WACHOVIA MORTGAGE LOAN TRUST, LLC
Depositor
WACHOVIA BANK, NATIONAL ASSOCIATION
Certificate Administrator
HOMEQ SERVICING CORPORATION
Servicer
U.S. BANK NATIONAL ASSOCIATION
Trustee
and
WACHOVIA BANK, NATIONAL ASSOCIATION
Custodian
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2005
---------------------------------
WACHOVIA MORTGAGE LOAN TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-WMC1
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES..................................................41
SECTION 2.01. Conveyance of Mortgage Loans.....................41
SECTION 2.02. Acceptance by the Trustee of the Mortgage
Loans............................................45
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor........................................46
SECTION 2.04. Representations and Warranties of the Servicer;
Representations and Warranties of the
Certificate Administrator........................50
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans
which are not "Qualified
Mortgages".......................................53
SECTION 2.06. Authentication and Delivery of
Certificates.....................................53
SECTION 2.07. REMIC Elections..................................54
SECTION 2.08. [RESERVED].......................................57
SECTION 2.09. Covenants of the Servicer........................57
SECTION 2.10. [RESERVED].......................................57
SECTION 2.11. Permitted Activities of the Trust................57
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..............57
SECTION 3.01. Servicer to Service Mortgage Loans...............57
SECTION 3.02. Servicing and Subservicing; Enforcement of
the Obligations of Servicer......................60
SECTION 3.03. Rights of the Depositor, the Certificate
Administrator and the Trustee in Respect of the
Servicer.........................................60
SECTION 3.04. [Reserved].......................................60
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Account; Certificate Account.....................61
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts..........................65
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.....................65
SECTION 3.08. Permitted Withdrawals from the Collection
Account and Certificate Account..................65
SECTION 3.09. [RESERVED].......................................67
SECTION 3.10. Maintenance of Hazard Insurance..................67
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.......................................68
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds.................69
SECTION 3.13. Custodian to Cooperate; Release of Mortgage
Files............................................73
SECTION 3.14. Documents, Records and Funds in Possession of
Servicer to be Held for the Trustee..............74
SECTION 3.15. Servicing Compensation...........................74
SECTION 3.16. Access to Certain Documentation..................75
SECTION 3.17. Annual Statement as to Compliance................75
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements..................75
SECTION 3.19. Rights of the NIMs Insurer.......................76
SECTION 3.20. [RESERVED].......................................76
SECTION 3.21. Annual Certificate by Certificate
Administrator....................................76
SECTION 3.22. Annual Certificate by Servicer...................76
SECTION 3.23. Prepayment Charge Reporting Requirements.........77
SECTION 3.24. Information to the Certificate Administrator.....77
SECTION 3.25. Indemnification..................................77
SECTION 3.26. Nonsolicitation..................................79
ARTICLE IV DISTRIBUTIONS...............................................79
SECTION 4.01. Advances.........................................79
SECTION 4.02. Reduction of Servicing Compensation in
Connection with Prepayment Interest Shortfalls...80
SECTION 4.03. Distributions on the REMIC Interests.............81
SECTION 4.04. Distributions....................................81
SECTION 4.05. Monthly Statements to Certificateholders.........86
ARTICLE V THE CERTIFICATES............................................89
SECTION 5.01. The Certificates.................................89
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates.....................90
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.....................................94
SECTION 5.04. Persons Deemed Owners............................94
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses........................................94
SECTION 5.06. Book-Entry Certificates..........................94
SECTION 5.07. Notices to Depository............................95
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.08. Definitive Certificates..........................95
SECTION 5.09. Maintenance of Office or Agency..................96
ARTICLE VI THE DEPOSITOR, THE SERVICER AND THE CERTIFICATE
ADMINISTRATOR...............................................96
SECTION 6.01. Respective Liabilities of the Depositor, the
Servicer and the Certificate Administrator.......96
SECTION 6.02. Merger or Consolidation of the Depositor, the
Servicer or the Certificate Administrator........96
SECTION 6.03. Limitation on Liability of the Depositor, the
Certificate Administrator, the Servicer and
Others...........................................97
SECTION 6.04. Limitation on Resignation of Servicer............98
SECTION 6.05. Errors and Omissions Insurance; Fidelity
Bonds............................................98
ARTICLE VII DEFAULT; TERMINATION OF SERVICER............................99
SECTION 7.01. Events of Default................................99
SECTION 7.02. Servicer Trigger Event..........................101
SECTION 7.03. Appointment of Successor........................102
SECTION 7.04. Notification to Certificateholders..............103
ARTICLE VIII CONCERNING THE TRUSTEE and the CERTIFICATE administrator...103
SECTION 8.01. Duties of the Trustee and the Certificate
Administrator...................................103
SECTION 8.02. Certain Matters Affecting the Trustee and the
Certificate Administrator.......................105
SECTION 8.03. Trustee and Certificate Administrator Not
Liable for Certificates or Mortgage Loans.......106
SECTION 8.04. Trustee and Certificate Administrator May Own
Certificates....................................106
SECTION 8.05. Trustee's Fees and Expenses.....................106
SECTION 8.06. Indemnification and Expenses of Trustee.........107
SECTION 8.07. Eligibility Requirements for Trustee............108
SECTION 8.08. Resignation and Removal of Trustee..............108
SECTION 8.09. Successor Trustee...............................109
SECTION 8.10. Merger or Consolidation of Trustee..............109
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee...109
SECTION 8.12. Tax Matters.....................................110
ARTICLE IX TERMINATION................................................113
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 9.01. Termination upon Liquidation or Repurchase of
all Mortgage Loans..............................113
SECTION 9.02. Final Distribution on the Certificates..........113
SECTION 9.03. Additional Termination Requirements.............114
ARTICLE X MISCELLANEOUS PROVISIONS...................................115
SECTION 10.01. Amendment.......................................115
SECTION 10.02. Counterparts....................................117
SECTION 10.03. Governing Law...................................117
SECTION 10.04. Intention of Parties............................117
SECTION 10.05. Notices.........................................117
SECTION 10.06. Severability of Provisions......................118
SECTION 10.07. Assignment......................................118
SECTION 10.08. Limitation on Rights of Certificateholders......118
SECTION 10.09. Inspection and Audit Rights.....................119
SECTION 10.10. Certificates Nonassessable and Fully Paid.......119
SECTION 10.11. Third Party Rights..............................120
SECTION 10.12. Additional Rights of the NIMs Insurer...........120
SECTION 10.13. Assignment; Sales; Advance Facilities...........120
v
TABLE OF CONTENTS
(continued)
PAGE
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF CUSTODIAN CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE 144A LETTER (QUALIFIED INSTITUTIONAL
BUYER)
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J FORM OF REGULATION S LETTER
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF CERTIFICATE
ADMINISTRATOR
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M FORM OF SWAP AGREEMENT
vi
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of September
1, 2005, among WACHOVIA MORTGAGE LOAN TRUST, LLC, a Delaware limited liability
company, as depositor (the "Depositor"), WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association, as certificate administrator (the "Certificate
Administrator") and custodian (the "Custodian"), HOMEQ SERVICING CORPORATION, a
New Jersey corporation, as servicer (the "Servicer"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) two real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) the Swap Agreement and the
Supplemental Interest Trust and (iv) the grantor trusts described in Section
2.07 hereof. The Lower Tier REMIC will consist of all of the assets constituting
the Trust Fund (other than the assets described in clauses (ii), (iii) and (iv)
above and the Lower Tier REMIC Regular Interests) and will be evidenced by the
Lower Tier REMIC Regular Interests (which will be uncertificated and will
represent the "regular interests" in the Lower Tier REMIC) and the Class LTR
Interest as the single "residual interest" in the Lower Tier REMIC. The Trustee
will hold the Lower Tier REMIC Regular Interests. The Upper Tier REMIC will
consist of the Lower Tier REMIC Regular Interests and will be evidenced by the
REMIC Regular Interests (which will represent the "regular interests" in the
Upper Tier REMIC) and the Residual Interest as the single "residual interest" in
the Upper Tier REMIC. The Class R Certificate will represent beneficial
ownership of the Class LTR Interest and the Residual Interest. The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the Latest Possible Maturity Date.
All covenants and agreements made by the Transferor in the Transfer
Agreement, by the Seller in the Sale Agreement and by the Depositor and the
Trustee herein with respect to the Mortgage Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates and, to the extent provided herein, the NIMs Insurer.
In consideration of the mutual agreements herein contained, the Depositor,
the Certificate Administrator, the Servicer and the Trustee hereby agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions that service for their own account mortgage loans of the
same type as the Mortgages Loans in the jurisdictions in which the related
Mortgaged Properties (or Underlying Mortgaged Properties in the case of Co-op
Loans) are located.
Accrual Period: With respect to each Class of Certificates and the
Lower Tier REMIC Interests and any Distribution Date, the period commencing on
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such advances being equal to the sum of the aggregate amount of
all scheduled payments of principal and interest (net of the Servicing Fee) on
the Mortgage Loans that were due during the applicable Due Period and not
received as of the close of business on the related Determination Date (other
than the principal portion of any Balloon Amount), less the aggregate amount of
any such Delinquent payments that the Servicer has determined would constitute a
Non-Recoverable Advance were an advance to be made with respect thereto;
provided, however, that with respect to any Mortgage Loan (x) which is a second
lien Mortgage Loan or (y) that has been converted to an REO Property, the
obligation to make advances shall be limited to payments of interest.
Advance Facility: A financing or other facility as described in Section
10.07.
Advance Facility Notice: As defined in Section 10.13(b).
Advance Financing Person: As defined in Section 10.13(a).
Advance Reimbursement Amount: As defined in Section 10.13(a).
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination,
the sum of the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance, the
Class A-4 Certificate Principal Balance, the Class R Certificate Principal
Balance, the Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal Balance, the Class M-3 Certificate Principal Balance, the Class M-4
Certificate Principal Balance, the Class M-5 Certificate Principal Balance, the
Class M-6 Certificate Principal Balance, the Class M-7 Certificate Principal
Balance, the Class M-8 Certificate Principal Balance, the Class M-9 Certificate
Principal Balance, the Class M-10 Certificate Principal Balance and the Class
M-11 Certificate Principal Balance, in each case as of such date of
determination.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class X Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged Property (or the related
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residential dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan), the "Appraised Value" of a Mortgaged Property (or the related
residential dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan) is the lesser of (1) the appraised value based on an appraisal made
for the Seller by an independent fee appraiser at the time of the origination of
the related Mortgage Loan, and (2) the sales price of such Mortgaged Property
(or the related residential dwelling unit in the Underlying Mortgaged Property
in the case of a Co-op Loan) at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property in
the case of a Co-op Loan) based upon the appraisal obtained at the time of
refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
(or UCC-3 assignment (or equivalent instrument) with respect to each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is endorsed in
blank), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
Available Funds Cap: As of any Distribution Date with respect to the
Certificates, a per annum rate equal to the excess of (A) the product of (i) 30
divided by the actual number of days in the related Accrual Period, (ii) the
aggregate principal balance of the Mortgage Loans as of the beginning of the
related Due Period, divided by the aggregate Certificate Principal Balance of
the Offered Certificates and the Class M-10 Certificates immediately prior to
such Distribution Date and (iii) the weighted average of the Net Mortgage Rates
on the Mortgage Loans for the related Due Period, weighted on the basis of the
principal balances thereof as of the beginning of the related Due Period (after
giving effect to principal prepayments in the related Prepayment Period) over
(B) the product of (i) 360 divided by the actual number of days in the related
Accrual Period and (ii) any amounts owed to the Swap Counterparty (other than
Defaulted Swap Termination Payments) for the related Distribution Date, divided
by the aggregate Certificate Principal Balance of the Offered Certificates and
the Class M-10 Certificates immediately prior to such Distribution Date.
Available Funds Cap Carryover: With respect to a Distribution Date, in the
event that the Pass-Through Rate for a class of Offered Certificates or Class
M-10 Certificates is based upon the Available Funds Cap, the excess of (1) the
amount of interest that such class would have been entitled to receive on such
Distribution Date had the Pass-Through Rate for that class not been calculated
based on the Available Funds Cap, up to but not exceeding the Maximum Rate Cap
over (2) the amount of interest such class was entitled to receive on such
Distribution Date based on the Available Funds Cap together with (A) the unpaid
portion of any such excess from prior Distribution Dates (and interest accrued
thereon at the then applicable Pass-Through Rate for such class, without giving
effect to the Available Funds Cap) and (B) any amount previously distributed
with respect to Available Funds Cap Carryover for such class that is recovered
as a voidable preference by a trustee in bankruptcy.
Balloon Loan: A Mortgage Loan having an original term to stated maturity
of approximately 15 years which provides for level monthly payments of principal
and interest based on a 30-year amortization schedule, with a balloon payment
of the remaining outstanding principal balance due on such Mortgage Loan at its
stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in
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Section 5.06). As of the Closing Date, each of the Class A (other than the Class
R Certificate) and Class M Certificates constitutes a Class of Book-Entry
Certificates.
Bring Down Letter: That certain letter agreement, dated as of September
29, 2005 between WMC and the Seller.
Business Day: Any day other than (i) a Saturday or Sunday or (ii) a day
on which banking institutions in the State of California, State of Minnesota,
State of North Carolina or the City of New York, New York are authorized or
obligated by law or executive order to be closed.
Certificate: Any one of the certificates of any Class executed by the
Certificate Administrator and authenticated by the Certificate Administrator in
substantially the forms attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and maintained
by the Certificate Administrator pursuant to Section 3.05(e) in the name of the
Certificate Administrator on behalf of the Trustee for the benefit of the
Certificateholders and designated "Wachovia Bank, National Association, in trust
for registered holders of Wachovia Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-WMC1." Funds in the Certificate Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Certificate Administrator: Wachovia Bank, National Association, a national
banking association, or any successor in interest.
Certificate Administrator Fee: The monthly fee paid to the Certificate
Administrator from interest collected with respect to each Mortgage Loan (as
well as from any liquidation proceeds from a liquidated Mortgage Loan that are
applied to accrued and unpaid interest) generally equal to the product of (a)
one-twelfth of the Certificate Administrator Fee Rate and (b) the Stated
Principal Balance of such Mortgage Loan. The Certificate Administrator is also
entitled to investment income earned on amounts on deposit in the Certificate
Account.
Certificate Administrator Fee Rate: 0.005% per annum.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any class of Offered Certificate, the
Class M-10 Certificates and the Class X Certificates and as of any Distribution
Date, the Initial Certificate Principal Balance of such Certificate less the sum
of (1) all amounts distributed with respect to such Certificate in reduction of
the Certificate Principal Balance thereof on previous Distribution Dates
pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts allocated to
such Certificate on previous Distribution Dates pursuant to Section 4.04(i).
On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class X Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date)) will be added to the aggregate
Certificate Principal Balance of the Class X Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the
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Certificateholders (reduced by the amount of the increase in the Certificate
Principal Balance of any more senior Class of Certificates pursuant to this
sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder; provided that neither the Certificate Administrator nor the Trustee
shall be responsible for knowing that any Certificate is registered in the name
of such an affiliate unless one of its Responsible Officers has actual
knowledge.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Certificate Principal Balance: For any date of determination,
the sum of the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance and
the Class A-4 Certificate Principal Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates and the Class A-4 Certificates.
Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal Distribution Amount for such
Distribution Date and (2) on or after the Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the Class A Certificate Principal
Balance immediately prior to such Distribution Date over (B) the lesser of (i)
55.10% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (ii) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount provided, however,
that in no event will the Class A Principal Distribution Amount with respect to
any Distribution Date exceed the aggregate Certificate Principal Balance of the
Class A Certificates.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class A-1
Certificates.
Class A-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
- 5 -
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class A-1 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class A-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1 Pass-Through Rate for the related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.110% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.220% per annum.
Class A-1 Pass-Through Rate: For the first Distribution Date, 3.940%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-1 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class A-2 Certificate: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2 Certificates.
Class A-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2 Pass-Through Rate on
the Class A-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class A-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2 Pass-Through Rate for the related Accrual Period.
Class A-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.180% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.360% per annum.
Class A-2 Pass-Through Rate: For the first Distribution Date, 4.010%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-2 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class A-3 Certificate: Any Certificate designated as a "Class A-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-3 Certificates.
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Class A-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-3 Pass-Through Rate on
the Class A-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-3 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class A-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-3 Pass-Through Rate for the related Accrual Period.
Class A-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates 0.260% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.520% per annum.
Class A-3 Pass-Through Rate: For the first Distribution Date, 4.090% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class A-4 Certificate: Any Certificate designated as a "Class A-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-4 Certificates.
Class A-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-4 Pass-Through Rate on
the Class A-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-4 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class A-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-4 Pass-Through Rate for the related Accrual Period.
Class A-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.370% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.740% per annum.
Class A-4 Pass-Through Rate: For the first Distribution Date, 4.200%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-4 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
- 7 -
Class LTA-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTA-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTA-3 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTA-4 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTM-1 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTM-2 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTM-3 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTM-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-7 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-8 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-9 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
- 8 -
Class LTM-10 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTM-11 Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower
Tier REMIC.
Class LTX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes and an interest
rate equal to the Net Rate.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates.
Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-1 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.440% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.660% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 4.270% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A
- 9 -
Certificate Principal Balance has been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date) and (B) the Class M-1 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 62.40% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, in no event will the Class M-1 Principal Distribution Amount with
respect to any Distribution Date exceed the Class M-1 Certificate Principal
Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-2 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.460% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.690% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 4.290%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-2 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M-1 Certificate Principal Balance have been reduced to zero
- 10 -
and a Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such Distribution Date) and (C) the Class M-2
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 69.20% of the Stated Principal Balances of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, in no event will the Class M-2 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-2
Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-3 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-3 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.490% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.735% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 4.320%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-3 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A
- 11 -
Certificate Principal Balance, Class M-1 Certificate Principal Balance and Class
M-2 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (D) the Class M-3 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 73.60% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, in no event will the Class M-3 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-3
Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4 Certificates.
Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-4 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.590% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.885% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 4.420% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
- 12 -
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance, Class M-2
Certificate Principal Balance and Class M-3 Certificate Principal Balance have
been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date) and (E) the Class M-4 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 76.80% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, in no event will the Class M-4 Principal Distribution Amount with
respect to any Distribution Date exceed the Class M-4 Certificate Principal
Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-5
Certificates.
Class M-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-5 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-5 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.640% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.960% per annum.
- 13 -
Class M-5 Pass-Through Rate: For the first Distribution Date, 4.470%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-5 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (F) the Class M-5 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 80.20% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, in no event will the Class M-5 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-5
Certificate Principal Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-6
Certificates.
Class M-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-6 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-6 Certificates with respect to interest on such prior Distribution Dates
- 14 -
and (2) interest on such excess (to the extent permitted by applicable law) at
the Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.690% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.035% per annum.
Class M-6 Pass-Through Rate: For the first Distribution Date, 4.520%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-6 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance, Class M-2
Certificate Principal Balance, Class M-3 Certificate Principal Balance, Class
M-4 Certificate Principal Balance and Class M-5 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance (after taking into account distributions of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (G) the Class M-6 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 83.10% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, in no event will the Class M-6 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-6
Certificate Principal Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-7 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-7 Certificates.
Class M-7 Certificate: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-7 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-7 Certificates.
- 15 -
Class M-7 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-7 Pass-Through Rate on
the Class M-7 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-7 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-7 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-7 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-7 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-7 Pass-Through Rate for the related Accrual Period.
Class M-7 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.150% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.725% per annum.
Class M-7 Pass-Through Rate: For the first Distribution Date, 4.980%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-7 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-7 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate Principal
Balance, Class M-5 Certificate Principal Balance and Class M-6 Certificate
Principal Balance have been reduced to zero and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date), (F) the Class M-5 Certificate
Principal Balance (after taking into account distributions of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class M-6
Certificate Principal Balance (after taking into account distributions of the
Class M-6 Principal Distribution Amount on such Distribution Date) and (H) the
Class M-7 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 86.30% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B)
the excess of the Stated Principal Balances for the Mortgage Loans as of the end
of the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, in no event will
the Class M-7 Principal Distribution Amount with respect to any Distribution
Date exceed the Class M-7 Certificate Principal Balance.
Class M-7 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-7 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-7 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-7 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
- 16 -
Class M-8 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-8 Certificates.
Class M-8 Certificate: Any Certificate designated as a "Class M-8
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-8 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-8 Certificates.
Class M-8 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-8 Pass-Through Rate on
the Class M-8 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-8 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-8 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-8 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-8 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-8 Pass-Through Rate for the related Accrual Period.
Class M-8 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.300% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.950% per annum.
Class M-8 Pass-Through Rate: For the first Distribution Date, 5.130%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-8 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-8 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance, Class M-2
Certificate Principal Balance, Class M-3 Certificate Principal Balance, Class
M-4 Certificate Principal Balance, Class M-5 Certificate Principal Balance,
Class M-6 Certificate Principal Balance and Class M-7 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date), (F) the Class M-5 Certificate
Principal Balance (after taking into account distributions of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class M-6
Certificate Principal Balance (after taking into account distributions of the
Class M-6 Principal Distribution Amount on such Distribution Date), (H) the
Class M-7 Certificate Principal Balance (after taking into account distributions
of the Class M-7 Principal Distribution Amount on such Distribution Date) and
(I) the Class M-8 Certificate Principal Balance immediately prior to such
Distribution Date
- 17 -
over (2) the lesser of (A) 88.60% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, in no event will
the Class M-8 Principal Distribution Amount with respect to any Distribution
Date exceed the Class M-8 Certificate Principal Balance.
Class M-8 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-8 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-8 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-8 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-9 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-9 Certificates.
Class M-9 Certificate: Any Certificate designated as a "Class M-9
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-9 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-9
Certificates.
Class M-9 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-9 Pass-Through Rate on
the Class M-9 Certificate Principal Balance as of such Distribution Date reduced
by any Non-Supported Interest Shortfalls allocated to the Class M-9 Certificates
on such Distribution Date. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class M-9 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-9 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-9 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-9 Pass-Through Rate for the related Accrual Period.
