the Servicer, to the effect that the elimination of such restrictions will
not cause the Trust Fund hereunder to fail to qualify as one or more REMICs at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class R Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (A) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (B) to provide for a means to compel the Transfer of a Class R
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Beneficial Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Beneficial Owners of the Book-Entry Certificates
for purposes of exercising the rights of Holders under this Agreement, and
requests and directions for and votes of such representatives shall not be
deemed to be inconsistent if they are made with respect to different Beneficial
Owners; and (vi) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Beneficial Owners.
All transfers by Beneficial Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Beneficial Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of Beneficial
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
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If (x) (i) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee is unable to locate a
qualified successor, (y) the Depositor, at its sole option with the consent of
the Trustee, advises the Trustee in writing that it elects to terminate the
book-entry system through the Depository or (z) after the occurrence of an Event
of Default or the resignation or removal of the Servicer, Beneficial Owners
representing at least 51% of the sum of the then outstanding Class Certificate
Balance of all Book-Entry Certificates together advise the Depository, either
directly or through the Depository Participants, and the Trustee in writing that
the continuation of a book-entry system through the Depository is no longer in
the best interests of the Beneficial Owners. Upon the occurrence of any of the
events described in the immediately preceding sentence, the Trustee shall notify
all Beneficial Owners of the occurrence of any such event and of the
availability of definitive, fully-registered Certificates (the "DEFINITIVE
CERTIFICATES") to Beneficial Owners requesting the same. Upon surrender to the
Trustee of the related Class of Certificates by the Depository, accompanied by
the instructions from the Depository for registration, the Trustee shall issue
the Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. 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 Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Servicer and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and neither the
Servicer, the Trustee nor any agent of the Servicer or the Trustee shall be
affected by any notice to the contrary.
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SECTION 5.05. Access to List of Certificateholders' Names
and Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and
the Servicer.
The Depositor and the Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Servicer.
The Depositor and the Servicer will each keep in full effect
their respective existence, rights and franchises as a corporation under the
laws of the United States or under the laws of one of the states thereof and
will each obtain and preserve their respective qualifications to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
or any of the Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the 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 the successor or surviving Person to the Servicer shall
be qualified to sell mortgage loans to, and to service mortgage loans on behalf
of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the
Sellers, the Servicer and Others.
None of the Depositor, the Sellers, the Servicer or any of the
directors, officers, employees or agents of the Depositor, the Sellers or the
Servicer shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Sellers, the Servicer or any such
Person against any breach of representations or warranties made by it herein or
protect the Depositor, the Sellers, the Servicer or any such Person from any
liability which would otherwise be imposed by reasons 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, the
Sellers, the Servicer and any director, officer, employee or agent of the
Depositor, the Sellers or the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Depositor, the Sellers, the Servicer and any
director, officer, employee or agent of the Depositor, the Sellers or the
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Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Loan or Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and 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. None of the Depositor, the Sellers or the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that any of the
Depositor, the Sellers or the Servicer may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Sellers and the Servicer
shall be entitled to be reimbursed therefor out of the Certificate Account.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer and
receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Certificates or (b) upon determination that its duties hereunder are
no longer permissible under applicable law. Any such determination under clause
(b) permitting the resignation of the Servicer shall be evidenced by an Opinion
of Counsel to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the Servicer's responsibilities, duties, liabilities and obligations hereunder.
SECTION 6.05. Indemnification.
The Servicer agrees to indemnify and hold the Trustee, the
Depositor and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, fees and expenses that the Trustee, the Depositor or any
Certificateholder may sustain directly resulting from the negligence or willful
misconduct of the Servicer in the performance of its duties hereunder or in the
servicing of the Loans in compliance with the terms of this Agreement. The
Servicer shall not be liable or responsible for any of the representations,
covenants, warranties, responsibilities, duties or liabilities of any prior
servicer. The Servicer shall immediately notify the Trustee, the Depositor and
each Certificateholder if a claim is made by a third party for which any of such
parties could require indemnification from the Servicer under this Section 6.05,
and the Servicer shall assume (with the consent of the Trustee) the defense of
any such claim and advance all expenses in connection therewith, including
reasonable counsel fees, and promptly advance funds to pay, discharge and
satisfy any non-appealable, final judgment or decree which may be entered
against the Servicer, the Trustee, the Depositor and/or the Certificateholder in
respect of such claim. The indemnity provided for in this Section 6.05 shall
survive the termination of the Agreement.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to deposit in the
Certificate Account or remit to the Trustee any payment (other than a
payment required to be made under Section 4.01 hereof) required to be
made with respect to any Class of Certificates under the terms of this
Agreement, which failure shall continue unremedied for 5 days after the
date upon which written notice of such failure shall have been given
(a) to the Servicer by the Trustee or the Depositor or (b) to the
Servicer, the Depositor and the Trustee by the Holders of Certificates
of such Class evidencing not less than 25% of the Voting Rights
allocated to such Class;
(ii) any failure by the Servicer to duly observe or
perform in any material respect any other of the covenants or
agreements on the part of the Servicer contained in this Agreement,
which failure shall continue unremedied for a period of 30 days after
the date on which written notice of such failure shall have been given
(a) to the Servicer by the Trustee or the Depositor or (b) to the
Servicer, the Depositor and the Trustee by the Holders of Certificates
of any Class evidencing not less than 25% of the Voting Rights
allocated to such Class;
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a 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 Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days;
(iv) the Servicer shall consent to the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or all or substantially all of the property of
the Servicer;
(v) the Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations;
(vi) so long as the Servicer is a Seller, any failure
by any Seller to observe or perform in any material respect any of the
other covenants or agreements on the part of any Seller contained in
this Agreement, which failure shall continue unremedied for a period of
60 days after the date on which written notice of such failure shall
have been given to such Seller by the Trustee or the Depositor, or to
such Seller and the Trustee by the Holders of Certificates of any Class
evidencing not less than 25% of the Voting Rights allocated to such
Class; or
(vii) any failure of the Servicer to make any Advance
in the manner and at the time required to be made pursuant to Section
4.01 which continues unremedied for a period of 1 Business Day after
the date of such failure.
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If an Event of Default described in clauses (i) to (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
direction of the Holders of Certificates of any Class evidencing not less than
25% of the Voting Rights allocated to such Class, by notice in writing to the
Servicer (with a copy to each Rating Agency) shall, terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder. If
an Event of Default described in clause (vii) of this Section shall occur, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied, the Trustee shall, by telephonic notice to the Servicer, followed
by notice in writing (with a copy to each Rating Agency), terminate all of the
rights and obligations of the Servicer under this Agreement and in and to the
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On and after the receipt by the Servicer of such telephonic notice,
all authority and power of the Servicer hereunder, whether with respect to the
Loans or otherwise, shall pass to and be vested in the Trustee, as successor
Servicer. The Trustee shall, subject to 3.04 hereof, thereupon promptly make any
Advance described in clause (vii) hereof. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Loans and related documents, or otherwise.
Unless expressly provided in such written notice, no such termination shall
affect any obligation of the Servicer to pay amounts owed pursuant to Article
VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Certificate Account, or thereafter be received
with respect to the Loans.
The Trustee shall be entitled to be reimbursed from the
Servicer (or by the Trust Fund if the Servicer does not fulfill its obligations
hereunder) for all costs associated with the transfer of servicing from the
predecessor Servicer, including, without limitation, any 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
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Loans properly and effectively,
costs reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, costs or
expenses associated with the transfer of all servicing files and costs of
amending the Agreement, if necessary. If the terminated Servicer does not pay
such reimbursement within thirty (30) days of its receipt of an invoice
therefor, such reimbursement shall be an expense of the Trust Fund and the
Trustee shall be entitled to receive such reimbursement from amounts on deposit
in the Certificate Account pursuant to Section 3.08(a)(vii)(B) or from the
Distribution Account pursuant to Section 3.08(b)(i), as applicable, in an amount
not to exceed the Trustee Permitted Withdrawal Amount and to receive all amounts
in excess of the Trustee Permitted Withdrawal Amount pursuant to Sections
4.02(a)(i)(A), 4.02(a)(ii)(A) and 4.02(a)(iii)(A).
Notwithstanding any termination of the activities of the
Servicer hereunder, the Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to such Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.
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SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, subject to and
to the extent provided in Section 3.04, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and applicable law including the obligation to make Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Loans that the Servicer would have been entitled to charge
to the Certificate Account or Distribution Account if the Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in accordance with Section 7.01 hereof, the Trustee
may, if it shall be unwilling to so act, or shall, if it is prohibited by
applicable law from making Advances pursuant to Section 4.01 hereof or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any successor to the Servicer shall be an institution
which is a FNMA and FHLMC approved seller/servicer in good standing, which has a
net worth of at least $10,000,000, and which is willing to service the Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, which contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01), with like
effect as if originally named as a party to this Agreement; and provided further
that no such delegation and assignment shall become effective unless each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such delegation and assignment will not be qualified or reduced as a
result of such delegation and assignment. Pending appointment of a successor to
the Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of the Servicing Fee permitted the
Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Servicer as servicer shall give notice to
the Mortgagors of such change of servicer.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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SECTION 7.04. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default of
which a Responsible Officer of the Trustee shall have actual knowledge and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default of which a Responsible Officer of the
Trustee shall have actual knowledge has occurred and remains uncured or waived,
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 their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
Unless an Event of Default of which a Responsible Officer of
the Trustee shall have actual knowledge shall have occurred and be continuing,
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder.
The Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or other officers of the Trustee, unless
it shall be finally proven that the Trustee was negligent in ascertaining the
pertinent facts.
The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
this Agreement or with the direction of the Holders of Certificates evidencing
not less than 25% of the Voting Rights of the Certificates relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under this
Agreement.
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Subject to the other provisions of this Agreement and without
limiting the generality of this Section 8.01, the Trustee shall have no duty (A)
to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any re-recording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust Fund other than from funds available in the
Certificate Account or (D) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to this Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties; provided, however, that the provisions of this
Section 8.01(D) shall not apply during any period during which the Trustee is
acting in the capacity of servicer.
