EXHIBIT 99.1
ARGENT SECURITIES INC.
Depositor
ARGENT MORTGAGE LOAN TRUST 2005-W1
Issuer
AMERIQUEST MORTGAGE COMPANY
Master Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Indenture Trustee
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SALE AND SERVICING AGREEMENT
Dated as of April 19, 2005
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ASSET-BACKED NOTES
SERIES 2005-W1
TABLE OF CONTENTS
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SECTION PAGE
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ARTICLE I DEFINITIONS 2
SECTION 1.01. Definitions................................................2
SECTION 1.02. Other Definitional Provisions..............................2
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES 3
SECTION 2.01. Conveyance of Mortgage Loans...............................3
SECTION 2.02. Acceptance of Trust Estate by the Indenture Trustee........5
SECTION 2.03. Repurchase or Substitution of Mortgage
Loans by the Seller or the Depositor;
Payment of Prepayment Charge Payment Amounts...............7
SECTION 2.04. [Reserved].................................................9
SECTION 2.05. Representations, Warranties and Covenants
of the Master Servicer.....................................9
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 12
SECTION 3.01. Master Servicer to Act as Master Servicer.................12
SECTION 3.02. Collection of Certain Mortgage Loan Payments..............14
SECTION 3.03. [Reserved]................................................15
SECTION 3.04. Collection Account, Escrow Account, Payment
Account and Loss Reserve Account..........................15
SECTION 3.05. Permitted Withdrawals From the Collection
Account, Escrow Account and Payment Account...............19
SECTION 3.06. Investment of Funds in the Collection Account,
the Escrow Account, the REO
Account and the Payment Account...........................22
SECTION 3.07. Payment of Taxes, Insurance and Other Charges.............24
SECTION 3.08. Maintenance of Hazard Insurance...........................24
SECTION 3.09. Maintenance of Mortgage Blanket Insurance.................25
SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.............25
SECTION 3.11. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.....................................26
SECTION 3.12. Realization Upon Defaulted Mortgage Loans.................27
SECTION 3.13. Title, Management and Disposition of REO Property.........29
SECTION 3.14. Maintenance of the Pool Insurance Policy;
Collections Thereunder....................................31
SECTION 3.15. Reports of Foreclosure and Abandonment
of Mortgaged Properties...................................33
SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.............33
SECTION 3.17. Indenture Trustee to Cooperate;
Release of Mortgage Files.................................33
SECTION 3.18. Servicing Compensation....................................34
SECTION 3.19. Statement as to Compliance................................35
SECTION 3.20. Independent Public Accountants' Servicing Report..........35
SECTION 3.21. Access to Certain Documentation...........................36
SECTION 3.22. [Reserved]................................................36
SECTION 3.23. Advance Facility..........................................36
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ARTICLE IV PAYMENTS 39
SECTION 4.01. Payments to Noteholders...................................39
SECTION 4.02. Statements to Noteholders.................................45
SECTION 4.03. Remittance Reports and Other Reports to the
Indenture Trustee; Advances; Payments in Respect
of Prepayment Interest Shortfalls.........................48
SECTION 4.04. Allocation of Realized Losses and the
Pool Insurance Policy.....................................50
SECTION 4.05. Allocation of Certain Interest Shortfalls.................52
SECTION 4.06. Commission Reporting......................................52
ARTICLE V THE DEPOSITOR AND THE MASTER SERVICER 55
SECTION 5.01. Liability of the Depositor and the Master Servicer........55
SECTION 5.02. Merger or Consolidation of the Depositor
or the Master Servicer....................................55
SECTION 5.03. Limitation on Liability of the Depositor,
the Master Servicer and Others............................55
SECTION 5.04. Limitation on Resignation of the Master Servicer..........56
SECTION 5.05. Rights of the Depositor in Respect
of the Master Servicer....................................57
SECTION 5.06. Sub-Servicing Agreements Between the
Master Servicer and Sub-Servicers.........................58
SECTION 5.07. Successor Sub-Servicers...................................59
SECTION 5.08. Liability of the Master Servicer..........................59
SECTION 5.09. No Contractual Relationship Between Sub-Servicers
and the Insurers, the Indenture Trustee or
Noteholders...............................................59
SECTION 5.10. Assumption or Termination of Sub-Servicing
Agreements by Trustee.....................................60
SECTION 5.11. Sub-Servicing Accounts....................................60
ARTICLE VI DEFAULT 62
SECTION 6.01. Master Servicer Events of Default.........................62
SECTION 6.02. Indenture Trustee to Act; Appointment of Successor........64
SECTION 6.03. Notification to Noteholders...............................67
SECTION 6.04. Waiver of Master Servicer Events of Default...............67
ARTICLE VII MISCELLANEOUS PROVISIONS 69
SECTION 7.01. Amendment.................................................69
SECTION 7.02. GOVERNING LAW.............................................69
SECTION 7.03. Notices...................................................69
SECTION 7.04. Severability of Provisions................................70
SECTION 7.05. Third-Party Beneficiaries.................................71
SECTION 7.06. Counterparts..............................................71
SECTION 7.07. Effect of Headings and Table of Contents..................71
SECTION 7.08. Termination...............................................71
SECTION 7.09. No Petition...............................................71
SECTION 7.10. No Recourse...............................................71
SECTION 7.11. Indenture Trustee Rights..................................71
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SECTION 7.12. Third Party Rights........................................72
SECTION 7.13. Certain Matters Regarding the Master
Servicer and the Seller...................................72
ARTICLE VIII DUTIES OF THE MASTER SERVICER AS ADMINISTRATOR 73
SECTION 8.01. Administrative Duties.....................................73
SECTION 8.02. Records...................................................74
SECTION 8.03. Additional Information to be Furnished....................75
SECTION 8.04. No Recourse to Owner Trustee..............................75
SECTION 8.05. Termination of Certain of Swap Provider Rights............75
ARTICLE IX CERTAIN MATTERS REGARDING THE NOTE INSURER 76
SECTION 9.01. Exercise of Rights of Holder of the Class A Notes.........76
SECTION 9.02. Indenture Trustee to Act Solely
with Consent of Note Insurer..............................76
SECTION 9.03. Trust and Accounts Held for Benefit of Note Insurer.......76
SECTION 9.04. Claims Upon the Note Insurance Policy;
Note Insurance Policy Payments Account....................77
SECTION 9.05. Effect of Payments by Note Insurer; Subrogation...........78
SECTION 9.06. Notices to Note Insurer...................................79
SECTION 9.07. Indenture Trustee to Hold the Note Insurance Policy.......79
SECTION 9.08. Termination of Certain of Note Insurer's Rights...........79
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Exhibits
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Exhibit A Form of Lost Note Affidavit
Exhibit B-1 Form of Indenture Trustee's Initial Certification
Exhibit B-2 Form of Indenture Trustee's Final Certification
Exhibit B-3 Form of Indenture Trustee's Receipt of Mortgage Note
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Request for Release Exhibit E-1 Form of Certification to Be
Provided by the Depositor with Form 10-K
Exhibit E-2 Form of Certification to Be Provided to Depositor by the
IndentureTrustee
Exhibit F Annual Statement of Compliance pursuant to Section 3.19
Exhibit G Form of Note Insurance Policy
Exhibit H Form of Pool Insurance Policy
Exhibit I Form of Interest Rate Swap Agreement
Exhibit J Form of Swap Administration Agreement
Schedule 1 Mortgage Loan Schedule
Appendix A Definitions
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This Sale and Servicing Agreement ("Agreement"), is dated and
effective as of April 19, 2005, among ARGENT SECURITIES INC., as Depositor,
ARGENT MORTGAGE LOAN TRUST 2005-W1, as Issuer, AMERIQUEST MORTGAGE COMPANY, as
Master Servicer and DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee.
W I T N E S S E T H T H A T :
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WHEREAS, pursuant to the terms of the Mortgage Loan Purchase
Agreement, Argent Securities Inc. (the "Depositor") will acquire the Mortgage
Loans;
WHEREAS, the Depositor will create
Argent Mortgage Loan Trust 2005-W1, a Delaware statutory trust, and will
transfer the Mortgage Loans and all of its rights under the Mortgage Loan
Purchase Agreement to the Issuer;
WHEREAS, pursuant to the terms of an Amended and Restated
Trust Agreement dated as of April 15, 2005 (the "Trust Agreement") among the
Depositor, as depositor, U.S. Bank Trust National Association, acting not in its
individual capacity, but solely as owner trustee (the "Owner Trustee") and
Deutsche Bank National Trust Company, as certificate registrar and certificate
paying agent and as stated herein, the Depositor will convey the Mortgage Loans
to the Issuer in exchange for the Notes (as defined below);
WHEREAS, pursuant to the terms of the Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Depositor, the
Trust Certificates, Series 2005-W1 (the "Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of
April 19, 2005 (the "Indenture") between the Issuer and Deutsche Bank National
Trust Company, as indenture trustee (the "Indenture Trustee"), the Issuer will
pledge the Mortgage Loans and issue and transfer to or at the direction of the
Purchaser the Asset-Backed Notes, Series 2005-W1, Class A-1 and Class A-2 Notes
(collectively, the "Notes"); and
WHEREAS, pursuant to the terms of this Agreement, the Master
Servicer will service the Mortgage Loans set forth on the Mortgage Loan Schedule
attached hereto as Exhibit A directly or through one or more Sub-Servicers;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Definitions contained in Appendix A which is incorporated by reference herein.
All other capitalized terms used herein shall have the meanings specified
herein.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(c) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms.
(d) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
SECTION 1.03. Interest Calculations.
All calculations of interest hereunder that are made in
respect of the Stated Principal Balance of a Mortgage Loan shall be made on the
basis of a 360-day year consisting of twelve 30-day months, notwithstanding the
terms of the related Mortgage Note and Mortgage.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, sell, set over and otherwise convey to the
Issuer without recourse for the benefit of the Noteholders and the Insurers, all
the right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement, the Pool Insurance Policy, the Interest Rate
Swap Agreement, certain payments made under the Swap Administration Agreement
and all other assets included or to be included in the Trust Estate. Such
assignment includes all interest and principal received by the Depositor or the
Master Servicer on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Indenture Trustee an executed copy
of the Mortgage Loan Purchase Agreement and the Indenture Trustee, on behalf of
the Issuer, the Noteholders and the Insurers, acknowledges receipt of the same.
In connection with such transfer and assignment to the Issuer,
the Depositor does hereby deliver to, and deposit with, the Indenture Trustee
the following documents or instruments with respect to each Mortgage Loan so
transferred and assigned (a "Mortgage File"):
(i) the original Mortgage Note, endorsed in blank, without
recourse, or in the following form: "Pay to the order of Deutsche Bank
National Trust Company, as Indenture Trustee under the applicable
agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Indenture Trustee, or with
respect to any lost Mortgage Note, an original Lost Note Affidavit;
provided however, that such substitutions of Lost Note Affidavits for
original Mortgage Notes may occur only with respect to Mortgage Loans,
the aggregate Cut-off Date Principal Balance of which is less than or
equal to 2.00% of the Pool Balance as of the Cut-off Date;
(ii) the original Mortgage, with evidence of recording
thereon, and a copy, certified by the appropriate recording office, of
the recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon;
(iii) an original Assignment assigned in blank, without
recourse;
(iv) the original recorded intervening Assignment or
Assignments showing a complete chain of assignment from the originator
to the Person assigning the Mortgage to the Indenture Trustee as
contemplated by the immediately preceding clause (iii) or the original
unrecorded intervening Assignments;
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(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy or an
attorney's opinion of title or similar guarantee of title acceptable to
mortgage lenders generally in the jurisdiction where the Mortgaged
Property is located, together with all endorsements or riders which
were issued with or subsequent to the issuance of such policy, or in
the event such original title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued by
the title insurance or escrow company.
If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has as of the Closing Date been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained the original of
such document, the obligations of the Depositor to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Indenture Trustee, or to the
appropriate Custodian on behalf of the Indenture Trustee, of a copy of each such
document certified by the applicable Originator in the case of (x) above or the
applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the applicable Originator, delivery to the Indenture
Trustee, or to the appropriate Custodian on behalf of the Indenture Trustee,
promptly upon receipt thereof of either the original or a copy of such document
certified by the applicable public recording office to be a true and complete
copy of the original. If the original lender's title insurance policy was not
delivered pursuant to Section 2.01(vi) above, the Depositor shall deliver or
cause to be delivered to the Indenture Trustee, or to the appropriate Custodian
on behalf of the Indenture Trustee, promptly after receipt thereof, the original
lender's title insurance policy. The Depositor shall deliver or cause to be
delivered to the Indenture Trustee, or to the appropriate Custodian on behalf of
the Indenture Trustee, promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.
The Depositor shall cause the Seller to promptly (and in no
event later than thirty (30) Business Days, subject to extension upon a mutual
agreement between the Master Servicer and the Indenture Trustee, following the
later of (i) the Closing Date, (ii) the date on which the Seller receives the
Assignment from the Custodian and (iii) the date of receipt by the Master
Servicer of the recording information for a Mortgage) submit or cause to be
submitted for recording, at no expense to the Issuer or the Indenture Trustee,
in the appropriate public office for real property records, each Assignment
referred to in Sections 2.01(iii) and (iv) above and shall execute each original
Assignment referred to in Section 2.01(iii) above in the following form:
"Deutsche Bank National Trust Company, as Indenture Trustee under the applicable
agreement." In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Depositor shall cause the Seller to promptly
prepare or cause to be prepared a substitute Assignment or cure or cause to be
cured such defect, as the case may be, and thereafter cause each such Assignment
to be duly recorded.
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Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Notes (without regard to the Note Insurance Policy); provided
further, however, each Assignment shall be submitted for recording by the Seller
in the manner described above, at no expense to the Issuer or the Indenture
Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of
Notes evidencing more than 25% of the Note Balance of the Notes or the Note
Insurer, (ii) failure of the Master Servicer Termination Test, (iii) the
occurrence of a bankruptcy or insolvency relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 6.02 hereof and (v)
if the Seller is not the Master Servicer and with respect to any one Assignment
or Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if
the Master Servicer is unable to pay the cost of recording the Assignments, such
expense shall be paid by the Indenture Trustee and shall be reimbursable to the
Indenture Trustee as set forth in Section 6.07 of the Indenture.
All original documents relating to the Mortgage Loans that are
not delivered to the Indenture Trustee, or to the appropriate Custodian on
behalf of the Indenture Trustee, are and shall be held by or on behalf of the
Seller, the Depositor, the Issuer or the Master Servicer, as the case may be, in
trust for the benefit of the Indenture Trustee on behalf of the Noteholders and
the Note Insurer. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Indenture Trustee, or to the
appropriate Custodian on behalf of the Indenture Trustee. Any such original
document delivered to or held by the Depositor that is not required pursuant to
the terms of this Section to be a part of a Mortgage File, shall be delivered
promptly to the Master Servicer.
The parties hereto understand and agree that it is not
intended that any mortgage loan be included in the Trust Estate that is a
"High-Cost Home Loan" as defined by HOEPA or any other applicable predatory or
abusive lending laws.
SECTION 2.02. Acceptance of Trust Estate by the Indenture
Trustee.
Subject to the provisions of Section 2.01, the Issuer
acknowledges receipt of the assets included in the Trust Estate and has directed
that the documents referred to in Section 2.01 and all other assets included in
the definition of "Trust Estate" be delivered to the Indenture Trustee (or, with
respect to Mortgage Loans subject to a Custodial Agreement, delivered to the
respective Custodian as the duly appointed agent of the Indenture Trustee),
other than such documents described in Section 2.01(v)) above and the Indenture
Trustee declares that it, or such Custodian as its agent, holds and shall hold
such documents and the other documents delivered to it constituting a Mortgage
File, and that it holds or shall hold all such assets and such other assets
included in the definition of "Trust Estate" in trust for the exclusive use and
benefit of all present and future Noteholders and the Note Insurer.
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On or prior to the Closing Date, the Indenture Trustee agrees,
for the benefit of the Noteholders and the Note Insurer, to execute and deliver
(or cause the Custodian to execute and deliver) to the Depositor and the
Insurers an acknowledgment of receipt of the Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit B-3 hereto.
The Indenture Trustee agrees, for the benefit of the
Noteholders and the Note Insurer, to review (or cause a Custodian on its behalf
to review) each Mortgage Note within 45 days of the Closing Date and to certify
in substantially the form attached hereto as Exhibit B-1 (or cause the Custodian
to certify in the form of the Initial Certification attached to the Custodial
Agreement) that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being covered by such
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(v)) required to be delivered to it
pursuant to this Agreement are in its possession, (ii) such documents have been
reviewed by it or such Custodian and are not mutilated, torn or defaced unless
initialed by the related borrower and relate to such Mortgage Loan, (iii) based
on its or the Custodian's examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(1) through (3), (6), (9), (10), (13), (15) and (19) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Indenture Trustee or such Custodian was under no duty or obligation (i) to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face or (ii) to determine
whether any Mortgage File should include any of the documents specified in
clause (v) of Section 2.01.
Prior to the first anniversary date of this Agreement the
Indenture Trustee shall deliver to the Depositor, the Master Servicer and the
Insurers a final certification in the form annexed hereto as Exhibit B-2 (or
shall cause the Custodian to deliver to the Indenture Trustee, the Depositor,
the Master Servicer and the Insurers a final certification in the form attached
to the Custodial Agreement) evidencing the completeness of the Mortgage Files,
with any applicable exceptions noted thereon, with respect to all of the
Mortgage Loans. Upon the request of the Master Servicer or the Insurers, any
exception report related to the final certification shall be provided in an
electronic computer readable format as mutually agreed upon by the Master
Servicer, the Insurers and the Indenture Trustee.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Indenture Trustee or any Custodian finds any document or documents constituting
a part of a Mortgage File to be missing, mutilated, torn or defaced or does not
conform to the requirements identified above, at the conclusion of its review
the Indenture Trustee (or a Custodian on behalf of the Indenture Trustee) shall
so notify the Depositor, the Insurers and the Master Servicer. In addition, upon
the discovery by the Depositor, the Insurers, the Master Servicer or the
Indenture Trustee of a breach of any of the representations and warranties made
by the Seller in the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects such Mortgage Loan or
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the interests of the related Noteholders or the Note Insurer in such Mortgage
Loan, the party discovering such breach shall give prompt written notice to the
other parties and the Insurers.
The Indenture Trustee (or a Custodian on behalf of the
Indenture Trustee) shall, at the written request and expense of any Noteholder,
Note Owner or the Insurers, provide a written report to such Noteholder, Note
Owner or the Insurers of all Mortgage Files released to the Master Servicer for
servicing purposes.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
the Seller or the Depositor; Payment of
Prepayment Charge Payment Amounts.
(a) Upon discovery or receipt of notice (including notice
under Section 2.02) of any materially defective document in, or that a document
is missing from, the Mortgage File or of the breach by the Seller of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Noteholders or the Insurers,
the Indenture Trustee shall promptly notify the Seller, the Insurers and the
Master Servicer of such defect, missing document or breach and request that the
Seller deliver such missing document or cure such defect or breach within 90
days from the date the Seller had knowledge or was notified of such missing
document, defect or breach, and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Master Servicer (or, in accordance with Section 5.06(b), the
Indenture Trustee) shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from the Trust
Estate at the Purchase Price within 90 days after the date on which the Seller
was notified (subject to Section 2.03(d)) of such missing document, defect or
breach, if and to the extent that the Seller is obligated to do so under the
Mortgage Loan Purchase Agreement or such other remedies as set forth in the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Indenture
Trustee, upon receipt of written certification from the Master Servicer of such
deposit, shall release to the Seller the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall furnish to it and as shall be necessary to vest in
the Seller any Mortgage Loan released pursuant hereto, and the Indenture Trustee
shall not have any further responsibility with regard to such Mortgage File. In
lieu of repurchasing any such Mortgage Loan as provided above, if so provided in
the Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to
be removed from the Trust Estate (in which case it shall become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in
the manner and subject to the limitations set forth in Section 2.03(c). It is
understood and agreed that the obligation of the Seller to cure or to repurchase
(or to substitute for) any Mortgage Loan as to which a document is missing, a
material defect in a document exists or as to which such a breach has occurred
and is continuing shall constitute the sole remedy respecting such omission,
defect or breach available to the Indenture Trustee on behalf of the
Noteholders.
(b) Promptly upon the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05, which materially and adversely affects the interests of
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the Noteholders in any Mortgage Loan, the Master Servicer shall cure such breach
in all material respects.
(c) As to any Deleted Mortgage Loan for which the Seller or
the Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Seller or the Depositor, as the case may
be, delivering to the Indenture Trustee (or a Custodian on behalf of the
Indenture Trustee), for such Qualified Substitute Mortgage Loan or Loans, the
Mortgage Note, the Mortgage, the Assignment to the Indenture Trustee, and such
other documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers' Certificate providing that
each such Qualified Substitute Mortgage Loan satisfies the definition thereof
and specifying the Substitution Shortfall Amount (as described below), if any,
in connection with such substitution. The Indenture Trustee (or a Custodian on
behalf of the Indenture Trustee) shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents as specified in Section 2.02 and deliver to the Depositor,
the Insurers, the Indenture Trustee and the Master Servicer, with respect to
such Qualified Substitute Mortgage Loan or Loans, a certification substantially
in the form attached hereto as Exhibit B-1, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the Indenture Trustee
shall deliver to the Depositor, the Insurers and the Master Servicer a
certification substantially in the form of Exhibit B-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust Estate and
shall be retained by the Depositor or the Seller, as the case may be. For the
month of substitution, payments to Noteholders shall reflect the Monthly Payment
due on such Deleted Mortgage Loan on or before the Due Date in the month of
substitution, and the Depositor or the Seller, as the case may be, shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. The Depositor shall give or cause to be given
written notice to the Noteholders and the Insurers that such substitution has
taken place, shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of
such amended Mortgage Loan Schedule to the Indenture Trustee and the Insurers.
Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
constitute part of the Mortgage Pool and shall be subject in all respects to the
terms of this Agreement and, in the case of a substitution effected by the
Seller, the Mortgage Loan Purchase Agreement, including all applicable
representations and warranties thereof.
For any month in which the Depositor or the Seller substitutes
one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Master Servicer shall determine the amount (the "Substitution
Shortfall Amount"), if any, by which the aggregate Purchase Price of all such
Deleted Mortgage Loans exceeds the aggregate of, as to each such Qualified
Substitute Mortgage Loan, the Scheduled Principal Balance thereof as of the date
of substitution, together with one month's interest on such Scheduled Principal
Balance at the applicable Net Mortgage Rate. On the date of such substitution,
the Depositor or the Seller, as the case may be, shall deliver or cause to be
delivered to the Master Servicer for deposit in the
8
Collection Account an amount equal to the Substitution Shortfall Amount, if any,
and the Indenture Trustee, upon receipt of the related Qualified Substitute
Mortgage Loan or Loans and certification by the Master Servicer of such deposit,
shall release to the Depositor or the Seller, as the case may be, the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Depositor or the
Seller, as the case may be, shall deliver to it and as shall be necessary to
vest therein any Deleted Mortgage Loan released pursuant hereto.
SECTION 2.04. [Reserved].
SECTION 2.05. Representations, Warranties and Covenants of the
Master Servicer.
The Master Servicer hereby represents, warrants and covenants
to the Issuer and the Indenture Trustee, for the benefit of each of the
Indenture Trustee, the Noteholders and to the Depositor that as of the Closing
Date or as of such date specifically provided herein:
(i) The Master Servicer is a corporation duly organized,
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 this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the Mortgage Loans
in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power and
authority to service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and has duly authorized by all necessary corporate
action on the part of the Master Servicer the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with
its terms, except to the extent 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 the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iii) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer hereunder, the consummation of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a breach of any term or provision
of the charter or by-laws of the Master Servicer or (B) conflict with,
result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to
9
which the Master Servicer is a party or by which it may be bound, or
any statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Master Servicer; and the Master Servicer
is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to the Master Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition,
properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for
Xxxxxx Xxx or Xxxxxxx Mac in good standing and is a HUD approved
mortgagee pursuant to Section 203 and Section 211 of the National
Housing Act;
(v) Except as disclosed in the Prospectus Supplement, no
litigation is pending against the Master Servicer that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date;
(vii) The information set forth in the "monthly tape" provided
to the Indenture Trustee or any of its affiliates is true and correct
in all material respects;
(viii) With respect to each Mortgage Loan, the Assignment is
in recordable form; (except that the name of the assignee and the
recording information with respect to such Mortgage Loan is blank) and
each Mortgage Loan was originated in the name of the Master Servicer or
an affiliate thereof;
(ix) The Master Servicer has fully furnished and shall
continue to fully furnish, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information
(e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company or their
successors on a monthly basis; and
(x) The Master Servicer shall transmit full-file credit
reporting data for each Mortgage Loan pursuant to Xxxxxx Mae Guide
Announcement 95-19 and for each Mortgage Loan, the Master Servicer
shall report one of the following statuses each
10
month as follows: new origination, current, delinquent (30-, 60-,
90-days, etc.), foreclosed, or charged-off.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Indenture Trustee or to a Custodian, as the case
may be, and shall inure to the benefit of the Indenture Trustee, the Depositor,
the Insurers, and the Noteholders. Upon discovery by any of the Depositor, the
Insurers, the Master Servicer or the Indenture Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Noteholders (without regard to the Note Insurance Policy), the party discovering
such breach shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the Indenture Trustee and the
Insurers. Subject to Section 6.01, the obligation of the Master Servicer set
forth in Section 2.03(b) to cure breaches shall constitute the sole remedies
against the Master Servicer available to the Noteholders, the Depositor or the
Indenture Trustee on behalf of the Noteholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05. The
preceding sentence shall not, however, limit any remedies available to the
Noteholders, the Depositor or the Indenture Trustee on behalf of the Noteholders
pursuant to the Mortgage Loan Purchase Agreement respecting a breach of the
representations, warranties and covenants of the Seller contained in the
Mortgage Loan Purchase Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Indenture Trustee and in the best interests of and for
the benefit of the Noteholders and the Note Insurer (as determined by the Master
Servicer in its reasonable judgment) in accordance with (i) the terms of the
respective Mortgage Loans and the terms of the Pool Policy, (ii) all Applicable
Regulations, (iii) the terms of this Agreement and (iv) to the extent consistent
with the preceding requirements, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of prudent mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:
(i) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(ii) the ownership of any Note by the Master Servicer or any
Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to
receive compensation for its services hereunder or with respect to any
particular transaction (the "Servicing Standard").
Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 5.06, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Indenture Trustee, in accordance with the
servicing standards set forth above, (i) to execute and deliver, on behalf of
the Noteholders and the Indenture Trustee, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
forbearance, or of modification and all other comparable instruments, with
respect to the Mortgage Loans and the Mortgaged Properties, (ii) to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, in the name of the Issuer, on behalf of the Indenture Trustee, the
Noteholders and the Note Insurer, (iii) to market, sell and transfer title of
REO Properties held in the name of the Issuer to third party purchasers upon
terms and conditions the Master Servicer deems
12
reasonable under the Servicing Standard, (iv) to bring or respond to civil
actions or complaints (in its own name or that of the Issuer or the Indenture
Trustee on behalf of the Issuer) related to any Mortgage Loan, Mortgaged
Property or REO Property held by the Issuer and (v) to execute any other
document necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder consistent with the Servicing
Standard.
At the written request of the Master Servicer, the Indenture
Trustee shall execute and furnish to the Master Servicer such documents as are
necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder. By execution of this Agreement,
the Indenture Trustee, on behalf of the Issuer, hereby grants to the Master
Servicer a power of attorney to execute any and all documents necessary to carry
out any and all servicing duties described in this Agreement (including the
taking of and transferring title of REO Properties to third parties held in the
name of the Indenture Trustee for the benefit of the Trust Estate) and expressly
confirms that this paragraph along with the face page and a copy of the
signature page (duly executed) to this Agreement shall constitute the power of
attorney for evidentiary and/or recording purposes. The Indenture Trustee shall
not be liable for the actions of the Master Servicer or any Sub-Servicers under
such powers of attorney.