Class M-9 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.625% per annum.
Class M-9 Pass-Through Rate: For the first Distribution Date, 5.580%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-9 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-9 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance, Class M-2
Certificate Principal Balance, Class M-3 Certificate Principal Balance, Class
M-4 Certificate Principal Balance, Class M-5 Certificate Principal Balance,
Class M-6 Certificate Principal Balance, Class M-7 Certificate Principal Balance
and Class M-8 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the
- 18 -
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance (after taking into account distributions of the Class M-5 Principal
Distribution Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal Balance (after taking into account distributions of the Class M-6
Principal Distribution Amount on such Distribution Date), (H) the Class M-7
Certificate Principal Balance (after taking into account distributions of the
Class M-7 Principal Distribution Amount on such Distribution Date), (I) the
Class M-8 Certificate Principal Balance (after taking into account distributions
of the Class M-8 Principal Distribution Amount on such Distribution Date) and
(J) the Class M-9 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 90.80% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances for the Mortgage
Loans as of the end of the immediately preceding Due Period over the Minimum
Required Overcollateralization Amount. Notwithstanding the foregoing, in no
event will the Class M-9 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-9 Certificate Principal Balance.
Class M-9 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-9 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-9 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-9 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-10 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-10 Certificates.
Class M-10 Certificate: Any Certificate designated as a "Class M-10
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-10 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-10
Certificates.
Class M-10 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-10 Pass-Through Rate on
the Class M-10 Certificate Principal Balance as of such Distribution Date
reduced by any Non-Supported Interest Shortfalls allocated to the Class M-10
Certificates on such Distribution Date. For purposes of calculating interest,
principal distributions on a Distribution Date will be deemed to have been made
on the first day of the Accrual Period in which such Distribution Date occurs.
Class M-10 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-10 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-10 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-10 Pass-Through Rate for the related Accrual Period.
- 19 -
Class M-10 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.125% per annum.
Class M-10 Pass-Through Rate: For the first Distribution Date, 6.580%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-10 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-10 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate Principal
Balance, Class M-5 Certificate Principal Balance, Class M-6 Certificate
Principal Balance, Class M-7 Certificate Principal Balance, Class M-8
Certificate Principal Balance and Class M-9 Certificate Principal Balance have
been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance (after taking into account distributions of the Class M-5 Principal
Distribution Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal Balance (after taking into account distributions of the Class M-6
Principal Distribution Amount on such Distribution Date), (H) the Class M-7
Certificate Principal Balance (after taking into account distributions of the
Class M-7 Principal Distribution Amount on such Distribution Date), (I) the
Class M-8 Certificate Principal Balance (after taking into account distributions
of the Class M-8 Principal Distribution Amount on such Distribution Date), (J)
the Class M-9 Certificate Principal Balance (after taking into account
distributions of the Class M-9 Principal Distribution Amount on such
Distribution Date) and (K) the Class M-10 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 92.40% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, in no event will the Class M-10 Principal Distribution Amount
with respect to any Distribution Date exceed the Class M-10 Certificate
Principal Balance.
Class M-10 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-10 Applied Realized Loss Amount over (2) the sum
of (x) all distributions in reduction of the Class M-10 Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-10 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."
Class M-11 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-11 Certificates.
Class M-11 Certificate: Any Certificate designated as a "Class M-11
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
- 20 -
Class M-11 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-11 Certificates.
Class M-11 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-11 Pass-Through Rate on
the Class M-11 Certificate Principal Balance as of such Distribution Date
reduced by any Non-Supported Interest Shortfalls allocated to the Class M-11
Certificates on such Distribution Date. For purposes of calculating interest,
principal distributions on a Distribution Date will be deemed to have been made
on the first day of the Accrual Period in which such Distribution Date occurs.
Class M-11 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-11 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-11 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-11 Pass-Through Rate for the related Accrual Period.
Class M-11 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.125% per annum.
Class M-11 Pass-Through Rate: For the first Distribution Date, 6.580%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-11 Margin, (2) the Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class M-11 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate Principal
Balance, Class M-5 Certificate Principal Balance, Class M-6 Certificate
Principal Balance, Class M-7 Certificate Principal Balance, Class M-8
Certificate Principal Balance, Class M-9 Certificate Principal Balance and Class
M-10 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date), (F) the
Class M-5 Certificate Principal Balance (after taking into account distributions
of the Class M-5 Principal Distribution Amount on such Distribution Date), (G)
the Class M-6 Certificate Principal Balance (after taking into account
distributions of the Class M-6 Principal Distribution Amount on such
Distribution Date), (H) the Class M-7 Certificate Principal Balance (after
taking into account distributions of the Class M-7 Principal Distribution Amount
on such Distribution Date), (I) the Class M-8 Certificate Principal Balance
(after taking into account distributions of the Class M-8 Principal Distribution
Amount on such Distribution Date), (J) the Class M-9 Certificate Principal
Balance (after taking into account distributions of the Class M-9 Principal
Distribution Amount on such Distribution Date), (K) the Class M-10 Certificate
Principal Balance (after taking into account distributions of the Class M-10
Principal Distribution Amount on such Distribution Date) and (L) the Class M-11
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 94.40% of the Stated Principal Balances of the Mortgage
- 21 -
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, in no event will the Class M-11 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-11
Certificate Principal Balance.
Class M-11 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (1) the Class M-11 Applied Realized Loss Amount over (2) the sum
of (x) all distributions in reduction of the Class M-11 Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of such Class M-11 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P
Certificate on the face thereof, executed by the Certificate Administrator and
authenticated by the Certificate Administrator in substantially the form set
forth in Exhibit A, representing the right to distributions as set forth herein.
Class R Certificate: The Class R Certificate executed by the
Certificate Administrator and authenticated by the Certificate Administrator in
substantially the form set forth in Exhibit A.
Class R Certificate Principal Balance: Not applicable.
Class R Current Interest: Not applicable.
Class R Interest Carry Forward Amount: Not applicable.
Class R Margin: Not applicable.
Class R Pass-Through Rate: Not applicable.
Class X Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class X Certificates.
Class X Certificate: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class X Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class X Certificates.
Class X Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class X Distributable Interest
Rate on a notional amount equal to the aggregate principal balance of the Lower
Tier REMIC Regular Interests immediately prior to such Distribution Date, plus
the interest portion of any previous distributions on such Class that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class X Certificates and less the sum of (A) the amount of any Excess Interest
Entitlement of the Offered Certificates and the Class M-10 Certificates for such
Distribution Date and (B) amounts due to the Swap Provider under the Swap
Agreement for such Distribution Date.
Class X Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC Regular Interests (treating for purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker Classes as being capped at the
interest rate of its Related
- 22 -
Certificates (disregarding the Available Funds Cap) and treating the Class LTX
Interest as being capped at zero). The averages described in the preceding
sentence shall be weighted on the basis of the respective principal balances of
the Lower Tier REMIC Regular Interests immediately prior to any date of
determination.
Class X Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class X Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class X Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class X Certificates.
Class X Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class X Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class X Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class X Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Closing Date: September 29, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d). Funds in the Collection
Account shall be held in trust for the uses and purposes set forth in this
Agreement.
Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan) and (B) the sales price
of the related Mortgaged Property (or applicable dwelling unit, in the case of a
Co-op Loan) at time of origination.
Compensating Interest: For any Distribution Date and any Principal
Prepayment in full in respect of a Mortgage Loan that is received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by the
Servicer to the extent funds are available from the total Servicing Fee payable
for such Distribution Date, equal to the amount of interest at the Net Mortgage
Rate payable for that Mortgage Loan from the date on which the Servicer applied
such Principal Prepayment in full to reduce the Stated Principal Balance of such
Mortgage Loan through the last day of such preceding calendar month. There shall
be no Compensating Interest paid with respect to Principal Prepayments in full
that occur during the period from the Cut-off Date through September 15, 2005.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released either to a Mortgagor in accordance with the terms of the related
mortgage loan documents or to the holder of a senior lien on the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan).
- 23 -
Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Corporate Trust Office: With respect to the Certificate Administrator,
the principal office of the Certificate Administrator at which at any particular
time its certificate transfer services are conducted, which office at the date
of the execution of this instrument is located at 000 Xxxxx Xxxxx Xxxxxx, 12th
Floor, (NC 1179), Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Client Services
Manager - Wachovia Mortgage Loan Trust, Series 2005-WMC1. With respect to the
Trustee, the principal office of the Trustee at which at any particular time its
certificate transfer services are conducted, which office at the date of the
execution of this instrument is located at 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx.
Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance/WMLT 2005-WMC1.
Current Interest: Any of the Class A-1 Current Interest, the Class A-2
Current Interest, the Class A-3 Current Interest, the Class A-4 Current
Interest, the Class R Current Interest, the Class M-1 Current Interest, the
Class M-2 Current Interest, the Class M-3 Current Interest, the Class M-4
Current Interest, the Class M-5 Current Interest, the Class M-6 Current
Interest, the Class M-7 Current Interest, the Class M-8 Current Interest, the
Class M-9 Current Interest, the Class M-10 Current Interest and the Class M-11
Current Interest.
Custodian: Wachovia Bank, National Association, a national banking
association, or any successor in interest.
Cut-off Date: September 1, 2005.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Defaulted Swap Termination Payment: Any payment required to be made by
the Trust to the Swap Counterparty pursuant to the Swap Agreement as a result of
an event of default under the Swap Agreement with respect to which the Swap
Counterparty is the defaulting party or a termination event under that agreement
(other than illegality or a tax event) with respect to which the Swap
Counterparty is the sole Affected Party (as defined in the Swap Agreement) or
with respect to a termination resulting from a Substitution Event.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-
- 24 -
day month in which a payment was due on the 31st day of such month), then on the
last day of such immediately succeeding month. Similarly for "60 days
delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Wachovia Mortgage Loan Trust, LLC, a Delaware limited
liability company, or any successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates, the agreement between the Certificate Administrator and the
initial Depository.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying
the Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or
political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (2) any
organization (other than a cooperative described in Section 521 of the Code)
which is exempt from tax under Chapter 1 of Subtitle A of the Code unless such
organization is subject to the tax imposed by Section 511 of the Code and (3)
any organization described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such 25th
day is not a Business Day, the next succeeding Business Day, commencing in
October 2005.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a
- 25 -
national bank or banking corporation which has a rating of at least A-1 by S&P
or F1 by Fitch, or (iii) an account or accounts the deposits in which are fully
insured by the FDIC, or (iv) an account or accounts, acceptable to each Rating
Agency without reduction or withdrawal of the rating of any Class of
Certificates, as evidenced in writing, by a depository institution in which such
accounts are insured by the FDIC (to the limit established by the FDIC), the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the
Certificate Administrator, the Trustee and each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account and a
perfected first security interest against any collateral (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other depositors or creditors of the depository institution with which
such account is maintained, or (v) maintained at an eligible institution whose
commercial paper, short-term debt or other short-term deposits are rated at
least A-1+ by S&P and F-1+ by Fitch, or (vi) maintained with a federal or state
chartered depository institution the deposits in which are insured by the FDIC
to the applicable limits and the short-term unsecured debt obligations of which
(or, in the case of a depository institution that is a subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P or Prime-1 by Moody's at the time any deposits are held on
deposit therein, or (vii) otherwise acceptable to each Rating Agency, as
evidenced by a letter from each Rating Agency to the Certificate Administrator
and the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
ERISA Restricted Certificates: The Class X, Class P Certificates and Class
R Certificate and any other Certificate, unless the acquisition and holding of
such other Certificate is covered by and exempt under the Underwriter's
exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest Entitlement: On any Distribution Date, for each Class
of the Offered Certificates and the Class M-10 Certificates, the excess, if any,
of (1) the amount of interest such Class of Certificates is entitled to receive
on such Distribution Date at its Pass-Through Rate over (2) the amount of
interest such Class of Certificates would have been entitled to receive on such
Distribution Date had the Pass-Through Rate for such Class been the REMIC
Pass-Through Rate.
Excess Interest Obligation: On any Distribution Date, for each Class of
the Offered Certificates and the Class M-10 Certificates, the excess, if any, of
(1) the amount of interest such Class of Certificates would have been entitled
to receive on such Distribution Date had the Pass-Through Rate for such Class
been the REMIC Pass-Through Rate over (2) the amount of interest such Class of
Certificates is entitled to receive on such Distribution Date at its
Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or
- 26 -
advanced to Certificateholders (and not reimbursed to the Servicer) up to the
Due Date in the month in which such Liquidation Proceeds are required to be
distributed on the unpaid principal balance of such Liquidated Loan outstanding
during each Due Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (A) the sum of (x) the amount distributed pursuant to
4.04(b)(vii) and (y) the amount distributed pursuant to 4.04(d)(iii) and (B) an
amount necessary to maintain the Overcollateralization Target Amount.
Xxxxxx Mae: A federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
Xxxxxxx Mac: A corporate instrumentality of the United States created
and existing under Title III of the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect with respect to such Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the case of a
Co-op Loan), including any replacement policy or policies for any insurance
policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or the
related Mortgaged Property (or the related Underlying Mortgaged Property, in the
case of a Co-op Loan) pursuant to any Insurance Policy or any other insurance
policy covering such Mortgage Loan or Mortgaged Property (or
- 27 -
Underlying Mortgaged Property, in the case of a Co-op Loan), to the extent such
proceeds are payable to the mortgagee under the Mortgage, the Servicer or the
trustee under the deed of trust and are not applied to the restoration of the
related Mortgaged Property (or the related Underlying Mortgaged Property, in the
case of a Co-op Loan) or released either to the Mortgagor or to the holder of a
senior lien on the related Mortgaged Property (or the related Underlying
Mortgaged Property in the case of a Co-op Loan) in accordance with the
procedures that the Servicer would follow in servicing mortgage loans held for
its own account, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property (or the related Underlying Mortgaged Property, in the case of a Co-op
Loan).
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry Forward
Amount, the Class A-2 Interest Carry Forward Amount, the Class A-3 Interest
Carry Forward Amount, the Class A-4 Interest Carry Forward Amount, the Class R
Interest Carry Forward Amount, the Class M-1 Interest Carry Forward Amount, the
Class M-2 Interest Carry Forward Amount, the Class M-3 Interest Carry Forward
Amount, the Class M-4 Interest Carry Forward Amount, the Class M-5 Interest
Carry Forward Amount, the Class M-6 Interest Carry Forward Amount, the Class M-7
Interest Carry Forward Amount, the Class M-8 Interest Carry Forward
Amount, the Class M-9 Interest Carry Forward Amount, the Class M-10 Interest
Carry Forward Amount, the Class M-11 Interest Carry Forward Amount or the Class
X Interest Carry Forward Amount, as the case may be.
Interest Determination Date: With respect to the Certificates, (i) for
any Accrual Period other than the first Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period and (ii) for the
first Accrual Period, September 27, 2005.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee and the Certificate
Administrator Fee, (2) all Advances relating to interest with respect to the
Mortgage Loans and such Distribution Date, (3) all Compensating Interest with
respect to the Mortgage Loans and such Distribution Date, (4) Liquidation
Proceeds with respect to the Mortgage Loans (to the extent such Liquidation
Proceeds relate to interest) collected during the related Prepayment Period, (5)
all proceeds of any purchase pursuant to Section 2.02 or 2.03 during the related
Prepayment Period or pursuant to Section 9.01 not later than the related
Determination Date (to the extent that such proceeds relate to interest) less
the Servicing Fee and (6) all Prepayment Charges received with respect to the
Mortgage Loans during the related Prepayment Period, less (A) all
Non-Recoverable Advances relating to interest and (B) other amounts reimbursable
to the Servicer, the Certificate Administrator and the Trustee pursuant to this
Agreement.
Latest Possible Maturity Date: The latest maturity date for any
Mortgage Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee's sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which the
Servicer has
- 28 -
certified (in accordance with Section 3.12) in the related Prepayment Period
that it has received all amounts it expects to receive in connection with such
liquidation or (b) as to which is not a first lien Mortgage Loan and is
delinquent 180 days or longer, the Servicer has certified in a certificate of an
officer of the Servicer delivered to the Depositor and the Certificate
Administrator that it does not believe that there is a reasonable likelihood
that any further net proceeds will be received or recovered with respect to such
Mortgage Loan.
Liquidation Proceeds: Amounts, including Condemnation Proceeds and
Insurance Proceeds received in connection with the partial or complete
liquidation of a Mortgage Loan, whether through trustee's sale, foreclosure
sale, sale by the Servicer pursuant to this Agreement or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with the final sale of a
related REO Property, less the sum of related unreimbursed Advances, Servicing
Fees, Servicing Advances and any other expenses related to such Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (X) the Appraised Value of the related Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan) and (Y) the sales price of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the Class
LTA-2 Interest, the Class LTA-3 Interest, the Class LTA-4 Interest, the Class
LTM-1 Interest, the Class LTM-2 Interest, the Class LTM-3 Interest, the Class
LTM-4 Interest, the Class LTM-5 Interest, the Class LTM-6 Interest, the Class
LTM-7 Interest, the Class LTM-8 Interest, the Class LTM-9 Interest, the Class
LTM-10 Interest, the Class LTM-11 Interest, the Class LTX Interest and the Class
LTR Interest.
Lower Tier REMIC Marker Classes: Each of the classes of Lower Tier REMIC
Regular Interests other than the Class LTX Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum Rate Cap: 13.00% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the
laws of the State of Delaware, or any successor thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgage
electronically maintained by MERS.
- 29 -
MIN: The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument with all riders attached thereto
creating a first or second lien or a first or second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note. With
respect to a Co-op Loan, the security agreement with all riders attached thereto
creating a security interest in the stock allocated to a dwelling unit in a
residential cooperative housing corporation and pledged to secure such Co-op
Loan and the related Co-op Lease.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Custodian to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Properties), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property. Any mortgage
loan that was intended by the parties hereto to be transferred to the Trust Fund
as indicated by such Mortgage Loan Schedule which is in fact not so transferred
for any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Servicer to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
this Agreement based on information provided to the Servicer) transferred to the
Custodian as part of the Trust Fund and from time to time subject to this
Agreement, attached hereto as Exhibit B, setting forth the following information
with respect to each Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
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(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a
first lien Mortgage Loan, or the Combined Loan-to-Value
Ratio with respect to a second lien Mortgage Loan;
(x) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of each Adjustment Date;
(B) the next Adjustment Date;
(C) the Maximum Mortgage Rate;
(D) the Minimum Mortgage Rate;
(E) the Mortgage Rate as of the Cut-off Date;
(F) the related Periodic Rate Cap;
(G) the Gross Margin;
(H) the lifetime rate cap;
(xiii) location of the related Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan);
(xiv) a code indicating whether a Prepayment Charge is applicable
and, if so the term of such Prepayment Charge;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto with all riders
attached thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
- 31 -
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate
and the Certificate Administrator Fee Rate.
Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Mortgage Loans calculated based on
the respective Net Mortgage Rates and the Stated Principal Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
Net Swap Payment: With respect to any Distribution Date, any net payment
(other than a Swap Termination Payment or Defaulted Swap Termination Payment)
made by the Trust to the Swap Provider on the related Fixed Rate Payer Payment
Date (as defined in the Swap Agreement) or any net payment received by the Trust
from the Swap Provider.
NIM Notes: Not applicable.
NIMs Insurer: Not applicable.
NIMs Insurer Default: Not applicable.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise with respect to the related Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A-1, Class A-2, Class X-0, Xxxxx X-0,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9 and Class M-11 Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Servicer or the Certificate Administrator (or any other officer customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with a
particular subject) or (2), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Servicer, the Certificate Administrator or the Trustee, as the case may be, as
required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Certificate Administrator on the related Interest
Determination Date on the basis of (a) the offered rates for one-month United
States dollar deposits, as such rates appear on Telerate page 3750, as of 11:00
a.m. (London time) on such Interest Determination Date or (b) if such rate does
not appear on Telerate Page 3750 as of 11:00 a.m. (London time), the offered
rates of the Reference Banks for one-month United States dollar deposits, as
such rates appear on the Reuters Screen LIBO Page, as of 11:00 a.m. (London
time) on such
- 32 -
Interest Determination Date. If One-Month LIBOR is determined pursuant to clause
(b) above, on each Interest Determination Date, One-Month LIBOR for the related
Accrual Period will be established by the Certificate Administrator as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the higher of
(i) One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor, the Servicer or the Certificate Administrator, reasonably
acceptable to each addressee of such opinion; provided, however, that with
respect to Section 6.04 or 10.01, or the interpretation or application of the
REMIC Provisions, such counsel must (1) in fact be independent of the Depositor,
the Servicer or the Certificate Administrator, (2) not have any direct financial
interest in the Depositor, the Servicer or the Certificate Administrator or in
any affiliate of any such party and (3) not be connected with the Depositor, the
Servicer or the Certificate Administrator as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Optional Termination: The termination of the Trust Fund hereunder
pursuant to clause (b) of Section 9.01 hereof.
Optional Termination Amount: The amount received by the Certificate
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 9.01(b).
Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
Optional Termination Price: On any date after the Optional Termination
Date, an amount equal to the sum of (A) the aggregate Stated Principal Balance
of the Mortgage Loans (or if such Mortgage Loan is an REO Property, the fair
market value of such REO Property), plus accrued interest thereon through the
Due Date preceding distribution of the proceeds, (B) any unreimbursed
out-of-pocket costs and expenses owed to the Trustee, the Certificate
Administrator or the Servicer and all unreimbursed Advances and Servicing
Advances, (C) any unreimbursed costs, penalties and/or damages incurred by the
Trust Fund in connection with any violation relating to any of the Mortgage
Loans of any predatory or abusive lending law and (D) any Swap Termination
Payment, other than a Defaulted Swap Termination Payment, owed to the Swap
Counterparty.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Certificate
Administrator or delivered to the Certificate Administrator for cancellation;
and (2) Certificates in exchange for which or in lieu of which other
Certificates have been executed by the Certificate Administrator and delivered
by the Certificate Administrator pursuant to this Agreement.