Notwithstanding anything contained in this Section 8.01 to the
contrary, no provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
SECTION 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee (acting as Trustee, Tax Matters
Person or as agent of the Tax Matters Person for any REMIC) may request
and rely upon and shall be protected in acting or refraining from
acting upon any resolution, Officers' Certificate, Opinion of Counsel,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and
the Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee (acting as Trustee, Tax Matters
Person or as agent of the Tax Matters Person for any REMIC) may consult
with counsel, financial advisers or accountants and the advice of any
such counsel, financial advisers or accountants and 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 Opinion of Counsel;
(iii) the Trustee shall not 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;
(iv) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the Trustee and
shall be repaid pursuant to Sections 3.08(a)(vii)(B), 3.08(b)(i),
4.02(a)(i)(A), 4.02(a)(ii)(A) and 4.02(a)(iii)(A) hereof, as
applicable;
(v) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, accountants, custodians or attorneys, and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent, accountant, custodian or attorney appointed
by the Trustee with due care;
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(vi) the Trustee shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it, and none of the provisions
contained in this Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement except during such
time, if any, as the Trustee shall be the successor to, and be vested
with the rights, duties, powers and privileges of the Servicer in
accordance with the terms of this Agreement;
(vii) the Trustee shall not be liable for any loss on
any investment of funds pursuant to this Agreement (other than as
issuer of the investment security);
(viii) the Trustee shall not be required to take
notice or be deemed to have knowledge of any Event of Default (except
an event of nonpayment by the Servicer) until a Responsible Officer of
the Trustee shall have received written notice thereof, and in the
absence of receipt of such notice, the Trustee may conclusively assume
that there is no default or Event of Default;
(ix) the Trustee shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(x) the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of such act;
(xi) the Trustee shall not be required to give any
bond or surety in respect of the execution of the Trust Fund created
hereby or the powers granted hereunder; and
(xii) anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee has
been advised of the likelihood of such loss or damage and regardless of
the form of action.
SECTION 8.03. Trustee Not Liable for Certificates or Loans.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the Sellers, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Loan or related document other than with respect to the
Trustee's execution and counter-signature of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Servicer
of any of the Certificates or of the proceeds of such Certificates or for the
use and application of any funds paid to the Depositor or the Servicer in
respect of the Loans or deposited in or withdrawn from the Certificate Account
by the Depositor or the Servicer. The Trustee shall not be responsible for the
legality or validity of this Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be issued
hereunder; provided, however, that the foregoing language shall not apply to the
Trustee's obligations under this Agreement.
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SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates, and may otherwise deal with the parties
hereto with the same rights as it would have if it were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Distribution Account on each Distribution
Date an amount equal to the Trustee Fee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and expenses for such Distribution Date. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Servicer and held
harmless against any loss, liability or expense (including reasonable attorney's
fees) (i) incurred in connection with any claim or legal action relating to (a)
this Agreement, (b) the Certificates or (c) the performance of any of the
Trustee's duties hereunder, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
any of the Trustee's duties hereunder, (ii) resulting from any error in any tax
or information return prepared by the Servicer and (iii) incurred in connection
with Section 2.01(d) hereof. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee hereunder. Without
limiting the foregoing, the Servicer covenants and agrees, except as otherwise
agreed upon in writing by the Depositor and the Trustee, and except for any such
expense, disbursement or advance as may arise from the Trustee's negligence, bad
faith or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to the
following: (A) the reasonable compensation and the expenses and disbursements of
its counsel not associated with the closing of the issuance of the Certificates,
(B) the reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage such persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with preparing
any Definitive Certificates. Except as otherwise provided herein, the Trustee
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Certificate Registrar, Tax Matters Person or Paying Agent hereunder or
for any other expenses.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a 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 subject to
supervision or examination by federal or state authority and with a credit
rating which would not cause any one of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction). If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07 hereof.
The entity serving as Trustee may have normal banking and trust relationships
with the Depositor and its affiliates or the Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Servicer other
than the Trustee in its role as successor to the Servicer.
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SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor
and the Servicer and each Rating Agency not less than 60 days before the date
specified in such notice when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Servicer may
remove the Trustee, and shall, within 30 days after such removal, appoint a
successor trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee, one copy of which shall be
delivered to the Servicer and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor trustee to the Servicer, one complete set to
the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to each Rating Agency by the
successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor and to its
predecessor trustee and the Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicer and the predecessor trustee
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 all such rights, powers, duties, and obligations.
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No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, 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 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the prior written approval of
the Servicer. If the Servicer shall not have joined in such appointment within
15 days after the receipt by it of a request to do so, or in the case an Event
of Default shall have occurred and be continuing, the Trustee alone shall have
the power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) to the extent necessary to effectuate the
purposes of this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee, except for the
obligation of the Trustee under this Agreement to advance funds on
behalf of the Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
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(ii) no trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee hereunder
and such appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the Trustee;
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee; and
(iv) the Servicer, and not the Trustee, shall be
liable for the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Tax Matters.
It is intended that the assets with respect to which any REMIC
election is to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to such assets shall be
such as to qualify such assets as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of each REMIC created
hereunder and that in such capacity it shall: (a) prepare and file, or cause to
be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Forms 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and filed
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
REMIC created hereunder, containing such information and at the times and in the
manner as may be required by the Code or regulations, rules or procedures issued
under the Code, or state or local tax laws, regulations, or rules, and furnish
or cause to be furnished to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
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(c) make or cause to be made elections that such assets be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law); (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns and reports as and
when required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the prepayment assumption described in the Prospectus Supplement; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a non-Permitted
Transferee, or a pass-through entity in which a non-Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control, conduct matters relating to such assets
at all times that any Certificates are outstanding so as to maintain the REMIC
status of each REMIC created hereunder under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs created
hereunder; (h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on each REMIC created hereunder
prior to its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings); (i) ensure that federal, state or local income tax
or information returns shall be signed by the Trustee or such other person as
may be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to each REMIC created
hereunder, including, but not limited to, the income, expenses, assets, and
liabilities thereof and the fair market value and adjusted basis of the assets
determined at such intervals as may be required by the Code, as may be necessary
to prepare the foregoing returns, schedules, statements or information; and (k)
as and when necessary and appropriate, represent each REMIC created hereunder in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as to
any taxable year of each REMIC created hereunder, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of each REMIC created hereunder, and
otherwise act on behalf of each REMIC created hereunder in relation to any tax
matter or controversy involving it.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Loans. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor, any such additional information
or data that the Trustee may, from time to time, reasonably request to enable
the Trustee to perform its duties as set forth herein. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims or expenses
of the Trustee arising from any errors or miscalculations of the Trustee that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.
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If 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 any REMIC created hereunder as defined
in Section 860G(c) of the Code, on any contribution to any REMIC created
hereunder after the Startup Day pursuant to Section 860G(d) of the Code, or any
other tax is imposed, if not paid as otherwise provided for herein, such tax and
all other related costs shall be paid by (i) the Trustee, if such tax arises out
of or results from a breach by the Trustee of any of its obligations under this
Agreement, (ii) the Servicer, or if such tax arises out of or results from a
breach by the Servicer or a Seller of any of their obligations under this
Agreement, (iii) the Sellers, if any tax arises out of or results from any
Seller's obligation to repurchase a Loan pursuant to Section 2.02 or 2.03 or
(iv) in all other cases, or if the Trustee, the Servicer or a Seller fails to
honor its obligations under the preceding clause (i),(ii) or (iii), such tax
will be paid with amounts otherwise to be distributed to the Certificateholders,
as provided in Section 3.08(b).
SECTION 8.12. Periodic Filings.
The Depositor shall prepare, execute and file all periodic
reports required under the Securities Exchange Act of 1934. In connection with
the preparation and filing of such periodic reports, the Servicer shall timely
provide to the Depositor all material information available to it which is
required to be included in such reports and not known to it to be in the
possession of the Depositor and such other information as the Depositor
reasonably may request from it and otherwise reasonably shall cooperate with the
Depositor. The Depositor shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Depositor's inability or failure to obtain any information not resulting from
its own gross negligence or willful misconduct.
SECTION 8.13. Appointment of Custodians.
The Trustee may, with the consent of the Servicer, appoint one
or more custodians (each, a "CUSTODIAN") to hold all or a portion of the
Trustee's Mortgage Files as agent for the Trustee, by entering into a custodial
agreement ("CUSTODIAL AGREEMENT"). The Trustee agrees to comply with the terms
of each Custodial Agreement and to enforce the terms and provisions thereof
against the Custodian for the benefit of the Certificateholders. The Trustee
shall be liable for the fees of any Custodian appointed hereunder. Each
Custodian shall be a depository institution subject to supervision by federal or
state authority and shall be qualified to do business in the jurisdiction in
which it holds any Trustee's Mortgage File.
SECTION 8.14. Trustee May Enforce Claims Without Possession of
Certificates.
All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, any such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
The Trustee shall afford the Sellers, the Depositor, the
Servicer and each Certificateholder, upon reasonable notice during normal
business hours, access to all records maintained by the Trustee in respect of
its duties hereunder and reasonable access to officers of the Trustee
responsible for performing such duties, or such other employees who can provide
the information required. Upon request, the Trustee shall furnish the Sellers,
the Depositor, the Servicer and each Certificateholder with its most recent
financial statements. The Trustee shall cooperate fully with the Sellers, the
Servicer, the Depositor and such Certificateholder and shall make available to
the Sellers, the Servicer, the Depositor and such Certificateholder for review
and copying at the expense of the party requesting such copies, such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Sellers, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
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SECTION 8.15. Suits for Enforcement.
In case an Event of Default or other default by the Servicer
hereunder shall occur and be continuing, the Trustee, in its discretion, may
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
SECTION 8.16. Derivative Transactions.