Subject to Section 3.04(d) hereof, in accordance with the
Servicing Standard, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.04(d), and further as provided in Section
3.05(a). Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Noteholders, be added
to the unpaid Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
Consistent with the terms of this Agreement, the Master
Servicer may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if such waiver, modification, postponement or
indulgence is in conformity with the Servicing Standard; provided, however,
that:
(A) the Master Servicer shall not make future advances (except
as provided in Section 4.03);
(B) the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Rate, defer
or forgive the payment of any principal or interest payments, reduce
the outstanding Stated Principal Balance (except for reductions
resulting from actual payments of principal) or extend the final
maturity date on such Mortgage Loan (unless as provided in Section
3.02, (i) the Mortgagor is in default with respect to the Mortgage Loan
or (ii) such default is, in the judgment of the Master Servicer,
reasonably foreseeable); and
13
(C) the Master Servicer shall not consent to (i) partial
releases of Mortgages, (ii) alterations, (iii) removal, demolition or
division of properties subject to Mortgages, (iv) modification or (v)
second mortgage subordination agreements with respect to any Mortgage
Loan.
To the extent consistent with the terms of this Agreement, the
Master Servicer may waive (or permit a Sub-Servicer to waive) a Prepayment
Charge only under the following circumstances: (i) such waiver is standard and
customary in servicing similar Mortgage Loans and (ii) such waiver relates to a
default or a reasonably foreseeable default and would, in the reasonable
judgment of the Master Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan.
The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement. All references to Master Servicer in this Agreement shall be deemed
to include any Sub-Servicer duly appointed by the Master Servicer pursuant to
this Agreement.
SECTION 3.02. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest only upon determining that
the coverage of any Covered Mortgage Loan by the Pool Insurance Policy will not
be affected, (ii) waive any provision of any Mortgage Loan requiring the related
Mortgagor to submit to mandatory arbitration with respect to disputes arising
thereunder or (iii) extend the due dates for the Monthly Payments due on a
Mortgage Note for a period of not greater than 180 days; provided that any
extension pursuant to clause (iii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder. In the
event of any such arrangement pursuant to clause (iii) above, the Master
Servicer shall make timely advances on such Mortgage Loan during such extension
pursuant to Section 4.03 and in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the Servicing
Standard and in accordance with the modification procedures submitted to the
Pool Insurer on the Closing Date ("Modification Procedures"), may also waive,
modify or vary any term of such Mortgage Loan (including modifications that
would change the Mortgage Rate, forgive the payment of principal or interest or
extend the final maturity date of such Mortgage Loan, provided, that the final
maturity date of any modified Mortgage Loan may not be extended beyond April
2035), accept payment from the related Mortgagor of an amount less than the
Stated Principal Balance in final satisfaction of such
14
Mortgage Loan, or consent to the postponement of strict compliance with any such
term or otherwise grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest, postponements,
or indulgences collectively referred to herein as "forbearance"). The Master
Servicer shall promptly notify the Pool Insurer of any proposed amendments or
changes to the Modification Procedures. The consent of the Pool Insurer will be
required for any modification of any Mortgage Loan in accordance with this
paragraph upon providing the Master Servicer with at least 60 days notice.
The Master Servicer's analysis supporting any forbearance and
the conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the Mortgage File and shall be provided to the Insurers
upon request.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the
Indenture Trustee for deposit in the Payment Account from its own funds the
amount of any such shortfall and shall indemnify and hold harmless the Insurers,
the Issuer, the Indenture Trustee, the Depositor and any successor master
servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement.
SECTION 3.03. [Reserved].
SECTION 3.04. Collection Account, Escrow Account, Payment
Account and Loss Reserve Account.
(a) Collection Account. On behalf of the Issuer, the Master
Servicer shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain in the name of the Indenture Trustee one
or more accounts (such account or accounts, the "Collection Account") in
accordance with this Section 3.04, held in trust for the benefit of the
Indenture Trustee, the Noteholders and the Note Insurer.
(b) Deposits to the Collection Account. On behalf of the
Issuer, the Master Servicer shall deposit or cause to be deposited in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, and
shall thereafter deposit in the Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, and retain therein, the
following payments and collections received or made by it subsequent to the
Cut-off Date with respect to the Mortgage Loans, or payments (other than
Principal Prepayments) received by it on or prior to the Cut-off Date but
allocable to a Due Period subsequent thereto:
15
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans and REO Properties;
(ii) all payments on account of interest on the Mortgage Loans
and REO Properties adjusted to the Net Mortgage Rate;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicing Standard), Subsequent
Recoveries and any amounts received in respect of the rental of any REO
Property prior to REO Disposition;
(iv) all proceeds related to the purchase, substitution or
repurchase of any Mortgage Loan or REO Property in accordance with
Section 2.03;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.09 in connection with the deductible
clause in any blanket hazard insurance policy, such deposit being made
from the Master Servicer's own funds, without reimbursement therefor;
(vi) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.06 in connection with any losses
realized on Permitted Investments with respect to funds held in the
Collection Account;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage Loans
pursuant to Section 2.03 (for purposes of this clause (vii), the
Cut-off Date with respect to any Qualified Substitute Mortgage Loan
shall be deemed to be the date of substitution);
(viii) any amounts required to be deposited by the Master
Servicer pursuant to Section 4.03(b);
(ix) all Prepayment Charges collected by the Master Servicer;
and
(x) without duplication, all payments of claims under the Pool
Insurance Policy.
The foregoing requirements for deposit to the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, assumption fees, insufficient funds charges, modification fees and
other ancillary fees (but not Prepayment Charges) need not be deposited by the
Master Servicer in the Collection Account and shall upon collection, belong to
the Master Servicer as additional compensation for its servicing activities. In
the event the Master Servicer shall deposit in the Collection Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding.
16
(c) Escrow Account. The Master Servicer shall segregate and
hold all funds collected and received pursuant to each Mortgage Loan which
constitute Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Indenture
Trustee one or more accounts (such account or accounts, the "Escrow Account")
held in trust for the benefit of the Noteholders, the Indenture Trustee and the
Note Insurer.
(d) Deposits to the Escrow Account. The Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Escrow Account,
in no event more than two Business Days after the deposit of such funds into the
clearing account, as and when received or as otherwise required hereunder, and
retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property.
(e) Payment Account. On behalf of the Issuer, the Indenture
Trustee shall segregate and hold all funds collected and received pursuant to
this Agreement separate and apart from any of its own funds and general assets
and shall establish and maintain in the name of the Indenture Trustee, as
Indenture Trustee, one or more segregated accounts (such account or accounts,
the "Payment Account"), held in trust for the benefit of the Noteholders and the
Note Insurer.
(f) Indenture Trustee Deposits to the Payment Account. Upon
receipt, the Indenture Trustee shall deposit or cause to be deposited into the
Payment Account all payments of any nature received from the Master Servicer in
accordance with this Agreement or the Swap Administrator pursuant to the Swap
Administration Agreement. The Indenture Trustee shall deposit in the Payment
Account any amounts required to be deposited pursuant to Section 3.06 in
connection with losses realized on Permitted Investments with respect to funds
held in the Payment Account. Furthermore, promptly upon receipt of any Stayed
Funds, whether from the Master Servicer, a trustee in bankruptcy, or federal
bankruptcy court or other source, the Indenture Trustee shall deposit such funds
in the Payment Account, subject to withdrawal thereof pursuant to Section
6.02(b) or as otherwise permitted hereunder.
(g) Master Servicer Transfer of Funds to the Payment Account.
On behalf of the Issuer, the Master Servicer shall deliver to the Indenture
Trustee in immediately available funds for deposit in the Payment Account by
3:00 p.m. (New York time) on the Master Servicer Remittance Date, (i) that
portion of Available Funds (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Payment Account) for the related Payment Date then on deposit in the Collection
Account, (ii) without
17
duplication, the amount of all Prepayment Charges collected by the Master
Servicer and (iii) any amounts reimbursable to an Advancing Person pursuant to
Section 3.23 and the terms of the related Advance Facility.
In addition, the Master Servicer shall deliver to the
Indenture Trustee from time to time as required by this Agreement, for deposit
and the Indenture Trustee shall so deposit, in the Payment Account:
(i) any Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.13 in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 3.16 and Section
8.07 of the Indenture;
(iv) any Compensating Interest as required pursuant to Section
4.01(e);
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(vi) any amounts required to be paid by the Master Servicer
pursuant to Section 3.06 in connection with any losses realized on
Permitted Investments with respect to funds held in the Collection
Account; and
(vii) any amounts required to be paid to the Indenture Trustee
from the assets of the Issuer on deposit in the Collection Account
pursuant to this Agreement, including but not limited to amounts
required to be paid to the Indenture Trustee pursuant to Section 6.02
and Section 6.07 of the Indenture.
Funds held in the Collection Account pursuant to Section
3.04(b) may at any time be delivered by the Master Servicer to the Indenture
Trustee for deposit into the Payment Account and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account until the
Business Day prior to the Payment Date; provided, however, that the Indenture
Trustee shall have the sole authority to withdraw any funds held pursuant to
this paragraph. In the event the Master Servicer shall deliver to the Indenture
Trustee for deposit in the Payment Account any amount not required to be
deposited therein, it may at any time request that the Indenture Trustee
withdraw such amount from the Payment Account and remit to it any such amount,
any provision herein to the contrary notwithstanding.
(h) Investment of Account Funds. Funds on deposit in the
Collection Account, the Payment Account, any REO Account and any Escrow Account
may be invested in Permitted Investments in accordance with the provisions set
forth in Section 3.06. Any investment earnings or interest paid on funds
deposited in the Collection Account, any REO Account and any Escrow Account
(subject to Section 3.05(b)) shall accrue to the benefit of the Master Servicer
and the Master Servicer shall be entitled to retain and withdraw such interest
18
from each such account on a daily basis. Any investment earnings or interest
paid on funds deposited in the Payment Account, shall accrue to the benefit of
the Indenture Trustee and the Indenture Trustee shall be entitled to retain and
withdraw such interest from such account on a daily basis.
(i) Creation, Location and Subsequent Transfers of Accounts.
Each account created pursuant to this Agreement must be an Eligible Account. On
or prior to the Closing Date, the Master Servicer and the Indenture Trustee
shall give notice, to each other, the Insurers and the Depositor of the location
of any account created by it pursuant to this Agreement. From time to time, the
Master Servicer and the Indenture Trustee may each transfer any account created
by it to a different depository institution provided that upon such transfer the
written notice is provided to all other parties listed in the preceding
sentence.
(j) In order to comply with its duties under the U.S.A.
Patriot Act of 2001, the Indenture Trustee shall obtain and verify certain
information and documentation from the other parties to this Agreement
including, but not limited to, each such party's name, address, and other
identifying information.
(k) Loss Reserve Account. The Indenture Trustee, on each
Payment Date, shall deposit, or cause to be deposited a portion of the Group I
Principal Payment Amount and the Group II Principal Payment Amount in accordance
with Section 4.01(a)(2). Amounts, if any, on deposit in the Loss Reserve Account
will be available to cover Realized Losses on the Mortgage Loans in accordance
with Section 4.04(a) and, on and after the Stepdown Date and so long as no
Trigger Event is in effect, will become part of Net Monthly Excess Cashflow and
paid in accordance with Section 4.01(a)(5). All such amounts in the Loss Reserve
Account shall remain uninvested.
SECTION 3.05. Permitted Withdrawals From the Collection
Account, Escrow Account and Payment Account.
(a) Collection Account. The Master Servicer may, from time to
time, withdraw from the Collection Account for the following purposes or as
described in Section 4.03:
(i) to remit to the Indenture Trustee for deposit in the
Payment Account the amounts required to be so remitted pursuant to
Section 3.04(g) or permitted to be so remitted pursuant to the last
paragraph of Section 3.04(g);
(ii) subject to Section 3.12(c), to reimburse itself for (a)
any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and
(c) any unreimbursed Advances, the Master Servicer's right to reimburse
itself pursuant to this subclause (ii) being limited to any Late
Collections, Liquidation Proceeds, Subsequent Recoveries and Insurance
Proceeds received on the related Mortgage Loan and any amounts received
in respect of the rental of the related REO Property prior to an REO
Disposition that represent payments of principal and/or interest
respecting which any such advance was made;
19
(iii) to reimburse itself for (a) any unpaid Servicing Fees to
the extent not recoverable under Section 3.05(a)(ii) and (b) any unpaid
Advances or Servicing Advances that have been deemed Nonrecoverable
Advances or Nonrecoverable Servicing Advances;
(iv) to pay to itself any Prepayment Interest Excess;
(v) to reimburse itself for any amounts paid pursuant to
Section 3.12(b) (and not otherwise previously reimbursed);
(vi) to pay to itself as servicing compensation any interest
earned on funds in the Collection Account;
(vii) subject to Section 4.03(b), to reimburse the Master
Servicer in respect of any unreimbursed Advances to the extent of funds
held in the Collection Account for future distribution that were not
included in Available Funds for the preceding Payment Date;
(viii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the
Depositor, as the case may be, pursuant to Section 5.03;
(ix) to reimburse the Insurers, the Master Servicer (if the
Master Servicer is not an Affiliate of the Seller) or the Indenture
Trustee, as the case may be, for enforcement expenses reasonably
incurred in respect of the breach or defect giving rise to the purchase
obligation under Section 2.03 of this Agreement that were included in
the Purchase Price of the Mortgage Loan, including any expenses arising
out of the enforcement of the purchase obligation;
(x) to pay to the Master Servicer, the Depositor or the
Seller, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 2.03 or
Section 3.16(a) all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(xi) to transfer funds in the Collection Account maintained at
a particular depository to the Collection Account maintained at a
different depository, pursuant to Section 3.04(i); and
(xii) to clear and terminate the Collection Account upon the
termination of this Agreement.
On each Business Day as of the commencement of which the
balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess
shall be remitted to the Indenture Trustee, but only if the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account." If the balance on deposit in the Collection Account
exceeds
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$75,000 as of the commencement of business on any Business Day and the
Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account," the Master Servicer shall, on or
before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Depositor,
the Master Servicer, the Indenture Trustee, the Owner Trustee or any
Sub-Servicer pursuant to Section 3.05 and shall pay such amounts to the Persons
entitled thereto.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (vii),
(viii) and (xi) above. The Master Servicer shall provide written notification to
the Indenture Trustee and the Insurers on or prior to the next succeeding Master
Servicer Reporting Date, upon making any withdrawals from the Collection Account
pursuant to subclause (viii) above.
(b) Escrow Account. The Master Servicer may, from time to
time, withdraw from the Escrow Account for the following purposes:
(i) to effect payments of ground rents, taxes, assessments,
water rates, hazard insurance premiums and comparable items;
(ii) to reimburse the Master Servicer for any Servicing
Advance made by the Master Servicer with respect to a related Mortgage
Loan but only from amounts received on the related Mortgage Loan which
represent late payments or Late Collections of Escrow Payments
thereunder;
(iii) to refund to the Mortgagor any funds as may be
determined to be overages;
(iv) for transfer to the Collection Account in accordance with
the terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Master Servicer, or to the Mortgagor to the
extent required by the related Mortgage Loan or Applicable Regulations,
any interest paid on the funds deposited in the Escrow Account; (vii)
to clear and terminate the Escrow Account on the termination of this
Agreement; and
(viii) to transfer to the Collection Account any Insurance
Proceeds.
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In the event the Master Servicer shall deposit in an Escrow
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from such Escrow Account, any provision herein to the
contrary notwithstanding. As part of its servicing duties, the Master Servicer
shall pay to the Mortgagor interest on funds in the Escrow Account, to the
extent required by the related Mortgage Loan or Applicable Regulations, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.
The Master Servicer may pay to itself any excess interest on funds in the Escrow
Account, to the extent such action is in conformity with the Servicing Standard,
is permitted by law and such amounts are not required to be paid to Mortgagors
or used for any of the other purposes set forth above.
(c) Payment Account. The Indenture Trustee shall, from time to
time, make withdrawals from the Payment Account, for any of the following
purposes:
(i) to make Net Swap Payments owed to the Swap Provider and
any Swap Termination Payment owed to the Swap Provider;
(ii) to make payments to Noteholders and the Insurers in
accordance with Section 4.01;
(iii) to pay to itself and the Owner Trustee amounts to which
it or the Owner Trustee are entitled pursuant to Section 6.07 of the
Indenture;
(iv) to pay itself any interest income earned on funds
deposited in the Payment Account pursuant to Section 3.06;
(v) to reimburse itself pursuant to Section 6.01 and Section
6.02(b) of the Indenture; and
(vi) to clear and terminate the Payment Account on the
termination of this Agreement.
SECTION 3.06. Investment of Funds in the Collection Account,
the Escrow Account, the REO Account and the
Payment Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account, the Escrow Account (subject to Section
3.05(b)), and the REO Account and the Indenture Trustee may direct any
depository institution maintaining the Payment Account (for purposes of this
Section 3.06, each an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Indenture Trustee is the obligor thereon, and (ii) no later than the
date on which such funds are required to be withdrawn from such Investment
Account pursuant to this Agreement, if the Indenture Trustee is the obligor
thereon. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of
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funds in an Investment Account shall be made in the name of the Indenture
Trustee (in its capacity as such) or in the name of a nominee of the Indenture
Trustee. The Indenture Trustee shall be entitled to sole possession (except with
respect to investment direction of funds held in the Collection Account, the
Escrow Account, and the REO Account) over each such investment and (except with
respect to the income on funds held in the Collection Account, the Escrow
Account and the REO Account) the income thereon, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Indenture Trustee or its agent, together with any document of transfer necessary
to transfer title to such investment to the Indenture Trustee or its nominee. In
the event amounts on deposit in an Investment Account are at any time invested
in a Permitted Investment payable on demand, the Indenture Trustee shall:
(i) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the Indenture Trustee
that such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the Investment
Account.
(b) All income in the nature of interest from the investment
of funds in the Collection Account, the Escrow Account (subject to Section
3.05(b)) and the REO Account shall be for the benefit of the Master Servicer as
compensation for the Master Servicer's services pursuant to this Agreement. The
Master Servicer shall deposit in the Collection Account, the Escrow Account, and
the REO Account, as applicable, from its own funds the amount of any loss
incurred in respect of any such Permitted Investment made with funds in such
account immediately upon realization of such loss.
(c) All income in the nature of interest or earnings from the
investment of funds in the Payment Account shall be for the benefit of the
Indenture Trustee as compensation for the Indenture Trustee's services pursuant
to this Agreement. The Indenture Trustee shall deposit in the Payment Account
from its own funds the amount of any loss incurred on Permitted Investments in
the Payment Account.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Indenture Trustee shall, in accordance with the terms
of the Indenture, take such action as may be appropriate to enforce such payment
or performance, including the institution and prosecution of appropriate
proceedings.
(e) The Indenture Trustee or its Affiliates are permitted to
receive compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect
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transactions in certain Permitted Investments and (iii) effecting transactions
in certain Permitted Investments. Such compensation shall not be considered an
amount that is reimbursable or payable pursuant to Section 3.05.
SECTION 3.07. Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records reflecting the status of ground rents, taxes
(including any applicable premium taxes with respect to Mortgaged Properties
which are located in the State of Kentucky or West Virginia), assessments, water
rates and other charges which (other than with respect to premium taxes) are or
may become a lien upon the Mortgaged Property and the status of fire and hazard
insurance coverage and, as to those Mortgage Loans subject to a voluntary escrow
agreement, shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Master Servicer in amounts sufficient for such purposes, as allowed under
the terms of the Mortgage or Applicable Regulations. The Master Servicer assumes
full responsibility for the timely payment of all such bills and shall effect
timely payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances from its own funds to effect such payments. To the
extent that the Mortgage does not provide for Escrow Payments, the Master
Servicer shall use reasonable efforts consistent with the Servicing Standard to
determine that any such payments are made by the Mortgagor at the time they
first become due and shall ensure that the Mortgaged Property is not lost to a
tax lien as a result of nonpayment and that such Mortgaged Property is not left
uninsured. The Master Servicer shall cause to be maintained any primary mortgage
guaranty insurance policy relating to any Mortgage Loan which was in force as of
the Closing Date and which is not cancelable under the terms of the related
Mortgage Loan or applicable law.
SECTION 3.08. Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
Stated Principal Balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that are a part of
such property on a replacement cost basis and (iii) the maximum insurable value
of the improvements which are a part of such Mortgaged Property, in each case in
an amount not less than such amount as is necessary to avoid the application of
any coinsurance clause contained in the related hazard insurance policy. The
Master Servicer shall also cause to be maintained fire insurance with extended
coverage on each REO Property in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding Stated Principal Balance of the related
Mortgage Loan, plus accrued interest at the Mortgage Rate and related Servicing
Advances (each measured at the time it became an REO Property). The Master
Servicer shall comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts to be collected by the Master Servicer under any such policies (other
than
24
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or amounts to be released to the Mortgagor in accordance
with the procedures that the Master Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.05, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.13, if received in respect of an REO Property. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Noteholders, be added to the unpaid Stated
Principal Balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, the
Master Servicer shall cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid Stated Principal Balance of the related Mortgage Loan; (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program); and (iii) the
maximum insurable value of the improvements which are part of the related
Mortgaged Property.
SECTION 3.09. Maintenance of Mortgage Blanket Insurance.
In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of
"A:V" or better in Best's Key Rating Guide (or such other rating that is
comparable to such rating) insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of Section 3.08, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of Section 3.08, and there shall have been one or more losses which
would have been covered by such policy, deposit to the Collection Account from
its own funds the amount not otherwise payable under the blanket policy because
of such deductible clause. In connection with its activities as administrator
and servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Indenture Trustee, the Noteholders and the
Note Insurer, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.
SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.
The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
25
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Xxxxxx Mae or Xxxxxxx Mac, unless the Master Servicer has obtained a waiver
of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall
provide the Indenture Trustee and the Insurers (upon reasonable request) with
copies of any such insurance policies and fidelity bond. The Master Servicer
shall be deemed to have complied with this provision if an Affiliate of the
Master Servicer has such errors and omissions and fidelity bond coverage and, by
the terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without thirty days'
prior written notice to the Indenture Trustee. The Master Servicer shall also
cause each Sub-Servicer to maintain a policy of insurance covering errors and
omissions and a fidelity bond which would meet such requirements.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Master Servicer shall, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the Pool Insurance Policy. If the
Master Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Master Servicer is authorized to
enter into an assumption and modification agreement from or with the person to
whom such property has been conveyed or is proposed to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. The
Master Servicer is also authorized to enter into a substitution of liability
agreement with such person, pursuant to which the original Mortgagor is released
from liability and such person is substituted as the Mortgagor and becomes
liable under the Mortgage Note, provided that no such substitution shall be
effective unless such person satisfies the underwriting criteria of the Master
Servicer. In connection with any assumption or substitution, the Master Servicer
shall apply such underwriting standards and follow such practices and procedures
as shall be normal and usual in its general mortgage servicing activities and as
it applies to other mortgage loans owned solely by it. The Master Servicer shall
not take or enter into any assumption and modification agreement, however,
unless (to the extent practicable in the circumstances) it shall have received
confirmation, in writing, of the continued effectiveness of the Pool Insurance
Policy and any applicable hazard insurance policy, or a new policy meeting the
requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of an assumption or substitution of liability agreement
shall be retained by the Master Servicer as additional servicing compensation.
In connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the
26
terms thereof or otherwise permitted under Section 3.01. The Master Servicer
shall notify the Indenture Trustee and any respective Custodian that any such
substitution or assumption agreement has been completed by forwarding to the
Indenture Trustee or to such Custodian, as the case may be, the executed
original of such substitution or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.11,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall, consistent with the Servicing
Standard and the Pool Insurance Policy, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.02. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses shall be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.05 and Section 3.13. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration shall increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.12 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Indenture
Trustee, either (i) obtain title to such Mortgaged Property as a result of or in
lieu of foreclosure or otherwise or (ii) otherwise acquire possession of, or
take any other action with respect to, such Mortgaged Property, if, as a result
of any such action, the Indenture Trustee, the Issuer or the Noteholders would
be considered to hold title to, to be a "mortgagee-in-possession" of, or to be
an "owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
27
(i) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Issuer to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(ii) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Issuer to take such actions with respect to
the affected Mortgaged Property.
Notwithstanding the foregoing, if such environmental audit
reveals, or if the Master Servicer has actual knowledge or notice, that such
Mortgaged Property contains such toxic or hazardous wastes or substances, the
Master Servicer shall not foreclose or accept a deed in lieu of foreclosure
without the prior written consent of the Note Insurer.
The cost of the environmental audit report contemplated by
this Section 3.12 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(a)(v), such right of reimbursement being prior to the
rights of Noteholders to receive any amount in the Collection Account received
in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Issuer to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Issuer; provided, however, that the Master Servicer
shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure if the estimated costs of the environmental clean up, as estimated
in the environmental audit report, together with the Advances made by the Master
Servicer and the estimated costs of foreclosure or acceptance of a deed in lieu
of foreclosure exceeds the estimated value of the Mortgaged Property. The cost
of any such compliance, containment, cleanup or remediation shall be advanced by
the Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Collection Account as provided in Section 3.05(a)(v), such
right of reimbursement being prior to the rights of Noteholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Subsequent Recoveries or Liquidation Proceeds, in respect of
any Mortgage Loan, shall be applied in the following order of priority: FIRST,
to reimburse the Master Servicer or any Sub-Servicer for any related
unreimbursed Servicing Advances and Advances, pursuant to Section 3.05(a)(ii);
SECOND, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery
28
Determination, or to the Due Date prior to the Payment Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and THIRD, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery shall be allocated by the Master Servicer as follows: FIRST, to unpaid
Servicing Fees; and SECOND, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.05(a)(ii).
SECTION 3.13. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Indenture Trustee, or its nominee, in trust for the
benefit of the Noteholders and the Note Insurer. Pursuant to the power of
attorney granted in Section 3.01, the Master Servicer is hereby authorized to
transfer the title of any REO Property taken in the name of the Indenture
Trustee to a third party purchaser pursuant to this Section 3.13 without further
documentation of its authority as attorney-in-fact for the Indenture Trustee on
behalf of the Issuer. The Master Servicer, on behalf of the Issuer (and on
behalf of the Indenture Trustee for the benefit of the Noteholders), shall, with
the consent of the Pool Insurer in accordance with the Pool Insurance Policy,
either sell any REO Property before the close of the third taxable year after
the year the Issuer acquires ownership of such REO Property for purposes of the
Code or request from the Internal Revenue Service, no later than 60 days before
the day on which the three-year grace period would otherwise expire, an
extension of the three-year grace period. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the benefit of the
Noteholders and solely for the purpose of its prompt disposition and sale in a
manner which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of the Code.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the
Indenture Trustee for the benefit of the Noteholders and the Note Insurer (the
"REO Account"), which shall be an Eligible Account. The Master Servicer shall be
permitted to allow the Collection Account to serve as the REO Account, subject
to separate ledgers for each REO Property. The Master Servicer shall be entitled
to retain or withdraw any interest income paid on funds deposited in the REO
Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Noteholders and appropriate to effect the prompt disposition and sale of the REO
Property. In connection therewith, the Master Servicer shall deposit, or cause
to be deposited in the clearing account (which account must be an Eligible
Account) in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan
29
servicing activities on a daily basis, and in no event more than one Business
Day after the Master Servicer's receipt thereof, and shall thereafter deposit in
the REO Account, in no event more than two Business Days after the deposit of
such funds into the clearing account, all revenues received by it with respect
to an REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property including, without
limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if in the Master Servicer's judgment,
the payment of such amounts shall be recoverable from the rental or sale of the
REO Property.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Master Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.13(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of its
duties and obligations to the Indenture Trustee on behalf of the
Noteholders with respect to the operation and management of any such
REO Property; and
(iv) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of such
REO Property.