- 33 -
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
aggregate Certificate Principal Balance of the Offered Certificates and the
Class M-10 Certificates.
Overcollateralization Floor: 0.50% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.
Overcollateralization Target Amount: (i) For any Distribution Date prior
to the Stepdown Date, 2.80% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date, and (ii) for any Distribution Date on or
after the Stepdown Date, the greater of (1) the lesser of (a) 2.80% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, and
(b) 5.60% of the Stated Principal Balance of the Mortgage Loans and (2) the
Overcollateralization Floor; provided, however, in either case, for any
Distribution Date on which a Stepdown Trigger Event is in effect, an amount
equal to the Overcollateralization Target Amount for the immediately preceding
Distribution Date.
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest evidenced by such Class which
shall be equal to the Certificate Principal Balance of such
Class divided by the aggregate Certificate Principal Balance
of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby
of the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of such
Class; except that in the case of any Class P Certificates,
the Percentage Interest with respect to such Certificate
shown on the face of such Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the Trust Fund created
pursuant to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor and
other assets of the Trust Fund, including the Swap Agreement
and any credit enhancement and passive derivative financial
instruments that pertain to beneficial interests issued or
sold to parties other than the Depositor, its Affiliates,
or its agents;
- 34 -
(ii) issuing Certificates and other interests in the assets of
the Trust Fund;
(iii) receiving collections on the Mortgage Loans and the Swap
Agreement and making payments on such Certificates and
interests in accordance with the terms of this Agreement;
and
(iv) engaging in other activities that are necessary or incidental
to accomplish these limited purposes, which activities cannot
be contrary to the status of the Trust Fund as a qualified
special purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia
receiving the highest long-term debt rating of each Rating
Agency rating the Certificates;
(iii) commercial or finance company paper, other than commercial
or finance company paper issued by the Depositor, the
Certificate Administrator or any of its Affiliates, which is
then receiving the highest commercial or finance company
paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances (other than banker's acceptances issued
by the Certificate Administrator or any of its Affiliates)
issued by any depository institution or trust company
incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by
federal and/or state banking authorities, provided that the
commercial paper and/or long term unsecured debt obligations
of such depository institution or trust company are then
rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such
securities;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the
extent that such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two
highest long-term or the highest short-term ratings of each
Rating Agency containing, at the time of the issuance of
such agreements, such terms and conditions as will not
result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any such Rating Agency as
evidenced by a letter from each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case
entered into with a depository institution or trust company
(acting as principal) described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or
- 35 -
sold at a discount issued by any corporation, other than the
Certificate Administrator or any of its Affiliates,
incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have
one of the two highest long term ratings of each Rating
Agency;
(ix) interests in any money market fund (including those managed
or advised by the Certificate Administrator, the Trustee or
their respective affiliates) which at the date of
acquisition of the interests in such fund and throughout the
time such interests are held in such fund has the highest
applicable long term rating by each Rating Agency rating
such fund; and
(x) short term investment funds sponsored by any trust company
or national banking association incorporated under the laws
of the United States or any state thereof, other than the
Certificate Administrator or any of its Affiliates, which on
the date of acquisition has been rated by each such Rating
Agency in their respective highest applicable rating
category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of the any REMIC provided
for herein as a REMIC under the Code or result in imposition of a tax on the
Trust Fund or any REMIC provided for herein and (II) each such investment must
be a "permitted investment" within the meaning of Section 860G(a)(5) of the
Code. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Certificate Administrator with a
duly completed Internal
- 36 -
Revenue Service Form W-8ECI or applicable successor form. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Section 7701 of the Code. A corporation will not be treated as an
instrumentality of the United States or of any State thereof for these purposes
if all of its activities are subject to tax and, with the exception of the
Federal Home Loan Mortgage Corporation, a majority of its board of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances, as of such Distribution Date, of the
Mortgage Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j) hereof.
Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Offered Certificates.
Prepayment Charges: Any prepayment fees, premiums or charges to be paid
by the Mortgagor on a Mortgage Loan pursuant to the terms of the related
Mortgage Note or Mortgage, as applicable, as identified on the Mortgage Loan
Schedule.
Prepayment Interest Excesses: With respect to any Servicer Remittance
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Servicer Remittance Date occurs
and the last day of the related Prepayment Period, an amount equal to interest
(to the extent received) at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the number of days commencing on the first day of
the calendar month in which such Servicer Remittance Date occurs and ending on
the date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution Date,
the sum of, for each Mortgage Loan that was, during the portion of the related
Prepayment Period from the first day of such Prepayment Period through the last
day of the month preceding the month in which such Distribution Date occurs, the
subject of a Principal Prepayment that was not accompanied by an amount equal to
one month of interest that would have been due on such Mortgage Loan on the
related Due Date and that was applied by the Servicer to reduce the outstanding
principal balance of such Mortgage Loan on a date preceding such Due Date, an
amount equal to the product of (a) the Net Mortgage Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period began.
Prepayment Period: With respect to any Distribution Date, (i) with
respect to Principal Prepayments in full and involuntary Principal Prepayments,
the period from and including the 16th day of the calendar month immediately
preceding the month in which such Distribution Date occurs to and including the
15th day of the calendar month in which such Distribution Date occurs; provided,
however, that the initial Prepayment Period shall be the period from and
including the Cut-off Date to and including October 15, 2005, and (ii) with
respect to voluntary Principal Prepayments in part, the calendar month preceding
the month in which such Distribution Date occurs.
- 37 -
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) all scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) Principal
Prepayments collected in the related Prepayment Period, (3) the Stated Principal
Balance of each Mortgage Loan that was purchased by the Depositor or the
Servicer during the related Prepayment Period or, in the case of a purchase
pursuant to Section 9.01, on any Business Day prior to such Distribution Date,
(4) the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loan is less than the aggregate unpaid principal of the
related Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan pursuant to Section 2.03(c), (5) all Liquidation
Proceeds collected during the related Prepayment Period (to the extent such
Liquidation Proceeds relate to principal), (6) all Subsequent Recoveries
received during the related Due Period and (7) all other collections and
recoveries in respect of principal during the related Prepayment Period less
(A) all Non-Recoverable Advances relating to principal with respect to the
Mortgage Loans and (B) other amounts reimbursable to the Servicer, the
Certificate Administrator and the Trustee pursuant to this Agreement and
allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated September 27,
2005 relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the Transferor pursuant to Section 2.02 or 2.03
hereof or purchased by the Servicer pursuant to Section 3.12(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan as of the date of such purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest on such unpaid principal balance at
the applicable Mortgage Rate from (a) the date through which interest was last
paid by the Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be distributed to Certificateholders and (iii) any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection with any violation relating to such
Mortgage Loan of any predatory or abusive lending law. With respect to any REO
Property purchased by the Servicer pursuant to Section 3.12(c) hereof, an amount
equal to the fair market value of such REO Property, as determined in good faith
by the Servicer
Rating Agency: Either of S&P or Xxxxx'x. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Certificate Administrator. References herein to a given rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.
- 38 -
Rating Agency Condition: With respect to any action to which a Rating
Agency Condition applies, that each Rating Agency shall have been given ten days
(or such shorter period as is acceptable to each rating agency) prior notice of
that action and that each of the Rating Agencies shall have notified the
Trustee, the Certificate Administrator, the Servicer, the Depositor and the
Trust in writing that such action will not result in a reduction, qualification
or withdrawal of the then current rating of the certificates that it maintains.
Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) a Mortgage Loan which is not
a Liquidated Loan, any amount of principal that the Mortgagor is no longer
legally required to pay (except for the extinguishment of debt that results from
the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Xxxxx Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Certificate Administrator which are engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London, England, (ii) whose quotations
appear on the Reuters Screen LIBO Page on the relevant Interest Determination
Date and (iii) which have been designated as such by the Certificate
Administrator.
Regular Certificate: Any one of the Offered Certificates and the Class
M-10 Certificates.
Related Certificates: With respect to the Class LTA-1 Interest, the
Class A-1 Certificates. With respect to the Class LTA-2 Interest, the Class A-2
Certificates. With respect to the Class LTA-3 Interest, the Class A-3
Certificates. With respect to the Class LTA-4 Interest, the Class A-4
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTM-6 Interest, the Class M-6
Certificates. With respect to the Class LTM-7 Interest, the Class M-7
Certificates. With respect to the Class LTM-8 Interest, the Class M-8
Certificates. With respect to the Class LTM-9 Interest, the Class M-9
Certificates. With respect to the Class LTM-10 Interest, the Class M-10
Certificates. With respect to the Class LTM-11 Interest, the Class M-11
Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code. References herein to "the REMICs" or "a REMIC"
shall mean any of (or, as the context requires, all of) the Lower Tier REMIC and
the Upper Tier REMIC.
- 39 -
REMIC Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing "Available Funds Cap" in such definition
with "Net Rate."
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interests: (i) Any of the rights under any of the
Certificates (other than the Class P Certificates, the Class X Certificates and
the Class R Certificate) other than the rights and obligations under notional
principal contracts described in Section 2.07 and (ii) the Uncertificated Class
X Interest.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer, on behalf
of the Trust for the benefit of the Certificateholders, through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; and (9) comply
with each representation and warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents submitted by
the Servicer to the Custodian, substantially in the form of Exhibit I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Required Percentage: As of any Distribution Date following the Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date, over (B) the Certificate Principal
Balance of the most senior Class of Certificates outstanding as of such
- 40 -
Distribution Date, prior to giving effect to distributions to be made on such
Distribution Date and (2) the Stated Principal Balance of the Mortgage Loans as
of such Distribution Date.
Required Swap Counterparty Rating: With respect to a counterparty or
entity guaranteeing the obligations of such counterparty, (x) either (i) if such
counterparty or entity has only a long-term rating by Moody's, a long-term
senior, unsecured debt obligation rating, credit rating or other similar rating
(as the case may be, the "Long-Term Rating") of at least "Aa3" by Moody's and if
rated "Aa3" by Xxxxx'x is not on negative credit watch by Moody's or (ii) if
such counterparty or entity has a Long-Term Rating and a short-term rating by
Moody's, a Long-Term Rating of at least "A1" by Moody's and a short-term rating
of "P-1" by Moody's and, in each case, such rating is not on negative credit
watch by Moody's, and (y) (i) a short-term rating of at least "A-1" by S&P or
(ii) if such counterparty or entity does not have a short-term rating by S&P, a
Long-Term Rating of at least "A+" by S&P.
Reserve Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Certificate Administrator determines to be (1) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the one-month United States dollar lending rates which New York
City banks selected by the Certificate Administrator are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (2) in the event that the Certificate
Administrator can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Certificate
Administrator are quoting on such Interest Determination Date to leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is entitled
to all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions to the
extent attributable to an interest rate in excess of the Net Rate.
Responsible Officer: When used with respect to the Certificate
Administrator or the Servicer, any officer of the Certificate Administrator or
the Servicer with direct responsibility for the administration of this Agreement
and any other officer to whom, with respect to a particular matter, such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Trustee, any officer of the
Trustee with direct responsibility for the administration of this Agreement and
also means any other officer to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of September 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated pursuant
to the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
Securities Act: The Securities Act of 1933, as amended.
- 41 -
Seller: Wachovia Bank, National Association, a national banking
association, or its successor in interest.
Servicer: HomEq Servicing Corporation, a New Jersey corporation, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date, the
18th day (or if such day is not a Business Day, the next succeeding Business
Day) of the month in which the related Distribution Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance of the Servicer's
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, inspection, restoration and protection of a Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan), including
without limitation advances in respect of real estate taxes and assessments, (2)
any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (3) the conservation,
management, sale and liquidation of any REO Property, (4) executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage to the extent not otherwise recovered from the related Mortgages or
payable under this Agreement, (5) correcting errors of prior servicers; costs
and expenses charged to the Servicer by the Trustee or Certificate
Administrator; tax tracking; title research; flood certifications; lender paid
mortgage insurance, (6) obtaining or correcting any legal documentation required
to be included in the Mortgage Files and reasonably necessary for the Servicer
to perform its obligations under this Agreement, (7) compliance with the
obligations under Sections 3.01 and 3.10; provided that such amounts are
required to be advanced only to the extent such advances constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii) and (8) costs and expenses (including reasonable attorney's
fees and expenses) incurred by the Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments in
connection with any foreclosure in respect of any Mortgage Loan to the extent
not received from the related Mortgagor or otherwise payable under this
Agreement. The Servicer shall not be required to make any Non-Recoverable
Servicing Advances in respect of a Mortgage Loan or REO Property.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) one-twelfth of the Servicing Fee Rate and (y)
the Stated Principal Balance of such Mortgage Loan or, in the event of any
payment of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan as of the preceding Distribution Date for the period covered
by such payment of interest.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Certificate Administrator and the Trustee by the Servicer on the Closing
Date pursuant to this Agreement, as such lists may from time to time be amended.
Servicing Transfer Costs: All costs associated with the transfer of
servicing from the predecessor Servicer, including, without limitation, any
costs or expenses associated with the termination of the predecessor Servicer,
the appointment of a successor servicer, the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by any
- 42 -
successor servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the successor servicer to service the Mortgage Loans
properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance
thereof, and (2) as of any Distribution Date, such Cut-off Date Principal
Balance, minus the sum of (A) the principal portion of the Scheduled Payments
(x) due with respect to such Mortgage Loan during each Due Period ending prior
to such Distribution Date and (y) that were received by the Servicer as of the
close of business on the Determination Date related to such Distribution Date or
with respect to which Advances were made on the Servicer Advance Date prior to
such Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
Stepdown Date: The earlier to occur of (1) the Distribution Date on
which the Class A Certificate Principal Balance is reduced to zero and (2) the
later to occur of (x) the Distribution Date in October 2008 and (y) the first
Distribution Date on which the Class A Certificate Principal Balance (reduced by
the Principal Funds with respect to such Distribution Date) is less than or
equal to 55.10% of the Stated Principal Balances of the Mortgage Loans as of
such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------ ---------------------------------
October 2007 ? September 2008 1.40% with respect to October 2007,
plus an additional 1/12th of 1.70%
for each month thereafter
October 2008 ? September 2009 3.10% with respect to October 2008,
plus an additional 1/12th of 1.75%
for each month thereafter
October 2009 ?September 2010 4.85% with respect to October 2009,
plus an additional 1/12th of 1.40%
for each month thereafter
October 2010 ?September 2011 6.25% with respect to October 2010,
plus an additional 1/12th of 0.70%
for each month thereafter
October 2011 and thereafter 6.95%
Stepdown Trigger Event: With respect to the Certificates on or after
the Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
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purposes of this calculation, Mortgage Loans in foreclosure and REO Properties
and Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 35.50%
and (ii) the Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds
the Stepdown Required Loss Percentage.
Subordinated Certificates: Each Class of the Class M Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts reimbursed to the Servicer related to such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Event: The situation whereby the Swap Provider (or its
guarantor) has a rating of less than "BBB-" or "A-2", if applicable, by S&P or a
rating of less than "A2" or "P-1", if applicable, by Moody's (if rated by
Moody's) and within the time period specified in the Swap Agreement, such Swap
Provider, while collateralizing its exposure to the Trust, fails to transfer the
Swap Agreement at its sole cost and expense, in whole, but not in part, to a
Counterparty that satisfies the Required Swap Counterparty Rating, subject to
satisfaction of the Rating Agency Condition.
Supplemental Interest Trust: the non-interest bearing trust account
established by the Certificate Administrator pursuant to Section 4.04(k) of this
Agreement out of which any Swap Termination Payments or Net Swap Payments owed
to the Swap Counterparty will be paid, certain distributions to
Certificateholders will be made, and into which any Swap Termination Payments or
Net Swap Payments received from the Swap Counterparty will be deposited as set
forth in Sections 4.04(g) and 4.04(k) hereof.
Swap Agreement: The interest rate swap agreement, dated as of September
29, 2005, between Wachovia Bank, National Association and the Trust or any other
cap agreement or swap agreement (including any related schedules) entered into
by the Trust pursuant to Section 4.04(k) hereof.
Swap Provider: Wachovia Bank, National Association or any successor
counterparty who meets the requirements set forth in the Swap Agreement.
Swap Termination Payment: Any payment payable by the Trust or the Swap
Provider upon termination of the Swap Agreement as a result of an Event of
Default (as defined in the Swap Agreement) or a Termination Event (as defined in
the Swap Agreement).
Tax Matters Person: The Person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Agreement: The Mortgage Loan Purchase and Interim Servicing
Agreement dated as of August 30, 2005, between Wachovia Bank, National
Association, as purchaser and WMC, as seller and interim servicer, as
supplemented by the Bring Down Letter.
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Transferor: WMC.
Trust Fund: The corpus of the trust (the "Wachovia Mortgage Loan Trust,
Series 2005-WMC1" or the "Trust") created hereunder consisting of (i) the
Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Collection Account; (ii) the Collection Account and the
Certificate Account and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv)
the mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loans; (v) all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property; and (vi) the Swap Agreement
and Supplemental Interest Trust.
Trustee: U.S. Bank National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Uncertificated Class X Interest: An uncertificated interest having (i)
the same rights to payments as the Class X Certificates (excluding any such
payments deemed received in respect of Excess Interest Obligations and
disregarding any payments made or received pursuant to the Swap Agreement), and
(ii) the rights to the payments treated as distributed to the Class X
Certificates under Section 2.07(d), provided, however, that such interest shall
have no obligation to make any payments treated as paid by, and no right to
receive any payments treated as received by, the Class X Certificates pursuant
to notional principal contracts under Section 2.07(d).
Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class M-7 Unpaid Realized Loss Amount,
Class M-8 Unpaid Realized Loss Amount, Class M-9 Unpaid Realized Loss Amount,
Class M-10 Unpaid Realized Loss Amount, Class M-11 Unpaid Realized Loss Amount
and Class X Unpaid Realized Loss Amount, collectively.
Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 97% to the Class A and Class M Certificates,
with the allocation among such Certificates to be in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes and (2) each Class of the Class R, Class
X and Class P Certificates will be allocated 1% of the Voting Rights. Voting
Rights will be allocated among the Certificates of each such Class in accordance
with their respective Percentage Interests.
WMC: WMC Mortgage Corp., a California corporation, or its successor in
interest.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
It is agreed and understood by the Depositor, the Servicer, the
Certificate Administrator and the Trustee that it is not intended that any
Mortgage Loan be included in the Trust that is, without limitation, either (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003; (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004; (iii) a "High-Cost Home
Loan" as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.
(i) In connection with such assignment, the Depositor does hereby
deliver to, and deposit with, the Custodian, the following documents or
instruments with respect to each Mortgage Loan so assigned that is not a Co-op
Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to the
order of U.S. Bank National Association, as trustee, without recourse"
together with all riders thereto. The Mortgage Note shall include all
intervening endorsements showing a complete chain of the title from the
originator to [____________________];
(B) Except as provided below and for each Mortgage Loan that is not
a MERS Loan, the original recorded Mortgage with all riders thereto, with
evidence of recording thereon, or, if the original Mortgage has not yet
been returned from the recording office, a copy of the original Mortgage
certified by the Transferor to be true copy of the original of the
Mortgage that has been delivered for recording in the appropriate
recording office of the jurisdiction in which the Mortgaged Property is
located and in the case of each MERS Loan, the original Mortgage, noting
the presence of the MIN of the Loan and either language indicating that
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan
at origination, the original Mortgage and the assignment thereof to MERS,
with evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage endorsed either in blank or, to "U.S.
Bank National Association, as trustee;"
(D) The original policy of title insurance (or a preliminary title
report, commitment or binder if the original title insurance policy has
not been received from the title insurance company);
(E) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the
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recording office, a copy of such assignment certified to be a true copy of
the original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located; and
(F) Originals of all assumption and modification agreements, if
any.
(ii) In connection with such assignment, the Depositor does hereby
deliver to, and deposit with, the Custodian the following documents or
instruments with respect to each Mortgage Loan so assigned that is a Co-op Loan:
(A) (i) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension and
modification agreement)), in either case endorsed either in blank or,
"Pay to the order of U.S. Bank National Association as trustee, without
recourse;"
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-Op Loan;
(C) The original Assignment of Mortgage endorsed either in blank or
to "U.S. Bank National Association, as trustee;"
(D) Original assignments of Mortgage showing a complete chain of
assignment from the originator of the related Co-Op Loan to the last
endorsee on the Mortgage Note;
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect to
such Co-Op Loan (or a recorded copy thereof);
(F) Form UCC-3 (or copy thereof) by the Transferor or its agent
assigning the security interest covered by such Form UCC-1 to "U.S. Bank
National Association., as trustee," together with all Forms UCC-3 (or
copies thereof) showing a complete chain of assignment from the originator
of the related Co-op Loan to the Transferor, with evidence of recording
thereon;
(G) Original stock certificate representing the stock allocated to
the related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached;
(H) Original proprietary lease;
(I) Original assignment of proprietary lease or a copy thereof, to
the Trustee or in blank, and all intervening assignments thereof;
(J) Original recognition agreement or a copy thereof of the
interests of the mortgagee with respect to the Co-op Loan by the
residential cooperative housing corporation, the stock of which was
pledged by the related Mortgagor to the originator of such Co-op Loan; and
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F) above
with respect to such Co-op Loan.
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If in connection with any Mortgage Loan that is not a Co-op Loan, the
Depositor cannot deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, with evidence of recording
thereon, if applicable, concurrently with the execution and delivery of this
Agreement solely because of a delay caused by the public recording office where
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Custodian written notice
stating that such Mortgage or assumption, consolidation or modification, as the
case may be, has been delivered to the appropriate public recording office for
recordation. Thereafter, the Depositor shall deliver or cause to be delivered to
the Custodian such Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, with evidence of recording
indicated thereon, if applicable, upon receipt thereof from the public recording
office. To the extent any required endorsement is not contained on a Mortgage
Note or an Assignment of Mortgage, the Depositor shall make or cause such
endorsement to be made.