The Holders of a majority of the Percentage Interests of the
Class R Certificates may at any time, at their option, direct the Trustee in
writing to enter into derivative transactions on behalf of, and for the benefit
of, one or more Classes of Certificates. All derivative transactions entered
into by the Trustee on behalf of Certificateholders will be subject to the
receipt by the Trustee of (a) Opinions of Counsel to the effect that the
inclusion of the derivatives in the Trust Fund will not (i) be inconsistent with
the ERISA provisions set forth in the Prospectus Supplement and in this
Agreement, or cause the Publicly Offered Certificates to fail to qualify for any
applicable prohibited transaction exemption, or (ii) disqualify any REMIC or
result in a prohibited transaction tax under the Code, and (b) written
confirmation from each Rating Agency that the inclusion of the derivative would
not result in a downgrade of its then current rating of any Class of
Certificates.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
Loans.
Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Servicer and the Trustee created hereby with respect to
the Trust Fund shall terminate upon the earlier of (a) the purchase by the
Servicer of all Loans (and REO Properties) remaining in the Trust Fund at a
price equal to the sum of (i) 100% of the Stated Principal Balance of each Loan
plus accrued and unpaid interest thereon at the applicable Mortgage Rate and
(ii) 100% of the Stated Principal Balance of each Loan related to any REO
Property plus accrued and unpaid interest thereon at the applicable Mortgage
Rate (the "TERMINATION PRICE"); provided, however, that in no event shall the
Termination Price be less than (1) with respect to the Offered Certificates,
100% of their then outstanding principal balance, (2) with respect to the
Offered Certificates, any accrued and unpaid interest thereon at the applicable
Pass-Through Rate (including any Class Unpaid Interest Amounts) and (3) with
respect to the Offered Certificates, any accrued and unpaid Net WAC Cap
Carryover as of such Distribution Date, or (b) the later of (i) the maturity or
other liquidation of the last Loan remaining in the Trust Fund (or any Advance
with respect thereto) and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the 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 or (ii) the
Latest Possible Maturity Date. The right to purchase all Loans and REO
Properties pursuant to clause (a) above shall be conditioned upon the Pool
Principal Balance, at the time of any such repurchase, aggregating less than ten
percent (10%) of the Cut-off Date Pool Principal Balance. If the Servicer elects
to exercise its purchase right pursuant to clause (a) above, the Servicer's
right to reimbursement from the Trust Fund for any Advances previously made on
the Loans being purchased shall terminate as of the date the purchase of the
Loans and REO Properties is completed.
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SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Servicer determines that
there are no Outstanding Loans and no other funds or assets in the Trust Fund
other than the funds in the Certificate Account, the Servicer shall direct the
Trustee in writing promptly to send a final distribution notice to each
Certificateholder. If the Servicer elects to terminate the Trust Fund pursuant
to clause (a) of Section 9.01, at least 20 days prior to the date notice is to
be mailed to the affected Certificateholders, the Servicer shall notify in
writing the Depositor and the Trustee of the date the Servicer intends to
terminate the Trust Fund and of the applicable repurchase price of the Loans and
REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month next preceding the month of
such final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of principal to be included in such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Servicer will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.
In the event such notice is given, the Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for deposit
in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Servicer the Mortgage Files for the Loans.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class, in
the order set forth in Section 4.02 hereof, on the final Distribution Date and
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to the Offered
Certificates, the Class Certificate Balance of each Class thereof plus accrued
interest thereon and (ii) as to the Class R Certificates, the amount, if any,
which remains on deposit in the Distribution Account (other than the amounts
retained to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund, on a pro-rata basis among the
remaining Certificateholders. If within one year after the second notice all
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets of
the Trust Fund which remain subject hereto.
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SECTION 9.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on any REMIC created
hereunder as defined in section 860F of the Code, or (ii) cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) Within 90 days prior to the final Distribution
Date set forth in the notice given by the Servicer under Section 9.02,
the Servicer shall prepare and the Trustee, at the expense of the Tax
Matters Person, shall adopt a plan of complete liquidation within the
meaning of section 860F(a)(4) of the Code which, as evidenced by an
Opinion of Counsel (which opinion shall not be an expense of the
Trustee or the Tax Matters Person), meets the requirements of a
qualified liquidation; and
(2) Within 90 days after the time of adoption of such
a plan of complete liquidation, the Trustee shall sell all of the
assets of the Trust Fund to the Servicer for cash in accordance with
Section 9.01.
(b) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1) and to take such other action in connection
therewith as may be reasonably requested by the Servicer.
(c) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Servicer to prepare and the Trustee to adopt and
sign a plan of complete liquidation.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Sellers, the Servicer and the Trustee, without the consent of any
of the Certificateholders, (a) to cure any ambiguity, (b) to correct or
supplement any provisions herein which may be defective or inconsistent with any
other provisions herein, (c) to conform this Agreement to the Prospectus
Supplement, (d) to make any other revisions relating to matters or questions
arising under this Agreement, provided that any such revisions shall not be
inconsistent with the provisions of this Agreement or (e) to modify, eliminate
or add to any of its provisions to such extent as shall be necessary or helpful
to (i) maintain the qualification of the Trust Fund as one or more REMICs under
the Code or (ii) avoid or minimize the risk of imposition of any tax on any
REMIC; provided that, (x) in the case of clauses (a) - (d), that amendment will
not adversely affect in any material respect the interests of any
Certificateholders covered by this Agreement as evidenced either by an Opinion
of Counsel to that effect or the delivery to the Trustee of written notification
from each Rating Agency that provides, at the request of the Depositor, a rating
for the Offered Certificates, of the related series to the effect that that
amendment or supplement will not cause that Rating Agency to lower or withdraw
the then current rating assigned to those Certificates, and (y) in the case of
clause (e), the Trustee has received an Opinion of Counsel (which opinion shall
not be an expense of the Trustee or the Trust Fund) to the effect that the
amendment is necessary or helpful to (i) maintain the qualification of the Trust
Fund as one or more REMICs under the Code or (ii) avoid or minimize the risk of
imposition of any tax on any REMIC, as applicable.
129
This Agreement may also be amended from time to time by the
Depositor, the Sellers, the Servicer and the Trustee with the consent of the
Holders of Percentage Interests of at least 66% of each Class of Certificates
affected thereby for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (a) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate or (b) reduce the aforesaid percentages of
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (which opinion shall not be an expense
of the Trustee or the Trust Fund) to the effect that such amendment will not
cause the Trust Fund to fail to qualify as one or more REMICs at any time that
any Certificates are outstanding. Prior to the execution of any amendment to
this Agreement, the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel (which opinion shall not be at the expense of the Trustee or
the Trust Fund) stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to,
enter into any such amendment that affects the Trustee's own rights, duties or
immunities under this Agreement.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
SECTION 10.02. Recordation of Agreement; Counterparts.
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 Servicer at its expense, but only upon
direction by 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, taken
together, shall constitute one and the same instrument.
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SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Loans by the Sellers to the Depositor pursuant to Article II
of this Agreement be, and be construed as, an absolute sale thereof to the
Depositor. It is, further, not the intention of the parties that such conveyance
be deemed a pledge thereof by the Sellers to the Depositor to secure a borrowing
by the Sellers from the Depositor. However, in the event that, notwithstanding
the intent of the parties, such assets are held to be the property of the
Sellers or any one of them, or if this Agreement is held or deemed to constitute
or have created a loan, lending transaction or an extension of credit by the
Depositor to the Sellers or any one of them, then and only then (i) this
Agreement shall be deemed, effective as of October 1, 2005, to be a security
agreement within the meaning of the Uniform Commercial Code of the State of New
York and (ii) the conveyance by the Sellers to the Depositor provided for in
this Agreement shall be deemed, effective as of October 1, 2005, to be an
assignment and a grant by the Sellers to the Depositor, and each of the Sellers
does hereby grant and assign to the Depositor, a security interest in, and lien
upon, all of the assets that constitute the Collateral, whether now owned or
hereafter acquired.
The Sellers, for the benefit of the Depositor, shall, in
connection with the perfection of the security interest described in the
preceding paragraph of this Section 10.04, deliver to the Depositor on the
Closing Date the financing statements described in Schedule IV. The Sellers
shall also arrange for the delivery to the Depositor of any appropriate Uniform
Commercial Code continuation statements as may be necessary or appropriate to
continue the perfection of the security interest of the Depositor in the
Collateral, whether now owned or hereafter acquired. The Sellers, for the
benefit of the Depositor, shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement is held
or deemed to constitute or have created a loan, lending transaction or an
extension of credit by the Depositor to the Sellers or any one of them, then and
only then (i) this Agreement shall be deemed, effective as of October 1, 2005,
to be a security agreement within the meaning of the Uniform Commercial Code of
the State of New York and (ii) the conveyance by the Sellers to the Depositor
provided for in this Agreement shall be deemed, effective as of October 1, 2005,
to be an assignment and a grant by the Sellers to the Depositor, and each of the
Sellers does hereby grant and assign to the Depositor, a security interest in,
and lien upon, all of the assets that constitute the Collateral, whether now
owned or hereafter acquired, such security interest shall be deemed to be a
perfected security interest of first priority under applicable law, and will be
maintained as such throughout the term of this Agreement. The Sellers shall
arrange for filing any appropriate Uniform Commercial Code financing statements,
continuation statements or other appropriate forms, notices or documents in
connection with any security interest granted or assigned to the Depositor.
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The Depositor does hereby assign the security interest in and
lien on the Collateral, whether now owned or hereafter acquired, to the Trustee
for the benefit of the Certificateholders. The Depositor shall arrange for
filing of such Uniform Commercial Code financing statements as are necessary to
effect the assignment of the security interest and lien to the Trustee for the
benefit of the Certificateholders.
It is the express intent of the parties hereto that the
conveyance of the Trust Fund by the Depositor to the Trustee pursuant to Article
II of this Agreement be, and be construed as, an absolute sale thereof to the
Trustee. It is, further, not the intention of the parties that such conveyance
be deemed a pledge thereof by the Depositor to the Trustee to secure a borrowing
by the Depositor from the Trustee. However, in the event that, notwithstanding
the intent of the parties, the assets constituting the Trust Fund are held to be
the property of the Depositor, or if this Agreement is held or deemed to
constitute or have created a loan, lending transaction or an extension of credit
by the Trustee to the Depositor, then and only then (i) this Agreement shall be
deemed, effective as of October 1, 2005, to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyance by the Depositor to the Trustee provided for in this Agreement shall
be deemed, effective as of October 1, 2005, to be an assignment and a grant by
the Depositor to the Trustee, and the Depositor does hereby grant and assign to
the Trustee, for the benefit of the Certificateholders, a security interest in,
and lien upon, all of the assets that constitute the Collateral, whether now
owned or hereafter acquired.