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The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees. The Master Servicer shall not engage an Independent
Contractor to engage in any activities that the Master Servicer would not be
permitted to engage in itself in accordance with the other provisions of this
Agreement.
(d) In addition to the withdrawals permitted under Section
3.13(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Payment Account in accordance with
Section 3.04(g)(ii), for payment on the related Payment Date in accordance with
Section 4.01, the income from the related REO Property received during the prior
calendar month, net of any withdrawals made pursuant to Section 3.13(c) or this
Section 3.13(d).
(e) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Payment Account in
accordance with Section 3.04(g)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for payment on the related Payment Date
in accordance with Section 3.05. Any REO Disposition shall be for cash only.
SECTION 3.14. Maintenance of the Pool Insurance Policy;
Collections Thereunder.
The Master Servicer covenants and agrees to exercise its best
reasonable efforts to maintain and keep the Pool Insurance Policy in full force
and effect throughout the term of this Agreement. The Master Servicer shall take
whatever action is appropriate to maximize the amounts payable under the Pool
Insurance Policy and to service the Mortgage Loans in the manner required by the
Pool Insurance Policy. In the event that in connection with the Pool Insurance
Policy (i) the Pool Insurer shall not be qualified to transact a mortgage
guaranty insurance business under the laws of the state of its principal place
of business or any other state which has jurisdiction over the Pool Insurer in
connection with the Pool Insurance Policy, (ii) the Pool Insurance Policy is
terminated as a result of the Pool Insurer's failure to pay claims in accordance
with the Pool Insurance Policy or (iii) the claims-paying ability of the Pool
Insurer shall be reduced below investment grade by each Rating Agency, the Note
Insurer may (A) consent to the appointment of another Qualified Pool Insurer to
provide a replacement policy as described in the next sentence or (B) may elect
not to have another Qualified Pool Insurer to replace the Insurer. Upon notice
to the Master Servicer of the occurrence of any of clauses (i), (ii) or (iii) of
the preceding sentence, the Master Servicer shall notify the Note Insurer to
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determine if the Master Servicer should identify a prospective Qualified Pool
Insurer to provide a replacement policy. To the extent that the Note Insurer
decides to allow another Qualified Pool Insurer to be selected, the Master
Servicer will exercise its best reasonable efforts to obtain from another
Qualified Pool Insurer a replacement policy comparable to the Pool Insurance
Policy with a total coverage which is equal to the then existing coverage of the
Pool Insurance Policy; provided that if the cost of such replacement policy
shall be greater than the cost of the Pool Insurance Policy, the amount of
coverage of such replacement policy shall be reduced to a level such that the
cost of such replacement policy shall not exceed the cost of the Pool Insurance
Policy.
In the event that the Pool Insurer is terminated as described
in this Section 3.14, all rights of the Pool Insurer to consent to any actions
to be taken pursuant to any of the Basic Documents shall permanently cease to be
operable.
The Indenture Trustee shall pay the Pool Insurer Premium from
amounts on deposit in the Payment Account on a monthly basis in accordance with
the terms of the Pool Insurance Policy and Section 4.01 of this Agreement. In
furtherance of the foregoing, the Indenture Trustee shall remit to the Pool
Insurer in immediately available funds (i) on or before 12:00 noon (Philadelphia
time) on each Payment Date the Pool Insurer Premium due on such Payment Date and
(ii) promptly when due, any other amount owed to the Pool Insurer under the Pool
Insurance Policy and this Agreement. To the extent that the Pool Insurer Premium
is not paid in a timely manner for any Payment Date, the Note Insurer may pay
the Pool Insurer Premium on behalf of the Issuer on such Payment Date. The Note
Insurer shall be entitled to reimbursement of any such amount from any Available
Funds that would otherwise have been payable to the Pool Insurer on such Payment
Date.
The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under the Pool Insurance
Policy or of any loss which, but for the actions of the Master Servicer or
Sub-Servicer, would have been covered thereunder. The Master Servicer will
comply in the performance of this Agreement, with all reasonable rules and
requirements of the Pool Insurer and the terms of the Pool Insurance Policy. In
connection with any assumption and modification agreement or substitution of
liability agreement entered into or to be entered into pursuant to Section 3.11,
the Master Servicer shall promptly notify the Pool Insurer of such assumption in
accordance with the terms of such policies and shall take all actions which may
be required by the Pool Insurer as a condition to the continuation of coverage
under the Pool Insurance Policy.
In connection with its activities as servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Indenture Trustee, the Noteholders and the Note Insurer, claims to the Pool
Insurer under the Pool Insurance Policy in a timely fashion in accordance with
the terms of the Pool Insurance Policy and, in this regard, to take such action
as shall be necessary to permit recovery under the Pool Insurance Policy
respecting a defaulted Mortgage Loan. Any amounts collected by the Master
Servicer under the Pool Insurance Policy shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.05(a); and any amounts
collected by the Master Servicer under the Pool Insurance
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Policy in respect of any REO Property shall be deposited in the related REO
Account, subject to withdrawal pursuant to Section 3.13.
SECTION 3.15. Reports of Foreclosure and Abandonment of
Mortgaged Properties.
The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.
The Master Servicer may, at its option, purchase a Mortgage
Loan which has become 90 or more days delinquent or for which the Master
Servicer has accepted a deed in lieu of foreclosure. Prior to purchase pursuant
to this Section 3.16, the Master Servicer shall be required to continue to make
Advances pursuant to Section 4.03. The Master Servicer shall not use any
procedure in selecting Mortgage Loans to be repurchased which is materially
adverse to the interests of the Noteholders. The Master Servicer shall purchase
such delinquent Mortgage Loan at a price equal to the Purchase Price of such
Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to this Section
3.16 shall be accomplished by remittance to the Master Servicer for deposit in
the Collection Account of the amount of the Purchase Price. The Indenture
Trustee shall effectuate the conveyance of such delinquent Mortgage Loan to the
Master Servicer to the extent necessary, as requested, and the Indenture Trustee
shall promptly deliver all documentation to the Master Servicer.
SECTION 3.17. Indenture Trustee to Cooperate; Release of
Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer shall
promptly notify the Indenture Trustee and any related Custodian by a
certification in the form of Exhibit D or such other form supplied by the Master
Servicer provided that it does not differ from the substantive content of
Exhibit D (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.04(b)
have been or shall be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such certification and
request, the Indenture Trustee or such Custodian, as the case may be, shall
promptly release (and in no event more than three (3) Business Days thereafter)
the related Mortgage File to the Master Servicer. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account or the Payment Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
the Pool Insurance Policy or
33
any insurance policy relating to the Mortgage Loans, the Indenture Trustee and
any related Custodian shall, upon request of the Master Servicer and delivery to
the Indenture Trustee or such Custodian, as the case may be, of a Request for
Release in the form of Exhibit D or such other form supplied by the Master
Servicer provided that it does not differ from the substantive content of
Exhibit D, release the related Mortgage File to the Master Servicer, and the
Indenture Trustee shall, at the direction of the Master Servicer, execute such
documents as shall be necessary to the prosecution of any such proceedings and
the Master Servicer shall retain such Mortgage File in trust for the benefit of
the Noteholders. Such Request for Release shall obligate the Master Servicer to
return each and every document previously requested from the Mortgage File to
the Indenture Trustee or to such Custodian when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered to the Indenture Trustee a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, upon request, a copy of the Request for Release
shall be released by the Indenture Trustee or such Custodian to the Master
Servicer.
(c) Upon written certification of a Servicing Officer, the
Indenture Trustee shall execute and deliver to the Master Servicer any court
pleadings, requests for trustee's sale or other documents reasonably necessary
to the foreclosure or trustee's sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Indenture Trustee and a
statement as to the reason such documents or pleadings are required and that the
execution and delivery thereof by the Indenture Trustee shall not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
(d) The Indenture Trustee and the Master Servicer may mutually
agree on policies and procedures (commercially reasonable in nature) to allow
the submission of any and all requests for the release of a Mortgage File
electronically with a digital signature or other identifier to designate the
Servicing Officer of the Master Servicer requesting such collateral.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 4.01(e). In
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addition, the Master Servicer shall be entitled to recover unpaid Servicing Fees
out of Insurance Proceeds, Subsequent Recoveries or Liquidation Proceeds to the
extent permitted by Section 3.05(a)(ii), out of general funds in the Collection
Account to the extent permitted by Section 3.05(a) and out of amounts derived
from the operation and sale of an REO Property to the extent permitted by
Section 3.13. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Master Servicer only to the extent such amounts, fees or charges are
received by the Master Servicer. The Master Servicer shall also be entitled
pursuant to Section 3.05(a)(vi) to withdraw from the Collection Account,
pursuant to Section 3.04(h) to withdraw from any Escrow Account and pursuant to
Section 3.13(b) to withdraw from any REO Account, as additional servicing
compensation, interest or other income earned on deposits therein, subject to
Section 3.06. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.08, Section 3.09 and Section 3.10, to
the extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided in Section 6.07 of the Indenture, the fees and expenses of the
Indenture Trustee) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
SECTION 3.19. Statement as to Compliance.
The Master Servicer shall deliver to the Indenture Trustee,
the Insurers, the Depositor and each Rating Agency on or before March 15th of
each calendar year commencing in 2006, an Officers' Certificate in a form
similar to Exhibit F attached hereto agreeable to the parties hereto, stating,
as to each signatory thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision and (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Indenture Trustee
to any Noteholder and to any Person identified to the Indenture Trustee as a
prospective transferee of a Note, upon the request and at the expense of the
requesting party, provided that such statement is delivered by the Master
Servicer to the Indenture Trustee.
SECTION 3.20. Independent Public Accountants' Servicing
Report.
Not later than March 15th of each calendar year commencing in
2006, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential
35
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Indenture Trustee, the
Insurers and each Rating Agency. Copies of such statement shall be provided by
the Indenture Trustee to any Noteholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Indenture Trustee. In the event such firm of independent certified public
accountants requires the Indenture Trustee to agree to the procedures performed
by such firm, the Master Servicer shall direct the Indenture Trustee in writing
to so agree; it being understood and agreed that the Indenture Trustee shall
deliver such letter of agreement in conclusive reliance upon the direction of
the Master Servicer, and the Indenture Trustee has not made any independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.
SECTION 3.21. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Noteholder or Note
Owner, access to the documentation regarding the Mortgage Loans required by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer designated by it. In addition, access to the
documentation regarding the Mortgage Loans shall be provided to any Noteholder
or Note Owner, the Indenture Trustee, the Owner Trustee, the Insurers and to any
Person identified to the Master Servicer as a prospective transferee of a Note,
upon reasonable request during normal business hours at the offices of the
Master Servicer designated by it at the expense of the Person requesting such
access. In each case, access to any documentation regarding the Mortgage Loans
may be conditioned upon the requesting party's acknowledgment in writing of a
confidentiality agreement regarding any information that is required to remain
confidential under the Xxxxx-Xxxxx-Xxxxxx Act of 1999.
SECTION 3.22. [Reserved].
SECTION 3.23. Advance Facility.
(a) The Master Servicer and/or the Issuer, in either case,
with the consent of the Note Insurer and the Master Servicer in the case of the
Issuer, is hereby authorized to enter into a facility (an "Advance Facility")
with any Person (an "Advancing Person") (1) under which the Master Servicer
sells, assigns or pledges to the Advancing Person the Master Servicer's
36
rights under this Agreement to be reimbursed for any Advances and/or Servicing
Advances or (2) which provides that the Advancing Person may fund Advances
and/or Servicing Advances to the Issuer under this Agreement, although no such
facility shall reduce or otherwise affect the Master Servicer's obligation to
fund such Advances and/or Servicing Advances. If the Master Servicer enters into
such an Advance Facility pursuant to this Section 3.23, upon reasonable request
of the Advancing Person, the Indenture Trustee shall execute a letter of
acknowledgment, confirming its receipt of notice of the existence of such
Advance Facility. To the extent that an Advancing Person funds any Advance or
any Servicing Advance or is assigned the right to be reimbursed for any Advance
or Servicing Advance and provides the Indenture Trustee with notice acknowledged
by the Master Servicer that such Advancing Person is entitled to reimbursement
directly from the Indenture Trustee pursuant to the terms of the Advance
Facility, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.23(b). Such notice from the Advancing Person must specify the amount of the
reimbursement, the Section of this Agreement that permits the applicable Advance
or Servicing Advance to be reimbursed and the section(s) of the Advance Facility
that entitle the Advancing Person to request reimbursement from the Indenture
Trustee, rather than the Master Servicer, and include the Master Servicer's
acknowledgment thereto or proof of an Event of Default under the Advance
Facility. The Indenture Trustee shall have no duty or liability with respect to
any calculation of any reimbursement to be paid to an Advancing Person and shall
be entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.23. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Section 5.06 hereof and shall not be deemed to be
a Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Person by the Issuer would not materially and
adversely affect the interests of any Noteholder or the Note Insurer, then the
Note Insurer shall not withhold its consent to the Issuer's entering such
facility.
(b) If, pursuant to the terms of the Advance Facility, an
Advancing Person is entitled to reimbursement directly from the Indenture
Trustee, then the Master Servicer shall not reimburse itself therefor under
Section 3.05(a)(ii), Section 3.05(a)(iii) or Section 3.05(a)(v) prior to the
remittance to the Payment Account, but instead the Master Servicer shall include
such amounts in the applicable remittance to the Indenture Trustee made pursuant
to Section 3.04(g) to the extent of amounts on deposit in the Collection Account
on the related Master Servicer Remittance Date. The Indenture Trustee is hereby
authorized to pay to the Advancing Person reimbursements for Advances and
Servicing Advances from the Payment Account, to the extent permitted under the
terms of the Advance Facility, to the same extent the Master Servicer would have
been permitted to reimburse itself for such Advances and/or Servicing Advances
in accordance with Section 3.05(a)(ii), Section 3.05(a)(iii) or Section
3.05(a)(v), as the case may be, had the Master Servicer itself funded such
Advance or Servicing Advance. The Indenture Trustee is hereby authorized to pay
directly to the Advancing Person such portion of the Servicing Fee as the
parties to any Advance Facility agree to in writing delivered to the Indenture
Trustee. An Advance Facility may provide that the Master Servicer will otherwise
cause the remittance of Advance and/or Servicing Advance reimbursement amounts
to the Advancing Person, in which case the foregoing sentences in this Section
3.23(b) shall not apply.
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(c) All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in first out" (FIFO) basis.
(d) In the event the Master Servicer is terminated pursuant to
Section 6.01, the Advancing Person shall succeed to the terminated Master
Servicer's right of reimbursement set forth in Section 6.02(c) to the extent of
such Advancing Person's financing of or receipt of assignment or pledge of the
right to be reimbursed for Advances or Servicing Advances hereunder then
remaining unreimbursed.
(e) Neither any party to this Agreement nor any other Person
shall have any right or claim (including without limitation any right of offset
or recoupment) to any amounts allocable under this Agreement to the
reimbursement of Advances or Servicing Advances that have been assigned,
conveyed or pledged to an Advancing Person, or that relate to Advances or
Servicing Advances that were funded by an Advancing Person.
(f) Any amendment to this Section 3.23 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.23,
including amendments to add provisions relating to a successor master servicer,
may be entered into by the Indenture Trustee and the Master Servicer without the
consent of any Noteholder but with the consent of the Note Insurer and written
confirmation from each Rating Agency that the amendment shall not result in the
reduction or withdrawal of the then-current ratings of any outstanding Class of
Notes (without regard to the Note Insurance Policy), notwithstanding anything to
the contrary in this Agreement.
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ARTICLE IV
PAYMENTS
SECTION 4.01. Payments to Noteholders.
(a)(1) (I) On each Payment Date, the Indenture Trustee shall
withdraw from the Payment Account an amount equal to the Group I Interest
Payment Amount and distribute to the Noteholders the following amounts, in the
following order of priority:
(i) concurrently, the premium payable to the Note Insurer
(with respect to the Class A-1 Notes) and to the Pool Insurer (with
respect to the Covered Mortgage Loans included in the Group I Mortgage
Loans, other than the Deferred Premium), PRO RATA;
(ii) to the Holders the Class A-1 Notes, the Senior Interest
Payment Amount related to such Class A-1 Notes;
(iii) to the Holders the Class A-2 Notes, the Senior Interest
Payment Amount related to such Class A-2 Notes, to the extent remaining
unpaid after the payment of the Group II Interest Payment Amount, as
set forth in in Section 4.01(a)(1)(II)(ii) below;
(iv) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-1 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-1 Notes; and
(v) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-2 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-2 Notes, to the extent
remaining unpaid after the payment of the Group II Interest Payment
Amount, as set forth in Section 4.01(a)(1)(II)(iv) below.
(II) On each Payment Date, the Indenture Trustee shall
withdraw from the Payment Account an amount equal to the Group II Interest
Payment Amount and distribute to the Noteholders the following amounts, in the
following order of priority:
(i) concurrently, the premium payable to the Note Insurer
(with respect to the Class A-2 Notes) and to the Pool Insurer (with
respect to the Covered Mortgage Loans included in the Group II Mortgage
Loans, other than the Deferred Premium), PRO RATA;
(ii) to the Holders of the Class A-2 Notes, the Senior
Interest Payment Amount related to such Class A-2 Notes; and
(iii) to the Holders of the Class A-1 Notes, the Senior
Interest Payment Amount related to such Class A-1 Notes, to the extent
remaining unpaid after the
39
payment of the Group I Interest Payment Amount, as set forth in in
Section 4.01(a)(1)(I)(ii) above;
(iv) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-2 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-2 Notes; and
(v) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-1 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-1 Notes, to the extent
remaining unpaid after the payment of the Group II Interest Payment
Amount, as set forth in Section 4.01(a)(1)(I)(iv) above.
(2) (I) On each Payment Date (a) prior to the Stepdown Date or
(b) on which a Trigger Event is in effect, the Group I Principal Payment Amount
shall be distributed in the following order of priority:
(i) to the Holders of the Class A-1 Notes, until the Note
Balance thereof has been reduced to zero;
(ii) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-1 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-1 Notes;
(iii) to the Note Insurer, the amount owing to the Note
Insurer under the Note Insurance Agreement for reimbursement for prior
claims paid under the Note Insurance Policy in respect of the Class A-2
Notes and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-2 Notes, to the extent
remaining unpaid after the payment of the Group II Principal Payment
Amount, as set forth in Section 4.01(a)(2)(II) below; and
(iv) to the Loss Reserve Account, any remaining amounts.
(II) On each Payment Date (a) prior to the Stepdown Date or
(b) on which a Trigger Event is in effect, the Group II Principal Payment Amount
shall be distributed in the following order of priority:
(i) to the Holders of the Class A-2 Notes, until the Note
Balance thereof has been reduced to zero;
(ii) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance
40
Policy in respect of the Class A-2 Notes and any other amounts owing to
the Note Insurer under the Note Insurance Agreement with respect to the
Class A-2 Notes;
(iii) to the Note Insurer, the amount owing to the Note
Insurer under the Note Insurance Agreement for reimbursement for prior
claims paid under the Note Insurance Policy in respect of the Class A-1
Notes and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-1 Notes, to the extent
remaining unpaid after the payment of the Group I Principal Payment
Amount, as set forth in Section 4.01(a)(2)(I) above; and
(iv) to the Loss Reserve Account, any remaining amounts.
(III) On each Payment Date (a) on or after the Stepdown Date
and (b) on which a Trigger Event is not in effect, the Group I Principal Payment
Amount shall be distributed in the following order of priority:
(i) to the Holders of the Class A-1 Notes, the Senior Group I
Principal Payment Amount , until the Note Balance thereof has been
reduced to zero;
(ii) to the Holders of the Class A-2 Notes, after taking into
account the payment of the Group II Principal Payment Amount already
paid, as described in Section 4.01(a)(2)(IV) below, the amount of any
unpaid Senior Group II Principal Payment Amount, until the Note Balance
thereof has been reduced to zero;
(iii) to the Note Insurer, the amount owing to the Note
Insurer under the Note Insurance Agreement for reimbursement for prior
claims paid under the Note Insurance Policy in respect of the Class A-1
Notes and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-1 Notes; and
(iv) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-2 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-2 Notes, to the extent
remaining unpaid after the payment of the Group II Principal Payment
Amount, as set forth in Section 4.01(a)(2)(IV) below.
(IV) On each Payment Date (a) on or after the Stepdown Date
and (b) on which a Trigger Event is not in effect, the Group II Principal
Payment Amount shall be distributed in the following order of priority:
(i) to the Holders of the Class A-2 Notes, the Senior Group II
Principal Payment Amount , until the Note Balance thereof has been
reduced to zero;
(ii) to the Holders of the Class A-1 Notes, after taking into
account the payment of the Group I Principal Payment Amount already
paid, as described in Section
41
4.01(a)(2)(III) above, the amount of any unpaid Senior Group I
Principal Payment Amount, until the Note Balance thereof has been
reduced to zero;
(iii) to the Note Insurer, the amount owing to the Note
Insurer under the Note Insurance Agreement for reimbursement for prior
claims paid under the Note Insurance Policy in respect of the Class A-2
Notes and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-2 Notes; and
(iv) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A-1 Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A-1 Notes, to the extent
remaining unpaid after the payment of the Group I Principal Payment
Amount, as set forth in Section 4.01(a)(2)(III) above.
(3) On each Payment Date, after making the after payment of
the Interest Payment Amount and the Principal Payment Amount, the Indenture
Trustee shall withdraw from Available Funds any amounts received under the Swap
Administration Agreement and distribute such amount as follows:
(i) concurrently, to the Class A Notes, the related Senior
Interest Payment Amount remaining unpaid after the payments of the
Group I Interest Payment Amount and the Group II Interest Payment
Amount, on a pro rata basis based on such respective remaining Senior
Interest Payment Amount;
(ii) to the Note Insurer, the amount owing to the Note Insurer
under the Note Insurance Agreement for reimbursement for prior claims
paid under the Note Insurance Policy in respect of the Class A Notes
and any other amounts owing to the Note Insurer under the Note
Insurance Agreement with respect to the Class A Notes, to the extent
remaining unpaid after the payments of the Interest Payment Amount and
the Principal Payment Amount; and
(iii) concurrently, to the Class A Notes, the related
Available Funds Carryover Amount, on a PRO RATA basis based on such
respective Available Funds Carryover Amounts remaining.
Notwithstanding anything to the contrary herein, any Swap Termination
Payment received by the Indenture Trustee, to the extent not used to obtain a
successor Swap Provider, shall be used to pay the amounts set forth under this
Section 4.01(a)(3) and any excess amounts shall be held by the Indenture Trustee
in the Payment Account for future payments under this Section 4.01(a)(3) until
the expiration of the original term of the Interest Rate Swap Agreement. Any
Swap Termination Payment remaining after the expiration of the original term of
the Interest Rate Swap Agreement shall become part of Net Monthly Excess
Cashflow.
(4) On each Payment Date, the Indenture Trustee shall withdraw
any amounts then on deposit in the Payment Account that represent Prepayment
Charges collected by the
42
Master Servicer to the extent not related to Principal Prepayments occurring
after the related Prepayment Period, and the Indenture Trustee shall distribute
such amounts to the Holders of the Certificates.
(5) On each Payment Date, the Net Monthly Excess Cashflow
shall be distributed as follows:
(i) concurrently, to the Class A Notes, on a PRO RATA basis
based on the Note Balance of each such Class, in an amount equal to any
Realized Losses incurred during the related Due Period in respect of
related Mortgage Loans that are not Covered Mortgage Loans or Covered
Mortgage Loans in which a claim under the Pool Insurance Policy has
been denied pursuant to the terms of the Pool Insurance Policy;
(ii) to make payments to the Pool Insurer for prior claims
paid under the Pool Insurance Policy and any other amounts owing to the
Pool Insurer under the Pool Insurance Policy (other than the Deferred
Premium);
(iii) concurrently, to the Class A Notes, in an amount equal
to the Overcollateralization Increase Amount, applied as part of the
Group I Principal Payment Amount or the Group II Principal Payment
Amount, as applicable, to reduce the Note Balance of such Notes until
the aggregate Note Balance of such Notes is reduced to zero;
(iv) concurrently, to the Class A Notes, the related Available
Funds Carryover Amount, to the extent remaining, on a pro rata basis
based on such respective Available Funds Carryover Amounts remaining;
(v) to pay to the Pool Insurer the Deferred Premium on the
Payment Date in May 2007 and, to the extent not paid in full on such
Payment Date, on each Payment Date thereafter, together with interest
at the related Late Payment Rate on the upaid amount thereof from the
Payment Date in May 2007 to the extent not paid in full on such Payment
Date;
(vi) to the Swap Provider, any Swap Termination Payment,
triggered by a Swap Provider Trigger Event owed to the Swap Provider
pursuant to the Interest Rate Swap Agreement; and
(vii) to the Owner Trustee, any fees, expenses and indemnities
not otherwise paid and then, to the Holders of the Certificates, any
remaining amounts.
(b) All payments made with respect to each Class of Notes on
each Payment Date shall be allocated PRO RATA among the outstanding Notes in
such Class based on their respective Percentage Interests. Payments in respect
of each Class of Notes on each Payment Date shall be made to the Holders of the
respective Class of record on the related Record Date (except as otherwise
provided in Section 4.01(e) or Section 9.01 respecting the final payment on such
Class), based on the aggregate Percentage Interest represented by their
respective Notes, and shall be made by wire transfer of immediately available
funds to the account of any such
43
Holder at a bank or other entity having appropriate facilities therefor, if such
Holder shall have so notified the Indenture Trustee in writing at least five
Business Days prior to the Record Date immediately prior to such Payment Date,
or otherwise by check mailed by first class mail to the address of such Holder
appearing in the Note Register. The final payment on each Note shall be made in
like manner, but only upon presentment and surrender of such Note at the office
of the Indenture Trustee maintained for such purpose pursuant to Section 8.12 or
such other location specified in the notice to Noteholders of such final
payment.
Each payment with respect to a Book-Entry Note shall be paid
to the Depository, as Holder thereof, and the Depository shall be responsible
for crediting the amount of such payment to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such payments to the Note Owners
that it represents and to each indirect participating brokerage firm (a
"brokerage firm" or "indirect participating firm") for which it acts as agent.
Each brokerage firm shall be responsible for disbursing funds to the Note Owners
that it represents. None of the Indenture Trustee, the Note Registrar, the
Depositor or the Master Servicer shall have any responsibility therefor except
as otherwise provided by this Agreement or applicable law.
(c) The rights of the Noteholders to receive payments in
respect of the Notes, and all interests of the Noteholders in such payments,
shall be as set forth in this Agreement. Neither the Holders of any Class of
Notes nor the Indenture Trustee nor the Master Servicer shall in any way be
responsible or liable to the Holders of any other Class of Notes in respect of
amounts properly previously distributed on the Notes.
(d) Except as otherwise provided in Section 9.01, whenever the
Indenture Trustee expects that the final payment with respect to any Class of
Notes shall be made on the next Payment Date, the Indenture Trustee shall, no
later than five (5) days after the related Determination Date, mail to each
Holder on such date of such Class of Notes a notice to the effect that:
(i) the Indenture Trustee expects that the final payment with
respect to such Class of Notes shall be made on such Payment Date, but
only upon presentation and surrender of such Notes at the office of the
Indenture Trustee therein specified or its agent; and
(ii) no interest shall accrue on such Notes from and after the
end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Notes of
such Class on such Payment Date because of the failure of such Holder or Holders
to tender their Notes shall, on such date, be set aside and held in trust by the
Indenture Trustee and credited to the account of the appropriate non-tendering
Holder or Holders. If any Notes as to which notice has been given pursuant to
this Section 4.01(e) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Indenture Trustee shall mail
a second notice to the remaining non-tendering Noteholders to surrender their
Notes for cancellation in order to receive the final payment with respect
thereto. If within one year after the second notice all such
44
Notes shall not have been surrendered for cancellation, the Indenture Trustee
shall, directly or through an agent, mail a final notice to remaining
non-tendering Noteholders concerning surrender of their Notes but shall continue
to hold any remaining funds for the benefit of non-tendering Noteholders. The
costs and expenses of maintaining the funds in Trust Estate and of contacting
such Noteholders shall be paid out of the assets remaining in the Trust Estate.