With respect to any Mortgage Loan that is not a Co-op Loan, none of the
Depositor, the Servicer, the Certificate Administrator or the Trustee shall be
obligated to cause to be recorded the Assignment of Mortgage referred to in this
Section 2.01. With respect to any Co-op Loan, none of the Depositor, the
Servicer or the Trustee shall be obligated to cause to be filed the Form UCC-3
referred to in this Section 2.01. In the event that any Assignment of Mortgage
referred to in this Section 2.01 is not recorded or is improperly recorded,
none of the Servicer, the Trustee or the Custodian shall have any liability for
any failure to receive or act on notices related to such Assignment of Mortgage
The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor, the Servicer nor the Certificate
Administrator shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor, the Servicer and
Certificate Administrator shall respond to any third party inquiries with
respect to ownership of the Mortgage Loans by stating that such ownership is
held by the Trustee on behalf of the Certificateholders. Mortgage documents
relating to the Mortgage Loans not delivered to the Custodian are and shall be
held in trust by the Servicer, for the benefit of the Trustee as the owner
thereof, and the Servicer's possession of the contents of each Mortgage File so
retained is for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by the Servicer is in a custodial capacity only.
The Depositor agrees to take no action inconsistent with the Trustee's ownership
of the Mortgage Loans, to promptly indicate to all inquiring parties that the
Mortgage Loans have been sold and to claim no ownership interest in the Mortgage
Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
(or the Custodian on its behalf) shall be deemed to be an independent custodian
for purposes of perfection of the security interest granted to the Depositor. If
the conveyance of the Mortgage Loans from the Depositor to the Trustee is
characterized as a pledge, it is the intention of this Agreement that this
Agreement shall constitute a security agreement under applicable law, and that
the Depositor shall be deemed to have granted to the Trustee a first priority
security interest in all of the Depositor's right, title and interest in, to and
under the Mortgage Loans, all payments of principal of or interest on such
Mortgage Loans, all other rights relating to and payments made in respect of the
Trust Fund, and all proceeds of any thereof. If the trust created by this
Agreement terminates prior to the satisfaction of the claims of any Person in
any
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Certificates, the security interest created hereby shall continue in full
force and effect and the Trustee (or the Custodian on its behalf) shall be
deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders its rights and interests under
the Sale Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreement described therein and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Seller, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto except as specifically set forth herein.
SECTION 2.02. Acceptance by the Custodian of the Mortgage Loans.
Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Custodian, on behalf of the Trustee,
acknowledges receipt of the Mortgage Note for each Mortgage Loan and delivery of
a Mortgage File (but does not acknowledge receipt of all documents required to
be included in such Mortgage File) with respect to each Mortgage Loan and
declares that it holds and will hold such documents and any other documents
constituting a part of the Mortgage Files delivered to it in trust for the use
and benefit of all present and future Certificateholders. The Depositor will
cause the Seller to repurchase any Mortgage Loan to which a material exception
was taken in the Exception Report unless such exception is cured within 45
Business Days of the Closing Date.
The Custodian, on behalf of the Trustee, acknowledges receipt of the
Transfer Agreement, the Bring Down Letter and the Sale Agreement. The
Certificate Administrator acknowledges receipt of the Swap Agreement.
The Custodian agrees, for the benefit of Certificateholders and the
NIMs Insurer, to review each Mortgage File delivered to it within 60 days after
the Closing Date to ascertain and to certify, within 70 days of the Closing
Date, to the NIMs Insurer, the Depositor, the Trustee and the Servicer that all
documents required by Section 2.01 have been executed and received, and that
such documents relate to the Mortgage Loans identified in Exhibit B that have
been conveyed to it. If the Custodian finds any document or documents
constituting a part of a Mortgage File to be missing or defective (that is,
mutilated, damaged, defaced or unexecuted) in any material respect, the
Custodian shall promptly (and in any event within no more than five Business
Days) after such finding so notify the NIMs Insurer, the Servicer, the Seller,
the Certificate Administrator, the Trustee and the Depositor. In addition, the
Custodian shall also notify the NIMs Insurer, the Servicer, the Seller, the
Certificate Administrator, the Trustee and the Depositor if the original
Mortgage with evidence of recording thereon with respect to a Mortgage Loan is
not received within 70 days of the Closing Date; if it has not been received
because of a delay caused by the public recording office where such Mortgage has
been delivered for recordation, the Depositor shall deliver or cause to be
delivered to the Custodian written notice stating that such Mortgage has been
delivered to the appropriate public recording office for recordation and
thereafter the Depositor shall deliver or cause to be delivered such Mortgage
with evidence of recording thereon upon receipt thereof from the public
recording office. The Trustee shall request that the Seller correct or cure such
omission, defect or other irregularity, or substitute a Mortgage Loan pursuant
to the provisions of Section 2.03, within 90 days from the date the Seller was
notified of such omission or defect and, if the Seller
- 49 -
does not correct or cure such omission or defect within such period, that the
Seller purchase such Mortgage Loan from the Trust Fund within 90 days from the
date the Seller was notified of such omission, defect or other irregularity at
the Purchase Price of such Mortgage Loan. The Purchase Price for any Mortgage
Loan purchased pursuant to this Section 2.02 shall be paid to the Servicer and
deposited by the Servicer in the Certificate Account or Collection Account, as
appropriate, promptly upon receipt, and, upon receipt by the Custodian of
written notification of such deposit signed by a Servicing Officer, the
Custodian, upon receipt of a Request for Release, shall promptly release to the
Seller the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, without recourse, as shall be requested
by the Seller and necessary to vest in the Seller or its designee, as the case
may be, any Mortgage Loan released pursuant hereto, and neither the Trustee nor
the Custodian shall have any further responsibility with regard to such Mortgage
Loan. It is understood and agreed that the obligation of the Seller to purchase,
cure or substitute any Mortgage Loan as to which a material defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to the Trustee on behalf of
Certificateholders and the NIMs Insurer. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the NIMs
Insurer, the Depositor or the Trustee pursuant to the Sale Agreement, the
Transfer Agreement and the Bring-Down Letter. The Custodian shall be under no
duty or obligation to inspect, review and examine such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable,
recordable or appropriate to the represented purpose, or that they have actually
been recorded, or that they are other than what they purport to be on their
face. The Servicer, the Certificate Administrator, the Trustee and the Custodian
shall keep confidential the name of each Mortgagor except as required by this
Agreement and the Servicer, the Certificate Administrator, the Trustee and the
Custodian shall not solicit any such Mortgagor for the purpose of refinancing
the related Mortgage Loan; notwithstanding anything herein to the contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, or information obtained by the
Custodian, Trustee, the Servicer or the Certificate Administrator from sources
other than the other parties hereto, (ii) disclosure of any and all information
(A) if required by any applicable law, rule or regulation, (B) to any government
agency or regulatory body having or claiming authority to regulate or oversee
any aspects of the Custodian's business or that of its affiliates, (C) pursuant
to any subpoena, civil investigation demand or similar demand or request of any
court, regulatory authority, arbitrator or arbitration to which the Custodian or
any affiliate or an officer, director, employer or shareholder thereof is a
party or (D) to any affiliate, independent or internal auditor, agent, employee
or attorney of the Trustee, the Custodian, the Servicer or the Certificate
Administrator having a need to know the same, provided that the Trustee, the
Custodian, the Servicer or the Certificate Administrator, as applicable, advises
such recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by the Depositor. It is understood and
agreed that all rights and benefits relating to the solicitation of any
Mortgagors and the attendant rights, title and interest in and to the list of
Mortgagors and data relating to their Mortgages shall be retained by the
Servicer.
Within 70 days of the Closing Date, the Custodian shall deliver to the
NIMs Insurer, the Depositor, the Trustee, the Seller, the Certificate
Administrator and the Servicer the Custodian's Certification, substantially in
the form of Exhibit D attached hereto, evidencing the completeness of the
Mortgage Files, with any exceptions noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.
(a) The Depositor hereby represents and warrants to the Servicer, the
Certificate Administrator, the Custodian, the NIMs Insurer and the Trustee as
follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware and has full power and
- 50 -
authority (corporate and other) necessary to own or hold its properties
and to conduct its business as now conducted by it and to enter into and
perform its obligations under this Agreement and the Sale Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and the Sale Agreement and
has duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the Sale
Agreement; and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject,
as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general principles of equity, regardless of whether enforcement
is sought in a proceeding in equity or at law.
(iii)The execution and delivery of this Agreement and the Sale Agreement
by the Depositor, the consummation of the transactions contemplated by
this Agreement and the Sale Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the Depositor and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Depositor or (B) materially
conflict with, result in a violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which the Depositor is a party or by which it may be bound
or (C) constitute a material violation of any statute, order or regulation
applicable to the Depositor of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Depositor; and
the Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it which breach or violation
may materially impair the Depositor's ability to perform or meet any of
its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and the Sale Agreement or the ability of the Depositor to
perform its obligations under this Agreement and the Sale Agreement in
accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement and the Sale Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage Loan as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets, claims,
liens, mortgage, pledge, charge, security interest, defenses or
counterclaims.
(b) The representations and warranties of the Transferor with respect
to the Mortgage Loans contained in the Transfer Agreement were made as of the
date of the Transfer Agreement and brought forward to the Closing Date pursuant
to the Bring Down Letter. The representations and warranties of the Transferor
with respect to the Mortgage Loans contained in the Bring Down Letter were made
as of the Closing Date. The representations and warranties of the Seller
- 51 -
with respect to the Mortgage Loans contained in the Sale Agreement were made as
of the Closing Date. To the extent that any fact, condition or event with
respect to a Mortgage Loan constitutes a breach of both (i) a representation or
warranty of the Transferor under the Transfer Agreement and (ii) a
representation or warranty of the Seller under the Sale Agreement, the only
rights or remedies of the Trustee, the NIMs Insurer or of any
Certificateholder shall be first, the Trustee's right to enforce the
obligations of the Transferor under any applicable representation or warranty
made by it and, only if the Transferor is unable or unwilling to fulfill its
obligations to cure or repurchase such Mortgage Loan, such party may seek to
enforce any rights it may have against the Seller under the Sale Agreement.
The Trustee acknowledges that the Seller shall have no obligation or liability
with respect to any breach of a representation or warranty made by it with
respect to the Mortgage Loans if the fact, condition or event constituting
such breach also constitutes a breach of a representation or warranty made by
the Transferor in the Transfer Agreement, without regard to whether the
Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee also acknowledges that the Seller
shall have no obligation or liability with respect to any breach of a
representation or warranty made solely by the Transferor with respect to the
Mortgage Loans, without regard to whether the Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee further acknowledges that the Depositor shall have no obligation or
liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(v))
under any circumstances.
In addition to the representations and warranties of the Transferor in
the Transfer Agreement that were brought forward to the Closing Date pursuant to
the Bring Down Letter, with respect to each Mortgage Loan, the Transferor made
certain additional covenants regarding such Mortgage Loan, as set forth in the
Transfer Agreement. With respect to any breach of such additional covenants that
materially and adversely affects the interests of the Certificateholders in such
Mortgage Loan, the Seller shall (1) use reasonable efforts to enforce such
covenant against the Transferor and (2) if the Seller successfully enforces any
obligation of the Transferor to repurchase such Mortgage Loan, the Seller shall
repurchase such Mortgage Loan in accordance with this Section 2.03. If the
Seller does not successfully enforce the obligation, if any, of the Transferor
to repurchase a Mortgage Loan with respect to any breach of any such additional
covenants, the Seller shall have no obligation or right to repurchase or cure
such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Certificate
Administrator, the Servicer, the NIMs Insurer or the Trustee of a breach of any
of such representations and warranties that adversely and materially affects
the value of the related Mortgage Loan, Prepayment Charges or the interests of
the Certificateholders, the party discovering such breach shall give prompt
written notice to the other parties. Within 90 days of the discovery of such
breach of any representation or warranty, the Transferor or the Seller, as
applicable, shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Trustee at the Purchase Price or (c) within the two year period following
the Closing Date, substitute a Replacement Mortgage Loan for the affected
Mortgage Loan. In the event of discovery of a breach of any representation and
warranty of the Transferor or the Seller, the Trustee shall enforce its rights
under the Transfer Agreement or the Sale Agreement for the benefit of
Certificateholders and the NIMs Insurer. If a breach of the representations
and warranties set forth in the Transfer Agreement exists solely due to the
unenforceability of a Prepayment Charge, the Trustee shall notify the NIMs
Insurer thereof and not seek to enforce the repurchase remedy provided for
herein unless directed in writing to do so by the NIMs Insurer. In the event
of a breach of the representations and warranties with respect to the Mortgage
Loans set forth in the Transfer Agreement, the Trustee shall, at the request
of the NIMs Insurer, enforce the right of the Trust Fund and the NIMs Insurer
to be indemnified for such breach of representation and warranty. In the event
that such breach relates solely to the unenforceability of a Prepayment
Charge, amounts received in respect of such indemnity up to the amount of such
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Prepayment Charge shall be distributed pursuant to Section 4.04(b)(i). As
provided in the Sale Agreement, if the Transferor substitutes for a Mortgage
Loan for which there is a breach of any representations and warranties in the
Transfer Agreement which adversely and materially affects the value of such
Mortgage Loan and such substitute mortgage loan is not a Replacement Mortgage
Loan, under the terms of the Sale Agreement, the Seller will, in exchange for
such substitute Mortgage Loan, (i) provide the applicable Purchase Price for
the affected Mortgage Loan or (ii) within two years of the Closing Date,
substitute such affected Mortgage Loan with a Replacement Mortgage Loan. Any
such substitution shall not be effected prior to the additional delivery to
the Custodian of a Request for Release substantially in the form of Exhibit I
and shall not be effected unless it is within two years of the Startup Day. As
provided in the Sale Agreement, the Seller indemnifies and holds the Trust
Fund, the Trustee, the Depositor, the NIMs Insurer, the Certificate
Administrator, the Custodian, the Servicer and each Certificateholder harmless
against any and all taxes, claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trust Fund, the Trustee, the Depositor, the NIMs
Insurer, the Certificate Administrator, the Custodian, the Servicer and any
Certificateholder may sustain in connection with any actions of the Seller
relating to a repurchase of a Mortgage Loan other than in compliance with the
terms of this Section 2.03 and the Sale Agreement, to the extent that any such
action causes (i) any federal or state tax to be imposed on the Trust Fund or
any REMIC provided for herein, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or
on "contributions after the startup day" under Section 860G(d)(1) of the Code,
or (ii) any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding. In furtherance of the foregoing, if the
Seller is not a member of MERS and repurchases a Mortgage Loan which is
registered on the MERS System, the Seller, at its own expense and without any
right of reimbursement, shall cause MERS to execute and deliver an assignment
of the Mortgage in recordable form to transfer the Mortgage from MERS to the
Seller and shall cause such Mortgage to be removed from registration on the
MERS System in accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Depositor pursuant
to this Agreement, by the Seller pursuant to the Sale Agreement or by the
Transferor pursuant to the Transfer Agreement, the principal portion of the
funds received by the Servicer in respect of such repurchase of a Mortgage Loan
will be considered a Principal Prepayment and shall be deposited by the Servicer
in the Collection Account pursuant to Section 3.05 and the Servicer shall notify
the Certificate Administrator of its receipt of the same. The Custodian, upon
written receipt of notice from the Servicer of its receipt of the full amount of
the Purchase Price for a Deleted Mortgage Loan, or upon receipt of the Mortgage
File for a Replacement Mortgage Loan substituted for a Deleted Mortgage Loan,
shall release or cause to be released and the Trustee shall reassign to the
Depositor, the Seller or the Transferor, as applicable, the related Mortgage
File for the Deleted Mortgage Loan and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be necessary to vest in such party or its
designee or assignee title to any Deleted Mortgage Loan released pursuant
hereto, free and clear of all security interests, liens and other encumbrances
created by this Agreement, which instruments shall be prepared by the Depositor,
the Seller or the Transferor, as applicable, and neither the Custodian nor the
Certificate Administrator shall have any further responsibility with respect to
the Mortgage File relating to such Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Custodian pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the Depositor, the Transferor or the Seller, as applicable,
must deliver to the Custodian the Mortgage File for the Replacement Mortgage
Loan containing the documents set forth in Section 2.01 along with a written
certification certifying as to the delivery of such Mortgage File and containing
the granting language set forth in Section 2.01; and (ii) the Depositor will be
deemed to have made, with respect to such Replacement Mortgage Loan, each of the
representations and warranties made by it with respect to the related Deleted
Mortgage Loan. The
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Custodian shall review the Mortgage File with respect to each Replacement
Mortgage Loan and certify to the NIMs Insurer and the Depositor that all
documents required by Section 2.01 have been executed and received.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Seller to the Servicer for deposit into the
Collection Account on the Determination Date for the Distribution Date relating
to the Prepayment Period during which the related Mortgage Loan became required
to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee, the NIMs Insurer and the
Certificate Administrator shall each have received an Opinion of Counsel (at the
expense of the party seeking to make the substitution) that, under current law,
such substitution will not (A) affect adversely the status of any REMIC
established hereunder as a REMIC, or of the related "regular interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC to engage in
a "prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions.
The Servicer shall cause the Mortgage Loan Schedule to be amended in
accordance with the terms of this Agreement based on information provided to the
Servicer.
The Seller shall give or cause to be given written notice to the
Certificateholders and the NIMs Insurer 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
Replacement Mortgage Loan or Replacement Mortgage Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to the NIMs Insurer, the Servicer and the
Trustee. Upon such substitution by the Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the Sale
Agreement, including all applicable representations and warranties thereof
included in the Sale Agreement as of the date of substitution..
(d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the Seller and
the Depositor set forth in the Sale Agreement and assigned to the Trustee by
the Depositor hereunder and (iii) of the Transferor, assigned by the Seller to
the Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the Servicer on the Closing Date.
SECTION 2.04. Representations and Warranties of the Servicer;
Representations and Warranties of the Certificate Administrator.
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(a) The Servicer hereby represents and warrants to the Depositor, the
Certificate Administrator, the Custodian and the Trustee as follows, as of the
date hereof:
(i) The Servicer is duly organized and is validly existing as a
corporation in good standing under the laws of the State of New Jersey and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by the Servicer in any state in which a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan) is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business laws
of any such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to service the Mortgage Loans in accordance with the terms of
this Agreement and to perform any of its other obligations under this Agreement
in accordance with the terms hereof.
(ii) The Servicer has the 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 Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Servicer and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Servicer or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Servicer's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Xxxxxx Xxx and is an approved servicer of mortgage loans for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Servicer to service the Mortgage Loans or to perform any of its
other obligations under this Agreement 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 Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Servicer has
obtained the same.
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(vii) The Servicer has fully furnished and will fully furnish (for
the period it serviced the Mortgage Loans), 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 on a monthly basis.
(viii) Notwithstanding any state or federal law to the contrary,
the Servicer shall not impose or collect a Prepayment Charge in any instance
when the mortgage debt is accelerated as the result of the Mortgagor's default
in making the Mortgage Loan payments.
(b) The Certificate Administrator hereby represents and warrants to
the Depositor, the Servicer and the Trustee as of the date hereof:
(i) The Certificate Administrator is duly organized and is
validly existing as a national banking association and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to be
conducted by the Certificate Administrator.
(ii) The Certificate Administrator has the full corporate power
and authority 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 Certificate Administrator the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Certificate Administrator, enforceable against the Certificate Administrator
in accordance with its terms, except that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Certificate Administrator, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Certificate
Administrator and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Certificate Administrator or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Certificate Administrator is a party or by
which it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Certificate Administrator of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Certificate Administrator; and the Certificate
Administrator is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation may
materially impair the Certificate Administrator's ability to perform or meet
any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of the Certificate
Administrator's knowledge, threatened, against the Certificate Administrator
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Certificate Administrator
to perform any of its other obligations under this Agreement in accordance with
the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Certificate Administrator of, or compliance by the
Certificate Administrator with, this Agreement or the
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consummation of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, the Certificate Administrator has
obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages".
Upon discovery by the Depositor, the Servicer, the Certificate
Administrator or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of section 860G(a)(3) of the Code, the
party discovering such fact shall promptly (and in any event within 5 Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Depositor shall, at the Depositor's option, either (i)
substitute, if the conditions in Section 2.03(c) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee, upon the written request of the
Depositor, shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Certificate
Administrator has caused to be authenticated and delivered to or upon the order
of the Depositor, in exchange for the Mortgage Loans, Certificates duly
authenticated by the Certificate Administrator in authorized denominations
evidencing ownership of the entire Trust Fund. The Trustee agrees to hold the
Trust Fund and exercise the rights referred to above for the benefit of all
present and future Holders of the Certificates and to perform its duties set
forth in this Agreement in accordance with the provisions hereof to the best of
its abilities, to the end that the interests of the Holders may be adequately
and effectively protected.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Certificate
Administrator to make an appropriate election to treat each of the Upper Tier
REMIC and the Lower Tier REMIC as a REMIC. The Trustee, upon written direction
of the Certificate Administrator, shall sign the returns providing for such
elections and such other tax or information returns which are required to be
signed by the Trustee under applicable law. This Agreement shall be construed
so as to carry out the intention of the parties that each of the Upper Tier
REMIC and the Lower Tier REMIC be treated as a REMIC at all times prior to the
date on which the Trust Fund is terminated.
(b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. Each REMIC's fiscal year shall be the calendar year.