The Depositor, for the benefit of the Trustee and the
Certificateholders, shall, in connection with the perfection of the security
interest described in the preceding paragraph of this Section 10.04, deliver to
the Trustee on the Closing Date the financing statements described in Schedule
V. The Depositor shall also arrange for the delivery to the Trustee of any
appropriate Uniform Commercial Code continuation statements as may be necessary
or appropriate to continue the perfection of the security interest of the
Trustee in the Trust Fund, and all of the proceeds thereof, whether now owned or
hereafter acquired. The Depositor, for the benefit of the Trustee and the
Certificateholders, shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement is held or
deemed to constitute or have created a loan, lending transaction or an extension
of credit by the Trustee to the Depositor, then and only then (i) this Agreement
shall be deemed, effective as of October 1, 2005, to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyance by the Depositor to the Trustee provided for in this
Agreement shall be deemed, effective as of October 1, 2005, to be an assignment
and a grant by the Depositor to the Trustee, and the Depositor does hereby grant
and assign to the Trustee, for the benefit of the Certificateholders, a security
interest in, and lien upon, all of the assets that constitute the Collateral,
whether now owned or hereafter acquired, such security interest shall be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of this Agreement. The Servicer
shall, within ten (10) days of the Closing Date, present to the appropriate
filing offices in the jurisdictions set forth on Schedules IV and V all of the
financing statements delivered on the Closing Date by the Sellers to the
Depositor, the assignments thereof delivered by the Depositor to the Trustee on
the Closing Date and the financing statements delivered by the Depositor to the
Trustee on the Closing Date. The Servicer shall arrange for filing any
appropriate Uniform Commercial Code continuation statements or other appropriate
forms, notices or documents in connection with any security interest granted or
assigned to the Trustee.
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SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency and the Underwriters with respect to each of the
following of which it has actual knowledge:
1. any material change or amendment to this
Agreement;
2. the occurrence of any Event of Default that has
not been cured;
3. the resignation or termination of the Servicer or
the Trustee and the appointment of any successor;
4. the repurchase or substitution of Loans pursuant
to Section 2.03; and
5. the final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency and the Underwriters copies of the following:
1. each report to Certificateholders described in
Section 4.03;
2. each annual statement as to compliance described
in Section 3.15;
3. each annual independent public accountants'
servicing report described in Section 3.16; and
4. any notice of a purchase or sale of a Loan
pursuant to Section 2.02, 2.03 or 3.11.
(b) Except as expressly provided otherwise in this Agreement,
all directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to the following addresses or such
other addresses as may hereafter be furnished in writing to the Servicer and the
Trustee: (a) in the case of the Depositor, Popular ABS, Inc., 000 Xxxxxxxx
Xxxxxxxx, 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief
Financial Officer, facsimile number: (000) 000-0000, (b) in the case of the
Servicer, Equity One, Inc., 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000,
Attention: Chief Financial Officer, facsimile number: (000) 000-0000, (c) in the
case of any of the Sellers, to that Seller c/o Popular Financial Services, LLC,
000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000, Attention: Chief Financial
Officer, facsimile number: (000) 000-0000, (d) in the case of the Trustee,
JPMorgan Chase Bank, N.A., 4 New York Plaza, 6th Floor, New York, New York
10004, Attention: Worldwide Securities Services/Global Debt, Popular ABS 2005-5,
facsimile number: (000) 000-0000, (e) in the case of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency, and (f) in the case of the Underwriters, (i) Greenwich Capital
Markets, Inc., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention:
General Counsel, facsimile number: (000) 000-0000 and (ii) Friedman, Billings,
Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxx Xxxxxx, facsimile number: (000) 000-0000. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Telephonic notice to the Servicer pursuant to Section 7.01 hereof shall be
deemed to have been duly given when the Trustee has delivered such notice via a
direct, in-person telephone conversation with the Chief Financial Officer of the
Servicer at (000) 000-0000 or such other telephone number as the Servicer may
provide to the Trustee in writing in accordance with the notice provisions of
this Section 10.05(b).
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SECTION 10.06. 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 10.07. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided in Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and the Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Servicer
relating to the Loans, to make copies and extracts therefrom, to cause such
books to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Loans with its officers, employees and independent public
accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor
or the Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the
Servicer or the related Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor and the Trustee that the
Certificateholders shall not be personally liable for obligations of the Trust
Fund, that the interests in the Trust Fund represented by the Certificates shall
be nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
SECTION 10.11. The Closing.
The closing of the transactions contemplated by this Agreement
shall occur at 10:00 a.m. Philadelphia time on the Closing Date at the Closing
Place.
SECTION 10.12. Interpretation.
Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to one gender includes all genders,
(c) "or" has the inclusive meaning frequently identified with the phrase
"and/or," (d) "including" has the inclusive meaning frequently identified with
the phrase "but not limited to" and (e) references to "hereunder," "hereof" or
"herein" relate to this Agreement. The section and other headings contained in
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any respect.
Section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
SECTION 10.13. RESERVED.
SECTION 10.14. No Partnership.
Nothing herein contained shall be deemed or construed to
create a co-partnership or joint venture between the parties hereto and the
services of the Trustee and the Servicer shall be rendered as an independent
contractor and not as agent for the Certificateholders.
SECTION 10.15. Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust Fund created by this Agreement is not authorized and has no power to:
135
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate
or sell assets;
(3) engage in any business or activities.
(b) Each party to this agreement agrees that it will not file
an involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
SECTION 10.16. Execution of Yield Maintenance Agreement.
The Depositor hereby directs the Trustee to execute, deliver
and perform its obligations under, and make the representations contained in,
the Yield Maintenance Agreement on the Closing Date and thereafter on behalf of,
and for the benefit of, the Holders of the Hedged Certificates. The Sellers, the
Depositor, the Servicer and the Holders of the Hedged Certificates (by their
acceptance of such Certificates) acknowledge and agree that the Trustee is
executing, delivering and performing its obligations under, and making the
representations contained in, the Yield Maintenance Agreement and shall do so
solely in its capacity as Trustee of the Trust Fund and not in its individual
capacity.
* * * * * *
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IN WITNESS WHEREOF, the Depositor, the Trustee, each of the
Sellers and the Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
POPULAR ABS, INC., a Delaware corporation, as Depositor
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------------------------
Xxxxx X. Xxxxxxx, Executive Vice President and CFO
JPMORGAN CHASE BANK, N.A., a banking association organized
under the laws of the United States, as Trustee
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------------------------
Xxxxx X. Xxxxxxxx, Assistant Vice President
EQUITY ONE, INC., a Delaware corporation, as Servicer
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------------------------
Xxxxx X. Xxxxxxx, Executive Vice President and CFO
POPULAR FINANCIAL SERVICES, LLC, a Delaware limited liability
company, as a Seller
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------------------------
Xxxxx X. Xxxxxxx, Executive Vice President and CFO
POPULAR FINANCIAL FUNDING, LLC, a Delaware limited liability
company, as a Seller
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------------------------
Xxxxx X. Xxxxxxx, Executive Vice President and CFO
SCHEDULE I
Loan Schedule
SEE ATTACHED
S-I-1
SCHEDULE IIA
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIA-1
SCHEDULE IIB
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIB-1
SCHEDULE IIC
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIC-1
SCHEDULE IID
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IID-1
SCHEDULE IIE
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
Representations and Warranties of Popular Financial
Popular Financial ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIE to the Depositor and the Trustee
as of the Closing Date, or if so specified herein, as of the Cut-off Date with
respect to the Loans being conveyed by Seller. Capitalized terms used but not
otherwise defined in this Schedule IIE shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT")
relating to the above-referenced Series, among Seller, the other Sellers and the
Servicer identified therein, Popular ABS, Inc., as depositor, and JPMorgan Chase
Bank, N.A., as trustee. The term "AGREEMENT" shall be used in this Schedule to
refer to the Pooling and Servicing Agreement.
(1) Seller is duly formed as a Delaware limited liability company and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by the Agreement to be conducted by Seller under
the laws of each state where a Mortgaged Property is located or is
otherwise exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification.
(2) Seller has the full power and authority to sell each Loan, and to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by the Agreement and has duly authorized by
all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the operating agreement of Seller or (b)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Seller is a party
or by which it may be bound or (c) constitute a material violation of
any statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's
ability to perform or meet any of its obligations under the Agreement.
S-IIE-1
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor as
a sale under applicable law.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IIE-2
SCHEDULE IIF
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
Representations and Warranties of Popular Funding
Popular Funding ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIF to the Depositor and the Trustee
as of the Closing Date, or if so specified herein, as of the Cut-off Date with
respect to the Loans being conveyed by Seller. Capitalized terms used but not
otherwise defined in this Schedule IIF shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT")
relating to the above-referenced Series, among Seller, the other Sellers and the
Servicer identified therein, Popular ABS, Inc., as depositor, and JPMorgan Chase
Bank, N.A., as trustee. The term "Agreement" shall be used in this Schedule to
refer to the Pooling and Servicing Agreement.
(1) Seller is duly formed as a Delaware limited liability company and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by the Agreement to be conducted by Seller under
the laws of each state where a Mortgaged Property is located or is
otherwise exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification.