If within one year after the final notice any such Notes shall not have been
surrendered for cancellation, the Indenture Trustee shall pay to the
Representative all remaining amounts, and all rights of non-tendering
Noteholders in or to such amounts shall thereupon cease. No interest shall
accrue or be payable to any Noteholder on any amount held in trust by the
Indenture Trustee as a result of such Noteholder's failure to surrender its
Note(s) for final payment thereof in accordance with this Section 4.01(e).
SECTION 4.02. Statements to Noteholders.
On each Payment Date, the Indenture Trustee shall prepare and
make available to each Holder of the Class A Notes, the Note Insurer and the
Pool Insurer, a statement as to the payments made on such Payment Date setting
forth:
(i) the amount of the payment made on such Payment Date to the
Holders of the Class A Notes allocable to principal, and the amount of
payment made on such Payment Date to the Holders of the Class A Notes
allocable to Prepayment Charges;
(ii) the amount of the payment made on such Payment Date to
the Holders of the Class A Notes allocable to interest;
(iii) the aggregate Servicing Fee received by the Master
Servicer during the related Due Period and such other customary
information as the Indenture Trustee deems necessary or desirable, or
which a Noteholder reasonably requests, to enable Noteholders to
prepare their tax returns;
(iv) the aggregate amount of Advances for such Payment Date;
(v) the aggregate Stated Principal Balance of the Mortgage
Loans and any REO Properties as of the close of business on such
Payment Date;
(vi) the number, aggregate Stated Principal Balance, weighted
average remaining term to maturity and weighted average Mortgage Rate
of the Mortgage Loans as of the related Due Date;
(vii) the number and aggregate unpaid Stated Principal Balance
of Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days,
(c) delinquent 90 or more days in each case, as of the last day of the
preceding calendar month, (d) as to which foreclosure proceedings have
been commenced and (e) with respect to which the related Mortgagor has
filed for protection under applicable bankruptcy laws, with respect to
whom bankruptcy proceedings are pending or with respect to whom
bankruptcy protection is in force;
45
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid Stated Principal Balance and the Stated
Principal Balance of such Mortgage Loan as of the date it became an REO
Property;
(ix) the book value and the Stated Principal Balance of any
REO Property as of the close of business on the last Business Day of
the calendar month preceding the Payment Date;
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during
the related Prepayment Period (or, in the case of Bankruptcy Losses
allocable to interest, during the related Due Period), separately
identifying whether such Realized Losses constituted Bankruptcy Losses
and the aggregate amount of Realized Losses incurred since the Closing
Date and the aggregate amount of Subsequent Recoveries received during
the related Due Period and the aggregate amount of Subsequent
Recoveries received since the Closing Date;
(xii) the aggregate amount of Expenses withdrawn from the
Collection Account or the Payment Account for such Payment Date;
(xiii) the aggregate Note Balance of each Class of Class A
Notes, after giving effect to the payments made on such Payment Date;
(xiv) the Note Rate for each such Class of Class A Notes
applicable to such Payment Date;
(xv) the Interest Distribution Amount in respect of the Class
A Notes for such Payment Date and the Available Funds Carryover Amount,
if any, with respect to the Class A Notes on such Payment Date;
(xvi) the aggregate amount of any Prepayment Interest
Shortfall for such Payment Date, to the extent not covered by payments
by the Master Servicer pursuant to Section 4.03(e);
(xvii) the aggregate amount of Relief Act Interest Shortfalls
for such Payment Date;
(xviii) the Overcollateralization Target Amount for such
Payment Date;
(xix) the Overcollateralization Increase Amount, if any, for
such Payment Date;
(xx) the Overcollateralization Reduction Amount, if any, for
such Payment Date;
46
(xxi) with respect to any Mortgage Loan as to which
foreclosure proceedings have been concluded, the loan number and unpaid
Stated Principal Balance of such Mortgage Loan as of the date of such
conclusion of foreclosure proceedings;
(xxii) with respect to Mortgage Loans as to which a Final
Liquidation has occurred, the number of Mortgage Loans, the unpaid
Stated Principal Balance of such Mortgage Loans as of the date of such
Final Liquidation and the amount of proceeds (including Liquidation
Proceeds and Insurance Proceeds) collected in respect of such Mortgage
Loans;
(xxiii) whether a Trigger Event is in effect;
(xxiv) the amount of any Net Swap Payment;
(xxv) the amount of any Swap Termination Payment;
(xxvi) the amount of any Insured Amount for such Payment Date,
separately identifying the portion of such payment allocable to
interest and principal;
(xxvii) the amount of any proceeds received pursuant to the
Pool Insurance Policy;
(xxviii) the amount of any Pool Insured Reimbursement Amount
for such Payment date and the amount received by the Pool Insurer in
respect thereof on such Payment Date, and
(xxix) the amount of the Note Insurer Reimbursement Amount and
the amount received by the Note Insurer in respect thereof on such
Payment Date.
With respect to the items described in (v), (vi), (vii),
(viii), (x), (xi) and (xxii) above, the Indenture Trustee shall set forth such
information with respect to each Loan Group and with respect to the Mortgage
Pool.
Items (i) and (ii) above shall be presented on the basis of a
Note having a $1,000 denomination. In addition, by January 31st of each calendar
year following any year during which the Notes are outstanding, the Indenture
Trustee shall furnish a report to each Noteholder of record if so requested in
writing at any time during each calendar year as to the aggregate of amounts
reported pursuant to (i) and (ii) with respect to the Notes for such calendar
year.
The Indenture Trustee will make such statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to the Noteholders, the Note Insurer, the Pool
Insurer, the Master Servicer and the Rating Agencies via the Indenture Trustee's
internet website. The Indenture Trustee's internet website shall initially be
located at https:\\xxx.xxx.xx.xxx/xxxx. Assistance in using the website can be
obtained by calling the Indenture Trustee's investor relations desk at (800)
735-7777. Parties that are unable to use the above delivery options are entitled
to have a paper copy mailed to them via first class mail by calling the investor
relations desk and indicating such. The Indenture Trustee shall
47
have the right to change the way such statements are distributed in order to
make such payment more convenient and/or more accessible to the above parties
and the Indenture Trustee shall provide timely and adequate notification to all
above parties regarding any such changes. Notwithstanding the way such
statements are distributed as provided above, the Indenture Trustee shall
transmit by electronic mail to the Note Insurer no later than the Payment Date,
such statements for such Payment Date.
The Indenture Trustee shall, upon request, furnish to each
Noteholder or Note Owner, the Note Insurer, the Pool Insurer and the Owner
Trustee, during the term of this Agreement, such periodic, special, or other
reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Noteholder or Note Owner, or otherwise with
respect to the purposes of this Agreement, all such reports or information to be
provided at the expense of the Noteholder or Note Owner in accordance with such
reasonable and explicit instructions and directions as the Noteholder or Note
Owner may provide. For purposes of this Section 4.02, the Indenture Trustee's
duties are limited to the extent that the Indenture Trustee receives timely
reports as required from the Master Servicer.
On each Payment Date the Indenture Trustee shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Class A Notes as of such Payment Date, using a format and media
mutually acceptable to the Indenture Trustee and Bloomberg.
SECTION 4.03. Remittance Reports and Other Reports to the
Indenture Trustee; Advances; Payments in Respect
of Prepayment Interest Shortfalls.
(a) On the Master Servicer Reporting Date, the Master Servicer
shall deliver to the Indenture Trustee and the Insurers by telecopy (or by such
other means as the Master Servicer, the Indenture Trustee and the Insurers may
agree from time to time) a Remittance Report with respect to the related Payment
Date. Such Remittance Report shall include (i) the amount of Advances to be made
by the Master Servicer in respect of the related Payment Date, the aggregate
amount of Advances outstanding after giving effect to such Advances, and the
aggregate amount of Nonrecoverable Advances in respect of such Payment Date and
(ii) such other information with respect to the Mortgage Loans as the Indenture
Trustee may reasonably require to perform the calculations necessary to make the
payments contemplated by Section 4.01 and to prepare the statements to
Noteholders contemplated by Section 4.02. The Indenture Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
Not later than fifteen days after each Payment Date, the
Master Servicer shall forward to the Indenture Trustee, the Insurers and the
Depositor a statement prepared by the Master Servicer setting forth the status
of the Collection Account as of the close of business on such Payment Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.04(b) and each category of withdrawal specified
in Section 3.05. Such statement may be in the form of the then current Xxxxxx
Xxx Monthly Accounting Report for its
48
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding Stated
Principal Balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Payment Date. Copies of such statement
shall be provided by the Indenture Trustee to any Noteholder and to any Person
identified to the Indenture Trustee as a prospective transferee of a Note, upon
request at the expense of the requesting party, provided such statement is
delivered by the Master Servicer to the Indenture Trustee.
(b) The amount of Advances to be made by the Master Servicer
for any Payment Date shall equal, subject to Section 4.03(d), the sum of (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date, (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Payment Account pursuant to Section 3.13 for
distribution on such Payment Date and (iii) with respect to each previously
liquidated Mortgage Loan and REO Property as to which Mortgage Loan or REO
Property, as the case may be, full settlement of a claim under the Mortgage Pool
Insurance Policy was pending as of the end of the most recently ended calendar
month, one month's interest on the Principal Balance thereof (net of related
Servicing Fees).
On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Indenture Trustee for deposit in the Payment Account an amount equal to
the aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Payment Date either (i) from its own
funds or (ii) from the Collection Account, to the extent of funds held therein
for future distribution (in which case, it shall cause to be made an appropriate
entry in the records of the Collection Account that amounts held for future
payment have been, as permitted by this Section 4.03, used by the Master
Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make an
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.05(a)(vii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Payment Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be paid to the Classes of Noteholders pursuant to
Section 4.01 on such Payment Date if such amounts held for future payment had
not been so used to make Advances. The Indenture Trustee shall provide notice to
the Master Servicer and the Insurers by telecopy by the close of business on any
Master Servicer Remittance Date in the event that the amount remitted by the
Master Servicer to the Indenture
49
Trustee on such date is less than the Advances required to be made by the Master
Servicer for the related Payment Date.
(c) The obligation of the Master Servicer to make such
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Estate pursuant to any applicable provision
of this Agreement or the Indenture, except as otherwise provided in this
Section.
(d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such Advance or Servicing Advance would, if made, constitute
a Nonrecoverable Advance or Nonrecoverable Servicing Advance. The determination
by the Master Servicer that it has made a Nonrecoverable Advance or a
Nonrecoverable Servicing Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Nonrecoverable Advance or Nonrecoverable
Servicing Advance, respectively, shall be evidenced by an Officers' Certificate
of the Master Servicer delivered to the Indenture Trustee and the Insurers.
(e) The Master Servicer shall deliver to the Indenture Trustee
for deposit into the Payment Account on or before 3:00 p.m. New York time on the
Master Servicer Remittance Date from its own funds an amount ("Compensating
Interest") equal to the lesser of (i) the aggregate of the Prepayment Interest
Shortfalls for the related Payment Date resulting solely from Principal
Prepayments during the related Prepayment Period and (ii) the amount of its
aggregate Servicing Fee for the most recently ended calendar month. The Master
Servicer shall not have the right to reimbursement for any amounts remitted to
the Indenture Trustee in respect of Prepayment Interest Shortfalls. Such amounts
so remitted shall be included in the Available Funds and paid therewith on the
next Payment Date. The Master Servicer shall not be obligated to pay any amounts
with respect to Relief Act Interest Shortfalls.
SECTION 4.04. Allocation of Realized Losses and the Pool
Insurance Policy.
(a) On or before each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. On or before each Determination Date, the Master
Servicer shall also determine as to each Mortgage Loan: (A) the total amount of
Realized Losses, if any, incurred in connection with any Deficient Valuations
made during the related Prepayment Period; and (B) the total amount of Realized
Losses, if any, incurred in connection with Debt Service Reductions in respect
of Monthly Payments due during the related Due Period. The information described
in the two preceding sentences that is to be supplied by the Master Servicer
shall be evidenced by an Officers' Certificate delivered to the Indenture
Trustee by the Master Servicer on the Master Servicer Reporting Date immediately
following the end of (x) in the case of Bankruptcy Losses
50
allocable to interest, the Due Period during which any such Realized Loss was
incurred, and (y) in the case of all other Realized Losses, the Prepayment
Period during which any such Realized Loss was incurred.
All Realized Losses on the Mortgage Loans which are not
Covered Mortgage Loans and on Covered Mortgage Loans in which a claim under the
Pool Insurance Policy has been denied pursuant to the terms of the Pool
Insurance Policy, shall be allocated by the Indenture Trustee on each
Distribution Date as follows: FIRST, in reduction of any amounts on deposit in
the Loss Reserve Account, SECOND, in reduction of Net Monthly Excess Cashflow
and THIRD, in reduction of the Overcollateralized Amount, until the
Overcollateralized Amount has been reduced to zero. No allocations of any
Realized Losses shall be made to the Note Balances of the Class A Notes.
Following such allocation, all Realized Losses on the Mortgage
Loans which are Covered Mortgage Loans shall be allocated by the Indenture
Trustee on each Distribution Date as follows: FIRST, in reduction of any amounts
on deposit in the Loss Reserve Account, SECOND, in reduction of Net Monthly
Excess Cashflow and THIRD, in reduction of the Overcollateralized Amount, until
the Overcollateralized Amount has been reduced to zero. No allocations of any
Realized Losses shall be made to the Note Balances of the Class A Notes.
Realized Losses on the Covered Mortgage Loans, to the extent not covered by Net
Monthly Excess Cashflow and the Overcollateralized Amount, shall be covered Pool
Insurer.
(b) Within ten (10) days after the Indenture Trustee receives notice or
otherwise becomes aware that:
(i) A Borrower is Four (4) Months in Default, or;
(ii) proceedings to acquire title to a Borrower's property
have been commenced,
whichever event occurs first, notice thereof shall be given to the Pool
Insurer by the Indenture Trustee upon the form furnished by the Pool Insurer,
provided, however, that failure of the Pool Insurer to furnish forms shall not
relieve the Indenture Trustee of the obligation to give notice in any reasonable
form within the required time. Thereafter, the Indenture Trustee shall report
monthly to the Pool Insurer in summary form the status of the Borrower's
account, until a claim is submitted to the Pool Insurer or until such Borrower
is less than Four (4) Months in Default. Failure by the Indenture Trustee to
give any notice or file any report required under the Pool Insurance Policy,
within the time period specified, shall not constitute failure to comply with a
material condition of the Pool Insurance Policy provided that such failure is
remedied within ten (10) days of receipt of notice thereof from the Pool
Insurer.
(c) The Indenture Trustee shall (i) receive as attorney-in-fact of the
applicable Noteholders any Pool Payment from the Pool Insurer and (ii) forward
such Pool Payment to the Indenture Trustee for deposit in the Payment Account
for payment by the Indenture Trustee to the Noteholders as provided in Section
4.01 hereof. All such amounts in the Payment Account shall remain uninvested.
Any and all Pool Payments remitted by the Indenture Trustee from
51
claims made under the Pool Insurance Policy shall not be considered payment by
the Issuer with respect to the Notes nor shall such payments discharge the
obligation of the Issuer with respect to the Notes, and the Pool Insurer shall
become the owner of such unpaid amounts due from the Issuer in respect of Pool
Payments as the deemed assignee of the Notes, as hereinafter provided. The
Indenture Trustee, each on behalf of itself and each Noteholder, hereby agree
for the benefit of the Pool Insurer that it recognizes that to the extent the
Pool Insurer pays Pool Payments to the Noteholders, the Pool Insurer shall
receive Available Funds in accordance with, but only in accordance with, Section
4.01 hereof until all such Pool Payments by the Pool Insurer have been fully
reimbursed are repaid in full.
If on any Payment Date, the Indenture Trustee determines that the Pool
Insurer has paid more under the Pool Insurance Policy than is required by the
terms hereof, the Indenture Trustee shall remit to the Pool Insurer any excess
funds received by the Indenture Trustee.
The Indenture Trustee shall keep a complete and accurate record of the
amount of the Pool Payments paid into the Note Account. The Insurers shall have
the right to inspect such record during normal business hours upon prior notice
to the Indenture Trustee.
SECTION 4.05. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Note
Interest and the amount of the Interest Payment Amount for the Notes for any
Payment Date, the aggregate amount of any Prepayment Interest Shortfalls (to the
extent not covered by payments by the Master Servicer pursuant to Section
4.03(e)) and any Relief Act Interest Shortfalls incurred in respect of the
Mortgage Loans for any Payment Date shall be allocated to reduce Net Monthly
Excess Cashflow.
SECTION 4.06. Commission Reporting.
(a) The Indenture Trustee shall reasonably cooperate with the
Depositor in connection with the Depositor's satisfying the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Indenture Trustee shall prepare on behalf of the Depositor
any Forms 8-K and 10-K customary for similar securities as required by the
Exchange Act and the Rules and Regulations of the Commission thereunder, and the
Depositor shall sign (or shall cause another entity acceptable to the Commission
to sign) and the Indenture Trustee shall file (via the Commission's Electronic
Data Gathering and Retrieval System) such forms on behalf of the Depositor (or
such other entity). The Depositor hereby grants to the Indenture Trustee a
limited power of attorney to execute any Form 8-K and file each such document on
behalf of the Depositor. Such power of attorney shall continue until the earlier
of (i) receipt by the Indenture Trustee from the Depositor of written
termination of such power of attorney and (ii) the redemption of the Notes.
Notwithstanding anything herein to the contrary, the Depositor, and not the
Indenture Trustee, shall be responsible for executing each Form 10-K filed on
behalf of the Issuer.
(b) Each Form 8-K shall be filed by the Indenture Trustee
within 15 days after each Payment Date, with a copy of the statement to the
Noteholders for such Payment Date as an
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exhibit thereto. Prior to March 30th of each year (or such earlier date as may
be required by the Exchange Act and the Rules and Regulations of the
Commission), the Indenture Trustee shall file a Form 10-K, in substance as
required by applicable law or applicable Commission staff's interpretations.
Such Form 10-K shall include as exhibits the Master Servicer's annual statement
of compliance described under Section 3.19 and the accountant's report described
under Section 3.20, in each case to the extent they have been timely delivered
to the Indenture Trustee. If they are not so timely delivered, the Indenture
Trustee shall file an amended Form 10-K including such documents as exhibits
reasonably promptly after they are delivered to the Indenture Trustee. The
Indenture Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Indenture Trustee's inability or failure to obtain any information not resulting
from its own negligence or willful misconduct. The Form 10-K shall also include
a certification in the form attached hereto as Exhibit E-1 (the
"Certification"), which shall be signed by the senior officer of the Depositor
in charge of securitization.
(c) In addition, the Indenture Trustee shall sign a
certification (in the form attached hereto as Exhibit E-2) for the benefit of
the Depositor and its officers, directors and Affiliates regarding certain
aspects of items 1 through 3 of the Certification (provided, however, that the
Indenture Trustee shall not undertake an analysis of the accountant's report
attached as an exhibit to the Form 10-K). The Indenture Trustee's certification
shall be delivered to the Depositor by no later than March 18th of each year (or
if such day is not a Business Day, the immediately preceding Business Day) and
the Depositor shall deliver the Certification to the Indenture Trustee for
filing no later than March 20th of each year (or if such day is not a Business
Day, the immediately preceding Business Day).
In addition, the Indenture Trustee shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Indenture Trustee's obligations
under this Section 4.02 or the Indenture Trustee's negligence, bad faith or
willful misconduct in connection therewith. The Depositor shall indemnify and
hold harmless the Indenture Trustee and its officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Depositor's obligations
under this Section 4.02 or the Depositor's negligence, bad faith or willful
misconduct in connection therewith. If the indemnification provided for herein
is unavailable or insufficient to hold harmless the Depositor or the Indenture
Trustee, as applicable, then the other party, in connection with a breach of its
respective obligations under this Section 4.02 or its respective negligence, bad
faith or willful misconduct in connection therewith, agrees that it shall
contribute to the amount paid or payable by the other party as a result of the
losses, claims, damages or liabilities of the other party in such proportion as
is appropriate to reflect the relative fault of the Depositor on the one hand
and the Indenture Trustee on the other.
(d) Upon any filing with the Commission, the Indenture Trustee
shall promptly deliver to the Depositor a copy of any executed report, statement
or information.
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(e) Prior to January 30th of the first year in which the
Indenture Trustee is able to do so under applicable law, the Indenture Trustee
shall file a Form 15 Suspension Notification with respect to the Issuer.
(f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.02 comply with the reporting requirements under
the Exchange Act, the Indenture Trustee hereby agrees that it shall reasonably
cooperate to amend the provisions of this Section 4.02 (in accordance with
Section 7.01) in order to comply with such amended reporting requirements and
such amendment of this Section 4.02. Any such amendment may result in the
reduction of the reports filed by the Depositor under the Exchange Act.
Notwithstanding the foregoing, the Indenture Trustee shall not be obligated to
enter into any amendment pursuant to this Section that adversely affects its
obligations and immunities under this Agreement.
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ARTICLE V
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 5.01. Liability of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.
SECTION 5.02. Merger or Consolidation of the Depositor or the
Master Servicer.
Subject to the following paragraph, the Depositor shall keep
in full effect its existence, rights and franchises as a corporation under the
laws of the jurisdiction of its incorporation. Subject to the following
paragraph, the Master Servicer shall keep in full effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Xxxxxx Mae or Xxxxxxx Mac in good standing. The Depositor and the Master
Servicer each shall obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Notes or any of the Mortgage Loans and to perform its respective duties under
this Agreement.
The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Mae or Xxxxxxx Mac; and provided further that the Rating Agencies'
ratings of the Notes in effect immediately prior to such merger or consolidation
shall not be qualified, reduced or withdrawn as a result thereof (without regard
to the Note Insurance Policy) (as evidenced by a letter to such effect from the
Rating Agencies). The successor Master Servicer shall have a minimum servicing
rating of "SQ3" by Xxxxx'x and an "average" rating by S&P.
SECTION 5.03. Limitation on Liability of the Depositor, the
Master Servicer and Others.
None of the Depositor, the Insurers, the Master Servicer or
any of the directors, officers, employees or agents of the Depositor or the
Master Servicer shall be under any liability to the Issuer or the Noteholders
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,
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that this provision shall not protect the Depositor, the Insurers, the Master
Servicer or any such person against any breach of warranties, representations or
covenants made herein, or against any specific liability imposed on the Master
Servicer pursuant hereto, or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Insurers, the Master Servicer or the
Indenture Trustee and any director, officer, employee or agent of the Depositor,
the Insurers, the Master Servicer or the Indenture Trustee may rely in good
faith on any document of any kind which, PRIMA FACIE, is properly executed and
submitted by any Person respecting any matters arising hereunder.
The Depositor, the Insurers, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Insurers, or the
Master Servicer shall be indemnified and held harmless by the Issuer against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Notes, other than any loss, liability or expense
relating to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or, in the case of the Depositor and the Master Servicer, any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the
Insurers or the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, in its opinion, does not involve it
in any expense or liability; provided, however, that each of the Depositor, the
Insurers and the Master Servicer may in its discretion undertake any such action
which it may deem necessary or desirable with respect to this Agreement and the
rights and duties of the parties hereto and the interests of the Noteholders
hereunder. In such event, unless the Depositor or the Master Servicer acts
without the consent of the Holders of Notes evidencing more than 51% of the Note
Balance of the Notes (which consent shall not be necessary in the case of
litigation or other legal action by either to enforce their respective rights or
defend themselves hereunder), the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Issuer, and the Depositor, the Insurers and the Master Servicer shall be
entitled to be reimbursed therefor from the Collection Account as and to the
extent provided in Section 3.05, any such right of reimbursement being prior to
the rights of the Noteholders to receive any amount in the Collection Account.
SECTION 5.04. Limitation on Resignation of the Master
Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Indenture Trustee, the Pool Insurer, the Note Insurer and
written confirmation from each Rating Agency (which confirmation shall be
furnished to the Depositor, the Insurers and the Indenture Trustee) that such
resignation shall not cause such Rating Agency to reduce the then current rating
of the Notes (without regard to
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the Note Insurance Policy). Any such determination pursuant to clause (i) of the
preceding sentence, permitting the resignation of the Master Servicer, shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Indenture Trustee and the Insurers. No
resignation of the Master Servicer shall become effective until the Indenture
Trustee or a successor servicer acceptable to the Note Insurer and the Pool
Insurer shall have assumed the Master Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.
Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, nor authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.
SECTION 5.05. Rights of the Depositor in Respect of the Master
Servicer.
The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the
Insurers and the Indenture Trustee, upon reasonable notice, during normal
business hours, access to all records maintained by the Master Servicer (and any
such Sub-Servicer) in respect of the Master Servicer's rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the Insurers and the Indenture Trustee
its (and any such Sub-Servicer's) most recent financial statements and such
other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor, the
Insurers and the Indenture Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Master Servicer's
(or any such Sub-Servicer's) written consent, except as required pursuant to
this Agreement or to the extent that it is appropriate to do so (i) in working
with legal counsel, auditors, taxing authorities or other governmental agencies,
rating agencies or reinsurers or (ii) pursuant to any law, rule, regulation,
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over the Depositor, the Indenture Trustee or the
Issuer, and in either case, the Depositor, the Insurers or the Indenture
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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SECTION 5.06. Sub-Servicing Agreements Between the Master
Servicer and Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrade by any Rating Agency of the ratings on any Class of Notes (without
regard to the Note Insurance Policy) and the Insurers shall have consented to
such Sub-Servicing Agreement) with Sub-Servicers, for the servicing and
administration of the Mortgage Loans.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the
Sub-Servicing Agreement, (ii) an institution approved as a mortgage loan
originator by the Federal Housing Administration or an institution the deposit
accounts in which are insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae
approved mortgage servicer. Each Sub-Servicing Agreement must impose on the
Sub-Servicer requirements conforming to the provisions set forth in Section 5.11
and provide for servicing of the Mortgage Loans consistent with the terms of
this Agreement. The Master Servicer shall examine each Sub-Servicing Agreement
and shall be familiar with the terms thereof. The terms of any Sub-Servicing
Agreement shall not be inconsistent with any of the provisions of this
Agreement. The Master Servicer and the Sub-Servicers may enter into and make
amendments to the Sub-Servicing Agreements or enter into different forms of
Sub-Servicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Noteholders or the Insurers without the consent of the Holders
of Notes evidencing more than 66% of the Note Balance of the Notes or the
Insurers. Any variation without the consent of the Holders of Notes evidencing
more than 66% of the Note Balance of the Notes or the Insurers from the
provisions set forth in Section 5.11, provisions relating to insurance in
Section 3.10 or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub-Servicing Accounts or the timing and amount of remittances by
the Sub-Servicers to the Master Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Master Servicer
shall deliver to the Indenture Trustee and the Insurers copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Indenture Trustee, the Noteholders and the Insurers,
shall enforce the obligations of each Sub-Servicer under the related
Sub-Servicing Agreement and of the Seller under the Mortgage Loan Purchase
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement, or to
purchase a Mortgage Loan on account of missing or defective documentation or on
account of a breach of a representation, warranty or covenant, as described in
Section 2.03(a). Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements, and the
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pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement, to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans or (ii) from a
specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed. Enforcement of the Mortgage Loan
Purchase Agreement against the Seller shall be effected by the Master Servicer
to the extent it is not the Seller, and otherwise by the Indenture Trustee, in
accordance with the foregoing provisions of this paragraph.
SECTION 5.07. Successor Sub-Servicers.
The Master Servicer, with the consent of the Insurers, shall
be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such
Sub-Servicer shall be assumed simultaneously by the Master Servicer without any
act or deed on the part of such Sub-Servicer or the Master Servicer, and the
Master Servicer either shall service directly the related Mortgage Loans or
shall enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 5.06.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Indenture Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Master Servicer shall, for any reason, no longer be the Master Servicer
(including termination due to a Master Servicer Event of Default).