The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund (other than (i) amounts distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof, (ii) the interests issued by the Lower
Tier REMIC, (iii) the grantor trusts described in Section 2.07 hereof and (iv)
the Swap Agreement and the Supplemental Interest Trust). The Lower Tier REMIC
shall issue the Class LTA-1 Interest, Class LTA-2 Interest, Class LTA-3
Interest, Class LTA-4, Class LTM-1 Interest, Class LTM-2 Interest, Class LTM-3
Interest, Class LTM-4 Interest, Class LTM-5 Interest, Class LTM-6 Interest,
Class LTM-7 Interest, Class LTM-8 Interest, Class LTM-9 Interest, Class LTM-10
Interest,
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Class LTM-11 Interest and Class LTX Interest which shall be designated as
regular interests of such REMIC and shall issue the Class LTR Interest that
shall be designated as the sole class of residual interest in the Lower Tier
REMIC. Each of the Lower Tier REMIC Regular Interests shall have the
characteristics set forth in its definition.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC Regular
Interests. The REMIC Regular Interests shall be designated as the regular
interests in the Upper Tier REMIC and the Residual Interest shall be designated
as the sole class of residual interest in the Upper Tier REMIC. For federal
income tax purposes, the pass-through rate on each REMIC Regular Interest (other
than the Uncertificated Class X Interest) shall be subject to a cap equal to the
lesser of (i) the Net Rate and (ii) the Maximum Rate Cap.
The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class LTR
Interest and the Residual Interest shall not have a principal balance or bear
interest.
(c) The "tax matters person" with respect to each REMIC for purposes
of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of the Class R Certificate, by
its acceptance thereof, irrevocably appoints the Certificate Administrator as
its agent and attorney-in-fact to act as "tax matters person" with respect to
each REMIC for purposes of the REMIC Provisions. If there is more than one
beneficial owner of the Class R Certificate, the "tax matters person" shall be
the Person with the greatest percentage interest in the Class R Certificate
and, if there is more than one such Person, shall be determined under Treasury
regulation Section 1.860F-4(d) and Treasury regulation Section
301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the Class A and
Class M Certificates to receive payments in respect of Excess Interest
Entitlements shall be treated as a right in notional principal contracts
written by the Class X Certificateholders in favor of the holders of each Class
of the Class A and Class M Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A and Class M Certificates. For
information reporting requirements, the rights of the Class A and Class M
Certificates to receive payments in respect of Excess Interest Entitlements
shall be assumed to have zero value or a de minimis value. This provision is
intended to satisfy the requirements of Treasury Regulations Section
1.860G-2(i) for the treatment of property rights coupled with REMIC interests
to be separately respected and shall be interpreted consistently with such
regulation. On each Distribution Date, to the extent that any of the Class A
and Class M Certificates receive payments of Excess Interest Entitlements, such
amounts, to the extent not derived from payments on the Swap Agreement, will be
treated as distributed by the Upper-Tier REMIC to the Class X Certificates pro
rata as payment in respect of the Uncertificated Class X Interest and then paid
to the relevant Class of Certificates pursuant to the related notional
principal contract. It is intended that the obligations of each Class of the
Class A and Class M Certificates to make payments in respect of Excess Interest
Obligations shall be treated as an obligation in notional principal contracts
in favor of the holders of the Class X Certificates and such shall be accounted
for as property held separate and apart from the regular interests in the Upper
Tier REMIC held by the holders of the Class A and Class M Certificates. For
information reporting requirements, the obligations of the Class A and Class M
Certificates to make payments in respect of Excess Interest Obligations shall
be assumed to have zero value or a de minimis value. On each Distribution
Date, to the extent that any of the Class A and Class M Certificates is deemed
to make payments in respect of Excess Interest Obligations, such amounts will
be treated as distributed by the Upper-Tier REMIC to the relevant Class of
Certificates as payment in respect of the REMIC Regular Interest represented
by such Certificate and then paid to the Class X Certificateholders pursuant
to the related notional principal contract.
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(e) The parties intend that the portion of the Trust Fund consisting
of the Uncertificated Class X Interest, the right to receive amounts in respect
of Excess Interest Obligations from the holders of the Class A and Class M
Certificates, the obligation of the holders of the Class X Certificates to pay
amounts in respect of Excess Interest Entitlements to the holders of the Class
A and Class M Certificates, the Swap Agreement and the Supplemental Interest
Trust shall be treated as a "grantor trust" under the Code, and the provisions
hereof shall be interpreted consistently with this intention. In furtherance
of such intention, the Certificate Administrator shall (i) furnish or cause to
be furnished to the holders of the Class X Certificates information regarding
their allocable share, if any, of the income with respect to such grantor
trust, (ii) file or cause to be filed with the Internal Revenue Service Form
1041 (together with any necessary attachments) and such other forms as may be
applicable and (iii) comply with such information reporting obligations with
respect to payments from such grantor trust to the holders of Class A, Class M
and Class X Certificates as may be applicable under the Code.
The Supplemental Interest Trust shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the
Supplemental Interest Trust for all federal income tax purposes, and shall be
taxable on all income earned thereon.
(f) The parties intend that the portion of the Trust Fund consisting
of the right to receive amounts distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the Code, and the provisions hereof shall be interpreted consistently
with this intention. In furtherance of such intention, the Certificate
Administrator shall (i) furnish or cause to be furnished to the holders of the
Class P Certificates information regarding their allocable share of the income
with respect to such grantor trust and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments)
and such other forms as may be applicable.
(g) [RESERVED]
(h) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than amounts distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received from the Mortgage
Loans shall be paid to the Lower Tier REMIC Regular Interests until the
principal balance of all such interests have been reduced to zero and any
losses allocated to such interests have been reimbursed. Any excess amounts
shall be distributed to the Class LTR Interest. On each Distribution Date, an
amount equal to 50% of the increase in the Overcollateralization Amount shall
be payable as a reduction of the principal amounts of the Lower Tier REMIC
Marker Classes (with such amount allocated among the Lower Tier REMIC Marker
Classes so that each Lower Tier REMIC Marker Class will have its principal
reduced by an amount equal to 50% of any increase in the Overcollateralization
Amount that results in a reduction in the principal balance of its Related
Certificates) and will be accrued and added to the principal balance of the
Class LTX Interest. All payments of scheduled principal and prepayments of
principal on the Mortgage Loans shall be allocated 50% to the Class LTX
Interest and 50% to the Lower Tier REMIC Marker Classes (with principal
payments allocated to each of the Lower Tier REMIC Marker Classes in an amount
equal to 50% of the principal amounts distributed to the Related Certificates
in reduction of their principal amounts). Notwithstanding the preceding
sentence, an amount equal to the principal payments that result in a reduction
in the Overcollateralization Amount shall be treated as payable entirely to
the Class LTX Interest. Realized Losses that are allocated to the Certificates
shall be applied to the Lower Tier REMIC Marker Classes and the Class LTX
Interest so that after all distributions have been made on each Distribution
Date (i) the principal balance of each of the Lower Tier REMIC Marker Classes
is equal to 50% of the principal balance of the Related Certificates and (ii)
the principal balance of the
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Class LTX Interest is equal to the sum of (x) 50% of the aggregate Stated
Principal Balance of the Mortgage Loans and (y) 50% of the
Overcollateralization Amount. Each Lower Tier REMIC Marker Class shall be
entitled to receive an amount equal to 50% of all amounts distributed to the
Related Certificates in respect of unreimbursed amounts of Realized Losses.
The Class LTX Interest shall be entitled to receive all other amounts
distributed to the Certificates in respect of unreimbursed amounts of Realized
Losses.
If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier REMIC Regular Interests on such
Distribution Date) among the Lower Tier REMIC Regular Interests so that (i) each
of the Lower Tier Marker Classes has a principal balance equal to 50% of the
principal balance of the Related Certificates, (ii) the Class LTX Interest has a
principal balance equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.
(i) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify the NIMs
Insurer, the Trustee, the Certificate Administrator and the Trust Fund against
any and all Losses resulting from such negligence; provided, however, that the
Servicer shall not be liable for any such Losses attributable to the action or
inaction of the Trustee, the Certificate Administrator, the Depositor or the
Holder of the residual interest in such REMIC, as applicable, nor for any such
Losses resulting from misinformation provided by the Holder of the residual
interest in such REMIC on which the Servicer has relied. The foregoing shall
not be deemed to limit or restrict the rights and remedies of the Holder of
the residual interest in such REMIC now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than those
arising out of a negligent performance by the Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
(j) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state or local
taxes as a result of a prohibited transaction or prohibited contribution under
the REMIC Provisions due to the negligent performance by the Certificate
Administrator of its duties and obligations set forth herein, the Certificate
Administrator shall indemnify the NIMs Insurer and the Trust Fund against any
and all Losses resulting from such negligence; provided, however, that the
Certificate Administrator shall not be liable for any such Losses attributable
to the action or inaction of the Servicer, the Depositor, the Trustee or the
Holder of the residual interest in such REMIC, as applicable, nor for any such
Losses resulting from misinformation provided by the Holder of the residual
interest in such REMIC on which the Certificate Administrator has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of the residual interest in such REMIC now or hereafter existing at
law or in equity. Notwithstanding the foregoing, however, in no event shall the
Certificate Administrator have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of,
or which is expressly permitted by the terms of, this Agreement, (2) for any
Losses other than those arising out of a negligent performance by the
Certificate Administrator of its duties and obligations set forth herein, and
(3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).
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SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy;
(b) the Servicer shall use commercially reasonable efforts consistent
with Accepted Servicing Practices to assure that no written information,
certificate of an officer, statement furnished in writing or written report
delivered to the Depositor, the Certificate Administrator, the NIMs Insurer,
the Custodian or the Trustee, any affiliate of the Depositor, the Certificate
Administrator, the NIMs Insurer or the Trustee and prepared by the Servicer
pursuant to this Agreement will be inaccurate in any material respect,
provided, however, that the Servicer shall not be responsible for inaccurate
information provided to it by third parties.
SECTION 2.10. [RESERVED]
SECTION 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and to perform the duties and obligations of the
Trustee under, the Swap Agreement, an insurance and indemnity agreement with a
NIMs Insurer and any other agreement or instrument related thereto, in each case
in such form as the Depositor shall direct or shall approve, the execution and
delivery of any such agreement by the Depositor to be conclusive evidence of its
approval thereof.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans, including without limitation, any powers of
attorney, in accordance with Accepted Servicing Practices. In connection with
such servicing and administration, the Servicer shall have full power and
authority, acting alone and/or through subservicers as provided in Section 3.02
hereof, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration, including but
not limited to, the power and authority, subject to the terms hereof (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property (or the stock allocated to a
dwelling unit related to a Co-op Loan) and assumptions of the Mortgage Notes and
related Mortgages (but only in the manner provided in this Agreement), (iii) to
collect any Insurance Proceeds and other Liquidation Proceeds and (iv) subject
to Section 3.12(a), to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property (or the stock allocated to a dwelling unit
related to a Co-op Loan) securing any Mortgage Loan; provided that, subject to
Section 6.03, the Servicer shall not take any action that is inconsistent with
or prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan serviced by it under this Agreement or the rights and interests of
the other parties to this Agreement except as otherwise required by this
Agreement or by law. The
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Servicer shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause any of the REMICs provided for
herein to fail to qualify as a REMIC or result in the imposition of any tax
under Section 860G(a) or 860G(d) of the Code. Subject to Section 6.03, the
Servicer shall represent and protect the interest of the Trust Fund in the same
manner as it currently protects its own interest in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan, but
in any case not in any manner that is a lesser standard than that provided in
the first sentence of this Section 3.01. Without limiting the generality of the
foregoing, the Servicer, in its own name or in the name of the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor and the Trustee,
when the Servicer believes it appropriate in its reasonable judgment, to execute
and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, subordinations and all other comparable
instruments, with respect to the Mortgage Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor, the Certificate
Administrator and/or the Trustee such documents requiring execution and delivery
by any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, including without limitation, any
powers of attorney. Upon receipt of such documents, the Depositor, the
Certificate Administrator and/or the Trustee shall execute such documents and
deliver them to the Servicer. For purposes of this Section 3.01, the Trustee
hereby grants to the Servicer a limited power of attorney to execute and file
any and all documents necessary to fulfill the obligations of the Servicer under
this Section 3.01.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. To the extent that a Mortgage does not provide for
escrow payments, (i) the Servicer shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or to foreclosure as a result
of a tax lien and (ii) the Servicer shall ensure that all insurance required to
be maintained on the Mortgaged Property pursuant to this Agreement is
maintained. If any such payment has not been made and the Servicer receives
notice of a tax lien being imposed with respect to the Mortgage Loan, the
Servicer will, to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property.
All costs incurred by the Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
In the event that the Mortgage Loan Documents relating to any Mortgage
Loan contain provisions requiring the related Mortgagor to submit to binding
arbitration any disputes arising in connection with such Mortgage Loan, the
Servicer shall be entitled to waive any such provisions on behalf of the Trust
and to send written notice of such waiver to the related Mortgagor, although the
Mortgagor may still require arbitration of such disputes at its option.
The Servicer shall deliver a list of Servicing Officers to the Trustee,
the Certificate Administrator and the Custodian on or before the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 97-02 and that for each
Mortgage Loan, the Servicer agrees that it
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shall report one of the following statuses each month as follows: current,
delinquent (30-, 60-, 90-days, etc.), foreclosed or charged-off.
The Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of the Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment,
release and other comparable instruments with respect to such assignment,
release or re-recording of a Mortgage in the name of MERS, solely as nominee for
the Trustee and its successors and assigns. Any reasonable expenses incurred in
connection with the actions described in the preceding sentence or as a result
of MERS discontinuing or becoming unable to continue operations in connection
with the MERS System, shall be subject to withdrawal by the Servicer from the
Collection Account.
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations
of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer, which may be an affiliate (each, a "subservicer") pursuant to
a Subservicing Agreement (each, a "Subservicing Agreement"); provided, however,
that (i) such subservicing arrangement and the terms of the related
Subservicing Agreement must provide for the servicing of such Mortgage Loans
in a manner consistent with the servicing arrangements contemplated hereunder,
(ii) that such agreement would not result in a withdrawal or downgrading by
any Rating Agency of the ratings of any Certificates or any of the NIM Notes
evidenced by a letter to that effect delivered by each Rating Agency to the
Depositor and the NIMs Insurer and (iii) the NIMs Insurer shall have consented
to such Subservicing Agreement, which consent shall not be unreasonably
withheld. Notwithstanding the provisions of any Subservicing Agreement, any of
the provisions of this Agreement relating to agreements or arrangements
between the Servicer and a subservicer or reference to actions taken through a
subservicer or otherwise, the Servicer shall remain obligated and liable to
the Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from
the subservicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Mortgage Loans.
Every Subservicing Agreement entered into by the Servicer shall contain a
provision giving any successor servicer the option to terminate such
agreement, with the consent of the NIMs Insurer, in the event a successor
servicer is appointed. All actions of the each subservicer performed pursuant
to the related Subservicing Agreement shall be performed as an agent of the
Servicer with the same force and effect as if performed directly by the
Servicer. The Servicer shall deliver to the NIMs Insurer copies of all
Subservicing Agreements. The Trustee and the Certificate Administrator shall
have no obligations, duties or liabilities with respect to a subservicer,
including, without limitation, any obligation, duty or liability to monitor
such subservicer or to pay a subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor, the Certificate Administrator, the
Custodian and the Trustee in Respect of the Servicer.
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None of the Certificate Administrator, the Custodian, the Trustee nor
the Depositor shall have any responsibility or liability for any action or
failure to act by the Servicer, and none of them is obligated to supervise the
performance of the Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall, within a period of time not to exceed ninety (90) days from
the date of notice of termination or resignation, thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Servicer pursuant to
Section 3.10 hereof or for any acts or omissions of such predecessor servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for any expenses of the Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee or its designee, in its capacity as the
successor servicer, shall immediately assume the Servicer's obligation to make
Advances and Servicing Advances. Any such assumption shall be subject to Section
7.02. No such termination or resignation shall affect any obligation of the
Servicer to pay amounts owed under this Agreement and to perform its duties
under this Agreement until its successor assumes all of its rights and
obligations hereunder. If the Servicer shall for any reason no longer be the
servicer (including by reason of any Event of Default), the Trustee (or any
other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance with
the terms thereof; provided, however, that the Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any Servicing Transfer Costs or
expenses are not paid by the Servicer pursuant to this Agreement, such amounts
shall be payable out of the Certificate Account; provided that the terminated
servicer shall reimburse the Trust Fund for any such expense incurred by the
Trust Fund upon receipt of a reasonably detailed invoice evidencing such
expenses. If the Trustee is unwilling or unable to act as servicer, or if the
NIMs Insurer so directs the Trustee, the Trustee shall seek to appoint a
successor servicer that is eligible in accordance with the criteria specified
this Agreement and reasonably acceptable to the NIMs Insurer.
The Servicer shall, upon request of the Trustee, but at the expense of the
Servicer, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any
default interest charge, or (ii) subject to Section 3.01, extend the due dates
for payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder,
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except as provided below; provided, further, that the NIMs Insurer's prior
written consent shall be required for any modification, waiver or amendment
after the Cut-off Date if the aggregate number of outstanding Mortgage Loans
which have been modified, waived or amended exceeds 5% of the number of
Mortgage Loans as of the Cut-Off Date. In the event of any such arrangement
pursuant to clause (ii) above, subject to Section 4.01, the Servicer shall make
any Advances on the related Mortgage Loan during the scheduled period 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 Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, 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), accept payment from the
related Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal
or interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in no event shall the Servicer grant
any such forbearance (other than as permitted by the second sentence of this
Section) with respect to any one Mortgage Loan more than once in any 12 month
period or more than three times over the life of such Mortgage Loan, and
provided, further, that in determining which course of action permitted by this
sentence it shall pursue, the Servicer shall adhere to the standards of Section
3.01. In connection with any modification pursuant to this Section 3.05(a) and
to the extent there are any unreimbursed Advances, the Servicer shall reimburse
itself for such amounts from the Collection Account.
(b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally or is otherwise prohibited by law, or
(ii) the collectability thereof shall have been limited due to acceleration in
connection with a foreclosure or other involuntary payment, or (iii) in the
Servicer's reasonable judgment as described in Section 3.01 hereof, (x) such
waiver relates to a default or a reasonably foreseeable default, (y) such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Charge and related Mortgage Loan and (z) doing so is
standard and customary in servicing similar Mortgage Loans (including any
waiver of a Prepayment Charge in connection with a refinancing of a Mortgage
Loan that is related to a default or a reasonably foreseeable default), or
(iv) the collection of such Prepayment Penalty would be considered "predatory"
pursuant to written guidance published or issued by any applicable federal,
state or local regulatory authority acting in its official capacity and having
jurisdiction over such matters. Except as provided in the preceding sentence,
in no event will the Servicer waive a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is not related to a default or a
reasonably foreseeable default. Except as otherwise provided above, the
Servicer shall not waive any Prepayment Penalty in connection with a voluntary
sale of the related Mortgaged Property unless there is an acceleration of the
maturity date of such Mortgage Loan. If the Servicer waives or does not
collect all or a portion of a Prepayment Charge relating to a Principal
Prepayment in full or in part due to any action or omission of the Servicer,
other than as provided above, the Servicer shall deposit the amount of such
Prepayment Charge (or such portion thereof as had been waived for deposit)
into the Collection Account for distribution in accordance with the terms of
this Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such
payment is required is prohibited by applicable law.
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(d) The Servicer shall establish and maintain so long as it is acting
as servicer hereunder, on behalf of the Trustee for the benefit of the
Certificateholders, the Collection Account. The Servicer shall deposit into
the Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received
or made by it on and after the Cut-Off Date with respect to the Mortgage
Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the Mortgage
Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other than (x)
interest due on the Mortgage Loans on or prior to the Cut-off Date and (y)
Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied
to the restoration or repair of the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan) or released to either the Mortgagor or
the holder of a senior lien on the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan) in accordance with the Servicer's
normal servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer pursuant
to Section 3.05(f) in connection with any losses on Permitted Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Purchase Prices and Substitution Adjustment Amounts;
(ix) all Advances made by the Servicer pursuant to Section 4.01;
(x) all Prepayment Charges;
(xi) all net monthly rental income from REO Properties required
to be deposited by the Servicer pursuant to Section 3.12; and
(xii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing-related fees,
including all late payment charges, insufficient funds charges, customary real
estate referral fees and payments in the nature of assumption fees (i.e. fees
related to the assumption of a Mortgage Loan upon the purchase of the related
Mortgaged Property or stock allocated to a dwelling unit in the case of a Co-op
Loan), modification fees, extension fees and other similar ancillary fees and
charges (other than Prepayment Charges) if collected, and any Prepayment
Interest Excess need not be remitted by the Servicer. Rather, such fees and
charges and similar amounts may be retained by the Servicer as additional
servicing compensation. In the event that the Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the Certificate
Administrator, or such other institution maintaining the
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Collection Account, to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08. In no event
shall the Certificate Administrator incur liability for withdrawals from the
Collection Account at the direction of the Servicer.
The Servicer shall give notice to the NIMs Insurer, the Certificate
Administrator and the Trustee of the location of the Collection Account
maintained by it when established and prior to any change thereof. Not later
than twenty days after each Distribution Date, the Servicer shall forward to the
NIMs Insurer, and upon request, to the Certificate Administrator, the Trustee
and the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Certificate
Administrator to any Certificateholder and to any Person identified to the
Certificate Administrator as a prospective transferee of a Certificate, upon
request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Certificate Administrator.
(e) The Certificate Administrator shall establish and maintain, on
behalf of the Certificateholders, the Certificate Account. The Certificate
Administrator shall, promptly upon receipt, deposit or cause to be deposited in
the Certificate Account and retain therein the following:
(i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate Account;
(ii) any amount required to be deposited by the Certificate
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iii) the Optional Termination Amount paid by Servicer pursuant to
Section 9.01.
Any amounts received by the Certificate Administrator prior to 1:00
p.m. New York City time (or such earlier deadline for investment in the
Permitted Investments designated by the Certificate Administrator) which are
required to be deposited in the Certificate Account by the Servicer shall be
invested in Permitted Investments on the Business Day on which they were
received. The foregoing requirements for remittance by the Servicer and deposit
by the Servicer into the Certificate Account shall be exclusive. In the event
that the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. All funds deposited in the Certificate Account
shall be held by the Certificate Administrator in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Certificate
Administrator incur liability for withdrawals from the Certificate Account at
the direction of the Servicer. The Certificate Administrator shall give notice
to the NIMs Insurer and the Servicer of the location of the Certificate Account
maintained by it when established and prior to any change thereof.