(2) Seller has the full power and authority to sell each Loan, and to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by the Agreement and has duly authorized by
all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the operating agreement of Seller or (b)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Seller is a party
or by which it may be bound or (c) constitute a material violation of
any statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's
ability to perform or meet any of its obligations under the Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
S-IIF-1
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor as
a sale under applicable law.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IIF-2
SCHEDULE IIX
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
Representations and Warranties of the Servicer
Equity One-Delaware, in its capacity as Servicer ("SERVICER"),
hereby makes the representations and warranties set forth in this Schedule IIX
to the Depositor and the Trustee as of the Closing Date, or if so specified
herein, as of the Cut-off Date with respect to the Loans being conveyed by the
Seller(s). Capitalized terms used but not otherwise defined in this Schedule IIX
shall have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced Series,
among Servicer, the Sellers identified therein, Popular ABS, Inc., as depositor,
and JPMorgan Chase Bank, N.A., as trustee. The term "AGREEMENT" shall be used in
this Schedule to refer to the Pooling and Servicing Agreement.
(1) Servicer is duly organized as a Delaware corporation and is validly
existing and in good standing under the laws of the State of Delaware
and is duly authorized and qualified to transact any and all business
contemplated by the Agreement to be conducted by Servicer in any state
in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to service the Loans in
accordance with the terms of the Agreement and to perform any of its
other obligations under the Agreement in accordance with the terms
thereof.
(2) Servicer has the full corporate power and authority to service each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Agreement and has duly
authorized by all necessary corporate action on the part of Servicer
the execution, delivery and performance of the Agreement; and the
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Servicer, enforceable against Servicer in
accordance with its terms, except that (a) the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of the Agreement by Servicer, the servicing
of the Loans by Servicer under the Agreement, the consummation of any
other of the transactions contemplated by the Agreement, and the
fulfillment of or compliance with the terms thereof are in the ordinary
course of business of Servicer and will not (a) result in a material
breach of any term or provision of the charter or by-laws of Servicer
or (b) materially conflict with, result in a material breach, violation
or acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Servicer is a party
or by which it may be bound or (c) constitute a material violation of
any statute, order or regulation applicable to Servicer of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Servicer; and Servicer is not in breach or violation
of any material indenture or other material agreement or instrument, or
in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
Servicer's ability to perform or meet any of its obligations under the
Agreement.
S-IIX-2
(4) No litigation is pending or, to the best of Servicer's knowledge,
threatened, against Servicer that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
ability of Servicer to service the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Servicer of, or compliance by Servicer with, the
Agreement or the consummation of the transactions contemplated thereby,
or if any such consent, approval, authorization or order is required,
Servicer has obtained the same.
S-IIX-2
SCHEDULE IIIA
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIIA-1
SCHEDULE IIIB
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIIB-1
SCHEDULE IIIC
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIIC-1
SCHEDULE IIID
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
RESERVED
S-IIID-1
SCHEDULE IIIE
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
Loan Representations and Warranties of Popular Financial
Popular Financial ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIIE to the Depositor and the Trustee
as of the Closing Date, or if so specified herein, as of the Cut-off Date with
respect to the Loans being conveyed by Seller and the Mortgages, Mortgage Notes
and Mortgaged Properties related thereto. Capitalized terms used but not
otherwise defined in this Schedule IIIE shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT")
relating to the above-referenced Series, among Seller, the other Sellers and the
Servicer identified therein, Popular ABS, Inc., as depositor, and JPMorgan Chase
Bank, N.A., as trustee. The term "AGREEMENT" shall be used in this Schedule to
refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on September 30, 2005, no Loan was
contractually past due (assuming 30 day months) for 60 or more days. In
addition, as of the close of business on September 30, 2005,
approximately 0.11% (by principal balance) of the Group I Loans,
approximately 0.18% (by principal balance) of the Group II Loans,
approximately 0.08% (by principal balance) of the Group II-A Loans and
approximately 0.26% (by principal balance) of the Group II-B Loans set
forth on Schedule I to the Agreement were 30 or more days contractually
past due (assuming 30 day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
S-IIIE-1
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Loan or a commitment (binder) to issue the same
was effective on the date of the origination of each Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in item (4) above; to
the best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
S-IIIE-2
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
S-IIIE-3
(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and
does not constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
S-IIIE-4
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIIE can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) Approximately 1.89% (by principal balance) of the Group I Loans and
none of the Group II Loans are Balloon Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
S-IIIE-5
(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
(59) No Group II-A Loan originated on or after October 1, 2002 has a
prepayment penalty longer than three years after its origination and no
Group II-A Loan originated prior to October 1, 2002 has a prepayment
penalty longer than five years after its origination.
(60) The Servicer has fully furnished with respect to each Group II-A Loan
(and, on a going forward basis, 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 (three of the credit repositories), on a monthly
basis (during the period in which the Servicer serviced the Group II-A
Loans).
(61) With respect to each Group II-A Loan, no borrower obtained a prepaid
single-premium credit-life, credit-disability, credit unemployment or
credit property insurance policy in connection with the origination of
the Group II-A Loan.
(62) The original principal balance of each Group II-A Loan is within FHLMC
loan balance limits in effect as of the Cut-off Date for conforming
one- to four-family mortgage loans.
(63) With respect to any Group II-A Loan originated on or after August 1,
2004, neither the related Mortgage nor the related Mortgage Note
requires the borrower to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan transaction.
S-IIIE-6
SCHEDULE IIIF
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
Loan Representations and Warranties of Popular Funding
Popular Funding ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIIF to the Depositor and the Trustee
as of the Closing Date, or if so specified herein, as of the Cut-off Date with
respect to the Loans being conveyed by Seller and the Mortgages, Mortgage Notes
and Mortgaged Properties related thereto. Capitalized terms used but not
otherwise defined in this Schedule IIIF shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT")
relating to the above-referenced Series, among Seller, the other Sellers and the
Servicer identified therein, Popular ABS, Inc., as depositor, and JPMorgan Chase
Bank, N.A., as trustee. The term "AGREEMENT" shall be used in this Schedule to
refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on September 30, 2005, no Loan was
contractually past due (assuming 30 day months) for 60 or more days. In
addition, as of the close of business on September 30, 2005, none of
the Group I Loans, approximately 0.15% (by principal balance) of the
Group II Loans, approximately 0.30% (by principal balance) of the Group
II-A Loans and none of the Group II-B Loans set forth on Schedule I to
the Agreement were 30 or more days contractually past due (assuming 30
day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
S-IIIF-1
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Loan or a commitment (binder) to issue the same
was effective on the date of the origination of each Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in item (4) above; to
the best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
S-IIIF-2
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
S-IIIF-3
(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and
does not constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
S-IIIF-4
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIIF can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) Approximately 2.72% (by principal balance) of the Group I Loans and
none of the Group II Loans are Balloon Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
S-IIIF-5
(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
(59) No Group II-A Loan originated on or after October 1, 2002 has a
prepayment penalty longer than three years after its origination and no
Group II-A Loan originated prior to October 1, 2002 has a prepayment
penalty longer than five years after its origination.
(60) The Servicer has fully furnished with respect to each Group II-A Loan
(and, on a going forward basis, 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 (three of the credit repositories), on a monthly
basis (during the period in which the Servicer serviced the Group II-A
Loans).
(61) With respect to each Group II-A Loan, no borrower obtained a prepaid
single-premium credit-life, credit-disability, credit unemployment or
credit property insurance policy in connection with the origination of
the Group II-A Loan.
(62) The original principal balance of each Group II-A Loan is within FHLMC
loan balance limits in effect as of the Cut-off Date for conforming
one- to four-family mortgage loans.
(63) With respect to any Group II-A Loan originated on or after August 1,
2004, neither the related Mortgage nor the related Mortgage Note
requires the borrower to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan transaction.
S-IIIF-6
SCHEDULE IV
LIST OF FINANCING STATEMENTS:
PERFECTION OF GRANT OF SECURITY INTEREST
BY SELLERS TO DEPOSITOR
===============================================================================
SELLER LOCATION
-------------------------------------------------------------------------------
Popular Financial Services, LLC Secretary of State of the State of Delaware
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Popular Financial Funding, LLC Secretary of State of the State of Delaware
===============================================================================
S-IV-1
SCHEDULE V
LIST OF FINANCING STATEMENTS:
PERFECTION OF GRANT OF SECURITY INTEREST
BY DEPOSITOR TO TRUSTEE
==============================================================================
DEPOSITOR LOCATION
==============================================================================
Popular ABS, Inc. Secretary of State of the State of Delaware
==============================================================================
S-V-1
SCHEDULE VI
LIST OF FINANCING STATEMENTS:
PERFECTION OF SALE
BY SELLERS TO DEPOSITOR
================================================================================
SELLER LOCATION
--------------------------------------------------------------------------------
Popular Financial Services, LLC Secretary of State of the State of Delaware
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Popular Financial Funding, LLC Secretary of State of the State of Delaware
================================================================================
S-VI-1
SCHEDULE VII
LIST OF FINANCING STATEMENTS:
PERFECTION OF SALE
BY DEPOSITOR TO TRUSTEE
=============================================================================
DEPOSITOR LOCATION
=============================================================================
Popular ABS, Inc. Secretary of State of the State of Delaware
=============================================================================
S-VII-1
EXHIBIT A-1
Form of Class AF-[] Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
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, AS AMENDED (THE "CODE").
Certificate No. :
Cut-off Date: : October 1, 2005
First Distribution Date: : November 25, 2005
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : %
CUSIP :
ISIN :
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5
Class AF-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans divided into two groups, Group I and Group II (collectively, the
"LOANS"). The Loans in Group I are fixed rate mortgage loans. The Loans
in Group II are adjustable rate mortgage loans. Group II is further
divided into Group II-A and Group II-B. Group II-A consists exclusively
of Loans with conforming balances. Group II-B includes Loans without
conforming balances. The Class AF-[] Certificates primarily represent
an interest in the Loans in Group I.
A-1-1
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Sellers, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that_____________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Loans deposited by Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "AGREEMENT") among the Depositor, Popular Financial
Funding, LLC and Popular Financial Services, LLC, as sellers (in such capacity,
collectively, the "SELLERS"), Equity One, Inc., a Delaware corporation, as
servicer (in such capacity, the "SERVICER"), and JPMorgan Chase Bank, N.A., as
trustee (the "TRUSTEE"). 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.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated , 20__ JPMorgan Chase Bank, N.A.,
---------------------
Countersigned: as Trustee
By: By:
------------------------------ -----------------------------
Authorized Signatory of
JPMorgan Chase Bank, N.A.,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class AV-[] Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
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, AS AMENDED (THE "CODE").