SECTION 5.08. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Indenture Trustee, the Noteholders and the Insurers for
the servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Sub-Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification. SECTION 5.09. No Contractual
Relationship Between Sub-Servicers and the Insurers, the Indenture Trustee or
Noteholders.
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Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Insurers, the Indenture Trustee and Noteholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 5.10. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.
SECTION 5.10. Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Master Servicer shall for any reason no
longer be the master servicer (including termination due to a Master Servicer
Event of Default), the Indenture Trustee or its designee shall thereupon assume
(or cause its designee or the successor master servicer for the Indenture
Trustee appointed pursuant to Section 5.02 to assume) all of the rights and
obligations of the Master Servicer under each Sub-Servicing Agreement that the
Master Servicer may have entered into, unless the Indenture Trustee elects to
terminate any Sub-Servicing Agreement in accordance with its terms as provided
in Section 5.07. Upon such assumption, the Indenture Trustee, its designee or
the successor servicer for the Indenture Trustee appointed pursuant to Section
5.02 shall be deemed, subject to Section 5.07, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Indenture Trustee, its designee or
any successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the
Indenture Trustee, deliver to the assuming party all documents and records
relating to each Sub-Servicing Agreement and the Mortgage Loans then being
serviced and an accounting of amounts collected and held by or on behalf of it,
and otherwise use its best efforts to effect the orderly and efficient transfer
of the Sub-Servicing Agreements to the assuming party.
SECTION 5.11. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer shall be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage
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Loans received by the Sub-Servicer less its servicing compensation to the extent
permitted by the Sub-Servicing Agreement, and shall thereafter deposit such
amounts in the Sub-Servicing Account, in no event more than two Business Days
after the deposit of such funds into the clearing account. The Sub-Servicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
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ARTICLE VI
DEFAULT
SECTION 6.01. Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein,
means any one of the following events:
(i) any failure by the Master Servicer to remit to the
Indenture Trustee for payment to the Noteholders any payment (other
than an Advance required to be made from its own funds on any Master
Servicer Remittance Date pursuant to Section 4.01) required to be made
under the terms of the Notes and this Agreement which continues
unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Depositor or the
Indenture Trustee (in which case notice shall be provided by telecopy),
or to the Master Servicer, the Depositor and the Indenture Trustee by
the Note Insurer, the Pool Insurer or the Holders of Notes evidencing
more than 25% of the Note Balance of the Notes; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any of the covenants or
agreements on the part of the Master Servicer contained in the Notes or
in this Agreement (or, if the Master Servicer is the Seller, the
failure of the Seller to repurchase a Mortgage Loan as to which a
breach has been established that requires a repurchase pursuant to the
terms of Section 7 of the Mortgage Loan Purchase Agreement) which
continues unremedied for a period of 45 days after the earlier of (i)
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Master Servicer by the
Depositor or the Indenture Trustee, or to the Master Servicer, the
Depositor and the Indenture Trustee by the Note Insurer, the Pool
Insurer or the Holders of Notes evidencing more than 25% of the Note
Balance of the Notes and (ii) actual knowledge of such failure by a
Servicing Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and if such proceeding is being contested by the Master
Servicer in good faith, such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days or results in
the entry of an order for relief or any such adjudication or
appointment; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and
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liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property;
or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(vi) any failure by the Master Servicer of the Master Servicer
Termination Test; or
(vii) any failure of the Master Servicer to make any Advance
on any Master Servicer Remittance Date required to be made from its own
funds pursuant to Section 4.01 which continues unremedied until 3:00
p.m. New York time on the Business Day immediately following the Master
Servicer Remittance Date.
If a Master Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Indenture Trustee may, at the written direction of the Holders of Notes
evidencing more than 51% of the Note Balance of the Notes (with the consent of
the Note Insurer so long as there is no Note Insurer Default), or at the
direction of the Note Insurer (with respect to clause (i)), or at the direction
of either the Note Insurer or the Pool Insurer (with respect to clauses (ii)
through (v)) or at the direction of the Controlling Insurer (with respect to
clause (vi)), shall, by notice in writing to the Master Servicer, the Issuer,
the Depositor and the Insurers terminate all of the rights and obligations of
the Master Servicer in its capacity as Master Servicer under this Agreement, to
the extent permitted by law, and in and to the Mortgage Loans and the proceeds
thereof. If a Master Servicer Event of Default described in clause (vii) hereof
shall occur, the Indenture Trustee shall, by notice in writing to the Master
Servicer, the Insurers, the Issuer and the Depositor, terminate all of the
rights and obligations of the Master Servicer in its capacity as Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
and the Indenture Trustee as successor Master Servicer or a successor Master
Servicer appointed in accordance with Section 6.02, shall immediately make such
Advance (which Advance shall be part of Available Funds for such Payment Date)
and assume, pursuant to Section 6.02, the duties of a successor Master Servicer.
On or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Notes (other than as a Holder of any Note) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Indenture Trustee pursuant to
and under this Section and, without limitation, the Indenture Trustee is hereby
authorized and empowered, as attorney-in-fact or otherwise, to execute and
deliver on behalf of and at the expense of the Master Servicer, any and all
documents and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer agrees, at its
sole cost and expense, promptly (and in any event no later than ten Business
Days subsequent to such notice) to provide the Indenture Trustee with all
documents and records requested by it to enable it to assume the Master
Servicer's functions under this Agreement, and to cooperate with the
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Indenture Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Indenture Trustee for administration
by it of all cash amounts which at the time shall be or should have been
credited by the Master Servicer to the Collection Account held by or on behalf
of the Master Servicer, the Payment Account or any REO Account or Escrow Account
held by or on behalf of the Master Servicer or thereafter be received with
respect to the Mortgage Loans or any REO Property serviced by the Master
Servicer (provided, however, that the Master Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Agreement on
or prior to the date of such termination, whether in respect of Advances or
otherwise, and shall continue to be entitled to the benefits of Section 5.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 6.01, the Indenture Trustee
shall not be deemed to have knowledge of a Master Servicer Event of Default
unless a Responsible Officer of the Indenture Trustee assigned to and working in
the Indenture Trustee's Corporate Trust Office has actual knowledge thereof or
unless written notice is received by the Indenture Trustee of any such event and
such notice references the Notes, the Trust Estate or this Agreement.
The Indenture Trustee shall be entitled to be reimbursed by
the Master Servicer (or by the Issuer if the Master Servicer is unable to
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 Indenture Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Indenture Trustee to service the
Mortgage Loans properly and effectively.
SECTION 6.02. Indenture Trustee to Act; Appointment of
Successor.
(a) Subject to the rights of the Insurers as set forth below,
on and after the time the Master Servicer receives a notice of termination, the
Indenture Trustee shall be the successor in all respects to the Master Servicer
in its capacity as Master 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 and arising thereafter placed on the
Master Servicer (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03(c) and its obligation to deposit amounts in respect of
losses pursuant to Section 3.06) by the terms and provisions hereof including,
without limitation, the Master Servicer's obligations to make Advances pursuant
to Section 4.01; provided, however, that if the Indenture Trustee is prohibited
by law or regulation from obligating itself to make advances regarding
delinquent mortgage loans, then the Indenture Trustee shall not be obligated to
make Advances pursuant to Section 4.01; and provided further, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by Section 6.01 shall not be considered
a default by the Indenture Trustee as successor to the Master Servicer
hereunder; provided, however, it is understood and acknowledged by the parties
that there shall be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, effective from
and after the time the Master Servicer receives a notice of
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termination or immediately upon assumption of the obligations to make Advances,
the Indenture Trustee shall be entitled to the Servicing Fee and all funds
relating to the Mortgage Loans to which the Master Servicer would have been
entitled if it had continued to act hereunder (other than amounts which were due
or would become due to the Master Servicer prior to its termination or
resignation).
If the Master Servicer is terminated pursuant to Section 6.01
by the Note Insurer, the Note Insurer may choose a successor Master Servicer
that meets the requirements of a successor Master Servicer under this Agreement,
with the consent of the Pool Insurer, such consent shall not be unreasonably
withheld. Alternatively, if the Master Servicer is terminated pursuant to
Section 6.01 by the Pool Insurer, the Pool Insurer may choose a successor Master
Servicer that meets the requirements of a successor Master Servicer under this
Agreement, with the consent of the Note Insurer, such consent shall not be
unreasonably withheld.
Notwithstanding the above and subject to the next paragraph,
in the event that neither the Note Insurer or the Pool Insurer appoints a
successor Master Servicer in accordance with preceding paragraph, the Indenture
Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so
act or if it is prohibited by law from making advances regarding delinquent
mortgage loans, or if the Holders of Notes evidencing more than 51% of the Note
Balance of the Notes, the Note Insurer or the Pool Insurer so request in writing
to the Indenture Trustee promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to each Rating Agency (with confirmation from the Rating Agencies
that such appointment shall not result in the reduction or withdrawal of the
rating of any outstanding Class of Notes (without regard to the Note Insurance
Policy)) and acceptable to the Note Insurer and the Pool Insurer and having a
net worth of not less than $15,000,000 as the successor to the Master Servicer
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement. No appointment of a successor to the Master Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Indenture
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Master Servicer as such hereunder. The Depositor, the Issuer, the Indenture
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the Master Servicer under this Agreement, the
Indenture Trustee shall act in such capacity as hereinabove provided.
In the event that the Note Insurer or Pool Insurer, as
appropriate, has not selected a successor Master Servicer, upon removal or
resignation of the Master Servicer, the Indenture Trustee, with the cooperation
of the Depositor and the Issuer, (x) shall solicit bids for a successor Master
Servicer as described below and (y) pending the appointment of a successor
Master Servicer as a result of soliciting such bids, shall serve as Master
Servicer of the Mortgage Loans serviced by such predecessor Master Servicer. The
Indenture Trustee shall solicit, by public announcement, bids from housing and
home finance institutions, banks and mortgage servicing
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institutions meeting the qualifications set forth above (including the Indenture
Trustee or any affiliate thereof) (including that such mortgage loan servicing
institution shall be acceptable to each Rating Agency, the Note Insurer and the
Pool Insurer). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Indenture Trustee, the successor Master Servicer and the Depositor; provided,
however, that no such fee shall exceed the Servicing Fee. Within 30 days after
any such public announcement, the Indenture Trustee, with the cooperation of the
Depositor, shall negotiate in good faith and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
shall pay to obtain such servicing. The Indenture Trustee upon receipt of the
purchase price shall pay such purchase price to the Master Servicer being so
removed, after deducting from any sum received by the Indenture Trustee from the
successor to the Master Servicer in respect of such sale, transfer and
assignment all costs and expenses of any public announcement and of any sale,
transfer and assignment of the servicing rights and responsibilities reasonably
incurred hereunder. After such deductions, the remainder of such sum shall be
paid by the Indenture Trustee to the Master Servicer at the time of such sale.
(b) If the Master Servicer fails to remit to the Indenture
Trustee for payment to the Noteholders any payment required to be made under the
terms of the Notes and this Agreement (for purposes of this Section 7.02(b), a
"Remittance") because the Master Servicer is the subject of a proceeding under
the federal Bankruptcy Code and the making of such Remittance is prohibited by
Section 362 of the federal Bankruptcy Code, the Indenture Trustee shall upon
notice of such prohibition, regardless of whether it has received a notice of
termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Payment Account on the related Payment Date. The
Indenture Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Indenture Trustee can reasonably be
expected to be ultimately recoverable from Stayed Funds and (ii) the Indenture
Trustee is not prohibited by law from making such advance or obligating itself
to do so. Upon remittance of the Stayed Funds to the Indenture Trustee or the
deposit thereof in the Payment Account by the Master Servicer, a trustee in
bankruptcy or a federal bankruptcy court, the Indenture Trustee may recover the
amount so advanced, without interest, by withdrawing such amount from the
Payment Account; however, nothing in this Agreement shall be deemed to affect
the Indenture Trustee's rights to recover from the Master Servicer's own funds
interest on the amount of any such advance. If the Indenture Trustee at any time
makes an advance under this Subsection which it later determines in its good
faith judgment shall not be ultimately recoverable from the Stayed Funds with
respect to which such advance was made, the Indenture Trustee shall be entitled
to reimburse itself for such advance, without interest, by withdrawing from the
Payment Account, out of amounts on deposit therein, an amount equal to the
portion of such advance attributable to the Stayed Funds.
(c) If the Master Servicer is terminated pursuant to Section
6.01, then the successor Master Servicer shall not be permitted to reimburse
itself directly for Advances or Servicing Advances under Section 3.05(a)(ii),
Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) if the Master
Servicer has not been fully reimbursed for its Advances and Servicing Advances,
but instead the successor Master Servicer shall include such amounts in the
applicable
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remittance to the Indenture Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Indenture Trustee is hereby authorized to pay to
the terminated Master Servicer (or the related Advancing Person in accordance
with Section 3.23) and the successor Master Servicer, as applicable,
reimbursements for Advances and Servicing Advances from the Payment Account to
the same extent each such Master Servicer would have been permitted to reimburse
itself for such Advances and/or Servicing Advances in accordance with Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii),
as the case may be. All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis. At such time as the Master Servicer (or related
Advancing Person) has been reimbursed for all Advances and Servicing Advances
made by it, the successor Master Servicer shall no longer be required to remit
in accordance with the first sentence of this Section 6.02(c) and shall then be
permitted to reimburse itself directly for Advances and Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii).
SECTION 6.03. Notification to Noteholders.
(a) Upon any termination of the Master Servicer pursuant to
Section 6.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 6.02 above, the Indenture Trustee shall give prompt written
notice thereof to Noteholders, the Note Insurers and the Pool Insurer at their
respective addresses appearing in the Note Register.
(b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Indenture Trustee becomes aware of the occurrence of
such an event, the Indenture Trustee shall transmit by mail to the Insurers and
to all Holders of Notes notice of each such occurrence, unless such default or
Master Servicer Event of Default shall have been cured or waived.
SECTION 6.04. Waiver of Master Servicer Events of Default.
The Holders of Notes evidencing 100% of the Note Balance of the Notes
(with the consent of the Note Insurer) affected by any default or Master
Servicer Event of Default under clause 6.01(i) or (vii) may waive such default
or Master Servicer Event of Default. The Holders of Notes evidencing more than
66% of the Note Balance of the Notes (with the consent of the Note Insurer or
the Pool Insurer) affected by any default or Master Servicer Event of Default
under clauses (ii) through (v) of Section 6.01 may waive such default or Master
Servicer Event of Default. The Holders of Notes evidencing more than 66% of the
Note Balance of the Notes (with the consent of the Controlling Insurer) affected
by any default or Master Servicer Event of Default under clause (vi) of Section
6.01 may waive such default or Master Servicer Event of Default. Upon any such
waiver of a default or Master Servicer Event of Default, such default or Master
Servicer Event of Default shall cease to exist and shall be deemed to have been
remedied for every purpose hereunder. No such waiver shall extend to any
subsequent or other default or Master Servicer Event of Default or impair any
right consequent thereon except to the extent expressly so waived.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. Amendment.
This Agreement may be amended from time to time by the parties hereto
(with the consent of the Note Insurer and the Pool Insurer), provided that any
amendment be accompanied by a letter from the Rating Agencies that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to
the Notes (without regard to the Note Insurance Policy). Notwithstanding any of
the other provisions of this Section 7.01, none of the parties hereto shall
enter into any amendment that would adversely affect the rights of the Swap
Provider without the prior written consent of the Swap Provider.
SECTION 7.02. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 7.03. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if when delivered to:
(a) in the case of the Depositor:
Argent Securities Inc.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Capital Markets (telecopy number: (000) 000-0000)
(b) in the case of the Master Servicer:
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
General Counsel (telecopy number: (000) 000-0000)
(c) in the case of Rating Agencies:
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Xxxxx'x Investors Service, Inc.
4th Floor
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgage Monitoring Unit
Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc.
00 Xxxxx Xxxxxx - 41st Floor
New York, New York 10041
Attention: Asset Backed Surveillance Group
(d) in the case of the Owner Trustee, the Corporate Trust Office:
U.S. Bank Trust National Association
000 Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(e) in the case of the Issuer:
Argent Mortgage Loan Trust 2005-W1
c/o U.S. Bank Trust National Association
000 Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(f) in the case of the Indenture Trustee:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration (AR0501)
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party and the Insurers. Any notice required or
permitted to be mailed to a Noteholder shall be given by first class mail,
postage prepaid, at the address of such Noteholder as shown in the Note
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Noteholder receives such notice. Any notice or other document required to be
delivered or mailed by the Indenture Trustee to any Rating Agency shall be given
on a reasonable efforts basis and only as a matter of courtesy and accommodation
and the Indenture Trustee shall have no liability for failure to deliver such
notice or document to any Rating Agency.
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SECTION 7.04. 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 Notes or the rights of the Noteholders thereof.
SECTION 7.05. Third-Party Beneficiaries.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, the Noteholders, the Owner Trustee, the Note Insurer, the Pool
Insurer, the Indenture Trustee, the Swap Provider and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person will have any right or obligation hereunder. The
Indenture Trustee shall have the right to exercise all rights of the Issuer
under this Agreement.
SECTION 7.06. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 7.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 7.08. Termination.
The respective obligations and responsibilities of the Depositor, the
Master Servicer and the Issuer created hereby shall terminate upon the
satisfaction and discharge of the Indenture pursuant to Section 4.10 thereof.
SECTION 7.09. No Petition.
The Depositor and the Master Servicer, by entering into this Agreement,
hereby covenant and agree that they will not at any time institute against the
Issuer, or join in any institution against the Issuer, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations of the Issuer. This section shall survive the
termination of this Agreement by one year.
SECTION 7.10. No Recourse.
Each of the Depositor and the Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Agreement.
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SECTION 7.11. Indenture Trustee Rights.
The Indenture Trustee shall be entitled to the same rights,
protections, indemnities and immunities afforded to it under the Indenture as if
specifically set forth herein.
SECTION 7.12. Third Party Rights.
Each of the Insurers and the Swap Provider shall be deemed to be a
third-party beneficiary to the same extent as if it were a party hereto, and
shall have the right to enforce the provisions of this Agreement.
SECTION 7.13. Certain Matters Regarding the Master Servicer
and the Seller.
(a) The Seller will have the option to purchase, at any one
time, 1.0% (and in any case, at least 5 Mortgage Loans) of the Mortgage Loans,
by aggregate Stated Principal Balance of the Mortgage Loans as of such date, at
a purchase price equal to the greater of (A) the aggregate Purchase Price of
such Mortgage Loans and (B) the aggregate fair market value of such Mortgage
Loans. The Mortgage Loans that may be purchased by the Seller pursuant to this
paragraph will be selected by the Seller in its sole discretion.
(b) Notwithstanding anything to the contrary anywhere in this
Agreement, the rights given to the Seller in Section 7.13(a) and the rights
given to the Master Servicer in Section 7.13(b) shall terminate upon the
transfer of the Certificates from the Seller or any of its Affiliates to an
unaffiliated third-party.
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ARTICLE VIII
DUTIES OF THE MASTERSERVICER AS ADMINISTRATOR
SECTION 8.01. Administrative Duties.
(a) Duties with Respect to the Indenture. The Administrator
shall perform all its duties and the duties of the Issuer under the Indenture.
In addition, the Administrator shall consult with the Owner Trustee as the
Administrator deems appropriate regarding the duties of the Issuer under the
Indenture. The Administrator shall monitor the performance of the Issuer and
shall advise the Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture. The Administrator shall prepare for
execution by the Issuer or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture. In furtherance of the foregoing, the Administrator
shall take all necessary action that is the duty of the Issuer to take pursuant
to the Indenture.
(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Administrator set forth
in this Agreement or any of the Basic Documents, the Administrator
shall perform such calculations and shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to
this Agreement or any of the Basic Documents or under state and federal
tax and securities laws (including, but not limited to, UCC filings in
applicable jurisdictions and annual compliance certificates, if any),
and at the request of the Owner Trustee or the Indenture Trustee shall
take all appropriate action that it is the duty of the Issuer to take
pursuant to this Agreement or any of the Basic Documents. In accordance
with the directions of the Issuer or the Owner Trustee, the
Administrator shall administer, perform or supervise the performance of
such other activities in connection with the Notes (including the Basic
Documents) as are not covered by any of the foregoing provisions and as
are expressly requested by the Issuer, the Indenture Trustee or the
Owner Trustee.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Administrator shall be responsible
for promptly notifying the Owner Trustee and Certificate Paying Agent
in the event that any withholding tax is imposed on the Issuer's
payments (or allocations of income) to an Owner (as defined in the
Trust Agreement) as contemplated in Section 5.03 of the Trust
Agreement. Any such notice shall be in writing and specify the amount
of any withholding tax required to be withheld by the Owner Trustee or
the Certificate Paying Agent pursuant to such provision.
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(iii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Administrator's opinion, no less favorable to the
Issuer in any material respect than with terms made available to
unrelated third parties.
(c) Tax Matters. The Administrator shall prepare, on behalf of
the Owner Trustee, financial statements and such annual or other reports of the
Issuer as are necessary for the preparation by the Indenture Trustee of tax
returns and information reports as provided in Section 5.03 of the Trust
Agreement, including, without limitation, Form 1099.
(d) Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action pursuant to this Article VIII unless
within a reasonable time before the taking of such action, the Administrator
shall have notified the Owner Trustee and the Indenture Trustee of the proposed
action and the Owner Trustee and, with respect to items (A), (B), (C) and (D)
below, the Indenture Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
(I) the amendment of or any supplement to the
Indenture;
(II) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Mortgage Loans);
(III) the amendment, change or modification of this
Agreement or any of the Basic Documents to which the Indenture
Trustee or the Owner Trustee, as applicable, is a party;
(IV) the appointment of successor Certificate Paying
Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Servicers or the
consent to the assignment by the Certificate Registrar, Paying
Agent or Indenture Trustee of its obligations under the
Indenture; and
(V) the removal of the Indenture Trustee.
(e) Master Servicer shall act as Administrator. By execution
of this Agreement, the Master Servicer agrees to be bound as Administrator and
shall perform the obligations of the Administrator as described herein.
SECTION 8.02. Records. The Administrator shall maintain
appropriate books of account and records relating to services performed under
this Agreement, which books of account and records shall be accessible for
inspection by the Issuer, the Insurers, the Indenture Trustee and the Owner
Trustee at any time during normal business hours.
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SECTION 8.03. Additional Information to be Furnished. The
Administrator shall furnish to the Issuer, the Indenture Trustee, the Insurers
and the Owner Trustee from time to time such additional information regarding
the Mortgage Loans and the Notes as the Issuer, the Indenture Trustee, the Owner
Trustee or the Insurers shall reasonably request.
SECTION 8.04. No Recourse to Owner Trustee. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by U.S. Bank Trust National Association, not individually or
personally, but solely as Owner Trustee of Argent Mortgage Loan Trust 2005-W1,
in the exercise of the powers and authority conferred and vested in it, (b) each
of the representations, undertakings and agreements herein made on the part of
the Issuer is made and intended not as personal representations, undertakings
and agreements by U.S. Bank Trust National Association but is made and intended
for the purpose for binding only the Issuer, (c) nothing herein contained shall
be construed as creating any liability of U.S. Bank Trust National Association,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall U.S. Bank Trust National Association
be personally liable for the payment of any indebtedness or expenses of the
Issuer or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Agreement or
any other related documents.
SECTION 8.05. Termination of Certain of Swap Provider Rights.
Notwithstanding anything to the contrary anywhere in this Agreement,
all rights of the Swap Provider under this Agreement shall permanently cease to
be operable upon the date on which the Interest Rate Swap Agreement has been
terminated and all payments required to be made under the Interest Rate Swap
Agreement have been made.
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ARTICLE IX
CERTAIN MATTERS REGARDING THE NOTE INSURER
SECTION 9.01. Exercise of Rights of Holder of the Class A
Notes.
Each of the Issuer, the Depositor, the Master Servicer and the
Indenture Trustee, and, by accepting its Certificate, each Holder of a Class A
Note, agrees that unless a Note Insurer Default has occurred and is continuing,
the Note Insurer shall have the right to exercise all rights of the Holders of
the Class A Notes under this Agreement without any further consent of the
Holders of the Class A Notes.
In addition, each Class A Noteholder agrees that, unless a
Note Insurer Default has occurred and is continuing, the rights specifically set
forth above may be exercised by the Class A Noteholders only with the prior
written consent of the Note Insurer.
SECTION 9.02. Indenture Trustee to Act Solely with Consent of
Note Insurer.
Unless a Note Insurer Default has occurred and is continuing,
the Indenture Trustee shall not: (i) agree to any amendment pursuant to Section
7.01 or (ii) undertake any litigation at the request or direction of the
Noteholders, without the prior written consent of the Note Insurer which consent
shall not be unreasonably withheld; provided, however, nothing contained herein
shall prohibit or prevent the Indenture Trustee from defending itself or the
Issuer or taking any action related thereto.
SECTION 9.03. Trust and Accounts Held for Benefit of Note
Insurer.
The Indenture Trustee shall hold the Trust Estate and the
Mortgage Files for the benefit of the Noteholders, the Swap Provider, the Note
Insurer and the Pool Insurer and all references in this Agreement (including,
without limitation, in Sections 2.01 and 2.02) and in the Notes to the benefit
of Holders of the Notes shall be deemed to include the Note Insurer and the Pool
Insurer. The Indenture Trustee shall cooperate in all reasonable respects with
any reasonable request by the Note Insurer or the Pool Insurer for action to
preserve or enforce the Note Insurer's and Pool Insurer's rights or interests
under this Agreement and the Note Insurer's rights under the Class A Notes.
The Master Servicer hereby acknowledges and agrees that it
shall service and administer the related Mortgage Loans and any REO Properties,
and shall maintain the Collection Account and any REO Account, for the benefit
of the Noteholders and for the benefit of the Note Insurer, the Pool Insurer and
the Swap Provider, and all references in this Agreement (including, without
limitation, in Section 3.01) to the benefit of or actions on behalf of the
Noteholders shall be deemed to include the Note Insurer and the Pool Insurer.
Unless a Note Insurer Default has occurred and is continuing, neither the Master
Servicer nor the Depositor shall undertake any litigation (other than litigation
to enforce their respective rights hereunder or
75
defend themselves against claims made against them) without the prior consent of
the Note Insurer or the Pool Insurer.
SECTION 9.04. Claims Upon the Note Insurance Policy; Note
Insurance Policy Payments Account.
(a) If, on the second Business Day prior to a Payment Date,
the Indenture Trustee determines that a Deficiency Amount for such Payment Date
is greater than zero, then the Indenture Trustee shall give notice to the Note
Insurer by telephone or telecopy of the amount of such Deficiency Amount. Such
notice of such Deficiency Amount shall be confirmed in writing in the form set
forth as Exhibit A to the Note Insurance Policy, to the Note Insurer and the
fiscal agent, if any, at or before 12:00 p.m. New York time on the second
Business Day prior to such Payment Date. Following receipt by the Note Insurer
of such notice in such form, the Note Insurer will pay any amount payable under
the Note Insurance Policy on the later to occur of (i) 12:00 noon New York time
on the second Business Day following such receipt and (ii) 12:00 noon New York
time on the Payment Date to which such Deficiency Amount relates, as provided in
the Note Insurance Policy.
(b) The Indenture Trustee shall establish a segregated
non-interest bearing account for the benefit of Holders of the Class A Notes and
the Note Insurer referred to herein as the "Note Insurance Policy Payments
Account." The Indenture Trustee shall deposit any amount paid under the Note
Insurance Policy in the Note Insurance Policy Payments Account and pay such
amount only for purposes of payment to Holders of Class A Notes of the
Deficiency Amount or any Preference Amount in respect of a voidable preference
for which a claim under the Note Insurance Policy was made, and such amount may
not be applied to satisfy any costs, expenses or liabilities of the Master
Servicer, the Indenture Trustee or the Issuer. Amounts paid under the Note
Insurance Policy shall be transferred to the Payment Account in accordance with
the next succeeding paragraph and disbursed by the Indenture Trustee to Holders
of Class A Notes in accordance with Section 4.01 (or, in the case of a
Preference Amount in respect of a voidable preference, to the related Holders of
Class A Notes as contemplated in Section 9.04(d)). It shall not be necessary for
such payments to be made by checks or wire transfers separate from the checks or
wire transfers used to pay the other payments to be made to such Holders
pursuant to Section 4.01. However, the amount of any payment of principal of or
interest on the Class A Notes to be paid from funds transferred from the Note
Insurance Policy Payments Account shall be noted as provided in paragraph (c)
below by the Note Register and in the statement to be furnished to Holders of
the Class A Notes pursuant to Section 4.02. Funds held in the Note Insurance
Policy Payments Account shall not be invested.