(f) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account as directed in
writing by the Servicer or as set forth herein, respectively, in Permitted
Investments, which shall mature not later than (i) in the case of the
Collection Account the Business Day preceding the related Servicer Remittance
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Servicer Remittance Date) and (ii) in the case of the Certificate Account, the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such
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Permitted Investment is an obligation of the institution that maintains such
Certificate Account or is otherwise immediately available, then such Permitted
Investment shall mature not later than such Distribution Date) and, in each
case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Servicer, or the
Certificate Administrator, as applicable, for the benefit of the
Certificateholders. All income and gain net of any losses realized from amounts
on deposit in the Collection Account shall be for the benefit of the Servicer
as servicing compensation and shall be remitted to it or withdrawn by it
monthly as provided herein. The amount of any losses incurred in the Collection
Account in respect of any such investments shall be deposited by the Servicer
in the Collection Account out of the Servicer's own funds immediately as
realized. All income and gain net of any losses realized from amounts on
deposit in the Certificate Account shall be for the benefit of the Certificate
Administrator and shall be remitted to or withdrawn by it monthly as provided
herein. Any and all amounts on deposit in the Certificate Account will be
invested in (i) 000000000 CUSIP for Delaware Money Market, (ii) to the extent
that the investment listed in (i) is unavailable for any reason, Evergreen
Prime Cash Management Money Market Fund-Fund Number 494-Symbol EPRXX or (iii)
to the extent that the investments listed in (i) and (ii) above are unavailable
for any reason, such amount will be held uninvested. The amount of any losses
incurred in the Certificate Account in respect of any such investments shall be
deposited by the Certificate Administrator, in the Certificate Account out of
the Certificate Administrator's own funds immediately as realized.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes, assessments, dues or comparable items and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account to withdraw funds
deposited in error or amounts previously deposited but returned as unpaid due to
a "not sufficient funds" or other denial by the related Mortgagor's banking
institution or to clear and terminate the Escrow Account at the termination of
this Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall
not be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
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SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.
(a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes (the order below not constituting
an order of priority):
(i) to pay to the Servicer (to the extent not previously paid to
or withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment or recovery of interest on a Mortgage
Loan that equals the Servicing Fee for the period with respect to which such
interest payment or recovery was made or allocated, and, as additional servicing
compensation, those other amounts set forth in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it) with respect to
the Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds)
that represent late recoveries of payments of principal and/or interest on
such particular Mortgage Loan(s) in respect of which any such Advance was
made;
(iii) to reimburse the Servicer for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made to
the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income with
respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(vi) to pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing Advances would constitute an "unanticipated expense"
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)), the
Servicer's right to reimbursement of Servicing Advances pursuant to this
subclause (vi) with respect to any Mortgage Loan being limited to amounts
received on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late recoveries of
the payments for which such advances were made pursuant to Section 3.01 or
Section 3.06;
(vii) to pay to the Depositor or the Servicer, as applicable, with
respect to each Mortgage Loan or property acquired in respect thereof that has
been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(viii) to reimburse the Servicer, the Certificate Administrator or
the Depositor for expenses incurred by any of them in connection with the
Mortgage Loans or the Certificates and reimbursable pursuant to Section 3.25 or
Section 6.03 hereof;
(ix) to reimburse the Trustee for enforcement expenses reasonably
incurred in respect of a breach or defect giving rise to the purchase obligation
in Section 2.03 that were incurred in the Purchase Price of the Mortgage Loans
including any expenses arising out of the enforcement of the purchase
obligation; provided that any such expenses will be reimbursable under this
subclause (ix) only
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to the extent that such expenses would constitute "unanticipated expenses"
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii) if paid by
one of the REMICs provided for herein;
(x) to withdraw any amount deposited in the Collection Account
and not required to be deposited therein;
(xi) to withdraw funds deposited in error or amounts previously
deposited but returned as unpaid due to a "not sufficient funds" or other denial
by the related Mortgagor's banking institution;
(xii) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof;
(xiii) to reimburse itself for Advances or Servicing Advances from
amounts in the Collection Account held for future distributions that were not
included in Available Funds for the preceding Distribution Date. An amount equal
to the amount withdrawn from the Collection Account pursuant to this subclause
(xiii) shall be deposited in the Collection Account by the Servicer on the next
succeeding Distribution Date on which funds are to be distributed to
Certificateholders; and
(xiv) to reimburse itself from any amounts in the Collection
Account for any prior Advances which have not otherwise been reimbursed at the
time a Mortgage Loan is modified.
In addition, no later than 1:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds to the extent on deposit, and
such amount shall be deposited in the Certificate Account; provided, however, if
the Certificate Administrator does not receive such Interest Funds and Principal
Funds by 2:00 p.m. Eastern Time, such Interest Funds and Principal Funds shall
be deposited in the Certificate Account on the next Business Day.
The 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.
The Servicer shall provide written notification to the Certificate
Administrator on or prior to the next succeeding Servicer Remittance Date upon
making any withdrawals from the Collection Account pursuant to subclauses (iii)
and (viii) above.
In the event of any failure by the Servicer to remit to the Certificate
Administrator for deposit into the Certificate Account any amounts (including
any Advance) required to be so remitted by the Servicer on the Servicer
Remittance Date, the Servicer shall pay to the Certificate Administrator, for
its own account, interest on such amounts at the "prime rate" (as specified in
the New York edition of The Wall Street Journal) until such failure is remedied.
Unless otherwise specified, any amounts reimbursable to the Servicer or
the Certificate Administrator from amounts on deposit in the Collection Account
or the Certificate Accounts shall be deemed to come from first, Interest Funds,
and thereafter, Principal Funds for the related Distribution Date.
(b) The Certificate Administrator shall withdraw funds from the
Certificate Account for distribution to the Certificateholders in the manner
specified in this Agreement (and shall withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to retain pursuant to this
Agreement). In addition, the Certificate Administrator may from time to time
make withdrawals
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from the Certificate Account for the following purposes (the order below not
constituting an order of priority):
(i) to withdraw any amount deposited in the Certificate Account
and not required to be deposited therein;
(ii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof (after paying all
amounts necessary to the Trustee, the Certificate Administrator or the Servicer
in connection with any such termination);
(iii) to reimburse the Certificate Administrator and the Trustee
for any fees, expenses and indemnification reimbursable pursuant to this
Agreement, including without limitation Sections 3.04, 6.03, 8.06 and 11.02
hereof; and
(iv) to pay to the Servicer or the Certificate Administrator, as
applicable, earnings on or investment income with respect to funds in or
credited to the Certificate Account as provided in Section 3.05(g).
SECTION 3.09. [RESERVED]
SECTION 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each Mortgage Loan
(other than a Co-op Loan), fire and hazard insurance with extended coverage in
an amount that is at least equal to the least of (i) the replacement value of
the improvements that are part of such Mortgaged Property, or (ii) the greater
of (a) the outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer or (iii) the amount
required under applicable HUD/FHA regulations. Each policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Servicer shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any Mortgage Loan, to the extent described below. Pursuant to Section 3.05
hereof, any amounts collected by the Servicer under any such policies (other
than the amounts to be applied to the restoration or repair of the related
Mortgaged Property or property thus acquired or amounts released to the
Mortgagor in accordance with the Servicer's normal servicing procedures) shall
be deposited in the Collection Account. Any cost incurred by the Servicer in
maintaining any such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the Certificate
Administrator for their benefit, be added to the principal balance of the
Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so permit.
Such costs shall be recoverable by the Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent and as otherwise
permitted by Section 3.08 hereof. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor or maintained
on property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special flood
hazard area and such area is participating in the national flood insurance
program, the Servicer shall cause flood insurance to be maintained with respect
to such Mortgage Loan. Such flood insurance shall be in an amount equal to the
least of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.
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In the event that the Servicer shall obtain and maintain a blanket
policy 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 sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Certificate Administrator for the benefit of the
Certificateholders, claims under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy; provided,
however, that the Servicer shall not exercise any such right if the due-on-sale
clause, in the reasonable belief of the Servicer, is not enforceable under
applicable law. An opinion of counsel, which shall be reimbursable as a
Servicing Advance (to the extent it is an "unanticipated expense" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)), delivered to the
Certificate Administrator, the Trustee and the Depositor shall conclusively
establish the reasonableness of such belief to the extent permitted under
applicable law. Notwithstanding the foregoing, the Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom the
related Mortgaged Property (or stock allocated to a dwelling unit, in the case
of a Co-op Loan) has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related
thereto and the consent of the mortgagee under such Mortgage Note or Mortgage
is not otherwise so required under such Mortgage Note or Mortgage as a
condition to such transfer. In the event that the Servicer is prohibited by
law from enforcing any such due-on-sale clause, or if coverage under any
Required Insurance Policy would be adversely affected, or if nonenforcement is
otherwise permitted hereunder, the Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from
or with the Person to whom such property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and,
unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if so
covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with
such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section 3.11(a) by reason of any transfer
or assumption that the Servicer reasonably believes it is restricted by law
from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property (or stock allocated to a dwelling unit, in the case of Co-op
Loan) has been conveyed to a Person by a Mortgagor, and such Person is to enter
into an assumption agreement or modification agreement or supplement to the
Mortgage Note or Mortgage that requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and
deliver or cause to be prepared and delivered to the Trustee for signature and
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shall direct, in writing, the Trustee to execute the assumption agreement with
the Person to whom the Mortgaged Property (or the stock allocated to a
dwelling unit, in the case of a Co-op Loan) is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) to such Person. In
connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Rate, the Minimum Rate, the Gross Margin, the Periodic
Rate Cap, the Adjustment Date, any prepayment penalty and any other term
affecting the amount or timing of payment on the Mortgage Loan) may be
changed. The Servicer shall notify the Trustee and the NIMs Insurer that any
such substitution or assumption agreement has been completed by forwarding to
the Trustee (with a copy to the NIMs Insurer) the original of such
substitution or assumption agreement, which in the case of the original shall
be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. The Servicer shall be
responsible for recording any such assumption or substitution agreements. Any
fee collected by the Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Servicer as additional
servicing compensation.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds.
(a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall
be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) and if applicable, as a Non-Recoverable Servicing
Advance, as contemplated in Section 3.08 hereof. If the Servicer has knowledge
that a Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan) that the Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site
with environmental or hazardous waste risks known to the Servicer, the
Servicer will, prior to acquiring the Mortgaged Property (or stock allocated
to a dwelling unit, in the case of a Co-op Loan), consider such risks and only
take action in accordance with Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name shall be
placed on the title to such REO Property solely as the Trustee hereunder and not
in its individual capacity. The Servicer servicing the related Mortgage Loan
shall ensure that the title to such REO Property references this Agreement and
the Trustee's capacity hereunder. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
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Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer or its affiliate may
receive usual and customary real estate referral fees for real estate brokers in
connection with the listing and disposition of REO Property. The Servicer shall
prepare a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Servicer to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on the Determination Date immediately following the
month concerned. The Servicer shall perform the tax reporting and withholding
related to foreclosures, abandonments and cancellation of indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing
such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, obtain, in accordance with applicable procedures for
obtaining an automatic extension of the grace period, more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period, in which case such property must be disposed of
prior to the end of such extension, unless the Trustee and the NIMs Insurer
shall have been supplied with an Opinion of Counsel (such Opinion of Counsel not
to be an expense of the Certificate Administrator, Trustee or the NIMs Insurer),
to the effect that the holding by the Trust Fund of such Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) subsequent to
such three-year period or extension will not result in the imposition of taxes
on "prohibited transactions" of the Trust Fund or any of the REMICs provided for
herein as defined in section 860F of the Code or cause any of the REMICs
provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) acquired by the
Trust Fund shall be held, rented (or allowed to continue to be rented) or
otherwise used for the production of income by or on behalf of the Trust Fund in
such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) to
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund or any REMIC provided for
herein to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes. The
Servicer shall have no liability for any losses resulting from a foreclosure on
a second lien Mortgage Loan in connection with the foreclosure of the related
first lien mortgage loan that is not a Mortgage Loan if the Servicer does not
receive notice of such foreclosure action.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for
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expenses incurred (including any property or other taxes) in connection with
such management and net of unreimbursed Servicing Fees, Advances, Servicing
Advances and any management fee paid or to be paid with respect to the
management of such Mortgaged Property (or stock allocated to a dwelling unit, in
the case of Co-op Loan), shall be applied for the purpose of the Trust Fund to
the payment of principal of, and interest on, the related defaulted Mortgage
Loans (with interest accruing as though such Mortgage Loans were still current)
and all such net income shall be deemed, for all purposes and as between the
parties to this Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the Collection
Account. To the extent that any such net income received during a Prepayment
Period is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related Mortgage Loan, such
excess shall be considered to be a partial Principal Prepayment for all purposes
hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds and any net income from an REO
Property, will be applied as between the parties in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and unpaid Servicing Fees, pursuant to Section 3.08(a)(vi) or
this Section 3.12; second, to reimburse the Servicer for any unreimbursed
Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to any
Prepayment Charges and then to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the applicable Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) The Servicer, in its sole discretion, shall have the right to
elect (by written notice sent to the Trustee and the Certificate Administrator)
to purchase for its own account from the Trust Fund any Mortgage Loan that is
90 days or more Delinquent or REO Property for which the Servicer has accepted
a deed-in-lieu of foreclosure at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan or REO Property purchased hereunder shall
be delivered to the Certificate Administrator for deposit to the Certificate
Account and the Custodian, upon receipt of such confirmation of deposit and a
Request for Release from the Servicer in the form of Exhibit I hereto, shall
release or cause to be released to the Servicer the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared
by the Servicer, in each case without recourse, representation or warranty, as
shall be necessary to vest in the Servicer any Mortgage Loan or REO Property
released pursuant hereto and the Servicer shall succeed to all the Trustee's
right, title and interest in and to such Mortgage Loan and all security and
documents related thereto. Such assignment shall be an assignment outright and
not for security. The Servicer shall thereupon own such Mortgage Loan, and all
security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. The Servicer shall not use any
procedure in selecting Mortgage Loans to be repurchased which is materially
adverse to the interests of the Certificateholders.
SECTION 3.13. Custodian to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Custodian or
its designee by delivering a Request for Release substantially in the
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form of Exhibit I. Upon receipt of such request, the Custodian shall promptly
release the related Mortgage File to the Servicer, and the Servicer is
authorized to cause the removal from the registration on the MERS System of any
such Mortgage if applicable, and the Servicer, on behalf of the Custodian shall
execute and deliver the request for reconveyance, deed of reconveyance or
release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage together with the Mortgage Note with written evidence of cancellation
thereon. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Collection Account, the
Certificate Account or the related subservicing account. From time to time and
as shall be appropriate for the servicing or foreclosure of any Mortgage Loan,
including for such purpose, collection under any policy of flood insurance, any
fidelity bond or errors or omissions policy, or for the purposes of effecting a
partial release of any Mortgaged Property from the lien of the Mortgage or the
making of any corrections to the Mortgage Note or the Mortgage or any of the
other documents included in the Mortgage File, the Custodian shall, upon
delivery to the Custodian of a Request for Release in the form of Exhibit I
signed by a Servicing Officer, release the Mortgage File to the Servicer.
Subject to the further limitations set forth below, the Servicer shall cause the
Mortgage File or documents so released to be returned to the Custodian when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in the Collection Account.
Each Request for Release may be delivered to the Custodian (i) via mail
or courier, (ii) via facsimile or (iii) by such other means, including, without
limitation, electronic or computer readable medium, as the Servicer and the
Custodian shall mutually agree. The Custodian shall promptly release the related
Mortgage File(s) within five (5) Business Days of receipt of a properly
completed Request for Release pursuant to clauses (i), (ii) or (iii) above.
Receipt of a properly completed Request for Release shall be authorization to
the Custodian to release such Mortgage Files, provided the Custodian has
determined that such Request for Release has been executed, with respect to
clauses (i) or (ii) above, or approved, with respect to clause (iii) above, by
an authorized Servicing Officer of the Servicer, and so long as the Custodian
complies with its duties and obligations under this Agreement. If the Custodian
is unable to release the Mortgage Files within the period previously specified,
the Custodian shall immediately notify the Servicer indicating the reason for
such delay. If the Servicer is required to pay penalties or damages due to the
Custodian's negligent failure to release the related Mortgage File or the
Custodian's negligent failure to execute and release documents in a timely
manner, the Custodian, shall be liable for such penalties or damages
respectively caused by it.
If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) as authorized by this Agreement, the Servicer may
deliver or cause to be delivered to the Trustee, for signature, as appropriate
or on behalf of the Trustee, execute any court pleadings, requests for trustee's
sale or other documents necessary to effectuate such foreclosure or any legal
action brought to obtain judgment against the Mortgagor on the Mortgage Note or
the Mortgage or to obtain a deficiency judgment or to enforce any other remedies
or rights provided by the Mortgage Note or the Mortgage or otherwise available
at law or in equity. Notwithstanding the foregoing, the Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Custodian to be returned to the Custodian promptly after
possession thereof shall have been released by the Custodian unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account, and the Servicer
shall have delivered to the Custodian a Request for Release in the form of
Exhibit I or (ii) the Mortgage File or document shall have 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 (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) and the Servicer shall have delivered to the Custodian
an Officer's Certificate of a Servicing Officer certifying as to the name and
address of the Person to which the Mortgage File or the documents therein were
delivered and the purpose or purposes of such delivery.
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SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Certificate Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee or the Certificate
Administrator for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to the
Servicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
or recovery of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan as of the immediately preceding
Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds,
late payment fees, assumption fees (i.e. fees related to the assumption of a
Mortgage Loan upon the purchase of the related Mortgaged Property (or stock
allocated to a dwelling unit, in the case of Co-op Loan)), modification fees,
customary real estate referral fees, extension fees and similar fees payable by
the Mortgagor, Prepayment Interest Excess, and all income and gain net of any
losses realized from Permitted Investments in the Collection Account shall be
retained by the Servicer to the extent not required to be deposited in the
Collection Account pursuant to Sections 3.05 or 3.12(a) hereof. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in this Agreement. In
no event shall the Trustee or the Certificate Administrator be liable for any
Servicing Fee or for any differential between the Servicing Fee and the amount
necessary to induce a successor servicer to act as successor servicer under this
Agreement.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it provided, that
the Servicer shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
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SECTION 3.17. Annual Statement as to Compliance.
Pursuant to this Agreement, the Servicer shall deliver to the Depositor
and the Certificate Administrator at least two weeks prior to the latest day in
each year on which an annual report on Form 10-K may be timely filed with the
Securities and Exchange Commission (without regard to any extension), or such
other date in order to remain in compliance with the Section 302 Requirements,
an Officer's Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Agreement or a similar agreement has been made under
such officer's supervision, and (ii) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement in all material respects throughout such year, or, if there has
been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officers and the nature and status
thereof. Copies of such statement shall be provided by the Certificate
Administrator to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement has been delivered by the
Servicer to the Certificate Administrator.
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
At least two weeks prior to the latest day in each year on which an
annual report on Form 10-K may be timely filed with the Securities and Exchange
Commission (without regard to any extension) or such other date in order to
remain in compliance with the Section 302 Requirements, the Servicer at its
expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Certificate Administrator and the
Depositor. Copies of the USAP Report shall be provided by the Certificate
Administrator to any Certificateholder upon request at the Certificateholder's
expense, provided such report has been delivered by the Servicer to the
Certificate Administrator. The Certificate Administrator shall deliver to the
NIMs Insurer upon written request: (i) a copy of such USAP Report, and (ii) the
Servicer's annual officer's certificate as to compliance with this Agreement
provided by the Servicer to the Certificate Administrator pursuant to Section
3.17. In addition, at the NIMs Insurer's written request, the Servicer shall
deliver copies of evidence of the Servicer's fidelity bond or errors and
omissions insurance coverage to the NIMs Insurer.
SECTION 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this agreement
shall exist so long as the NIM Notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such NIM notes.
SECTION 3.20. Periodic Filings.
(a) Promptly upon receipt of any report of the independent public
accountants required pursuant to Section 3.18, the Certificate Administrator
shall review such report. As part of the Form 10-K required to be filed
pursuant to the terms of this Agreement, the Certificate Administrator shall
include such accountants report as well as the Officer's Certificate delivered
by the Servicer pursuant to Section 3.17 relating to the Servicer's performance
of its obligations under this Agreement and any significant deficiencies
relating to the Servicer's compliance set forth in the report of the Servicer's
certified independent accountants described above.
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(b) The Depositor shall prepare and file the initial report on Form
8-K. The Certificate Administrator shall prepare for filing, and execute (other
than the Form 10-Ks and the Certification), on behalf of the Trust Fund, and
file with the Securities and Exchange Commission, (i) within 15 days after each
Distribution Date in each month, each Monthly Statement on Form 8-K under the
Exchange Act executed by the Certificate Administrator, (ii) on or before
March 31 of each year beginning in 2005 or such other date in order to remain
in compliance with the Section 302 Requirements, a Form 10-K under the
Exchange Act executed by the Depositor, including any certification (the
"Certification") required by the Section 302 Requirements, and (iii) any and
all reports, statements and information respecting the Trust Fund and/or the
Certificates required to be filed on behalf of the Trust Fund under the
Exchange Act executed by the Certificate Administrator. The Certification
shall be executed by a senior officer of the Depositor. Upon such filing with
the Securities and Exchange Commission, the Certificate Administrator shall
promptly deliver to the Depositor a copy of any such executed report,
statement or information. Prior to making any such filings and certifications,
the Certificate Administrator shall comply with the provisions set forth in
this Section. If permitted by applicable law and unless the Depositor
otherwise directs, the Certificate Administrator shall file a Form 15 under
the Exchange Act as soon as it is able to do so. The Depositor hereby grants
to the Certificate Administrator a limited power of attorney to execute (other
than the Form 10-Ks and the Certification) and file each such document on
behalf of the Depositor. Such power of attorney shall continue until either
the earlier of (i) receipt by the Certificate Administrator from the Depositor
of written termination of such power of attorney and (ii) the termination of
the Trust Fund. The Depositor agrees to promptly furnish to the Certificate
Administrator, from time to time upon request, such further information,
reports, and financial statements within its control related to this Agreement
and the Mortgage Loans as the Certificate Administrator reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Certificate Administrator shall have no responsibility to file any items other
than those specified in this Section.