Certificate No. :
Cut-off Date: : October 1, 2005
First Distribution Date: : November 25, 2005
Initial Class Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : LIBOR + %
CUSIP :
ISIN :
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5
Class AV-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans divided into two groups, Group I and Group II (collectively, the
"LOANS"). The Loans in Group I are fixed rate mortgage loans. The Loans
in Group II are adjustable rate mortgage loans. Group II is further
divided into Group II-A and Group II-B. Group II-A consists exclusively
of Loans with conforming balances. Group II-B includes Loans without
conforming balances. [The Class AV-[] Certificates primarily represent
an interest in the Group II-A Loans.] [The Class AV-[] Certificates
primarily represent an interest in the Group II-B Loans.]
A-2-1
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Sellers, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that_________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Loans deposited by Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "AGREEMENT") among the Depositor, Popular Financial
Funding, LLC and Popular Financial Services, LLC, as sellers (in such capacity,
collectively, the "SELLERS"), Equity One, Inc., a Delaware corporation, as
servicer (in such capacity, the "SERVICER"), and JPMorgan Chase Bank, N.A., as
trustee (the "TRUSTEE"). 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.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated , 20__ JPMorgan Chase Bank, N.A.,
---------------------
Countersigned: as Trustee
By: By:
------------------------------------ -------------------------------
Authorized Signatory of
JPMorgan Chase Bank, N.A.,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class M[]-[] Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
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, AS AMENDED (THE "CODE").
THIS CLASS M[]-[] CERTIFICATE IS SUBORDINATE TO THE [[CLASS AF][CLASS AV]
CERTIFICATES] [[CLASS AF][CLASS AV] CERTIFICATES AND THE CLASS M[]-1
CERTIFICATES] [[CLASS AF][CLASS AV] CERTIFICATES, THE CLASS M[]-1 CERTIFICATES
AND THE CLASS M[]-2 CERTIFICATES] [[CLASS AF][CLASS AV] CERTIFICATES, THE CLASS
M[]-1 CERTIFICATES, THE CLASS M[]-2 CERTIFICATES AND THE CLASS M[]-3
CERTIFICATES] OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
Certificate No. :
Cut-off Date: : October 1, 2005
First Distribution Date: : November 25, 2005
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : [%] [LIBOR + %]
CUSIP :
ISIN :
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5
Class M[]-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans divided into two groups, Group I and Group II (collectively, the
"LOANS"). The Loans in Group I are fixed rate mortgage loans. The Loans
in Group II are adjustable rate mortgage loans. Group II is further
divided into Group II-A and Group II-B. Group II-A consists exclusively
of Loans with conforming balances. Group II-B includes Loans without
conforming balances. [The Class M[]-[] Certificates primarily represent
an interest in the Group I Loans.] [The Class M[]-[] Certificates
primarily represent an interest in the Group II Loans.]
A-3-1
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Sellers, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that_________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Loans deposited by Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "AGREEMENT") among the Depositor, Popular Financial
Funding, LLC and Popular Financial Services, LLC, as sellers (in such capacity,
collectively, the "SELLERS"), Equity One, Inc., a Delaware corporation, as
servicer (in such capacity, the "SERVICER"), and JPMorgan Chase Bank, N.A., as
trustee (the "TRUSTEE"). 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.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated , 20__ JPMorgan Chase Bank, N.A.,
---------------------
Countersigned: as Trustee
By: By:
-------------------------------- -----------------------------
Authorized Signatory of
JPMorgan Chase Bank, N.A.,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class B[]-[] Certificate
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
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, AS AMENDED (THE "CODE").
THIS CLASS B[]-[] CERTIFICATE IS SUBORDINATE TO THE [[CLASS AF][CLASS AV]
CERTIFICATES, THE CLASS M[]-1 CERTIFICATES, THE CLASS M[]-2 CERTIFICATES, THE
CLASS M[]-3 CERTIFICATES, THE CLASS M[]-4 CERTIFICATES, THE CLASS M[]-5
CERTIFICATES AND THE CLASS M[]-6 CERTIFICATES] [[CLASS AF][CLASS AV]
CERTIFICATES, THE CLASS M[]-1 CERTIFICATES, THE CLASS M[]-2 CERTIFICATES, THE
CLASS M[]-3 CERTIFICATES, THE CLASS M[]-4 CERTIFICATES, THE CLASS M[]-5
CERTIFICATES, THE CLASS M[]-6 CERTIFICATES AND THE CLASS B[]-1 CERTIFICATES]
[[CLASS AF][CLASS AV] CERTIFICATES, THE CLASS M[]-1 CERTIFICATES, THE CLASS
M[]-2 CERTIFICATES, THE CLASS M[]-3 CERTIFICATES, THE CLASS M[]-4 CERTIFICATES,
THE CLASS M[]-5 CERTIFICATES, THE CLASS M[]-6 CERTIFICATES, CLASS B[]-1
CERTIFICATES AND THE CLASS B[]-2 CERTIFICATES] OF THIS SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Certificate No. :
Cut-off Date: : October 1, 2005
First Distribution Date: : November 25, 2005
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : [%] [LIBOR + %]
CUSIP :
ISIN :
A-4-1
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5
Class B[]-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans divided into two groups, Group I and Group II (collectively, the
"LOANS"). The Loans in Group I are fixed rate mortgage loans. The Loans
in Group II are adjustable rate mortgage loans. Group II is further
divided into Group II-A and Group II-B. Group II-A consists exclusively
of Loans with conforming balances. Group II-B includes Loans without
conforming balances. [The Class B[]-[] Certificates primarily represent
an interest in the Group I Loans.] [The Class B[]-[] Certificates
primarily represent an interest in the Group II Loans.]
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Sellers, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that_________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Loans deposited by Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "AGREEMENT") among the Depositor, Popular Financial
Funding, LLC and Popular Financial Services, LLC, as sellers (in such capacity,
collectively, the "SELLERS"), Equity One, Inc., a Delaware corporation, as
servicer (in such capacity, the "SERVICER"), and JPMorgan Chase Bank, N.A., as
trustee (the "TRUSTEE"). 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.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated , 20__ JPMorgan Chase Bank, N.A.,
---------------------
Countersigned: as Trustee
By: By:
---------------------------------- ------------------------------
Authorized Signatory of
JPMorgan Chase Bank, N.A.,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class R Certificate
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST" ISSUED
UNDER THE AGREEMENT REFERRED TO BELOW AND MAY NOT BE TRANSFERRED TO ANY PERSON
EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE TRANSFEREE OF THE DUTIES OF THE
SERVICER UNDER SUCH AGREEMENT.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
B-1-1
Certificate No. :
Cut-off Date : October 1, 2005
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans divided into two groups, Group I and Group II (collectively, the
"LOANS"). The Loans in Group I are fixed rate mortgage loans. The Loans
in Group II are adjustable rate mortgage loans. Group II is further
divided into Group II-A and Group II-B. Group II-A consists exclusively
of Loans with conforming balances. Group II-B includes Loans without
conforming balances.
Popular ABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Sellers, the Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Loans are guaranteed or insured by any governmental agency
or instrumentality.
This certifies that________________ is the registered owner of the
Percentage Interest (set forth on the face hereof) in certain monthly
distributions with respect to a Trust Fund consisting of the Loans deposited by
Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "AGREEMENT") among the Depositor, Popular Financial Funding, LLC and
Popular Financial Services, LLC, as sellers (in such capacity, collectively, the
"SELLERS"), Equity One, Inc., a Delaware corporation, as servicer (in such
capacity, the "SERVICER"), and JPMorgan Chase Bank, N.A., as trustee (the
"TRUSTEE"). 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.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
Any proposed transfer of a Class R Certificate shall be subject to the
restrictions on transfer described in Section 5.02 of the Agreement.
No transfer of a Class R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, nor a person acting
on behalf of any such plan, which representation letter shall not be an expense
of the Trustee or the Servicer or (ii) in the case of any such Class R
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or Section 4975 of the Code (or comparable provisions of any
subsequent enactment), or a trustee of any such plan or any other person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Trustee
and the Servicer to the effect that the purchase or holding of such Class R
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee or the Servicer to any obligation in
addition to those undertaken in the Agreement, which Opinion of Counsel shall
not be an expense of the Trustee or the Servicer. Notwithstanding anything else
to the contrary herein, any purported transfer of a Class R Certificate to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
opinion of counsel satisfactory to the Trustee as described above shall be void
and of no effect.
B-1-2
Each Holder of this Class R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class R Certificate must agree not to transfer an
Ownership Interest in this Class R Certificate if it has actual knowledge that
the proposed transferee is not a Permitted Transferee and (v) any attempted or
purported transfer of any Ownership Interest in this Class R Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: , 20
------------------- ---
JPMorgan Chase Bank, N.A.,
as Trustee
By:
-----------------------------------
Countersigned:
By:
---------------------------------
Authorized Signatory of
JPMorgan Chase Bank, N.A.,
as Trustee
B-1-3
EXHIBIT B-2
Form of Class X 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, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER (I) A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR (II) IF THIS CERTIFICATE HAS BEEN THE SUBJECT OF
AN ERISA QUALIFYING UNDERWRITING, A REPRESENTATION THAT THE TRANSFEREE IS
PURCHASING SUCH CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY
GENERAL ACCOUNT", AS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
("PTCE 95-60") AND THAT THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE
COVERED UNDER SECTIONS I AND III OF PTCE 95-60, OR (III) AN OPINION OF COUNSEL
IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
B-2-1
Certificate No. : 1
Cut-off Date : October 1, 2005
Percentage Interest : __.__%
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2005-5
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans divided into two groups, Group I and Group II (collectively, the
"LOANS"). The Loans in Group I are fixed rate mortgage loans. The Loans
in Group II are adjustable rate mortgage loans. Group II is further
divided into Group II-A and Group II-B. Group II-A consists exclusively
of Loans with conforming balances. Group II-B includes Loans without
conforming balances.