On any Payment Date with respect to which a claim has been
made under the Note Insurance Policy, the amount of any funds received by the
Indenture Trustee as a result of any claim under the Note Insurance Policy, to
the extent required to pay the Deficiency Amount on such Payment Date, shall be
withdrawn from the Note Insurance Policy Payments Account and deposited in the
Payment Account and applied by the Indenture Trustee, directly to the payment in
full of the Deficiency Amount due on the Class A Notes. Funds received by the
Indenture Trustee as a result of any claim under the Note Insurance Policy shall
be deposited by the Indenture Trustee in the Note Insurance Policy Payments
Account and used solely for
76
payment to the Holders of the Class A Notes and may not be applied to satisfy
any costs, expenses or liabilities of the Master Servicer, the Indenture Trustee
or the Issuer. Any funds remaining in the Note Insurance Policy Payments Account
on the first Business Day following a Payment Date shall be remitted to the Note
Insurer, pursuant to the instructions of the Note Insurer, by the end of such
Business Day.
(c) The Indenture Trustee shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Insured
Certificate from moneys received under the Note Insurance Policy. The Note
Insurer shall have the right to inspect such records at reasonable times during
normal business hours upon reasonable request to the Indenture Trustee.
(d) In the event that the Indenture Trustee has received a
certified copy of an order of the appropriate court that any payment on the
Notes has been voided in whole or in part as a preference payment under
applicable bankruptcy law, the Indenture Trustee shall so notify the Note
Insurer, shall comply with the provisions of the Note Insurance Policy to obtain
payment by the Note Insurer of the amount of such voided payment constituting a
Preference Amount, and shall, at the time it provides notice to the Note
Insurer, notify, by mail to the Holders of the affected Notes that, in the event
any Noteholder's distribution is so recovered as a preference payment, such
Noteholder will be entitled to payment of an amount constituting a Preference
Amount pursuant to the Note Insurance Policy, a copy of which shall be made
available through the Indenture Trustee, the Note Insurer and the Indenture
Trustee shall furnish to the Note Insurer, if any, its records evidencing the
payments which have been made by the Indenture Trustee and subsequently
recovered from the Noteholders, and dates on which such payments were made.
(e) The Indenture Trustee shall promptly notify the Issuer and
the Note Insurer of any proceeding or the institution of any action, of which a
Responsible Officer of the Indenture Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any payment required to be
made under the Note Insurance Policy with respect to the Class A Notes. Each
Holder of the Class A Notes, by its purchase of such Notes, the Master Servicer
and the Indenture Trustee hereby agree that the Note Insurer (so long as no Note
Insurer Default has occurred and is continuing) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to such Preference Claim and (ii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Note Insurer
shall be subrogated to the rights of the Master Servicer, the Indenture Trustee
and each Holder of the Class A Notes in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim.
SECTION 9.05. Effect of Payments by Note Insurer; Subrogation.
Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on any of the Class A Notes which is
made with moneys received
77
pursuant to the terms of the Note Insurance Policy shall not be considered
payment of such Notes by the Issuer and shall not result in the payment of or
the provision for the payment of the principal of or interest on such Notes
within the meaning of Section 4.01. The Depositor, the Master Servicer, the
Indenture Trustee and the Issuer acknowledge, and each Holder of an Insured
Certificate by its acceptance of a such Note agrees, that without the need for
any further action on the part of the Note Insurer, the Depositor, the Master
Servicer or the Indenture Trustee (i) to the extent the Note Insurer makes
payments, directly or indirectly, on account of principal of or interest on any
Class A Notes to the Holders of such Notes, the Note Insurer will be fully
subrogated to the rights of such Holders to receive such principal and interest
from the Issuer and (ii) the Note Insurer shall be paid such principal and
interest but only from the sources and in the manner provided herein for the
payment of such principal and interest.
The Indenture Trustee and the Master Servicer shall cooperate
in all respects with any reasonable request by the Note Insurer for action to
preserve or enforce the Note Insurer's rights or interests under this Agreement
without limiting the rights or affecting the interests of the Holders as
otherwise set forth herein.
SECTION 9.06. Notices to Note Insurer.
All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to any other party hereto or to any of the
Noteholders shall also be sent to the Note Insurer. The Indenture Trustee shall,
upon retirement of the Class A Notes, furnish to the Note Insurer a notice of
such retirement, and, upon retirement of the Class A Notes and the expiration of
the term of the Note Insurance Policy, surrender the Note Insurance Policy to
the Note Insurer for cancellation.
SECTION 9.07. Indenture Trustee to Hold the Note Insurance
Policy.
The Indenture Trustee shall hold the Note Insurance Policy for
the purpose of making claims thereon and distributing the proceeds thereof. The
Note Insurance Policy shall expire and terminate without any action on the part
of the Note Insurer or any other Person on the date that is the later of (i) the
date that is one year and one day following the date on which the Class A Notes
shall have been paid in full and (ii) if any insolvency proceeding with respect
to which the Issuer is the debtor has been commenced on or prior to the date
specified in clause (i) above, the 30th day after the entry of a final,
non-appealable order in resolution or settlement of such proceeding. Each Holder
of Class A Notes, by accepting its Notes, appoints the Indenture Trustee as
attorney-in-fact for the purpose of making claims on the Note Insurance Policy.
SECTION 9.08. Termination of Certain of Note Insurer's Rights.
Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the Note Insurer, except in the case of any right to
indemnification hereunder, shall permanently cease to be operable upon the
latest to occur of (A) the date upon which the Note Balance of the Class A Notes
has been reduced to zero and all distributions required to be made under the
Note Insurance Policy with respect to the Class A Notes have been made, (B) the
date
78
on which the Note Insurance Policy expires by its terms and (C) the payment in
full to the Note Insurer of all amounts paid under the Note Insurance Policy
plus interest at the Late Payment Rate thereon from the date such payment was
made and any other amounts owing to the Note Insurer under the Note Insurance
Agreement.
79
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Indenture Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized, in each case as of the day and
year first above written.
ARGENT SECURITIES INC.,
as Depositor
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
AMERIQUEST MORTGAGE COMPANY,
as Master Servicer
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: EVP
ARGENT MORTGAGE LOAN TRUST 2005-W1,
as Issuer
By: U.S. Bank Trust National Association, not
in its individual capacity, but solely as Owner
Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ___ day of _________2005, before me, a notary public in
and for said State, personally appeared ____________, known to me to be an
________________ of Argent Securities Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the __th day of _________ 2005, before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF )
On the ___ day of _________ 2005, before me, a notary public
in and for said State, personally appeared _________________, known to me to be
an ____________________ of Deutsche Bank National Trust Company, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF )
On the ___ day of _________ 2005, before me, a notary public
in and for said State, personally appeared _________________, known to me to be
an ____________________ of U.S. Bank Trust National Association, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
EXHIBIT A
FORM OF LOST NOTE AFFIDAVIT
Loan #: _______________
Borrower: _____________
LOST NOTE AFFIDAVIT
I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of Ameriquest Mortgage Securities Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:
1. The Seller's address is: ---------------------
---------------------
---------------------
2. The Seller previously delivered to the Purchaser a signed Initial
Certification with respect to such Mortgage and/or Assignment of Mortgage;
3. Such Mortgage Note and/or Assignment of Mortgage was assigned or sold to
the Purchaser by ________________________, a ____________ corporation pursuant
to the terms and provisions of a Mortgage Loan Purchase Agreement dated as of
__________ __, _____;
4. Such Mortgage Note and/or Assignment of Mortgage is not outstanding
pursuant to a request for release of Documents;
5. Aforesaid Mortgage Note and/or Assignment of Mortgage (the "Original")
has been lost;
6. Deponent has made or caused to be made a diligent search for the
Original and has been unable to find or recover same;
7. The Seller was the Seller of the Original at the time of the loss; and
8. Deponent agrees that, if said Original should ever come into Seller's
possession, custody or power, Seller will immediately and without consideration
surrender the Original to the Purchaser.
9. Attached hereto is a true and correct copy of (i) the Note, endorsed in
blank by the Mortgagee and (ii) the Mortgage or Deed of Trust (strike one) which
secures the Note, which Mortgage or Deed of Trust is recorded in the county
where the property is located.
10. Deponent hereby agrees that the Seller (a) shall indemnify and hold
harmless the Purchaser, its successors and assigns, against any loss, liability
or damage, including reasonable attorney's fees, resulting from the
unavailability of any Notes, including but not limited to any
A-1
loss, liability or damage arising from (i) any false statement contained in this
Affidavit, (ii) any claim of any party that has already purchased a mortgage
loan evidenced by the Lost Note or any interest in such mortgage loan, (iii) any
claim of any borrower with respect to the existence of terms of a mortgage loan
evidenced by the Lost Note on the related property to the fact that the mortgage
loan is not evidenced by an original note and (iv) the issuance of a new
instrument in lieu thereof (items (i) through (iv) above hereinafter referred to
as the "Losses") and (b) if required by any Rating Agency in connection with
placing such Lost Note into a Pass-Through Transfer, shall obtain a surety from
an insurer acceptable to the applicable Rating Agency to cover any Losses with
respect to such Lost Note.
11. This Affidavit is intended to be relied upon by the Purchaser, its
successors and assigns. _____________________, a ______________ corporation
represents and warrants that it has the authority to perform its obligations
under this Affidavit of Lost Note.
Executed this ____ day, of ___________ ______.
SELLER,
By:
-------------------------
Authorized officer
On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.
Signature:
[Seal]
X-0
XXXXXXX X-0
FORM OF INDENTURE TRUSTEE'S INITIAL CERTIFICATION
[Date]
Argent Securities Inc.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Sale and Servicing Agreement, dated as of April 19, 2005 among Argent
Securities Inc., Argent Mortgage Loan Trust 2005-W1, Ameriquest
Mortgage Company and Deutsche Bank National Trust Company,
Asset-BACKED NOTES, SERIES 2005-W1
---------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Sale and Servicing Agreement, dated as
of April 19, 2005, among Argent Securities Inc. as Depositor, Argent Mortgage
Loan Trust 2005-W1, as Issuer, Ameriquest Mortgage Company, as master servicer
and Deutsche Bank National Trust Company as indenture trustee, we hereby
acknowledge that as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being covered by such
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(v)) required to be delivered to it
pursuant to this Agreement are in its possession, (ii) such documents have been
reviewed by it or such Custodian and are not mutilated, torn or defaced unless
initialed by the related borrower and relate to such Mortgage Loan, (iii) based
on its or the Custodian's examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(1) through (3), (6), (9), (10), (13), (15) and (19) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File.
The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Sale and Servicing Agreement. The Indenture
Trustee makes no representations as to: (i) the validity, legality, sufficiency,
recordability, enforceability or genuineness of any of the documents contained
in the Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule, or (ii) the collectability, insurability, perfection, priority,
effectiveness or suitability of any such Mortgage Loan.
The Indenture Trustee was under no duty or obligation (i) to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to
B-1-1
determine whether any Mortgage File should include any of the documents
specified in clause (v) of Section 2.01.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Sale and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By:
---------------------------------
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Argent Securities Inc.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Sale and Servicing Agreement, dated as of April 19, 2005 among Argent
Securities Inc., Argent Mortgage Loan Trust 2005-W1, Ameriquest
Mortgage Company and Deutsche Bank National Trust Company,
Asset-BACKED NOTES, SERIES 2005-W1
---------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Indenture Trustee, hereby certifies
that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or listed on the attachment hereto), it or a
Custodian on its behalf has received each of the documents listed in Section
2.01.
The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Sale and Servicing Agreement. The Indenture
Trustee makes no representations as to: (i) the validity, legality, sufficiency,
recordability, enforceability or genuineness of any of the documents contained
in the Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule, or (ii) the collectability, insurability, perfection, priority,
effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By:
---------------------------------
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRUSTEE'S RECEIPT OF MORTGAGE NOTE
[Date]
Ameriquest Mortgage Securities Inc.
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Sale and Servicing Agreement, dated as of April 19, 2005 among Argent
Securities Inc., Argent Mortgage Loan Trust 2005-W1, Ameriquest
Mortgage Company and Deutsche Bank National Trust Company,
Asset-BACKED NOTES, SERIES 2005-W1
---------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.03 of the above-captioned Sale and Servicing
Agreement, we hereby acknowledge the receipt of the original Mortgage Note for
each Mortgage Loan with any exceptions thereto listed on Exhibit 1.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the above-captioned Sale and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By:
---------------------------------
Name:
Title:
B-3-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
SEE EXHIBIT 99.2
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000-0000
Attn: Trust Administration - AR05W1
Re: Sale and Servicing Agreement, dated as of April 19, 2005 among
Argent Securities Inc., Argent Mortgage Loan Trust 2005-W1,
Ameriquest Mortgage Company and Deutsche Bank National Trust
COMPANY, ASSET-BACKED NOTES, SERIES 2005-W1
-------------------------------------------
In connection with the administration of the Mortgage Loans held by
you as Indenture Trustee pursuant to the above-captioned Sale and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Indenture Trustee's Mortgage File for the Mortgage Loan described below, for the
reason indicated.
MORTGAGE LOAN NUMBER:
--------------------
MORTGAGOR NAME. ADDRESS & ZIP CODE:
----------------------------------
REASON FOR REQUESTING DOCUMENTS (check one):
-------------------------------
_____1. Mortgage Paid in Full
_____2. Foreclosure
_____3. Substitution
_____4. Other Liquidation (Repurchases, etc.)
_____5. Nonliquidation Reason:_______________
Address to which Indenture Trustee should deliver
the Indenture Trustee's Mortgage File:
By:
---------------------------------
(authorized signer)
Issuer:
-----------------------------
Address:
----------------------------
Date:
-------------------------------
D-1
INDENTURE TRUSTEE
-----------------
Deutsche Bank National Trust Company
Please acknowledge the execution of the above request by your signature and
date below:
---------------------
Signature
Documents returned to
Indenture Trustee:
---------------------
Indenture Trustee
D-2
EXHIBIT E-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: Argent Mortgage Loan Trust 2005-W1,
ASSET-BACKED NOTES, SERIES 2005-W1
----------------------------------
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of Argent Mortgage
Loan Trust 2005-W1, Asset-Backed Notes, Series 2005-W1;
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the trustee by the servicer under the Sale and
servicing, or similar, agreement, for inclusion in these reports is included in
these reports;
4. Based on my knowledge and upon the annual compliance statement
included in the report and required to be delivered to the trustee in accordance
with the terms of the Sale and servicing, or similar, agreement, and except as
disclosed in the reports, the servicer has fulfilled its obligations under the
servicing agreement; and
5. The reports disclose all significant deficiencies relating to the
servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar procedure, as set forth in the Sale and servicing, or similar,
agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: Deutsche Bank
National Trust Company.
ARGENT SECURITIES INC.
Date:
------------------
-----------------------
[Signature]
[Title]
E-1-1
EXHIBIT E-2
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: Argent Mortgage Loan Trust 2005-W1,
ASSET-BACKED NOTES, SERIES 2005-W1
----------------------------------
I, [identify the certifying individual], a [title] of Deutsche Bank
National Trust Company, as Trustee, hereby certify to Argent Securities Inc.
(the "Depositor"), and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and
3. Based on my knowledge, the distribution information required to be
provided by the Trustee under the Sale and Servicing Agreement is included in
these distribution reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Sale and Servicing Agreement, dated April 19, 2005 (the
"Sale and Servicing Agreement"), among the Depositor as depositor, Argent
Mortgage Loan Trust 2005-W1, as issuer, Ameriquest Mortgage Company as master
servicer and Deutsche Bank National Trust Company as indenture trustee.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By:
----------------------------------
Name:
Title:
Date:
E-2-1
EXHIBIT F
ANNUAL STATEMENT OF COMPLIANCE PURSUANT TO SECTION 3.19
Argent Securities Inc.
Asset-Backed Notes, Series 2005-W1
I, _____________________, hereby certify that I am a duly appointed
__________________________ of Ameriquest Mortgage Company (the "Master
Servicer"), and further certify as follows:
1. This certification is being made pursuant to the terms of the Sale
and Servicing Agreement, dated as of April 19, 2005 (the "Agreement"), among
Argent Securities Inc., as depositor, Argent Mortgage Loan Trust 2005-W1, as
issuer, the Master Servicer and Deutsche Bank National Trust Company, as
indenture trustee.
2. I have reviewed the activities of the Master Servicer during the
preceding year and the Master Servicer's performance under the Agreement and to
the best of my knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under the Agreement throughout the year.
Capitalized terms not otherwise defined herein have the meanings set
forth in the Agreements.
Dated:
-----------------
F-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of _____________.
By:
------------------------------
Name:
Title:
I, _________________________, a (an) __________________ of the Master
Servicer, hereby certify that _________________ is a duly elected, qualified,
and acting _______________________ of the Master Servicer and that the signature
appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ______________.
By:
------------------------------
Name:
Title:
F-2
EXHIBIT G
FORM OF NOTE INSURANCE POLICY
Available Upon Request
G-1
EXHIBIT H
FORM OF POOL INSURANCE POLICY
Available Upon Request
H-1
EXHIBIT I
FORM OF INTEREST RATE SWAP AGREEMENT
FACSIMILE COVER SHEET
To: Deutsche Bank National Trust Company, not
individually, but solely as Indenture Trustee
on behalf of Argent Mortgage Loan Trust
2005-W1, Asset-Backed Notes, Series 2005-W1
Attention: Xxxxxxxx Xxxxx, CSFBi Marketer
Fax number: To be delivered by Xxxxxxxx Xxxxx
Date: 19 April 2005
Pages (including cover page): 7
Our Reference No: External ID: 9191198N / Risk ID: 47084058
Credit Suisse First Boston International has entered into a transaction with you
as attached. Please find attached a letter agreement (the "Confirmation") which
confirms the terms and conditions of the above transaction.
If you agree with the terms specified therein, PLEASE ARRANGE FOR THE
CONFIRMATION TO BE SIGNED BY YOUR AUTHORISED SIGNATORIES and return a signed
copy to this office to the facsimile listed below.
FOR INTEREST RATE PRODUCTS: FOR EQUITY DERIVATIVES:
Telephone Numbers: (000) 000-0000 Telephone numbers: (000) 000-0000 / (212) 538-
Facsimile number: (000) 000-0000 8297 / (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxx.xxx Facsimile number: (000) 000-0000
FOR CREDIT DERIVATIVES:
Telephone Numbers: (000) 000-0000
Facsimile number: (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxx.xxx
We are delighted to have entered into this transaction with you.
CONFIDENTIALITY NOTICE: This facsimile is intended only for the use of the
individual or entity to which it is addressed and may contain information which
is privileged and confidential. If the reader of this message is not the
intended recipient or an employee or agent responsible for delivering the
message to the intended recipient, you are hereby notified that any
dissemination, distribution or copying of this communication is strictly
prohibited. If you have received this communication in error, please notify us
immediately by telephone and return the original message to us by mail. Thank
you.
1
[LETTERHEAD OF CREDIT SUISSE FIRST BOSTON]
19 April 2005
Deutsche Bank National Trust Company,
not individually, but solely as Indenture Trustee
on behalf of Argent Mortgage Loan Trust 2005-W1,
Asset Backed Notes, Series 2005-W1
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx
Xxxxxxxxxx 00000-0000
() EXTERNAL ID: 9191198N
---------------------------------------------------------------------------
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the Agreement specified below.
1. The definitions and provisions contained in the 2000 ISDA Definitions
(as published by the International Swaps and Derivatives Association, Inc.)
are incorporated into this Confirmation. In the event of any inconsistency
between those definitions and provisions and this Confirmation, this
Confirmation will govern. References herein to a "Transaction" shall be
deemed to be references to a "Swap Transaction" for the purposes of the
2000 ISDA Definitions.
This Confirmation supplements, forms part of, and is subject to, the 1992
ISDA Master Agreement dated as of 19 April 2005 as amended and supplemented
from time to time (the "Agreement"), between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below.
CSFBi and Counterparty each represents to the other that it has entered
into this Transaction in reliance upon such tax, accounting, regulatory,
legal, and financial advice as it deems necessary and not upon any view
expressed by the other.
In this Confirmation "CSFBi" means Credit Suisse First Boston International and
"Counterparty" means Deutsche Bank National Trust Company, not individually, but
solely as Indenture Trustee on behalf of the Indenture Trust.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: USD 2,500,000,000, subject to
amortisation as set out in the Additional
Terms
2
Trade Date: 7 April 2005
Effective Date: 19 April 2005
Termination Date: 25 July 2009
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: The 25th of each month, commencing on 25
May 2005, and ending on 25 July 2009,
inclusive, subject to adjustment in
accordance with the Following Business
Day Convention, using No Adjustment of
Period End Dates.
Fixed Rate: 4.0995%
Fixed Rate
Day Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: CSFBi
Floating Rate
Payment Dates: The 25th of each month, commencing on 25
May 2005, and ending on 25 July 2009,
inclusive, subject to adjustment in
accordance with the Modified Following
Business Day Convention, except for the
final Period End Date where no adjustment
shall be made.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month; provided however, that in
respect of the initial Calculation
Period, Linear Interpolation shall apply
based upon a Designated Maturity of 1
month and a Designated Maturity of 2
months.
Spread: None
Floating Rate
Day Count Fraction: Actual/360
3
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Calculation Agent: CSFBi
Account Details:
Payments to CSFBi: As advised separately in writing
Payments to Counterparty: Deutsche Bank
ABA#000000000
Acct.#01419663
Acct. Name: NYLTD Funds Control -
Stars West
Ref.: Argent Mortgage Loan Trust 2005-W1
Credit Suisse First Boston International is authorised and regulated by the
Financial Services Authority and has entered into this Transaction as principal.
The time at which the above transaction was executed will be notified to
Counterparty on request.
It is expressly understood and agreed by the parties hereto that (i) this
Confirmation is executed and delivered by Deutsche Bank National Trust Company,
not individually or personally but solely as Indenture Trustee on behalf of
Argent Mortgage Loan Trust 2005-W1, Asset-Backed Notes, Series 2005-W1 in the
exercise of the powers and authority conferred and vested in it under the
Indenture, (ii) each of the representations, undertakings and agreements herein
made on the part of the Indenture Trust is made and intended not as personal
representations, undertakings and agreements by Deutsche Bank National Trust
Company but is made and intended for the purpose of binding only the Indenture
Trust, (iii) nothing herein contained shall be construed as creating any
liability on the part of Deutsche Bank National Trust Company, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (iv)
under no circumstances shall Deutsche Bank National Trust Company be personally
liable for the payment of any indebtedness or expenses of the Indenture Trust or
be liable for the breach or failure of any obligation, representation, warranty
or covenant made or undertaken by Indenture Trust under this Confirmation or any
other related documents.
4
ADDITIONAL TERMS
---------------------------------------------------------------------------
CALCULATION PERIOD UP TO BUT NOTIONAL AMOUNT
EXCLUDING THE PAYMENT DATE ( IN USD)
SCHEDULED TO OCCUR ON:
---------------------------------------------------------------------------
May 25, 2005 $2,500,000,000.00
---------------------------------------------------------------------------
June 25, 2005 $2,470,600,630.40
---------------------------------------------------------------------------
July 25, 2005 $2,434,458,206.28
---------------------------------------------------------------------------
August 25, 2005 $2,391,629,421.34
---------------------------------------------------------------------------
September 25, 2005 $2,342,223,674.46
---------------------------------------------------------------------------
October 25, 2005 $2,286,404,614.77
---------------------------------------------------------------------------
November 25, 2005 $2,224,390,959.46
---------------------------------------------------------------------------
December 25, 2005 $2,156,456,678.18
---------------------------------------------------------------------------
January 25, 2006 $2,082,930,874.44
---------------------------------------------------------------------------
February 25, 2006 $2,005,666,066.28
---------------------------------------------------------------------------
March 25, 2006 $1,925,058,155.92
---------------------------------------------------------------------------
April 25, 2006 $1,847,281,221.50
---------------------------------------------------------------------------
May 25, 2006 $1,772,688,721.36
---------------------------------------------------------------------------
June 25, 2006 $1,701,148,894.57
---------------------------------------------------------------------------
July 25, 2006 $1,632,535,475.44
---------------------------------------------------------------------------
August 25, 2006 $1,566,727,463.08
---------------------------------------------------------------------------
September 25, 2006 $1,503,608,900.54
---------------------------------------------------------------------------
October 25, 2006 $1,443,068,663.32
---------------------------------------------------------------------------
November 25, 2006 $1,385,000,256.80
---------------------------------------------------------------------------
December 25, 2006 $1,329,301,622.13
---------------------------------------------------------------------------
January 25, 2007 $1,275,874,950.35
---------------------------------------------------------------------------
February 25, 2007 $1,223,953,865.63
---------------------------------------------------------------------------
March 25, 2007 $533,709,733.96
---------------------------------------------------------------------------
April 25, 2007 $445,264,565.20
---------------------------------------------------------------------------
May 25, 2007 $411,298,359.64
---------------------------------------------------------------------------
June 25, 2007 $381,364,717.34
---------------------------------------------------------------------------
July 25, 2007 $366,224,147.52
---------------------------------------------------------------------------
August 25, 2007 $352,803,348.06
---------------------------------------------------------------------------
September 25, 2007 $339,901,162.28
---------------------------------------------------------------------------
October 25, 2007 $327,496,405.59
---------------------------------------------------------------------------
November 25, 2007 $315,568,803.73
---------------------------------------------------------------------------
December 25, 2007 $304,098,952.01
---------------------------------------------------------------------------
January 25, 2008 $293,068,276.44
---------------------------------------------------------------------------
February 25,2008 $282,458,996.62
---------------------------------------------------------------------------
March 25, 2008 $198,733,174.36
---------------------------------------------------------------------------
April 25, 2008 $186,309,676.44
---------------------------------------------------------------------------
May 25, 2008 $180,631,801.30
---------------------------------------------------------------------------
June 25, 2008 $175,125,553.38
---------------------------------------------------------------------------
July 25, 2008 $169,785,777.49
---------------------------------------------------------------------------
August 25, 2008 $164,607,472.50
---------------------------------------------------------------------------
September 25, 2008 $159,585,786.78
---------------------------------------------------------------------------
October 25, 2008 $154,716,013.78
---------------------------------------------------------------------------
5
---------------------------------------------------------------------------
CALCULATION PERIOD UP TO BUT NOTIONAL AMOUNT
EXCLUDING THE PAYMENT DATE ( IN USD)
SCHEDULED TO OCCUR ON:
---------------------------------------------------------------------------
November 25, 2008 $149,993,587.62
---------------------------------------------------------------------------
December 25, 2008 $145,414,079.01
---------------------------------------------------------------------------
January 25, 2009 $140,973,191.10
---------------------------------------------------------------------------
February 25, 2009 $136,666,755.57
---------------------------------------------------------------------------
March 25, 2009 $132,490,728.80
---------------------------------------------------------------------------
April 25, 2009 $128,441,188.15
---------------------------------------------------------------------------
May 25, 2009 $124,514,328.34
---------------------------------------------------------------------------
June 25, 2009 $120,706,457.99
---------------------------------------------------------------------------
July 25, 2009 $117,013,996.19
---------------------------------------------------------------------------
A-6
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours faithfully,
Credit Suisse First Boston International
By:
-----------------------------
Name:
Title:
Confirmed as of the date first written above:
By Deutsche Bank National Trust Company, not
individually, but solely as Indenture Trustee
on behalf of Argent Mortgage Loan Trust 2005-W1,
Asset-Backed Notes, Series 2005-W1
By:
--------------------------------
Name:
Title:
(MULTICURRENCY - CROSS BORDER)
19
ISDA(R)
International Swap Dealers Association, Inc.