(c) [RESERVED].
(d) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which the Certificate
Administrator is obligated to file Form 8-Ks and 10-Ks pursuant to paragraph
(b) of this Section. In the event a Form 15 is properly filed pursuant to
paragraph (b) of this Section, there shall be no further obligations under
paragraphs (a) through (c) of this Section commencing with the fiscal year in
which the Form 15 is filed (other than the obligations in paragraphs (a) and
(b) of this Section to be performed in such fiscal year that relate back to
the prior fiscal year).
SECTION 3.21. Annual Certificate by Certificate Administrator.
(a) On or before March 1 of each year (commencing in 2006), an officer
of the Certificate Administrator shall execute and deliver an Officer's
Certificate, signed by a Responsible Officer of the Certificate Administrator
or any officer to whom that officer reports, to the Depositor for the benefit
of the Depositor and its officers, directors and affiliates, certifying as to
the matters described in the Officer's Certificate attached hereto as Exhibit
K.
(b) The Certificate Administrator shall indemnify and hold harmless
the Depositor and its officers, directors, agents and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of
or based upon a breach by the Certificate Administrator or any of its officers,
directors, agents or affiliates of its obligations under this Section 3.21,
any material misstatement or omission in the Officer's Certificate required
under this Section or the negligence, bad faith or willful misconduct of the
Certificate Administrator in connection therewith. If the indemnification
provided for herein is
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unavailable or insufficient to hold harmless the Depositor, then the
Certificate Administrator agrees that it shall contribute to the amount paid or
payable by the Depositor as a result of the losses, claims, damages or
liabilities of the Depositor in such proportion as is appropriate to reflect
the relative fault of the Certificate Administrator on the one hand and of the
Depositor on the other in connection with a breach of the Certificate
Administrator's obligations under this Section 3.21, any material misstatement
or omission in the Officer's Certificate required under this Section or the
Certificate Administrator's negligence, bad faith or willful misconduct in
connection therewith.
SECTION 3.22. Annual Certificate by Servicer.
(a) Within 15 days prior to the date on which a Form 10-K is required
to be filed with a Certification by the Depositor, the Servicer shall execute
and deliver an Officer's Certificate in the form of Exhibit L attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the Certificate Administrator and the
Depositor for the benefit of the Certificate Administrator and the Depositor
and their respective officers, directors and affiliates.
(b) The Servicer shall indemnify and hold harmless the Depositor and
its officers, directors, agents and affiliates from and against (i) any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach by the Servicer or any of its officers, directors, agents or affiliates
of its obligations under Section 3.17, Section 3.18 and this Section 3.22,
including any misstatement of a material fact or omission to state a material
fact in the Officer's Certificate required under this Section necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading or (ii) the negligence, bad faith or
willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Servicer agrees that it shall contribute to
the amount paid or payable by the Certificate Administrator and the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the
Depositor on the one hand and the Servicer on the other in connection with a
breach of the Servicer's obligations under this Section 3.22, any material
misstatement or omission in the Officer's Certificate required under this
Section or the Servicer's negligence, bad faith or willful misconduct in
connection therewith.
SECTION 3.23. Prepayment Charge Reporting Requirements.
Promptly after each Distribution Date, the Servicer shall provide to
the Depositor the following information with regard to each Mortgage Loan that
has prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii)current principal balance;
(iv) Prepayment Charge amount due;
(v) Prepayment Charge amount collected; and
(vi) reason why full Prepayment Charge amount was not collected, if
applicable.
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SECTION 3.24. Statements to Certificate Administrator
Not later than the Servicer Remittance Date in each month, the Servicer
shall furnish to the Certificate Administrator and the NIMs Insurer an
electronic file providing loan level accounting data for the period ending on
the last Business Day of the preceding month in the format mutually agreed upon
between the Servicer and the Certificate Administrator, including but not
limited to information sufficient to allow the Certificate Administrator to
prepare the Monthly Statement described in Section 4.05(a).
SECTION 3.25. Indemnification.
(a) The Servicer shall indemnify the Seller, the Trust Fund, the
Trustee, the Custodian, the Depositor, the Certificate Administrator, the NIMs
Insurer and their officers, directors, employees and agents and hold each of
them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Servicer to perform its duties and
service the Mortgage Loans in compliance with the terms of this Agreement. The
Servicer immediately shall notify the Seller, the Trustee, the Certificate
Administrator, the NIMs Insurer, the Custodian and the Depositor or any other
relevant party if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld or
delayed) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or any of such parties in
respect of such claim. The Servicer shall follow any reasonable written
instructions received from the NIMs Insurer in connection with such claim. The
Servicer shall provide the Depositor, the Certificate Administrator, the
Trustee and the NIMs Insurer with a written report of all expenses and
advances incurred by the Servicer pursuant to this Section 3.25(a), and the
Servicer shall promptly reimburse itself from the assets of the Trust Fund in
the Collection Account for all amounts advanced by it pursuant to the
preceding sentence except when and to the extent a determination has been made
that the claim in any way relates to the failure of the Servicer to service
and administer the Mortgage Loans in material compliance with the terms of
this Agreement or the gross negligence, bad faith or willful misconduct of the
Servicer. The provisions of this paragraph shall survive the termination of
this Agreement and the payment of the outstanding Certificates.
(b) [Reserved].
(c) The Certificate Administrator immediately shall notify the Seller,
the Trustee, the Servicer and the Depositor or any other relevant party if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld or delayed) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or any of such parties in respect of such claim. The
Certificate Administrator shall follow any written instructions received from
the Trustee in connection with such claim it being understood that the Trustee
shall have no duty to monitor or give instructions with respect to such
claims. The Certificate Administrator shall provide the Trustee, the Servicer
and the Depositor with a written report of all expenses and advances incurred
by the Certificate Administrator pursuant to this Section 3.25(c), and the
Certificate Administrator shall promptly reimburse itself from the assets of
the Trust Fund in the Certificate Account for all amounts advanced by it
pursuant to the preceding sentence except when the claim in any way relates to
the failure of the Certificate Administrator to perform its duties in material
compliance with the terms of this Agreement or the negligence, bad faith or
willful misconduct of the Certificate Administrator. The provisions of this
paragraph shall survive the termination of this Agreement and the payment of
the outstanding Certificates.
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SECTION 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Advances.
(a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the
Collection Account. Each such Advance shall be remitted to the Collection
Account no later than 1:00 p.m. Eastern time on the Servicer Advance Date in
immediately available funds. The Servicer shall be obligated to make any such
Advance only to the extent that such advance would not be a Non-Recoverable
Advance. If the Servicer shall have determined that it has made a Non-
Recoverable Advance or that a proposed Advance or a lesser portion of such
Advance would constitute a Non-Recoverable Advance, the Servicer shall deliver
(i) to the Certificate Administrator for the benefit of the Certificateholders,
funds constituting the remaining portion of such Advance, if applicable, and
(ii) to the Depositor, the NIMs Insurer and each Rating Agency an Officer's
Certificate setting forth the basis for such determination. The Servicer may,
in its sole discretion, make an Advance with respect to the principal portion
of the final Scheduled Payment on a Balloon Loan, but the Servicer is under no
obligation to do so; provided, however, that nothing in this sentence shall
affect the Servicer's obligation under this Section 4.01 to advance the
interest portion of the final Scheduled Payment with respect to a Balloon Loan
as if such Balloon Loan were a fully amortizing Mortgage Loan. If a Mortgagor
does not pay its final Scheduled Payment on a Balloon Loan when due, the
Servicer shall Advance (unless it determines in its good faith judgment that
such amounts would constitute a Non-Recoverable Advance) a full month of
interest (net of the Servicing Fee) on the Stated Principal Balance thereof
each month until its Stated Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Collection Account that any amount held for future distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Collection Account to the
Certificate Account. Any funds so applied and transferred shall be replaced by
the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled to be
reimbursed from the Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until the earlier of
(i) the date such Mortgage Loan is paid in full or (ii) the date the related
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
any applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but
not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or Servicing
Advance shall be required to be made hereunder by the Servicer if such Advance
or Servicing Advance would, if made, constitute a
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Non-Recoverable Advance or a Non-Recoverable Servicing Advance. The
determination by the Servicer that it has made a Non-Recoverable Advance or a
Non-Recoverable Servicing Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Non-Recoverable Advance or a
Non-Recoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Depositor and the
Certificate Administrator. In addition, the Servicer shall not be required to
advance any Relief Act Shortfalls.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
No later than the Servicer Remittance Date immediately preceding each
Distribution Date, the Servicer shall remit to the Certificate Administrator an
amount from its own funds equal to the Compensating Interest with respect to
such Servicer Remittance Date; and in case of such remittance, the Servicer
shall not be entitled to any recovery or reimbursement from the Depositor, the
Certificate Administrator, the Trustee, the Trust Fund or the
Certificateholders. With respect to any Mortgage Loan and Distribution Date, to
the extent that the Prepayment Interest Shortfall exceeds Compensating Interest
(such excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Certificates, pro rata, based upon the amount of interest each such Class would
otherwise be entitled to receive on such Distribution Date. Notwithstanding the
foregoing, the Servicer shall not be obligated to pay Compensating Interest with
respect to any Relief Act Shortfall.
SECTION 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Certificate
Account shall be treated for federal income tax purposes as applied to
distributions on the interests in the Lower Tier REMIC in an amount sufficient
to make the distributions on the respective Certificates on such Distribution
Date in accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) Reserved.
(b) On each Distribution Date, the Certificate Administrator shall
make the following distributions from funds then available in the Certificate
Account, of an amount equal to the Interest Funds in the following order of
priority:
(i) to the Class P Certificates, an amount equal to any
Prepayment Charges received with respect to the Mortgage Loans or paid by the
Servicer or the Seller in respect of Prepayment Charges pursuant to this
Agreement during the related Prepayment Period;
(ii) to the Certificate Administrator, the Certificate
Administrator Fee;
(iii) to the Supplemental Interest Trust, any Net Swap Payments
owed to the Swap Counterparty;
(iv) to the Supplemental Interest Trust, any Swap Termination
Payment owed by the Trust to the Swap Counterparty (other than Defaulted Swap
Termination Payments);
(v) to each class of the Class A Certificates, on a pro rata
basis, the Current Interest and any Interest Carry Forward Amount with respect
to each such class based upon the ratio of
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(x) the Current Interest and Interest Carry Forward Amount for each class of the
Class A Certificates to (y) the total amount of Current Interest and any
Interest Carry Forward Amount for the Class A Certificates;
(vi) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, the Current Interest for such class; and
(vii) any remainder pursuant to Section 4.04(f) hereof.
(c) [Reserved]
(d) On each Distribution Date, the Certificate Administrator shall
make the following distributions from the Certificate Account of an amount
equal to the Principal Distribution Amount in the following order of priority
until such amount shall have been fully distributed for such Distribution Date:
(i) to the Class A Certificates, the Class A Principal
Distribution Amount will be distributed sequentially to the Class A-1, Class
A-2, Class A-3 and Class A-4 Certificates, in that order, until the Certificate
Principal Balance of each such class has been reduced to zero; provided,
however, that in the event that the aggregate Certificate Principal Balance of
the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates is greater than
or equal to the aggregate Stated Principal Balance of the Mortgage Loans, the
Class A Principal Distribution Amount will be distributed pro rata to the Class
A-1, Class A-2, Class A-3 and Class A-4 Certificates;
(ii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, the Class M-1 Principal Distribution Amount,
the Class M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution Amount, the
Class M-7 Principal Distribution Amount, the Class M-8 Principal Distribution
Amount, the Class M-9 Principal Distribution Amount, the Class M-10 Principal
Distribution Amount and the Class M-11 Principal Distribution Amount,
respectively, for each such class; and
(iii) any remainder pursuant to Section 4.04(f) hereof.
(e) [Reserved].
(f) On each Distribution Date, the Certificate Administrator shall
make the following distributions up to the following amounts from the
Certificate Account of the remainders pursuant to Section 4.04(b)(vii) and (d)
(iii) hereof and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(b) and (d) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date:
(i) the Extra Principal Distribution Amount;
(ii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, any Interest Carry Forward Amount with respect
to such class;
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(iii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and
Class M-11 Certificates, in that order, any Unpaid Realized Loss Amount for such
class;
(iv) to the Offered Certificates and Class M-10 Certificates, on
a pro rata basis based upon the Available Funds Cap Carryover for each such
Class, the Available Funds Cap Carryover; and
(v) the remainder pursuant to Section 4.04(g) hereof.
(g) on each Distribution Date, the Certificate Administrator shall
allocate the remainders pursuant to Section 4.04(f)(v) to the Supplemental
Interest Trust.
(h) On each Distribution Date, the Certificate Administrator shall
allocate the remainder pursuant to Section 4.04(k)(xi) hereof (i) to the
Certificate Administrator to reimburse amounts or pay indemnification amounts
owing to the Certificate Administrator pursuant to Section 6.03 and (ii) to the
Class R Certificate and such distributions shall be made only after all
preceding distributions shall have been made until such remainder shall have
been fully distributed.
(i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Certificate Administrator shall allocate the
Applied Realized Loss Amount for the Certificates to reduce the Certificate
Principal Balances of the Class X Certificates and the Subordinated
Certificates in the following order of priority:
(i) to the Class X Certificates until the Class X Certificate
Principal Balance is reduced to zero;
(ii) to the Class M-11 Certificates until the Class M-11
Certificate Principal Balance is reduced to zero;
(iii) to the Class M-10 Certificates until the Class M-10
Certificate Principal Balance is reduced to zero;
(iv) to the Class M-9 Certificates until the Class M-9
Certificate Principal Balance is reduced to zero;
(v) to the Class M-8 Certificates until the Class M-8
Certificate Principal Balance is reduced to zero; (vi) to the Class M-7
Certificates until the Class M-7 Certificate Principal Balance is reduced to
zero;
(vii) to the Class M-6 Certificates until the Class M-6
Certificate Principal Balance is reduced to zero;
(viii) to the Class M-5 Certificates until the Class M-5
Certificate Principal Balance is reduced to zero;
(ix) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;
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(x) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(xi) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero;
(xii) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Certificate Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either by wire transfer in immediately available funds to the account of such
holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Certificate Administrator at least five (5)
Business Days prior to the related Record Date or, if not, by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
In accordance with this Agreement, the Servicer shall prepare and
deliver a report (the "Remittance Report") to the Certificate Administrator in
the form of a computer readable magnetic tape (or by such other means as the
Servicer and the Certificate Administrator may agree from time to time)
containing such data and information as to permit the Certificate Administrator
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date. The Certificate Administrator
will prepare the Monthly Report based solely upon the information received from
the Servicer.
The Certificate Administrator shall promptly notify the NIMs Insurer of
any proceeding or the institution of any action, of which a Responsible Officer
of the Certificate Administrator has actual knowledge, seeking the avoidance as
a preferential transfer under applicable bankruptcy, insolvency, receivership
or similar law (a "Preference Claim") of any distribution made with respect to
the Class X Certificates or the Class P Certificates. Each Holder of the Class
X Certificates or the Class P Certificates, by its purchase of such
Certificates hereby agrees, and it is hereby acknowledged, that the NIMs
Insurer 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,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMs Insurer shall be subrogated to the rights
of the Trustee and each Holder of the Class X and the Class P Certificates 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; provided, however,
that the NIMs Insurer will not have any rights with respect to any Preference
Claim set forth in this paragraph unless the indenture trustee with respect to
the NIM Notes or the holder of any NIMs Notes has been required to relinquish a
distribution made on the Class X and the Class P Certificates or the NIM Notes,
as applicable, and the NIMs Insurer made a payment in respect of such
relinquished amount.
(k) On the Closing Date, the Certificate Administrator shall establish
and maintain in its name, a separate non-interest bearing trust account for the
benefit of the holders of the Certificates (the "Supplemental Interest Trust")
as a part of the Trust Fund. The Supplemental Interest Trust shall be an
Eligible Account, and funds on deposit therein shall be held separate and
apart from, and shall not be
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commingled with, any other moneys, including, without limitation, other moneys
of the Certificate Administrator held pursuant to this Agreement.
The Trustee shall enforce all of the Trust's rights and exercise any
remedies under the Swap Agreement and, in the event the Swap Agreement is
terminated as a result of the designation by either party thereto of an Early
Termination Date (as defined therein), find a replacement counterparty to enter
into a replacement swap agreement utilizing the amounts of the net Swap
Termination Payments received.
Any Swap Termination Payment received by the Certificate Administrator
shall be deposited in to the Supplemental Interest Trust and shall be used to
make any upfront payment required under a replacement swap agreement and any
upfront payment received from the counterparty to a replacement swap agreement
shall be used to pay any Swap Termination Payment owed to the Swap Provider.
Notwithstanding anything contained herein, in the event that a
replacement swap agreement cannot be obtained within 30 days after receipt by
the Certificate Administrator of the Swap Termination Payment paid by the
terminated Swap Provider, the Certificate Administrator shall deposit such Swap
Termination Payment into a separate, non-interest bearing account established by
the Certificate Administrator and the Certificate Administrator shall, on each
Distribution Date following receipt of such Swap Termination Payment, withdraw
from such account, an amount equal to the Net Swap Payment, if any, that would
have been paid to the Trust by the original Swap Provider (computed in
accordance with the original Swap Agreement attached hereto as Exhibit M) and
distribute such amount in accordance with Section 4.04 of this Agreement. Any
such account shall not be an asset of any REMIC. Any amounts remaining in such
account shall be distributed to the holders of the Class X Certificates on the
Distribution Date following the earlier of (i) the exercise of the option to
terminate the Trust Fund by the holders Class X Certificates and (ii) the
termination date of the original Swap Agreement.
On any Distribution Date, any Swap Termination Payments or Net Swap
Payments owed to the Swap Counterparty will be paid out of, or any Net Swap
Payments or Swap Termination Payments received from the Swap Counterparty will
be deposited into, the Supplemental Interest Trust. The Supplemental Interest
Trust will not be an asset of any REMIC. Funds in the Supplemental Interest
Trust shall be distributed in the following order of priority by the Certificate
Administrator:
(i) to the Swap Counterparty, all Net Swap Payments, if any,
owed to the Swap Counterparty for such Distribution Date;
(ii) to the Swap Counterparty, any Swap Termination Payment,
other than a Defaulted Swap Termination Payment, if any, owed to the Swap
Counterparty;
(iii) to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, on a pro rata basis, any Current Interest and any Interest Carry
Forward Amount with respect to such class to the extent unpaid from Interest
Funds;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, any Current Interest for such class to the
extent unpaid from Interest Funds;
(v) to the Offered Certificates and the Class M-10 Certificates,
to pay principal as described and in the same manner and order of priority as
set forth in Sections 4.04(d)(i) through 4.04(d)(ii) in order to maintain the
Overcollateralization Target Amount, and after giving effect to distributions
from Principal Distribution Amount for each such Class;
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(vi) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, any Interest Carry Forward with respect to
such class to the extent unpaid from Interest Funds and Principal Funds;
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, any Unpaid Realized Loss Amount for such class
to the extent unpaid from Interest Funds and Principal Funds;
(viii) to the Offered Certificates and the Class M-10 Certificates,
on a pro rata basis, any Available Funds Cap Carryover to the extent not paid
from Interest Funds or Principal Funds based on the amount of such unpaid
Available Funds Cap Carryover;
(ix) to the Swap Counterparty, any Defaulted Swap Termination
Payment owed to the Swap Counterparty to the extent not already paid;
(x) to the Class X Certificates in the following order of
priority, (I) the Class X Current Interest, (II) the Class X Interest Carry
Forward Amount, (III) as principal on the Class X Certificates until the
Certificate Principal Balance of the Class X Certificates has been reduced to
zero (distributions pursuant to this clause (III) being made only to the extent
of Interest Funds and Principal Funds that would be remaining had distributions
on such Distribution Date pursuant to prior clauses of this Section 4.04(k) been
made out of Interest Funds and Principal Funds (rather than out of proceeds of
the Swap Agreement) and (IV) the Class X Unpaid Realized Loss Amount; and
(xi) the remainder pursuant to Section 4.04(h).
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities set
forth in this Section 4.04(k).
(l) With respect to the failure of the Swap Provider to perform any of
its obligations under the Swap Agreement, the breach by the Swap Provider of
any of its representations and warranties made pursuant to the Swap Agreement,
or the termination of the Swap Agreement, the Trustee shall send any notices
and make any demands, on behalf of the Trust, as are required under the Swap
Agreement.
(m) The Trustee is hereby directed by the Depositor, on or before the
Closing Date, to sign the Swap Agreement on behalf of the Trust for the benefit
of the Certificateholders, in the form presented to it by the Depositor.
Neither the Trustee nor the Certificate Administrator shall have any
responsibility for the contents, adequacy or sufficiency of the Swap Agreement,
including, without limitation, any representations and warranties contained
therein. Notwithstanding anything to the contrary contained herein or in the
Swap Agreement, neither the Trustee nor the Certificate Administrator shall,
individually or personally, have any liability to perform any covenant either
express or implied contained in the Swap Agreement and under no circumstance
shall the Trustee be personally liable for the payment of any amounts payable
by the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under the
Swap Agreement.