Popular ABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Sellers, the Servicer
or the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Popular ABS, Inc. is the registered owner
of the Percentage Interest (set forth on the face hereof) in certain monthly
distributions with respect to a Trust Fund consisting of the Loans deposited by
Popular ABS, Inc. (the "Depositor"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement") among the Depositor, Popular Financial Funding, LLC and
Popular Financial Services, LLC, as sellers (in such capacity, collectively, the
"SELLERS"), Equity One, Inc., a Delaware corporation, as servicer (in such
capacity, the "SERVICER"), and JPMorgan Chase Bank, N.A., as trustee (the
"TRUSTEE"). 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.
No transfer of a Class X Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, nor a person acting
on behalf of any such plan, which representation letter shall not be an expense
of the Trustee or the Servicer, (ii) if the Class X Certificate has been the
subject of an ERISA Qualifying Underwriting and the transferee is an insurance
company, a representation that the transferee is an insurance company which is
purchasing such Certificate with funds contained in an "insurance company
general account", as defined in Prohibited Transaction Class Exemption 95-60
("PTCE 95-60") and that the purchase and holding of the Certificate is covered
under Sections I and III of PTCE 95-60 or (iii) in the case of any such Class X
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or Section 4975 of the Code (or comparable provisions of any
subsequent enactment), or a trustee of any such plan or any other person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Trustee
and the Servicer to the effect that the purchase or holding of such Class X
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee or the Servicer to any obligation in
addition to those undertaken in the Agreement, which Opinion of Counsel shall
not be an expense of the Trustee or the Servicer. Notwithstanding anything else
to the contrary herein, any purported transfer of a Class X Certificate to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
opinion of counsel satisfactory to the Trustee as described above shall be void
and of no effect.
B-2-2
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class X
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: _____________, 20__
JPMorgan Chase Bank, N.A.
as Trustee
By:
---------------------------------
Name:
Title:
Countersigned:
By:__________________________________________
Authorized Signatory of
JPMorgan Chase Bank, N.A.,
as Trustee
B-2-3
EXHIBIT C
Form of Reverse of Certificates
Popular ABS, Inc.
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Popular ABS, Inc. Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"CERTIFICATES"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution 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 (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder 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 or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. 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 therefor 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 of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar 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 and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
C-1
The Certificates are issuable only as registered Certificates without
coupons in denominations 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
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Sellers and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the Pool Principal Balance is less
than 10% of the Cut-off Date Pool Principal Balance, the Servicer will have the
option to repurchase, in whole, from the Trust Fund all remaining Loans and all
property acquired in respect of the Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Loan remaining in the Trust Fund or the
disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person named
in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
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 _______________ if mailed by check, to _________________________.
Applicable statements should be mailed to ______________________________________
This information is provided ___________________________________________________
by the assignee named above, or _______________________________________________,
________________________________________________________________________________
as its agent.
C-3
EXHIBIT D
Form of Initial Certification Of Trustee
[date]
[Depositor]
[Servicer]
[Sellers]
---------------------
---------------------
Re: Pooling and Servicing Agreement among Popular ABS, Inc., as
Depositor, Popular Financial Funding, LLC and Popular
Financial Services, LLC, as Sellers, Equity One, Inc., a
Delaware corporation, as Servicer, and JPMorgan Chase Bank,
N.A., as Trustee, Mortgage Pass-Through Certificates, Series
2005-5
--------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that, as to each Loan listed in the Loan Schedule
(other than any Loan paid in full or listed on the attached Exception Report) it
has received the original Mortgage Note or an executed Affidavit of Lost Note in
the form attached hereto as Annex I, and confirms that, for all Mortgage Notes
received, the name on the Mortgage Note matches that on the Loan Schedule,
except as set forth on the Exception Report attached hereto.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Loans identified on the
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
JPMorgan Chase Bank, N.A.,
as Trustee
By:_____________________________
Name:
Title:
D-1
ANNEX I
AFFIDAVIT OF LOST NOTE
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
The undersigned, being duly sworn, deposes and says that:
1. __________________, a __________ corporation (the "Holder")
is the owner of a note dated _____________ of _______________, in the principal
amount of $_________ (the "Note").
2. The Holder has not pledged or disposed of the Note in any
manner whatsoever to any person nor given any person authority to transfer or
pledge the same.
3. The Holder does not know of the whereabouts of the Note and
believes the Note has been lost or destroyed.
4. The Holder makes this affidavit to JPMorgan Chase Bank,
N.A. ("Trustee") in order to induce the Trustee to issue its initial
certification pursuant to Section 2.02 of the Pooling and Servicing Agreement
dated as of October 1, 2005 among the Trustee, the Holder and the other parties
set forth therein, without an exception therefrom.
5. The Holder and its successors and assigns shall at all time
indemnify and save harmless the Trustee against all loss or damage it might
suffer by reason of the issuance and delivery of a replacement note for the
Note, including all cost, charges, expenses and claims of every kind and nature.
6. If the Note shall be found the Holder shall promptly
deliver the same to the Trustee in order that it may be cancelled.
7. The undersigned is duly authorized to execute this
Affidavit on behalf of the Holder.
Date:______________________________ [SELLER]
By:_______________________________
___________________________________
Witness Name:
Title:
JPMorgan Chase Bank, N.A.,
as Trustee
By:_____________________________
Name:
Title:
D-2
EXHIBIT E
Form of Final Certification Of Trustee
[date]
[Depositor]
[Servicer]
[Seller]
---------------------
---------------------
Re: Pooling and Servicing Agreement among Popular ABS, Inc., as
Depositor, Popular Financial Funding, LLC and Popular
Financial Services, LLC, as Sellers, Equity One, Inc., a
Delaware corporation, as Servicer, and JPMorgan Chase Bank,
N.A., as Trustee, Mortgage Pass-Through Certificates, Series
2005-5
--------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), the undersigned, as
Trustee, hereby certifies that as to each Loan listed in the Loan Schedule
(other than any Loan paid in full or listed on the attached Exception Report),
except as set forth on the Exception Report attached hereto, it has received:
(i) the original Mortgage Note and confirms that the name on
the Mortgage Note matches that on the Loan Schedule;
(ii) the original recorded Mortgage (unless such Mortgage has
not yet been returned by the relevant recording office, as certified by the
Depositor;
(iii) the original recorded assignment of the Mortgage in the
form provided in Section 2.01(c) of the Pooling and Servicing Agreement;
(iv) the original or duplicate original recorded assignment or
assignments of the Mortgage necessary to show a complete chain of assignment
from the originator to the Seller, unless the Depositor has certified that the
related assignment has not been returned from the applicable recording office;
and
(v) the original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company, unless the Depositor has certified that such
title policy has not yet been received from the applicable title insurance
company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Loan, and (b) the information set forth in items (c), (d), (e) and (i) of the
definition of the "Loan Schedule" in Article I of the Pooling and Servicing
Agreement accurately reflects information set forth in the Mortgage File.
E-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Loans identified on the
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
JPMorgan Chase Bank, N.A.,
as Trustee
By:_____________________________________
Name:
Title:
E-2
EXHIBIT F
Form of Transfer Affidavit
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
STATE OF )
) ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of________________ , the proposed
Transferee of an Ownership Interest in a Class R Certificate (the "CERTIFICATE")
issued pursuant to the Pooling and Servicing Agreement, (the "AGREEMENT"),
relating to the above-referenced Series, by and among Popular ABS, Inc., as
depositor (the "DEPOSITOR"), Popular Financial Funding, LLC and Popular
Financial Services, LLC, as Sellers, Equity One, Inc., a Delaware corporation,
as Servicer, and JPMorgan Chase Bank, N.A., as Trustee. Capitalized terms used,
but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee acknowledges that it understands that as the holder
of the residual interest, the Transferee may incur tax liabilities in excess of
any cash flows the residual interest generates and the Transferee intends to pay
any taxes associated with its holding the residual interest as those taxes
become due.
4. The Transferee represents that the conditions specified in either
or both of subparagraph (a) and (b) of this paragraph are satisfied:
(a) The requirements of this subparagraph (a) will be met if:
the present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (i) the present value of any
consideration given to the Transferee to acquire the interest, (ii) the present
value of the expected future distributions on the interest, and (iii) the
present value of the anticipated tax savings associated with holding the
interest as the REMIC generates losses. For purposes of this subparagraph (a),
the Transferee is assumed to pay tax at a rate equal to the highest rate of tax
specified in section 11(b)(1) of the Code, and present values are computed using
a discount rate equal to the applicable federal rate prescribed by section
1274(d) of the Code, compounded semiannually, or such other rate that the
Transferee can demonstrate it borrows substantial funds at in the course of its
trade or business from unrelated third parties.
F-1
(b) The requirements of this subparagraph (b) will be met if:
(i) at the time of the transfer, and at the close of each of the Transferee's
two fiscal years preceding the year of transfer the Transferee's gross assets
for financial reporting purposes exceed $100 million and its net assets for
financial reporting purposes exceed $10 million, (ii) The Transferee is an
eligible corporation (within the meaning of section 860L(a)(2) of the Code),
(iii) The Transferee is not a foreign branch of an eligible corporation or any
other arrangement by which the Residual interest will at any time be subject to
net tax by a foreign country or possession of the United States, (iv) The
Transferee agrees, in executing this Certificate that any subsequent transfer of
the Residual interest will be to another eligible corporation in a "qualifying
transaction," and (v) the Transferee has not indicated to, nor provided to the
Transferor any grounds to believe that, the Transferee will not pay the taxes
associated with the residual interest. For purposes of applying this
subparagraph (b), the Transferee's gross assets and net assets do not include
any obligation of any person related to the Transferee within the meaning of
section 860L(g) of the Code, or any other asset if a principal purpose for
holding or acquiring the asset is to permit the Transferee to satisfy the
requirements of this subparagraph (b), and a "qualifying transaction" is a
transaction that satisfies the requirements of ss.4 of Rev. Proc. 2001-12,
2001-3 I.R.B. 35.
5. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
6. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (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 and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
7. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
8. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit G to the Agreement (a "TRANSFEROR CERTIFICATE") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
F-2
9. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
10. The Transferee's taxpayer identification number is _____.
11. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
12. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to 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
was to impede the assessment or collection of tax.
13. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan or arrangement that is subject to Section 4975 of the Code, and
the Transferee is not acting on behalf of such a plan or arrangement or using
the assets of any such plan or arrangement to effect the transfer.
14. The Transferee has provided financial statements or other financial
information requested by the transferor in connection with the transfer of the
Class R Certificates to permit the transferor to assess the financial capability
of the Transferee to pay any such taxes.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___day of__________ , 20_.
_______________________________________
PRINT NAME OF TRANSFEREE
By:____________________________________
Name:__________________________________
Title:_________________________________
[Corporate Seal]
ATTEST:
___________________________________
[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 the of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this____day of ______________, 20_.
_____________________________________
NOTARY PUBLIC
My Commission expires the____ day of
_________, 20_.
F-3
EXHIBIT 1
to EXHIBIT F
Certain Definitions
"OWNERSHIP INTEREST": As to any Class R Certificate, any ownership
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
"PERMITTED TRANSFEREE": Any person other than (a) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (b) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (c) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Class R Certificate, (d) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (e) a Person that is not (i) a citizen or
resident of the United States, (ii) a corporation or partnership (or other
entity properly treated as a corporation or partnership for U.S. federal income
tax purposes) created or organized in or under the laws of the United States or
any political subdivision thereof, (iii) an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or (iv) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States Persons have authority
to control all substantial decisions of the trust, unless such Person listed in
clause (i), (ii), (iii) or (iv) above has furnished the transferor and the
Trustee with a duly completed Internal Revenue Service Form W-8ECI and (f) any
other Person so designated by the Depositor based upon an Opinion of Counsel
that the Transfer of an Ownership Interest in a Class R Certificate to such
Person may cause any REMIC hereunder to fail to qualify as one or more REMICs at
any time that the Certificates are outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.
"PERSON": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"TRANSFER": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"TRANSFEREE": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
F-4
EXHIBIT 2
to EXHIBIT F
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate
may be registered on the Closing Date or thereafter transferred, and
the Trustee shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "TRANSFER AFFIDAVIT") of the initial
owner or the proposed transferee in the form attached hereto as
Exhibit F.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class R Certificate, (B) to obtain
a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Class R Certificate in violation of the
provisions of this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Class R Certificate in violation
of the provisions of this Section 5.02(c), then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section or for making any payments due on such
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long
as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A Letter or
the Investment Letter. The Trustee shall be entitled but not obligated
to recover from any Holder of a Class R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
F-5
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Sellers
or the Servicer, to the effect that the elimination of such restrictions will
not cause the Trust Fund hereunder to fail to qualify as one or more REMICs at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class R Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (A) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (B) to provide for a means to compel the Transfer of a Class R
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
F-6
EXHIBIT G
Form of Transferor Certificate
_______________________
Date
Popular ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: _______________
JPMorgan Chase Bank, N.A.
_________________________
_________________________
Attention: ____________________________
____________________________
Re: Popular ABS, Inc. Mortgage Pass-Through Certificates, Series
2005-5, Class ,
------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "ACT"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Class R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
___________________________________
Print Name of Transferor
By: _______________________________
Authorized Officer
G-1
EXHIBIT H
Form of Investment Letter (Non Rule 144A)
________________________________
Date
Popular ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:____________________________
JPMorgan Chase Bank, N.A.
__________________________________
__________________________________
Attention: ______________________________
______________________________
Re: Popular ABS, Inc. Mortgage Pass-Through Certificates,
Series 2005-5, Class
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition, or (ii) we are an insurance company and
are purchasing Certificates, other than the Class R Certificates, that have been
the subject of an ERISA Qualifying Underwriting, we are purchasing the
Certificates with funds contained in an "insurance company general account", as
defined in Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
purchasing and holding of such Certificates are covered by Sections I and III of
PTCE 95-60, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.
Very truly yours,
____________________________________
Print Name of Transferee
By:_________________________________
Authorized Officer
H-2
EXHIBIT I
Form of Rule 144A Letter
____________________________________
Date
Popular ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: __________________________
JPMorgan Chase Bank, N.A.
__________________________________
__________________________________
Attention: ______________________________
______________________________
Re: Popular ABS, Inc. Mortgage Pass-Through Certificates,
Series 2005-5, Class ,
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition, or (ii) we are an insurance company and
are purchasing Certificates, other than the Class R Certificates, that have been
the subject of an ERISA Qualifying Underwriting, we are purchasing the
Certificates with funds contained in an "insurance company general account", as
defined in Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
I-1
purchasing and holding of such Certificates are covered by Sections I and III of
PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Act or that would render the
disposition of the Certificates a violation of Section 5 of the Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Act and have completed either of the forms of certification to
that effect attached hereto as Annex 1 or Annex 2. We are aware that the sale to
us is being made in reliance on Rule 144A. We are acquiring the Certificates for
our own account or for resale pursuant to Rule 144A and further, understand that
such Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed 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 Act.
Very truly yours,
__________________________________________
Print Name of Transferee
By:_______________________________________
Authorized Officer
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("RULE 144A") because (i) the Buyer owned and/or
invested on a discretionary basis either at least $100,000,000 in securities or,
if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities (except for the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by 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 Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over 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.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
I-3
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a) (22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
____________________________________________
Print Name of Buyer
By:_________________________________________
Name:
Title:
Date:_______________________________________
I-4
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("RULE 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $______ in securities (other than the
excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $______ in securities
(other than the excluded securities referred to
below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
I-5
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
____________________________________
Print Name of Buyer or Adviser
By:_________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
I-6
EXHIBIT J
Form of Request for Release of Documents
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series 2005-5
To:__________________________ Attn:___________________________
________________________________
Re: Pooling and Servicing Agreement among Popular ABS, Inc., as
Depositor, Popular Financial Funding, LLC and Popular
Financial Services, LLC, as Sellers, Equity One, Inc., a
Delaware corporation, as Servicer, and JPMorgan Chase Bank,
N.A., as Trustee, Mortgage Pass-Through Certificates, Series
2005-5
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Loans held by you as
Trustee for Popular ABS, Inc., we request the release of the Mortgage File for
the Loan(s) described below, for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Loan Number:
Reason for Requesting Documents (check one)
1. Loan paid in full (_______________________ hereby certifies
that all amounts have been received.)
2. Loan Liquidated (___________________________ hereby certifies
that all proceeds of foreclosure, insurance, or other
liquidation have been finally received.)
3. Loan in Foreclosure.
4. Other (explain):
The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Servicer shall be
deposited into the Certificate Account, and the Servicer shall keep the
Documents and any proceeds separate and distinct from all other property in the
Servicer's possession, custody or control.
J-1
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Loan. If item 3 or 4 is checked, upon return of all of
the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
__________________________________
__________________________________
__________________________________
By: _______________________________
Name:______________________________
Title:_____________________________
Date:______________________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By: _______________________________
Name:______________________________
Title:_____________________________
Date:______________________________
J-2
EXHIBIT K
Form of Reporting Document
SEE ATTACHED
K-1
EXHIBIT L
Yield Maintenance Agreement
SEE ATTACHED
L-1
EXHIBIT M
Form of Power of Attorney
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, N.A., a banking
association organized under the laws of the United States, having a place of
business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, X.X. 00000, as Trustee (and
in no personal or other representative capacity) under the Pooling and Servicing
Agreement, dated as of __________, 20__ (as amended, restated, supplemented or
otherwise modified from time to time, the "Agreement"; capitalized terms not
defined herein have the definitions assigned to such terms in the Agreement),
relating to the __________________, hereby appoints _______________, in its
capacity as a Servicer under the Agreement, as the Trustee's true and lawful
Special Attorney-in-Fact, in the Trustee's name, place and stead and for the
Trustee's benefit, but only in its capacity as Trustee aforesaid, to perform all
acts and execute all documents as may be customary, necessary and appropriate to
effectuate the following enumerated transactions in respect of any mortgage,
deed of trust, promissory note or real estate owned from time to time owned
(beneficially or in title, whether the Trustee is named therein as mortgagee or
beneficiary or has become mortgagee or beneficiary by virtue of endorsement,
assignment or other conveyance) or held by or registered to the Trustee
(directly or through custodians or nominees), or in respect of which the Trustee
has a security interest or other lien, all as provided under the applicable
Agreement and only to the extent the respective Trustee has an interest therein
under the Agreement, and in respect of which the Servicer is acting as servicer
pursuant to the Agreement (the "Mortgage Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document for the purpose of
correcting it to conform to the original intent of the parties thereto or to
correct title errors discovered after title insurance was issued and where such
modification or re-recording does not adversely affect the lien under the
Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to an easement in
favor of a public utility company or a state or federal agency or unit with
powers of eminent domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be
acquired as real estate so owned, or conveyance of title to real estate so
owned.
4. The completion of loan assumption and modification agreements in respect of
Mortgage Documents.
5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof, including,
without limitation, the assignment of the related note.
M-1
8. With respect to a Mortgage Document, 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 Document or state law to
expeditiously complete said transactions in paragraphs 8(a)
through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and every sum of money,
debt, account and interest (which now is, or hereafter shall become due and
payable) belonging to or claimed by the Trustee under the Mortgage Documents,
and to use or take any lawful means for recovery thereof by legal process or
otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or negotiable
instruments made payable to the Trustee in respect of the Mortgage Documents.
The Trustee gives the Special 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 this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
[SIGNATURE PAGE FOLLOWS]
M-2
IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 20__.
JPMorgan Chase Bank, N.A., as Trustee
____________________________________
By:
Name:
Title:
WITNESS: WITNESS:
_______________________________ __________________________________
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 20__, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting _______________ of JPMorgan Chase Bank, N.A., and
such person acknowledged to me that such person executed the within instrument
in such person's authorized capacity as a ___________________ of JPMorgan Chase
Bank, N.A., and that by such signature on the within instrument the entity upon
behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
_______________________________
Notary Public
M-3