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of April 19, 2005
between
DEUTSCHE BANK NATIONAL TRUST
COMPANY, NOT INDIVIDUALLY, BUT
CREDIT SUISSE FIRST BOSTON and SOLELY AS INDENTURE TRUSTEE ON
INTERNATIONAL BEHALF OF ARGENT MORTGAGE
LOAN TRUST 2005-W1, ASSET-BACKED
NOTES, SERIES 2005-W1
--------------------------------------- -----------------------------------------
------- -------
("Party A") ("Party A")
PART 1
TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
and in relation to Party B for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
19
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) CERTAIN EVENTS OF DEFAULT. The following Events of Default will apply to
the parties as specified below, and the definition of "Event of Default" in
Section 14 is deemed to be modified accordingly:
Section 5(a)(i) (FAILURE TO PAY OR DELIVER) will apply to Party A and
Party B.
Section 5(a)(ii) (BREACH OF AGREEMENT) will not apply to Party A or
Party B.
Section 5(a)(iii) (CREDIT SUPPORT DEFAULT) will not apply to Party A
or Party B. Section 5(a)(iv) (MISREPRESENTATION) will not apply to
Party A or Party B.
Section 5(a)(v) (DEFAULT UNDER SPECIFIED TRANSACTION) will not apply
to Party A or Party B.
Section 5(a)(vi) (CROSS DEFAULT) will not apply to Party A or Party B.
Section 5(a)(vii) (BANKRUPTCY) will apply to Party A and Party B;
PROVIDED that clause (2) thereof shall not apply to Party B.
Section 5(a)(viii) (MERGER WITHOUT ASSUMPTION) will apply to Party A
and will not apply to Party B.
(d) TERMINATION EVENTS. The following Termination Events will apply to the
parties as specified below:
Section 5(b)(i) (ILLEGALITY) will apply to Party A and Party B.
Section 5(b)(ii) (TAX EVENT) will apply to Party A and Party B.
Section 5(b)(iii) (TAX EVENT UPON MERGER) will apply to Party A and
will not apply to Party B.
Section 5(b)(iv) (CREDIT EVENT UPON MERGER) will not apply to Party A
or Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) of this
Agreement will not apply to Party A and will not apply to Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) ADDITIONAL TERMINATION EVENTS. The following Additional Termination Events
will apply, in each case with respect to Party B as the sole Affected Party
(unless otherwise provided below):
20
(i) Party A fails to comply with the Downgrade Provisions as set forth in
Part 5(b). For all purposes of this Agreement, Party A shall be the sole
Affected Party with respect to the occurrence of a Termination Event
described in this Part 1(h)(i).
(ii) The Trust is terminated.
(iii) The Sale and Servicing Agreement, dated as of April 19, 2005 among
Argent Securities Inc., Argent Mortgage Loan Trust 2005-W1,
Ameriquest Mortgage Company and Deutsche Bank National Trust Company
(the "Sale and Servicing Agreement"), the Indenture dated as of April
19, 2005, between Argent Mortgage Loan Trust 2005-W1 and Deutsche
Bank National Trust Company (the "Indenture") or other Basic Document
is amended or modified without the prior written consent of Party A,
where such consent is required under the terms of the Basic
Documents.
(iv) The Notes are redeemed pursuant to Sections 8.07 of the Indenture.
(v) The Indenture Trust is terminated.
21
PART 2
TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
Party A will make the following representation and Party B will make the
following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, PROVIDED that
it shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) of this Agreement by reason of material prejudice to its
legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the representations specified below, if any:
(i) Party A makes the following representation to Party B:
(A) Party A is entering into each Transaction in the ordinary course
of its trade as, and is, a recognized UK bank as defined in
Section 840A of the UK Income and Corporation Taxes Act of 1988.
(B) Party A has been approved as a Withholding Foreign Partnership by
the US Internal Revenue Service.
(C) Party A's Withholding Foreign Partnership Employer Identification
Number is 00-0000000.
(D) Party A is a partnership that agrees to comply with any
withholding obligation under Section 1446 of the Internal Revenue
Code.
(ii) Party B represents that it is the indenture trustee under a trust
created under under the Indenture (the "Indenture Trust").
22
PART 3
AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:--
----------------------- ---------------------------------- ---------------------------------------------
PARTY REQUIRED FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED
TO DELIVER
DOCUMENT
----------------------- ---------------------------------- ---------------------------------------------
Party A U.S. Internal Revenue Service (i) Before the first Payment Date under this
Form W-8IMY and any successor Agreement, such form to be updated at the
form thereto beginning of each succeeding three-
calendar-year period after the first payment
date under this Agreement, (ii) promptly
upon reasonable demand by Party B, and
(iii) promptly upon learning that any such
Form previously provided by Party A has
become obsolete or incorrect.
----------------------- ---------------------------------- ---------------------------------------------
(b) Other documents to be delivered are:--
---------------- -------------------------------------------------------------- ----------------------- -------------------
PARTY REQUIRED FORM/DOCUMENT/CERTIFICATE DATE BY WHICH COVERED BY
TO DELIVER TO BE DELIVERED SECTION 3(D)
DOCUMENT REPRESENTATION
---------------- -------------------------------------------------------------- ----------------------- -------------------
Party A Certified copy of the Board of Directors resolution Concurrently Yes
and Party (or equivalent authorizing documentation) which with the
B sets forth the authority of each signatory to this execution and
Agreement and each Credit Support Document (if delivery of this
any) signing on its behalf and the authority of such Agreement.
party to enter into Transactions contemplated and
performance of its obligations hereunder.
---------------- -------------------------------------------------------------- ----------------------- -------------------
23
---------------- -------------------------------------------------------------- ----------------------- -------------------
Party A and Incumbency Certificate (or, if available the current Concurrently Yes
Party B authorized signature book or equivalent with the
authorizing documentation) specifying the names, execution and
titles, authority and specimen signatures of the delivery of this
persons authorized to execute this Agreement Agreement
which sets forth the specimen signatures of each unless previously
signatory to this Agreement, each Confirmation delivered and
and each Credit Support Document (if any) signing still in full force
on its behalf. and effect.
---------------- -------------------------------------------------------------- ----------------------- -------------------
Party A and B An opinion of counsel to such party reasonably Concurrently No
satisfactory in form and substance to the other with the
party. execution and
delivery of the
Agreement
unless previously
delivered and
still in full force
and effect.
---------------- -------------------------------------------------------------- ----------------------- -------------------
Party B An executed copy of the Sale and Servicing Within 30 days Yes
Agreement. after the date of
this Agreement.
---------------- -------------------------------------------------------------- ----------------------- -------------------
24
PART 4.
MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purposes of Section 12(a) of this Agreement:
Party A:
(1) Address for notices or communications to Party A (other than by
facsimile):-
Address: One Cabot Square Attention: (1) Head of Credit Risk
Management;
Xxxxxx X00 0XX (2) Managing Director -
England Operations
Department;
(3) Managing Director -
Legal Department
Telex No.:264521 Answerback: CSFBI G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under
this Agreement (other than a notice or communication under Section 5
or 6):-
Facsimile No.: 44 20 7888 2686
Attention: Managing Director - Legal Department
Telephone number for oral confirmation of receipt of facsimile in
legible form: 44 20 7888 2028
Designated responsible employee for the purposes of Section
12(a)(iii): Senior Legal Secretary
Party B: Argent Mortgage Loan Trust 2005-W1
c/o Deutsche Bank National Trust Company
0000 Xxxx Xx Xxxxxx Xxxxx
Xxxxx Xxx
Xxxxxxxxxx 00000-0000
Attn: Trust Administration -AR0501
Telephone No.: (000) 000 0000
Facsimile No.: (000) 000 0000
(b) PROCESS AGENT. For the purposes of Section 13(c) of this Agreement:
25
Party A appoints as its Process Agent:
Credit Suisse First Boston LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Legal and Compliance Department
Party B appoints as its Process Agent: Not Applicable.
(c) OFFICES. With respect to Party A, the provisions of Section 10(a) will
apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) CREDIT SUPPORT DOCUMENT. Credit Support Document means
With respect to Party A: The Credit Support Annex.
With respect to Party B: The Sale and Servicing Agreement.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: Not Applicable.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine other than New York General Obligation Law Sections
5-1401 and 5-1402).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions.
(j) "AFFILIATE." Each of Party A and Party B shall be deemed to have no
Affiliates.
(k) JURISDICTION. Section 13(b) is hereby amended by: (i) deleting in the
second line of subparagraph (i) thereof the word "non-": and (ii) deleting
the final paragraph thereof.
(l) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding
26
relating to this Agreement or any Credit Support Document. Each party
certifies (i) that no representative, agent or attorney of the other party
or any Credit Support Provider has represented, expressly or otherwise,
that such other party would not, in the event of such a suit, action or
proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that
it and the other party have been induced to enter into this Agreement and
provide for any Credit Support Document, as applicable, by, among other
things, the mutual waivers and certifications in this Section.
(m) CONSENT TO RECORDING. Each party (i) consents to the recording of the
telephone conversations of trading and marketing personnel of the parties
and their Affiliates in connection with this Agreement or any potential
transaction and (ii) if applicable, agrees to obtain any necessary consent
of, and give notice of such recording to, such personnel of it and its
Affiliates.
(n) SEVERABILITY. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall
be held to be illegal, invalid or unenforceable (in whole or in part) for
any reason, the remaining terms, provisions, covenants and conditions
hereof shall continue in full force and effect as if this Agreement had
been executed with the illegal, invalid or unenforceable portion
eliminated, so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits or
expectations of the parties to this Agreement.
27
PART 5.
OTHER PROVISIONS.
(a) DEFINITIONS.
This Agreement, including each Confirmation and each Swap Transaction, is
subject to the 2000 ISDA Definitions, as amended, supplemented, updated,
and superseded from time to time (the "Definitions"), as published by the
International Swaps and Derivatives Association, Inc. ("ISDA") and will be
governed in all respects by the Definitions (except that references to
"Swap Transactions" shall be deemed to be references to "Transactions").
The Definitions are incorporated by reference in, and made part of, this
Agreement and each Confirmation as if set forth in full in this Agreement
and such Confirmations. In the event of any inconsistency between the
provisions of this Agreement and the Definitions, this Agreement will
prevail (and, in the event of any inconsistency between any Confirmation
and the Definitions, the Confirmation will control). Any reference in a
Confirmation to any Definitions which are amended or supplemented in this
Schedule shall be deemed to be a reference to such Definitions as so
amended or supplemented, unless the Confirmation states, by specific
reference to any such amendment or supplement, that such amendment or
supplement will not apply in respect of the Transaction to which such
Confirmation relates. Any capitalized terms used but not otherwise defined
in this Agreement shall have the meanings assigned to them (or incorporated
by reference) in the Sale and Servicing Agreement.
4. (b) DOWNGRADE PROVISIONS.
(1) It shall be a collateralization event (COLLATERALIZATION EVENT) if (A)
either (i) the unsecured, unguaranteed and otherwise unsupported long-term
senior debt obligations of Party A are rated below "A1" by Xxxxx'x
Investors Service, Inc. (MOODY'S) or are rated "A1" by Moody's and such
rating is on watch for possible downgrade (but only for so long as it is on
watch for possible downgrade) or (ii) the unsecured, unguaranteed and
otherwise unsupported short-term debt obligations of Party A are rated
below "P-1" by Moody's or are rated "P-1" by Moody's and such rating is on
watch for possible downgrade (but only for so long as it is on watch for
possible downgrade), (B) no short-term rating is available from Moody's and
the unsecured, unguaranteed and otherwise unsupported long-term senior debt
obligations of Party A are rated below "Aa3" by Moody's or are rated "Aa3"
by Moody's and such rating is on watch for possible downgrade (but only for
so long as it is on watch for possible downgrade), or (C) either (i) the
unsecured, unguaranteed and otherwise unsupported short-term debt
obligations of Party A are rated below "A-1" by Standard & Poor's Rating
Services, a division of The XxXxxx-Xxxx Companies, Inc. (S&P) or (ii) if
Party A does not have a short-term rating from S&P, the unsecured,
unguaranteed and otherwise unsupported long-term senior debt obligations of
Party A are rated below "A+" by S&P. For the avoidance of doubt, the
parties hereby acknowledge and agree that notwithstanding the occurrence of
a Collateralization Event, this Agreement and each Transaction hereunder
shall continue to qualify as a Swap Agreement for purposes of the
distribution priorities in Section 4.01 of the Sale and Servicing
Agreement. During any period in which a Collateralization Event is
occurring, Party A shall, at its own expense, either (i) post collateral
according to the terms of the 1994 ISDA Credit Support Annex between Party
A and Party B, dated as of April 19, 2005,
28
including Paragraph 13, thereof (the "Credit Support Annex"), or (ii)
obtain a substitute counterparty that (a) is reasonably acceptable to Party
B and satisfies the Rating Agency Condition, (b) satisfies the Hedge
Counterparty Ratings Requirement (as defined herein) and (c) assumes the
obligations of Party A under this Agreement (through an assignment and
assumption agreement in form and substance reasonably satisfactory to Party
B) or replaces the outstanding Transactions hereunder with transactions on
identical terms, except that Party A shall be replaced as counterparty,
PROVIDED that such substitute counterparty, as of the date of such
assumption or replacement, will not, as a result thereof, be required to
withhold or deduct on account of tax under the Agreement or the new
transactions, as applicable, and such assumption or replacement will not
lead to a termination event or event of default occurring under the
Agreement or new transactions, as applicable. To the extent that Party A
elects or is required to post collateral pursuant to this Part 5(b)(1),
Party A shall request its legal counsel to deliver to each applicable
Rating Agency within thirty (30) calendar days of the occurrence of such
Collateralization Event an opinion as to the enforceability of the ISDA
Credit Support Annex.
(2) It shall be a ratings event (RATINGS EVENT) if at any time after the
date hereof Party A shall fail to satisfy the Hedge Counterparty Ratings
Threshold. HEDGE COUNTERPARTY RATINGS THRESHOLD shall mean (A) the
unsecured, unguaranteed and otherwise unsupported long-term senior debt
obligations of Party A are rated at least "BBB-" by S&P, (B) the unsecured,
unguaranteed and otherwise unsupported long-term senior debt obligations of
Party A are rated at least "A3" by Moody's (and such rating is not on watch
for possible downgrade) and the unsecured, unguaranteed and otherwise
unsupported short-term debt obligations of Party A are rated at least "P-2"
by Moody's (and such rating is not on watch for possible downgrade), and
(C) either (i) the unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations of Party A are rated at least "A+" by
Fitch, Inc. (FITCH) or (ii) the unsecured, unguaranteed and otherwise
unsupported short-term debt obligations of Party B are rated at least "F1"
by Fitch. For the avoidance of all doubts, the parties hereby acknowledge
and agree that notwithstanding the occurrence of a Ratings Event, this
Agreement and each Transaction hereunder shall continue to qualify as a
Swap Agreement for purposes of the distribution priorities in Section 4.01
of the Sale and Servicing Agreement and Section 5.04 of the Indenture.
(3) Following a Ratings Event, Party A shall take the following actions:
(A) PARTY A, AT ITS SOLE EXPENSE, SHALL (I) COMMENCE ACTIVELY TO SEEK
TO OBTAIN A SUBSTITUTE COUNTERPARTY THAT (A) SATISFIES THE RATING
AGENCY CONDITION, (B) SATISFIES THE HEDGE COUNTERPARTY RATINGS
REQUIREMENT AND (C) ASSUMES THE OBLIGATIONS OF PARTY A UNDER THIS
AGREEMENT (THROUGH AN ASSIGNMENT AND ASSUMPTION AGREEMENT IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO PARTY B) OR REPLACES THE
OUTSTANDING TRANSACTIONS HEREUNDER WITH TRANSACTIONS ON IDENTICAL
TERMS, EXCEPT THAT PARTY A SHALL BE REPLACED AS COUNTERPARTY, PROVIDED
THAT SUCH SUBSTITUTE COUNTERPARTY, AS OF THE DATE OF SUCH ASSUMPTION OR
REPLACEMENT, WILL NOT, AS A RESULT THEREOF, BE REQUIRED TO WITHHOLD OR
DEDUCT ON ACCOUNT OF TAX UNDER THE AGREEMENT OR THE NEW TRANSACTIONS,
AS APPLICABLE, AND SUCH ASSUMPTION OR REPLACEMENT WILL NOT LEAD TO A
TERMINATION EVENT OR EVENT OF DEFAULT OCCURRING UNDER THE AGREEMENT OR
NEW TRANSACTIONS, AS APPLICABLE, AND (II) BE REQUIRED TO POST
COLLATERAL AS SET FORTH IN (B) BELOW;
(B) IF PARTY A HAS NOT OBTAINED A SUBSTITUTE COUNTERPARTY AS SET FORTH
IN (3)(A) ABOVE WITHIN 30 DAYS (OR, IN THE CASE OF A FAILURE TO MEET
THE REQUIREMENTS OF SUBPARAGRAPH (A) OF THE DEFINITION OF "HEDGE
COUNTERPARTY RATINGS THRESHOLD", AS SOON AS COMMERCIALLY PRACTICABLE
AFTER SUCH FAILURE) OF THE RATINGS EVENT, THEN PARTY A SHALL CONTINUE
TO SEEK A SUBSTITUTE COUNTERPARTY AND, ON OR PRIOR TO THE EXPIRATION OF
SUCH PERIOD, POST COLLATERAL ACCORDING TO THE TERMS OF THE CREDIT
SUPPORT ANNEX. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, IF PARTY A IS REQUIRED TO TRANSFER ITS RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT PURSUANT TO THIS PART 5(B)(3) AS A RESULT OF A
RATING ISSUED BY S&P, PARTY A SHALL, AT ALL TIMES PRIOR TO SUCH
TRANSFER, BE REQUIRED TO POST COLLATERAL IN ACCORDANCE WITH (I) THE
TERMS OF THE CREDIT SUPPORT ANNEX OR (II)
29
AN AGREEMENT WITH PARTY B PROVIDING FOR THE POSTING OF COLLATERAL,
WHICH AGREEMENT SHALL SATISFY THE RATING AGENCY CONDITION SPECIFIED IN
PART 5(N) BELOW AND REQUIRE PARTY A TO POST THE REQUIRED COLLATERAL.
HEDGE COUNTERPARTY RATINGS REQUIREMENT shall mean (a) either (i) the
unsecured, unguaranteed and otherwise unsupported short-term debt
obligations of the substitute counterparty are rated at least "A-1" by
S&P or (ii) if the substitute counterparty does not have a short-term
rating from S&P, the unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations of the substitute counterparty are
rated at least "A+" by S&P, (b) either (i) the unsecured, unguaranteed
and otherwise unsupported long-term senior debt obligations of such
substitute counterparty are rated at least "A1" by Moody's (and if
rated "A1" by Moody's, such rating is not on watch for possible
downgrade) and the unsecured, unguaranteed and otherwise unsupported
short-term debt obligations of such substitute counterparty are rated
at least "P-1" by Moody's (and if rated "P-1" by Moody's, such rating
is not on watch for possible downgrade and remaining on watch for
possible downgrade), or (ii) if such substitute counterparty does not
have a short-term debt rating from Moody's, the unsecured,
unguaranteed and otherwise unsupported long-term senior debt
obligations of such substitute counterparty are rated at least "Aa3"
by Moody's (and if rated "Aa3" by Moody's, such rating is not on watch
for possible downgrade), and (c) either (i) the unsecured,
unguaranteed and otherwise unsupported long-term senior debt
obligations of such substitute counterparty are rated at least "A+" by
Fitch or (ii) the unsecured, unguaranteed and otherwise unsupported
short-term debt obligations of such substitute counterparty are rated
at least "F1" by Fitch. For the purpose of this definition, no direct
or indirect recourse against one or more shareholders of the
substitute counterparty (or against any Person in control of, or
controlled by, or under common control with, any such shareholder)
shall be deemed to constitute a guarantee, security or support of the
obligations of the substitute counterparty.
(c) Section 3(a) of this Agreement is hereby amended to include the following
additional representations after paragraph 3(a)(v):
(vi) ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible contract
participant" as defined in section 1a(12) of the U.S. Commodity Exchange
Act.
(vii) INDIVIDUAL NEGOTIATION. This Agreement and each Transaction hereunder
is subject to individual negotiation by the parties.
(viii) RELATIONSHIP BETWEEN PARTY A AND PARTY B. Subject as provided in
Part 5(g), each of Party A and Party B will be deemed to represent to the
other on the date on which it enters into a Transaction or an amendment
thereof that (absent a written agreement between Party A and Party B that
expressly imposes affirmative obligations to the contrary for that
Transaction):
30
(1) PRINCIPAL. It is acting as principal and not as agent when
entering into this Agreement and each Transaction.
(2) NON-RELIANCE. It is acting for its own account and it has made its
own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to enter
into that Transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance or guarantee
as to the expected results of that Transaction.
(3) EVALUATION AND UNDERSTANDING. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks
of this Agreement and each Transaction hereunder. It is also capable
of assuming, and assumes, all financial and other risks of this
Agreement and each Transaction hereunder.
(4) STATUS OF PARTIES. The other party is not acting as a fiduciary or
an advisor for it in respect of that Transaction.
(d) Section 4 is hereby amended by adding the following new agreement:
(f) ACTIONS AFFECTING REPRESENTATIONS. Party B agrees not to take any
action during the term of this Agreement or any Transaction hereunder
that renders or could render any of the representations and warranties
in this Agreement untrue, incorrect, or incomplete, and if any event
or condition occurs that renders or could render any such
representation untrue, incorrect, or incomplete, Party B will
immediately give written notice thereof to Party A.
(e) SECTION 1(C). For purposes of Section 1(c) of the Agreement, this
Transaction shall be the sole Transaction under the Agreement.
(f) TRANSFER. Neither Party A nor Party B is permitted to assign, novate or
transfer (whether by way of security or otherwise) as a whole or in part any of
its rights, obligations or interests under this Agreement or any Transaction
without the prior written consent of the other party; PROVIDED, HOWEVER, that
(i) Party A may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of
substantially all of its assets to, another entity, or an incorporation,
reincorporation or reconstitution, and (ii) Party A may transfer this Agreement
to any Person, including, without limitation, another of Party A's offices,
branches or affiliates (any such Person, office, branch or affiliate, a
"Transferee") on at least five Business Days'
31
prior written notice to Party B; PROVIDED that, with respect to clause (ii), (A)
as of the date of such transfer the Transferee will not be required to withhold
or deduct on account of a Tax from any payments under this Agreement unless the
Transferee will be required to make payments of additional amounts pursuant to
Section 2(d)(i)(4) of this Agreement in respect of such Tax; (B) a Termination
Event or Event of Default does not occur under this Agreement as a result of
such transfer; (C) such notice is accompanied by a written instrument pursuant
to which the Transferee acquires and assumes the rights and obligations of Party
A so transferred; and (D) Party A will be responsible for any costs or expenses
incurred in connection with such transfer. Party B will execute such
documentation as is reasonably deemed necessary by Party A for the effectuation
of any such transfer. Notwithstanding the foregoing, no such transfer shall be
made unless Party A obtains a written acknowledgment from each of the Rating
Agencies (as defined in the Sale and Servicing Agreement) that, notwithstanding
such transfer, the then-current ratings of the Notes will not be reduced or
withdrawn.
Except as specified otherwise in the documentation evidencing a transfer, a
transfer of all the obligations of Party A made in compliance with this Section
7 will constitute an acceptance and assumption of such obligations (and any
related interests so transferred) by the Transferee, a novation of the
Transferee in place of Party A with respect to such obligations (and any related
interests so transferred), and a release and discharge by Party B of Party A
from, and an agreement by Party B not to make any claim for payment, liability,
or otherwise against Party A with respect to, such obligations from and after
the effective date of the transfer.
(g) TRUSTEE CAPACITY. It is expressly understood and agreed by the parties
hereto that (i) this Agreement is executed and delivered by Deutsche Bank
National Trust Company, not individually or personally but solely as
Indenture Trustee on behalf of the Indenture Trust in the exercise of the
powers and authority conferred and vested in it under the Indenture, (ii)
each of the representations, undertakings and agreements herein made on the
part of the Indenture Trust is made and intended not as personal
representations, undertakings and agreements by Deutsche Bank National
Trust Company but is made and intended for the purpose of binding only the
Indenture Trust, (iii) nothing herein contained shall be construed as
creating any liability on the part of Deutsche Bank National Trust Company,
individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly
waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (iv) under no circumstances shall Deutsche
Bank National Trust Company be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Indenture Trust under this Agreement or any other related
documents.
32
Party B represents that:
(i) Status. Deutsche Bank National Trust Company (the "Indenture
Trustee") is indenture trustee of the Indenture Trust whose
appointment is valid and effective both under the laws of the State of
New York and under the Indenture, and the Indenture Trustee has the
power to own assets in its capacity as indenture trustee of the
Indenture Trust.
(ii) Powers. In its capacity as indenture trustee of the Indenture
Trust, the Indenture Trustee has power under the Indenture to execute
this Agreement and any other documentation relating to this Agreement
to which the Indenture Trust is party, to deliver this Agreement and
any other documentation relating to this Agreement that it is required
by this Agreement to deliver and to perform its obligations (on behalf
of the Indenture Trust) under this Agreement and any obligations (on
behalf of the Indenture Trust) it has under any Credit Support
Document to which the Indenture Trust is party and has taken all
necessary action to authorize such execution, delivery and
performance;
(iii) No Violation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable to the
Indenture Trustee or the Indenture Trust, any provision of the Sale
and Servicing Agreement or the Indenture, any order or judgment of any
court or other agency of government applicable to the Indenture
Trustee, the Indenture Trust or any assets of the Indenture Trust, or
any contractual restriction binding on or affecting the Trustee, the
Indenture Trust or any assets of the Indenture Trust;
(iv) Consents. All governmental and other consents that are required
have been obtained by the Indenture Trustee with respect to this
Agreement or any Credit Support Document to which the Indenture
Trustee is party have been obtained and are in full force and effect
and all conditions of such consents have been complied with; and
(v) Obligations Binding. The obligation of the Indenture Trust under
this Agreement and any Credit Support Document to which the Indenture
Trust is party constitute legal, valid and binding obligations of the
Indenture Trust, enforceable against the Indenture Trust in accordance
with their respective terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or law)) and no
circumstances are known to the Indenture Trustee which would or might
prevent the Indenture Trustee from having recourse to the assets of
the Indenture Trust for the purposes of meeting such obligations.
(h) PROCEEDINGS. Without impairing any right afforded to it under the Sale and
Servicing Agreement or the Indenture as a third party beneficiary, Party A
shall not institute
33
against or cause any other person to institute against, or join any other
person in instituting against the Indenture Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings under any federal or state bankruptcy, dissolution or
similar law, for a period of one year and one day, or if longer the
applicable preference period then in effect, following indefeasible payment
in full of the Notes. Nothing shall preclude, or be deemed to stop, Party A
(i) from taking any action prior to the expiration of the aforementioned
one year and one day period, or if longer the applicable preference period
then in effect, in (A) any case or proceeding voluntarily filed or
commenced by Party B or (B) any involuntary insolvency proceeding filed or
commenced by a Person other than Party A, or (ii) from commencing against
Party B or any of the Collateral any legal action which is not a
bankruptcy, reorganization, arrangement, insolvency, moratorium,
liquidation or similar proceeding.
(i) CHANGE OF ACCOUNT. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word "delivery" in the first line
thereof:-
"to another account in the same legal and tax jurisdiction as the original
account"
(j) SALE AND SERVICING AGREEMENT AND INDENTURE.
(1) Capitalized terms used in this Agreement that are not defined herein
and are defined in the Sale and Servicing Agreement shall have the
respective meanings assigned to them in the Sale and Servicing Agreement.
(2) Party B will provide at least ten days' prior written notice to Party A
of any proposed amendment or modification to the Sale and Servicing
Agreement or the Indenture.
(k) SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreements, each of Party A and Party B irrevocably
waives as to itself any and all contractual rights it may have to set off,
net, recoup or otherwise withhold or suspend or condition its payment or
performance of any obligation to the other party under this Agreement
against any obligation of one party hereto to the other party hereto
arising outside of this Agreement. The provisions for set off set forth in
Section 6(e) of this Agreement shall not apply for purposes of this
Transaction.
(l) NOTICE OF CERTAIN EVENTS OR CIRCUMSTANCES. Each party agrees, upon learning
of the occurrence or existence of any event or condition that constitutes
(or that with the giving of notice or passage of time or both would
constitute) an Event of Default or Termination Event with respect to such
party, promptly to give the other party notice of such event or condition
(or, in lieu of giving notice of such event or condition in the case of an
event or condition that with the giving of notice or passage of time or
both would constitute an Event of Default or Termination Event with respect
to the party, to
34
cause such event or condition to cease to exist before becoming an Event of
Default or Termination Event); PROVIDED that failure to provide notice of
such event or condition pursuant to this Part 5(l) shall not constitute an
Event of Default or a Termination Event.
(m) REGARDING PARTY A. Party B acknowledges and agrees that Party A has had and
will have no involvement in and, accordingly Party A accepts no
responsibility for: (i) the establishment, structure, or choice of assets
of Party B; (ii) the selection of any person performing services for or
acting on behalf of Party B; (iii) the selection of Party A as the
Counterparty; (iv) the terms of the Notes; (v) the preparation of or
passing on the disclosure and other information contained in any offering
circular for the Notes, the Sale and Servicing Agreement, or any other
agreements or documents used by Party B or any other party in connection
with the marketing and sale of the Notes; (vi) the ongoing operations and
administration of Party B, including the furnishing of any information to
Party B which is not specifically required under this Agreement; or (vii)
any other aspect of Party B's existence.
(n) AMENDMENT. This Agreement will not be amended unless Party B shall have
received prior written confirmation from each of the Rating Agencies that
such amendment will not cause any of the Rating Agencies to downgrade or
withdraw its then-current ratings of any outstanding Notes (without regard
to the Note Policy).
(o) RATING AGENCY CONDITION. For purposes of this Agreement, "Rating Agency
Condition" means, with respect to any particular proposed act or omission
to act hereunder that the party acting or failing to act must consult with
any of the Rating Agencies then providing a rating of the Notes and receive
from the relevant Rating Agencies a prior written confirmation that the
proposed action or inaction would not cause a downgrade or withdrawal of
the then-current rating of the Notes (without regard to the Note Policy).
35
IN WITNESS WHEREOF, the parties have executed this document by their duly
authorized officers with effect from the date so specified on the first page
hereof.
DEUTSCHE BANK NATIONAL
TRUST COMPANY, NOT IN ITS
INDIVIDUAL CAPACITY, BUT
SOLELY AS INDENTURE TRUSTEE
ON BEHALF OF ARGENT
CREDIT SUISSE FIRST BOSTON MORTGAGE LOAN TRUST 2005-W1,
INTERNATIONAL ASSET-BACKED NOTES, SERIES
2005-W1
("Party A") ("Party B")
By:-----------------------
Name:
Title:
By: By:
----------------------- -----------------------
Name: Name:
Title: Title:
(MULTICURRENCY - CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of April 19, 2005
and
DEUTSCHE BANK NATIONAL TRUST
COMPANY, NOT IN ITS INDIVIDUAL
CAPACITY, BUT SOLELY AS
CREDIT SUISSE FIRST BOSTON INDENTURE TRUSTEE ON BEHALF
INTERNATIONAL OF ARGENT MORTGAGE LOAN
TRUST 2005-W1, ASSET-BACKED
NOTES, SERIES 2005-W1
-------------------------------------- ---------------------------------
------- -------
("Party A") ("Party B")
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: -
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement'), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
DEUTSCHE BANK NATIONAL
TRUST COMPANY NOT IN ITS
INDIVIDUAL CAPACITY, BUT
SOLELY AS INDENTURE
TRUSTEE ON BEHALF OF
ARGENT MORTGAGE LOAN
TRUST 2005-W1, ASSET -
CREDIT SUISSE FIRST BOSTON BACKED NOTES, SERIES 2005-
INTERNATIONAL W1
(NAME OF PARTY) (NAME OF PARTY)
BY: BY:
----------------------------- --------------------------
Name: Name:
Title: Title:
Date: Date:
BY:
-----------------------------
18
Name:
Title:
Date:
18
ELECTIONS AND VARIABLES
TO THE ISDA CREDIT SUPPORT ANNEX
DATED AS OF APRIL 19, 2005
BETWEEN
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
AND DEUTSCHE BANK NATIONAL
TRUST COMPANY, NOT INDIVIDUALLY, BUT
SOLELY AS INDENTURE TRUSTEE ON BEHALF OF
ARGENT MORTGAGE LOAN TRUST 2005-W1,
ASSET-BACKED NOTES, SERIES 2005-W1
("PARTY A")
("PARTY B")
PARAGRAPH 13.
(a) SECURITY INTEREST FOR "OBLIGATIONS".
The term "OBLIGATIONS" as used in this Annex includes the following
additional obligations:
With respect to Party A: None.
With respect to Party B: None.
(b) CREDIT SUPPORT OBLIGATIONS.
(i) DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT.
(A) "DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a), except
that the words "upon a demand made by the Secured Party" shall be deleted
and the word "that" on the second line of Paragraph 3(a) shall be replaced
with the word "a". Paragraph 4(b) is hereby amended by the insertion of the
words "(i) in respect of a Transfer pursuant to Paragraph 3(b),"
immediately prior to the words "if a demand for" and the insertion of the
words "; and (ii) in respect of a Transfer pursuant to Paragraph 3(a), the
relevant Transfer will be made not later than the close of business on the
Local Business Day following the Valuation Date" immediately prior to the
period.
(B) "RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
(C) "CREDIT SUPPORT AMOUNT" for a Valuation Date shall mean one of the
following depending on whether or not the specified events have occurred on
such Valuation Date:-
(i) if a Collateralization Event has not occurred, or has
occurred but is not continuing, "CREDIT SUPPORT AMOUNT"
shall mean zero (0);
11
(ii) if a Collateralization Event has occurred other than
pursuant to Part 5(b)(1)(C) and is continuing, "CREDIT
SUPPORT AMOUNT" shall mean an amount in USD equal to the
greater of (a) 2.5% of the Notional Amount of the
Transaction on such date plus the Secured Party's Exposure
and (b) an amount equal to the Floating Amount payable by
Party A in respect of the first Floating Rate Payer Payment
Date scheduled to occur on or after the date on which the
Delivery Amount as a result of such Collateralization Event
is due;
(iii) if a Collateralization Event has occurred pursuant to Part
5(b)(1)(C) and is continuing, "CREDIT SUPPORT AMOUNT" shall
mean an amount in USD equal to the sum of (a) the greater of
Party B's Exposure and zero, and (b) the Notional Volatility
Buffer. NOTIONAL VOLATILITY BUFFER, as determined by the
Valuation Agent for any date, means the product of (i) the
Notional Amount of the Transaction on such date, (ii)
multiplied by the Volatility Buffer Percentage for such date
as set out in the table below on such date,
-------------------------------------- ------------------------------------
PARTY A S&P RATING ON SUCH DATE VOLATILITY BUFFER PERCENTAGE
-------------------------------------- ------------------------------------
-------------------------------------- ------------------------------------
S&P S-T Rating of A-1 or above 0.00%
-------------------------------------- ------------------------------------
S&P S-T Rating of A-2 4.75%
-------------------------------------- ------------------------------------
S&P S-T Rating of A-3 6.75%
-------------------------------------- ------------------------------------
S&P L-T Rating of BB+ or lower 7.50%
-------------------------------------- ------------------------------------
L-T RATING means with respect to any Person, the unsecured,
unguaranteed and otherwise unsupported long-term senior debt
obligations of such Person.
S-T RATING means with respect to any Person, the unsecured,
unguaranteed and otherwise unsupported short-term debt
obligations of such Person.
(ii) ELIGIBLE COLLATERAL. On any date, the following items will qualify as
"ELIGIBLE COLLATERAL" for Party A:
VALUATION
PERCENTAGE
(A) Cash 100%
(B) negotiable debt obligations issued 98.5%
after 18 July 1984 by the U.S. Treasury Department
12
having a residual maturity on such date
of less than 1 year
(C) negotiable debt obligations issued 93.6%
after 18 July 1984 by the U.S. Treasury Department
having a residual maturity on such date
equal to or greater than
1 year but less than 5 years
(D) negotiable debt obligations issued 89.9%
after 18 July 1984 by the U.S. Treasury Department
having a residual maturity on such date
equal to or greater than 5 years but less
than 10 years
(iii) OTHER ELIGIBLE SUPPORT. None.
(iv) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" means with respect to Party A: Not
applicable.
"INDEPENDENT AMOUNT" means with respect to Party B: Not
applicable.
(B) "THRESHOLD" means with respect to Party A and Party B: Not
applicable.
(C) "MINIMUM TRANSFER AMOUNT" means with respect to Party A: $50,000.
"MINIMUM TRANSFER AMOUNT" means with respect to Party B: Not
applicable.
(D) ROUNDING The Delivery Amount and the Return Amount will be
rounded up and down respectively to the nearest integral multiple
of $10,000, provided that this Rounding Provision shall not apply
in respect of any Return Amount payable in respect of any date on
which Party B's Exposure is less than or equal to zero.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means Party A. Calculations by Party A will be made
by reference to commonly accepted market sources.
(ii) "VALUATION DATE" means,
(A) in the event that (1) no Collateralization Event has occurred, or
has occurred but is not continuing, (2) a Collateralization Event
has occurred other than pursuant to Part 5(b)(1)(C) and is
continuing, or (3) two or more Collateralization Events have
occurred pursuant to Part 5(b)(1)(C) and any other subparagraph
of Part 5(b)(1) and are continuing, each Local Business Day
which, if treated as a Valuation Date, would result in a Delivery
Amount or a Return Amount; and
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(B) in the event that a Collateralization Event has occurred solely
pursuant to Part 5(b)(1)(C) and is continuing, or a Ratings Event
has occurred and Party A has not obtained a substitute
counterparty as set forth in Part 5(b)(3) the last Local Business
Day of each calendar week.
(iii) "VALUATION TIME" means the close of business in the city of the
Valuation Agent on the Local Business Day prior to the Valuation Date
or date of calculation, as applicable, PROVIDED that the calculations
of Value and Exposure will be made as of approximately the same time
on the same date.
(iv) "NOTIFICATION TIME" means 4:00 p.m., London time, on a Local Business
Day.
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES.
No events shall constitute a "Specified Condition."
(e) SUBSTITUTION.
(i) "SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
(ii) CONSENT. The Pledgor must obtain the Secured Party's prior consent to
any substitution pursuant to Paragraph 4(d) and shall give to the
Secured Party not less than two (2) Local Business Days' notice
thereof specifying the items of Posted Credit Support intended for
substitution.
(f) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 4:00 p.m. London time on the Local Business
Day following the date on which the notice of the dispute is given
under Paragraph 5.
(ii) VALUE. For the purpose of Paragraphs 5(i)(C) and 5(ii), on any date,
the Value of Eligible Collateral and Posted Collateral will be
calculated as follows:
(A) with respect to any Cash; the amount thereof; and
(B) with respect to any Eligible Collateral comprising securities;
the sum of (a)(x) the last bid price on such date for such
securities on the principal national securities exchange on which
such securities are listed, multiplied by the applicable
Valuation Percentage or (y) where any such securities are not
listed on a national securities exchange, the bid price for such
securities quoted as at the close of business on such date by any
principal market maker for such securities chosen by the
Valuation Agent, multiplied by the applicable Valuation
Percentage or (z) if no such bid price is listed or quoted for
such date, the last bid price listed or quoted (as the case may
be), as of the day next preceding such date on which such prices
were available; multiplied by the applicable Valuation
Percentage; plus (b) the accrued interest on such securities
(except to the extent that such interest shall have been paid to
the Pledgor pursuant to Paragraph 6(d)(ii) or included in the
applicable price referred to in subparagraph (a) above) as of
such date.
(iii) ALTERNATIVE. The provisions of Paragraph 5 will apply provided the
obligation of the appropriate party to deliver the undisputed amount
to the other party will not arise prior to the time that would
otherwise have applied to the Transfer pursuant to, or deemed made,
under Paragraph 3 if no dispute had arisen.
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(g) HOLDING AND USING POSTED COLLATERAL.
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS:
The Indenture Trustee (as defined in the Sale and Servicing Agreement)
will be entitled to hold Posted Collateral pursuant to Paragraph 6(b).
(ii) USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c) will not
apply to Party B. Therefore, Party B will not have any of the rights
specified in Paragraph 6(c)(i) or 6(c)(ii).
(h) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) INTEREST RATE. The "INTEREST RATE" will be the annualized rate of
return actually achieved on Posted Collateral in the form of Cash
during the relevant Interest Period.
(ii) TRANSFER OF INTEREST AMOUNT. The Transfer of the Interest Amount will
be made on any Local Business Day on which Posted Collateral in the
form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph 6(d)(ii)
will apply and for the purposes of calculating the Interest Amount the
amount of interest calculated for each day of the Interest Period
shall be compounded daily.
(i) ADDITIONAL REPRESENTATION(S).
There are no additional representations by either party.
(j) DEMANDS AND NOTICES.
All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement, save that any demand,
specification or notice:
(i) shall be given to or made at the following addresses:
If to Party A:
Address: One Xxxxx Xxxxxx
Xxxxxx X00 0XX
Xxxxxxx
Telephone: 00 00 0000 0000
Facsimile: 44 20 7883 7987
Attention: Collateral Management Unit
If to Party B:
As set forth in Part 4(a) of the Schedule;
or at such other address as the relevant party may from time to time
designate by giving notice (in accordance with the terms of this paragraph)
to the other party;
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(ii) shall (unless otherwise stated in this Annex) be deemed to be
effective at the time such notice is actually received unless such
notice is received on a day which is not a Local Business Day or after
the Notification Time on any Local Business Day in which event such
notice shall be deemed to be effective on the next succeeding Local
Business Day.
(k) ADDRESS FOR TRANSFERS.
Party A: To be notified to Party B by Party A at the time of the request
for the Transfer.
Party B: To be notified to Party A by Party B at the time of the request
for the Transfer.
(l) OTHER PROVISIONS.
(i) ADDITIONAL DEFINITIONS
As used in this Annex:
"EQUIVALENT COLLATERAL" means, with respect to any security
constituting Posted Collateral, a security of the same issuer and, as
applicable, representing or having the same class, series, maturity,
interest rate, principal amount or liquidation value and such other
provisions as are necessary for that security and the security
constituting Posted Collateral to be treated as equivalent in the
market for such securities;
"LOCAL BUSINESS DAY" means: (i) any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign
currency deposits) in London, and (ii) in relation to a Transfer of
Eligible Collateral, a day on which the clearance system agreed
between the parties for the delivery of Eligible Collateral is open
for acceptance and execution of settlement instructions (or in the
case of a Transfer of Cash or other Eligible Collateral for which
delivery is contemplated by other means, a day on which commercial
banks are open for business (including dealings for foreign exchange
and foreign currency deposits) in New York and such other places as
the parties shall agree);
(ii) TRANSFER TIMING
(a) Paragraph 4(b) shall be deleted and replaced in its entirety by
the following paragraph:
"Subject to Paragraphs 4(a) and 5 and unless otherwise specified,
if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the
relevant Transfer will be made not later than the close of
business on the second Local Business Day thereafter; if a demand
is made after the Notification Time then the relevant Transfer
will be made not later than the close of business on the third
Local Business Day thereafter."
(b) Paragraph 6(d)(1) shall be amended so that the reference therein
to "the following Local Business Day" shall be replaced by
reference to "the second Local Business Day thereafter".
(iii) EVENTS OF DEFAULT
Paragraph 7 shall be deleted and replaced in its entirety by the
following paragraph:
16
"For the purposes of Section 5(a)(i) of this Agreement, an Event
of Default will exist with respect to a Party if that Party fails
(or fails to cause its Custodian) to make, when due, any Transfer
of Posted Credit Support or the Interest Amount, as applicable,
required to be made by it and that failure continues for two
Local Business Days after the notice of that failure is given to
that Party".
(iv) RETURN OF FUNGIBLE SECURITIES
In lieu of returning to the Pledgor pursuant to Paragraphs 3(b), 4(d),
5 and 8(d) any Posted Collateral comprising securities the Secured
Party may return Equivalent Collateral.
(v) COVENANTS OF THE PLEDGOR
So long as the Agreement is in effect, the Pledgor covenants that it
will keep the Posted Collateral free from all security interests or
other encumbrances created by the Pledgor, except the security
interest created hereunder and any security interests or other
encumbrances created by the Secured Party; and will not sell,
transfer, assign, deliver or otherwise dispose of, or grant any option
with respect to any Posted Collateral or any interest therein, or
create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other
encumbrance with respect to any Posted Collateral or any interest
therein, without the prior written consent of the Secured Party.
(vi) NO COUNTERCLAIM
A party's rights to demand and receive the Transfer of Eligible
Collateral as provided hereunder and its rights as Secured Party
against the Posted Collateral or otherwise shall be absolute and
subject to no counterclaim, set-off, deduction or defense in favor of
the Pledgor except as contemplated in Sections 2 and 6 of the
Agreement and Paragraph 8 of this Annex.
(vii) HOLDING COLLATERAL
The Secured Party shall cause any Custodian appointed hereunder to
open and maintain a segregated account and to hold, record and
identify all the Posted Collateral in such segregated account and,
subject to Paragraphs 6(c) and 8(a), such Posted Collateral shall at
all times be and remain the property of the Pledgor and shall at no
time constitute the property of, or be commingled with the property
of, the Secured Party or the Custodian.
(viii) SECURITY AND PERFORMANCE
Eligible Collateral Transferred to the Secured Party constitutes
security and performance assurance without which the Secured Party
would not otherwise enter into and continue any and all Transactions.
(ix) AGREEMENT AS TO SINGLE SECURED PARTY AND PLEDGOR
Party A and Party B agree that, notwithstanding anything to the
contrary in the recital to this Annex, Paragraph 1(b), Paragraph 2 or
the definitions in Paragraph 12, (a) the term "SECURED PARTY" as used
in this Annex means only Party B, (b) the term "PLEDGOR" as used in
this Annex means only Party A, (c) only Party A makes the pledge and
grant in Paragraph 2, the acknowledgment in the final sentence of
Paragraph 8(a) and the representations in Paragraph 9 and (d) only
Party A will be required to make Transfers of Eligible Credit Support
hereunder.
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(x) EXTERNAL VERIFICATION OF XXXX-TO-MARKET VALUATIONS.
Every month after a Collateralization Event has occurred pursuant to
Part 5(b)(1)(C) and is continuing, then, unless otherwise agreed in
writing with S&P, Party A will verify its determination of Exposure of
the Transaction on the next Valuation Date by seeking quotations from
two (2) Reference Market-makers for their determination of Exposure of
the Transaction on such Valuation Date and the Valuation Agent will
use the greater of either (a) its own determination or (b) the highest
quotation for a Reference Market-maker, if applicable, for the next
Valuation Date; PROVIDED, that this Paragraph 13(l)(xi) shall only
apply to the extent that the Notes outstanding at such time (as
defined in the Sale and Servicing Agreement) are rated higher by S&P
than the S&P L-T Rating of Party A; and PROVIDED FURTHER, that Party A
shall not seek verification of its determination of Exposure as
described above from the same Reference Market-maker more than four
times in any twelve-month period.
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(y) TRUSTEE CAPACITY.
It is expressly understood and agreed by the parties hereto that (i)
this Agreement is executed and delivered by Deutsche Bank National
Trust Company, not individually or personally but solely as Indenture
Trustee on behalf of the Indenture Trust in the exercise of the powers
and authority conferred and vested in it under the Indenture, (ii)
each of the representations, undertakings and agreements herein made
on the part of the Indenture Trust is made and intended not as
personal representations, undertakings and agreements by Deutsche Bank
National Trust Company but is made and intended for the purpose of
binding only the Indenture Trust (iii) nothing herein contained shall
be construed as creating any liability on the part of Deutsche Bank
National Trust Company, individually or personally, to perform any
covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by
any Person claiming by, through or under the parties hereto and (iv)
under no circumstances shall Deutsche Bank National Trust Company be
personally liable for the payment of any indebtedness or expenses of
the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the
Indenture Trust under this Agreement or any other related documents.
19
CREDIT SUISSE FIRST BOSTON DEUTSCHE BANK NATIONAL TRUST
INTERNATIONAL COMPANY, NOT IN ITS INDIVIDUAL
CAPACITY, BUT SOLELY AS INDENTURE
TRUSTEE FOR ARGENT MORTGAGE LOAN
TRUST 2005-W1, ASSET-BACKED NOTES,
SERIES 2005-W1
By:
-
Name:
Title: Authorized Signatory
By: By:
- -
Name: Name:
Title: Authorized Signatory Title:
EXHIBIT J
FORM OF SWAP ADMINISTRATION AGREEMENT
This Swap Administration Agreement, dated as of April 19, 2005 (this
"Agreement"), among Deutsche Bank National Trust Company, a national banking
association ("Deutsche Bank"), as swap administrator (in such capacity, the
"Swap Administrator"), Deutsche Bank, as indenture trustee for Argent Securities
Inc., Asset-Backed Notes, Series 2005-W1 (in such capacity, the "Indenture
Trustee"), and Argent Mortgage Company, LLC (the "Seller").
WHEREAS, Deutsche Bank, as Indenture Trustee for Argent Mortgage Loan
Trust 2005-W1 (the "Trust"), is executing on behalf of the Trust as counterparty
to an Interest Rate Swap Agreement (the "Swap Agreement"), a copy of which is
attached hereto as Exhibit A, between Deutsche Bank, not in its individual
capacity, but solely as Indenture Trustee and Credit Suisse First Boston
International ("CSFBi");
WHEREAS, it is desirable to appoint the Swap Administrator, and the
Swap Administrator desires to accept such appointment, to distribute funds
received by the Swap Provider as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
2. DEFINITIONS. Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned thereto in the Sale and
Servicing Agreement or in the related Indenture, as the case may be, as in
effect on the date hereof.
"DEFAULT SWAP AMOUNT": With respect to Net Swap Payments, an amount
determined in the same manner as Net Swap Payments as set forth in the Interest
Rate Swap Agreement, PROVIDED, HOWEVER, that the definition of "Notional Amount"
used therein shall be equal to the lesser of (i) the aggregate Stated Principal
Balance of the Mortgage Loans for such Payment Date and (ii) the Swap Notional
Amount for such Payment Date. With respect to Swap Termination Payments, 100% of
such amounts.
"SWAP NOTIONAL AMOUNT": The amount set forth on the notional schedule
attached to the Interest Rate Swap Agreement.
"SECURED PARTY": Any Person that holds a security interest in the Trust
Certificates as identified to the Swap Administrator in writing by the Seller.
"TRUST CERTIFICATE DEFAULT DATE": The date in which the Indenture Trustee,
Owner Trustee and the Swap Administrator receives notice from a Secured Party,
stating the Seller, or its Affiliates have defaulted under certain financing
documents, and that ownership of the Trust Certificates should be transferred
into the name of such secured party.
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3. SWAP ADMINISTRATOR.
The Swap Administrator is hereby appointed to receive all funds paid by
CSFBi, or its successors in interest (the "Swap Provider") under the Interest
Rate Swap Agreement (including any Swap Termination Payment) and the Swap
Administrator hereby agrees to receive such amounts and to distribute as
follows:
(A) ON ANY PAYMENT DATE PRIOR TO THE TRUST CERTIFICATE DEFAULT DATE, TO THE
INDENTURE TRUSTEE, 100% OF THE NET SWAP PAYMENT RECEIVED BY THE SWAP
ADMINISTRATOR UNDER THE INTEREST RATE SWAP AGREEMENT, FOR DEPOSIT INTO THE
PAYMENT ACCOUNT, AND FOR DISTRIBUTION IN ACCORDANCE WITH SECTION 4.01(A)(3)
OF THE SALE AND SERVICING AGREEMENT.
(B) ON ANY PAYMENT DATE ON OR AFTER THE TRUST CERTIFICATE DEFAULT DATE,
PAYMENTS MADE BY THE SWAP PROVIDER WILL BE DISTRIBUTED IN THE FOLLOWING
AMOUNTS AND ORDER OF PRIORITY:
(I) TO THE INDENTURE TRUSTEE, THE DEFAULT SWAP AMOUNT, FOR DEPOSIT
INTO THE PAYMENT ACCOUNT, AND FOR DISTRIBUTION IN ACCORDANCE WITH SECTION
4.01(A)(3) OF THE SALE AND SERVICING AGREEMENT; AND
(II) TO THE SECURED PARTY; THE EXCESS OF THE NET SWAP PAYMENT AND
DEFAULT SWAP AMOUNT, PROVIDED, HOWEVER, THAT SUCH AMOUNTS SHALL BE
AVAILABLE TO PAY ANY SHORTFALLS IN THE AMOUNTS OWNED UNDER SECTION
4.01(A)(3) AND SECTION 4.01(A)(5) (OTHER THAN PAYMENTS MADE UNDER CLAUSE
(V) THEREOF) OF THE SALE AND SERVICING AGREEMENT.
4. REPRESENTATIONS AND WARRANTIES OF THE SWAP ADMINISTRATOR. Deutsche Bank
represents and warrants as follows:
1. Deutsche Bank is duly organized and validly existing
national banking association under the laws of the United States and has
all requisite power and authority to execute and deliver this Agreement, to
perform its obligations as Swap Administrator hereunder.
2. The execution, delivery and performance of this Agreement by
Deutsche Bank as Swap Administrator has been duly authorized by Deutsche
Bank.
3. This Agreement has been duly executed and delivered by
Deutsche Bank as Swap Administrator and is enforceable against Deutsche
Bank in accordance with its terms, except as enforceability may be affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law).
5. MISCELLANEOUS.
1. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
J-2
2. Any action or proceeding against any of the parties hereto
relating in any way to this Agreement may be brought and enforced in the
courts of the State of New York sitting in the borough of Manhattan or of
the United States District Court for the Southern District of New York and
the Swap Administrator irrevocably submits to the jurisdiction of each such
court in respect of any such action or proceeding. The Swap Administrator
waives, to the fullest extent permitted by law, any right to remove any
such action or proceeding by reason of improper venue or inconvenient
forum.
3. This Agreement may be amended, supplemented or modified in
writing by the parties hereto.
4. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
5. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
6. The representations and warranties made by the parties to
this Agreement shall survive the execution and delivery of this Agreement.
No act or omission on the part of any party hereto shall constitute a
waiver of any such representation or warranty
7. The article and section headings herein are for convenience
of reference only, and shall not limit or otherwise affect the meaning
hereof.
6. THIRD PARTY BENEFICIARY.
The Indenture Trustee, the Note Insurer and the Pool Insurer shall
each be deemed a third-party beneficiary of this Agreement to the same extent as
if it were a party hereto, and shall have the right to enforce the provisions of
this Agreement.
7. SWAP ADMINISTRATOR RIGHTS.
The Swap Administrator shall be entitled to the same rights, protections
and indemnities afforded to the Indenture Trustee under the Indenture as if
specifically set forth herein with respect to the Swap Administrator.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
J-3
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Swap Administrator
By::
----------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST
COMPANY,as Indenture Trustee
By:
----------------------------------
Name:
Title:
ARGENT MORTGAGE COMPANY, LLC
By:
----------------------------------
Name:
Title:
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EXHIBIT A
SWAP AGREEMENT
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