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SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on information
provided by the Servicer (which information is not required to include any
prediction of future performance as to which such report relates), the
Certificate Administrator shall prepare and make available on its website
located at xxx.xxxxxxxxxxxx.xxx to each Holder of a Class of Certificates of
the Trust Fund, the Servicer, the Trustee, the NIMs Insurer, the Rating
Agencies and the Depositor a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein, (C) the Extra Principal Distribution
Amount, if any, and (D) the aggregate amount of Prepayment Charges, if any;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;
(iii) the Class Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;
(iv) the Pool Stated Principal Balance for such Distribution
Date;
(v) the amount of the Servicing Fee paid to or retained by the
Servicer, the amount of the Certificate Administrator Fee paid to or retained by
the Certificate Administrator and any amounts constituting reimbursement or
indemnification of the Servicer, Certificate Administrator or Trustee;
(vi) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(vii) the amount of Advances included in the distribution on such
Distribution Date;
(viii) the cumulative amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts to date, in the aggregate;
(ix) the amount of (A) Realized Losses and (B) Applied Realized
Loss Amounts with respect to such Distribution Date, in the aggregate;
(x) the number and aggregate principal amounts of Mortgage Loans
(A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60 days,
(2) 61 to 90 days and (3) 91 or more days, and (B) in foreclosure and Delinquent
(1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, (C) in bankruptcy
and (D) that are REO Properties, in each case as of the close of business on the
last day of the calendar month preceding such Distribution Date, in the
aggregate;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on the last
day of the calendar month preceding such Distribution Date and the date of
acquisition thereof, in the aggregate and with respect to the Mortgage Loans;
(xii) the total number and principal balance of any REO Properties
as of the close of business on the last day of the calendar month preceding such
Distribution Date, in the aggregate;
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(xiii) the aggregate Stated Principal Balance of all Liquidated
Loans as of the preceding Distribution Date, in the aggregate;
(xiv) whether a Stepdown Trigger Event has occurred and is in
effect;
(xv) with respect to each Class of Certificates, any Interest Carry
Forward Amount with respect to such Distribution Date for each such Class, any
Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;
(xvi) the number and Stated Principal Balance (as of the preceding
Distribution Date) of any Mortgage Loans which were purchased or repurchased
during the preceding Due Period and since the Cut-off Date;
(xvii) the number of Mortgage Loans for which Prepayment Charges
were received during the related Prepayment Period and, for each such Mortgage
Loan, the amount of Prepayment Charges received during the related Prepayment
Period and in the aggregate of such amounts for all such Mortgage Loans since
the Cut-off Date;
(xviii) the amount and purpose of any withdrawal from the Collection
Account pursuant to Section 3.08(a)(viii);
(xix) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC "regular interest"
or REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
"regular interest" or REMIC "residual interest"; and
(xx) as of each Distribution Date, the amount, if any, to be
deposited in the Supplemental Interest Trust pursuant to the Swap Agreement as
described in Section 4.04(k) and the amount thereof to be paid to the Offered
Certificates and the Class M-10 Certificates described in Section 4.04(k)
hereof.
(b) The Certificate Administrator will make the Monthly Statement
(and, at its option, any additional files containing the same information in
an alternative format) available each month to Certificateholders, other
parties to this Agreement and any other interested parties via the Certificate
Administrator's Internet website. The Certificate Administrator's Internet
website shall initially be located at "xxx.xxxxxxxxxxxx.xxx". Assistance in
using the website can be obtained by calling the Certificate Administrator's
customer service desk at 0-000-000-0000. Parties that are unable to use the
website are entitled to have a paper copy mailed to them via first class mail
by calling the customer service desk and indicating such. The Certificate
Administrator shall have the right to change the way the monthly statements to
Certificateholders are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Certificate
Administrator shall provide timely and adequate notification to all above
parties regarding any such changes.
The Certificate Administrator shall also be entitled to rely on but
shall not be responsible for the content or accuracy of any information provided
by third parties for purposes of preparing the monthly statement and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
As a condition to access the Certificate Administrator's internet
website, the Certificate Administrator may require registration and the
acceptance of a disclaimer. The Certificate Administrator will not be liable for
the dissemination of information in accordance with this Agreement.
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(c) The Servicer shall deliver to the NIMs Insurer a copy of any
report delivered by the Servicer to the Certificate Administrator.
(d) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Certificate Administrator shall make
available on its website or cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder of record, a statement
containing the information set forth in clauses (a)(i) without regard to
subclauses (A)-(D) thereof and (a)(ii) of this Section 4.05 aggregated for
such calendar year or applicable portion thereof during which such Person was
a Certificateholder. Such obligation of the Certificate Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Certificate Administrator pursuant to any
requirements of the Code as are from time to time in effect.
(e) Upon filing with the Internal Revenue Service, the Certificate
Administrator shall furnish to the Holder of the Class R Certificate and the
NIMs Insurer each Form 1066 and each Form 1066Q, upon written request, and
shall respond promptly to written requests made not more frequently than
quarterly by any Holder of a Class R Certificate with respect to the following
matters:
(i) The original projected principal and interest cash flows on
the Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as
of the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The Prepayment Assumption and any interest rate assumptions
used in determining the projected principal and interest cash flows described
above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of such
calendar quarter with respect to each Class of regular or residual interests
created hereunder and to the Mortgage Loans, together with each constant yield
to maturity used in computing the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the REMICs with respect
to such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
REMICs; and
(vii) Any taxes (including penalties and interest) imposed on the
REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
-------------------- --------------------- ------------------------------- --------------------------------
A-1 $25,000.00 $1.00 $242,419,000
A-2 $25,000.00 $1.00 $184,014,000
A-3 $25,000.00 $1.00 $79,239,000
A-4 $25,000.00 $1.00 $48,828,000
M-1 $25,000.00 $1.00 $26,098,000
M-2 $25,000.00 $1.00 $24,311,000
M-3 $25,000.00 $1.00 $15,730,000
M-4 $25,000.00 $1.00 $11,440,000
M-5 $25,000.00 $1.00 $12,155,000
M-6 $25,000.00 $1.00 $10,368,000
M-7 $25,000.00 $1.00 $11,440,000
M-8 $25,000.00 $1.00 $8,223,000
M-9 $25,000.00 $1.00 $7,865,000
M-10 $25,000.00 $1.00 $5,720,000
M-11 $25,000.00 $1.00 $7,150,000
X (1) (1) (1)
R (2) (2) (2)
P (3) (3) (3)
-------------------
(1) The Class X Certificates shall not have minimum dollar denominations or
certificate notional balances and shall be issued in a minimum
percentage interest of 5%, with additional amounts issued in increments
of 1%. The initial Overcollateralization Amount is $20,020,746.47.
(2) The Class R Certificate shall not have minimum dollar denominations or
a certificate notional balance and shall be issued in a minimum
percentage interest of 100%.
(3) The Class P Certificates shall not have minimum dollar denominations or
Certificate Principal Balances and shall be issued in a minimum
percentage interest of 5%, with additional amounts issued in increments
of 1%.
The minimum initial investment amount for any of the Class A or Class M
Certificates shall be $100,000.00. The Certificates shall be executed by manual
or facsimile signature on behalf of the Certificate Administrator by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Certificate Administrator shall bind the Trust Fund,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to
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any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form set forth as attached hereto executed by the Certificate Administrator by
manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. On the Closing Date, the Certificate
Administrator shall authenticate the Certificates to be issued at the written
direction of the Depositor, or any Affiliate thereof.
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Certificate Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Certificate Administrator shall provide for the registration of
Certificates and of Transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of Transfer of any Certificate, the Certificate
Administrator shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Certificate Administrator. Whenever any
Certificates are so surrendered for exchange, the Certificate Administrator
shall execute, authenticate and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for registration of Transfer or exchange shall be
accompanied by a written instrument of Transfer in form satisfactory to the
Certificate Administrator duly executed by the holder thereof or his attorney
duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Certificate Administrator in accordance
with such Certificate Administrator's customary procedures.
(b) No Transfer of a Class X, Class P or Class R Certificate shall be
made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such Transfer and such Certificateholder's prospective
transferee shall (except with respect to the initial transfer of a Class X or
Class P Certificate by Wachovia Capital Markets, LLC or, in connection with a
transfer of a Class X or Class P Certificate to the indenture trustee under an
Indenture pursuant to which NIM Notes are issued, whether or not such notes
are guaranteed by the NIMs Insurer) each certify to the Certificate
Administrator in writing the facts surrounding the Transfer in substantially
the form set forth in Exhibit F (the "Transferor Certificate") and (i) deliver
a letter in substantially the form of either Exhibit G (the "Investment
Letter"), Exhibit H (the "Rule 144A Letter") or Exhibit J (the "Regulation S
Letter") or (ii) there shall be delivered to the Certificate Administrator an
Opinion of Counsel that such Transfer may be made pursuant to an exemption
from the Securities Act, which Opinion of Counsel shall not be an expense of
the Depositor, the Certificate Administrator or the Trustee. The Depositor
shall provide to any Holder
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of a Class X, Class P or Class R Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A or Regulation S.
The Certificate Administrator shall cooperate with the Depositor in providing
the Rule 144A or Regulation S information referenced in the preceding sentence,
including providing to the Depositor such information in the possession of the
Certificate Administrator regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Class X, Class P or Class R Certificate desiring to effect such Transfer shall,
and does hereby agree to, indemnify the Depositor, the Certificate
Administrator and the Trustee against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an Restricted Certificate that is a Class R Certificate
may be made to any Person that is an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), or to any Person directly or indirectly acquiring such Certificate for,
on behalf of, or with any assets of any such Plan. Each Person to whom a Class R
Certificate is to be transferred shall be required or deemed to represent that
it is not a Plan.
No transfer of an ERISA-Restricted Certificate (other than the Class R
Certificate) shall be made to any Person unless the Certificate Administrator
has received (A) a representation that such transferee is not a Plan and is not
directly or indirectly acquiring the Certificate for, on behalf of, or with the
assets of any such Plan, (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that such transferee is an
insurance company that is acquiring the Certificate with assets contained in an
"insurance company general account," as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60, and the acquisition and holding of
the Certificate are covered and exempt under Sections I and III of PTCE 95-60,
or (C) solely in the case of a Definitive Certificate, an Opinion of Counsel
satisfactory to the Certificate Administrator, and upon which the Certificate
Administrator and the NIMs Insurer shall be entitled to rely, to the effect that
the acquisition and holding of such Certificate will not constitute or result in
a nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Trustee, the
Certificate Administrator, the Servicer, the NIMs Insurer or the Depositor to
any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Certificate
Administrator, the Trustee, the Servicer, the NIMs Insurer or the Depositor.
Except in the case of Definitive Certificates, for purposes of the two
immediately preceding paragraphs of this Subsection 5.02(b), other than clause
(C) in the immediately preceding paragraph, the representations as set forth
therein shall be deemed to have been made to the Certificate Administrator by
the transferee's acceptance of an ERISA Restricted Certificate (or the
acceptance by a Certificate Owner of the beneficial interest in any Class of
ERISA Restricted Certificates).
Notwithstanding any other provision herein to the contrary, any
purported transfer of an ERISA Restricted Certificate to or on behalf of a Plan
without the delivery to the Certificate Administrator of a representation or an
Opinion of Counsel satisfactory to the Certificate Administrator as described
above shall be void and of no effect. The Certificate Administrator shall not be
under any liability to any Person for any registration or transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 5.02(b),
nor shall the Certificate Administrator be under any liability for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under
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the provisions of this Agreement so long as the transfer was registered by the
Certificate Administrator in accordance with the foregoing requirements. The
Certificate Administrator shall be entitled, but not obligated, to recover from
any Holder of any ERISA Restricted Certificate that was in fact a Plan and that
held such Certificate in violation of this Section 5.02(b) all payments made on
such ERISA Restricted Certificate at and after the time it commenced such
holding. Any such payments so recovered shall be paid and delivered to the last
preceding Holder of such Certificate that is not a Plan.
(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Certificate Administrator of any change or impending change in its status as
a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Certificate
Administrator shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Certificate Administrator under subparagraph (b) above, the Certificate
Administrator shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit E-1 and an affidavit of the proposed transferor in
the form attached hereto as Exhibit E-2. In the absence of a contrary
instruction from the transferor of a Class R Certificate, declaration (11) in
Appendix A of the Transfer Affidavit may be left blank. If the transferor
requests by written notice to the Certificate Administrator prior to the date
of the proposed transfer that one of the two other forms of declaration (11)
in Appendix A of the Transfer Affidavit be used, then the requirements of this
Section 5.02(c)(ii) shall not have been satisfied unless the Transfer
Affidavit includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership
Interest in a Class R Certificate or to cause the Transfer of an Ownership
Interest in a Class R Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee. Further, no
transfer, sale or other disposition of any Ownership Interest in a Class R
Certificate may be made to a person who is not a U.S. Person (within the
meaning of Section 7701 of the Code) unless such person furnishes the
transferor and the Certificate Administrator with a duly completed and
effective Internal Revenue Service Form W-8ECI (or any successor thereto) and
the Certificate Administrator consents to such transfer, sale or other
disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(c),
then the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Certificate Administrator shall be under no liability to any
Person for any registration of Transfer of a Class R Certificate that is in
fact not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof
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or taking any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of the
related Transfer Affidavit. The Certificate Administrator shall be entitled but
not obligated to recover from any Holder of a Class R Certificate that was in
fact not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all payments
made on such Class R Certificate at and after either such time. Any such
payments so recovered by the Certificate Administrator shall be paid and
delivered by the Certificate Administrator to the last preceding Permitted
Transferee of such Certificate.
(v) At the option of the Holder of the Class R Certificate, the
Class LTR Interest and the residual interest in the Upper Tier REMIC may be
severed and represented by separate certificates (with the certificate that
represents the Residual Interest also representing all rights of the Class R
Certificate to distributions attributable to a Pass-Through Rate on the Class R
Certificate in excess of the Net Rate); provided, however, that such separate
certification may not occur until the Certificate Administrator and the NIMs
Insurer receive an Opinion of Counsel to the effect that separate
certification in the form and manner proposed would not result in the
imposition of federal tax upon the Trust Fund or any of the REMICs provided
for herein or cause any of the REMICs provided for herein to fail to qualify
as a REMIC; and provided further, that the provisions of Sections 5.02(b) and
(c) will apply to each such separate certificate as if the separate
certificate were a Class R Certificate. If, as evidenced by an Opinion of
Counsel, it is necessary to preserve the REMIC status of any of the REMICs
provided for herein, the Class LTR Interest and the residual interest in the
Upper Tier REMIC shall be severed and represented by separate Certificates.
The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Certificate Administrator and the NIMs Insurer
of an Opinion of Counsel, which Opinion of Counsel shall not be an expense of
the Certificate Administrator, the NIMs Insurer or the Depositor, to the effect
that the elimination of such restrictions will not cause any of the REMICs
provided for herein to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, any REMIC provided for herein, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a Class R Certificate
hereby consents to any amendment of this Agreement that, based on an Opinion of
Counsel furnished to the Certificate Administrator, is reasonably necessary (a)
to ensure that the record ownership of, or any beneficial interest in, a Class R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The transferor of the Class R Certificate shall notify the
Certificate Administrator in writing upon the transfer of the Class R
Certificate.
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense
of the Trust Fund, the Depositor, the Certificate Administrator or the Trustee.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Certificate
Administrator or the Certificate Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof and (b) there is delivered to the Certificate Administrator
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Certificate
Administrator that such Certificate has been acquired by a bona fide purchaser,
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the Certificate Administrator shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Certificate Administrator may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Certificate
Administrator and the Trustee and their counsel) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Certificate
Administrator under the terms of this Section 5.03 shall be canceled and
destroyed by the Certificate Administrator in accordance with its standard
procedures without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The NIMs Insurer, the Trustee, the Certificate Administrator and any
agent of the NIMs Insurer, the Trustee or the Certificate Administrator may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the NIMs Insurer,
the Trustee or the Certificate Administrator, nor any agent of the NIMs Insurer,
the Trustee or the Certificate Administrator shall be affected by any notice to
the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Certificate Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication that such Certificateholders propose to
transmit or if the NIMs Insurer or the Depositor shall request such information
in writing from the Certificate Administrator, then the Certificate
Administrator shall, within ten Business Days after the receipt of such request,
provide the NIMs Insurer or the Depositor or such Certificateholders at such
recipients' expense the most recent list of the Certificateholders of the Trust
Fund held by the Certificate Administrator, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Certificate Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Certificate Administrator, the NIMs Insurer and
the Trustee may deal with the Depository and the Depository Participants for
all purposes (including the making of
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distributions) as the authorized representative of the respective Certificate
Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Certificate Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or
the Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants
and receive and transmit distributions of principal and interest on the
related Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Certificate Administrator and the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Certificate Administrator shall
give all such notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Certificate
Administrator and the Trustee that the Depository is no longer willing,
qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Certificate
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Certificate Administrator of its intent to terminate
the book-entry system through the Depository and, upon receipt of notice of such
intent from the Depository, the Certificate Owners of the Book-Entry
Certificates agree to initiate such termination or (c) after the occurrence and
continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Certificate Administrator, the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners
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of such Class, then the Certificate Administrator shall notify all Certificate
Owners of such Book-Entry Certificates and the NIMs Insurer, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Certificate Administrator with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Certificate Administrator of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Certificate Administrator shall
authenticate and deliver such Definitive Certificates. Neither the Depositor nor
the Certificate Administrator shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Certificate Administrator, to the extent applicable with respect to such
Definitive Certificates and the Certificate Administrator shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Certificate Administrator will maintain or cause to be maintained
at its expense an office or offices or agency or agencies where Certificates may
be surrendered for registration of transfer or exchange. The Certificate
Administrator initially designates its offices at 000 Xxxxx Xxxxx Xxxxxx, 12th
Floor (NC 1179), Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Client Services
Manager - Wachovia Mortgage Loan Trust, Series 2005-WMC1 as offices for such
purposes. The Certificate Administrator will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR, THE SERVICER, THE CERTIFICATE ADMINISTRATOR, AND THE CUSTODIAN
SECTION 6.01. Respective Liabilities of the Depositor, the Servicer and
the Certificate Administrator.
The Depositor, the Servicer, the Certificate Administrator and the
Custodian shall each be liable in accordance herewith only to the extent of the
obligations specifically and respectively imposed upon and undertaken by them
herein.
SECTION 6.02. Merger or Consolidation of the Depositor, the Servicer, the
Certificate Administrator or the Custodian.
Except as provided in the next paragraph, the Depositor, the Servicer,
the Certificate Administrator or the Custodian will each keep in full effect its
existence, rights and franchises as a corporation or banking association under
the laws of the United States or under the laws of one of the States thereof and
will each 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, or any
of the Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor, the Servicer, the Certificate
Administrator or the Custodian may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Depositor, the Servicer,
the Certificate Administrator or the Custodian shall be a party, or any Person
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succeeding to the business of the Depositor, the Servicer, the Certificate
Administrator or the Custodian, shall be the successor of the Depositor, the
Certificate Administrator or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding
(except for the execution of an assumption agreement where such succession is
not effected by operation of law); provided, however, that the successor or
surviving Person to the Servicer shall be qualified to service mortgage loans on
behalf of Xxxxxx Mae or Xxxxxxx Mac.
SECTION 6.03. Limitation on Liability of the Depositor, the Certificate
Administrator, the Servicer, the Custodian and Others.
None of the Depositor, the Servicer, the Certificate Administrator or
the Custodian nor any of the directors, officers, employees or agents of the
Depositor, the Servicer, the Certificate Administrator or the Custodian shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Servicer, the Certificate
Administrator, the Custodian or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicer, the Certificate Administrator, the Custodian or any such Person from
any liability that would otherwise be imposed by reasons 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 Servicer, the
Certificate Administrator or the Custodian and any director, officer, employee
or agent of the Depositor, the Servicer, the Certificate Administrator or the
Custodian may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Servicer, the Certificate Administrator, the
Custodian and any director, officer, employee or agent of the Depositor, the
Servicer, the Certificate Administrator, or the Custodian shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense,
incurred in connection with the performance of their duties under this agreement
or incurred in connection with any audit, controversy or judicial proceeding
relating to a governmental taxing authority or any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense (i)
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 or (ii) which does not constitute an
"unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). None of the Depositor, the Servicer, the Certificate
Administrator nor the Custodian shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided, however, that any of the Depositor, the Servicer, the
Certificate Administrator or the Custodian in its discretion may undertake any
such action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and the interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor, the Servicer and the
Certificate Administrator and the Custodian shall be entitled to be reimbursed
therefor out of the Collection Account as provided by Section 3.08 hereof.
In addition, the Certificate Administrator shall be entitled to be
reimbursed out of the Certificate Account for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Certificate
Administrator on behalf of the Trust Fund in accordance with any of the
provisions of this Agreement (including, without limitation: (A) the reasonable
compensation and the expenses and disbursements of its counsel, but only for
representation of the Certificate Administrator acting in its capacity as
Certificate Administrator hereunder and (B) to the extent that the Certificate
Administrator must engage persons not regularly in its employ to perform acts or
services on behalf of the Trust Fund,
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which acts or services are not in the ordinary course of the duties of a
certificate administrator, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such
persons), except any such compensation, expense, disbursement or advance that
either (i) arises from its negligence, bad faith or willful misconduct or (ii)
does not constitute an "unanticipated expense" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii).
The provisions of this Section 6.03 shall survive any termination of this
Agreement and the resignation or removal of the Certificate Administrator
or the Custodian.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the NIMs Insurer. No such resignation shall
become effective until a successor servicer reasonably acceptable to the NIMs
Insurer is appointed and has assumed the Servicer's responsibilities, duties,
liabilities and obligations hereunder. Any such resignation shall not relieve
the Servicer of any of the obligations specified in Section 7.01 and 7.02 as
obligations that survive the resignation or termination of the Servicer.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for Persons
performing servicing for mortgage loans purchased by Xxxxxx Mae or Xxxxxxx Mac
unless the Servicer has obtained a waiver of such requirements from Xxxxxx Mae
or Xxxxxxx Mac. The Servicer shall provide the Trustee, the Certificate
Administrator and the NIMs Insurer, upon request and reasonable notice, with
copies of such policies and fidelity bond or a certification from the insurance
provider evidencing such policies and fidelity bond. In the event that any such
policy or bond ceases to be in effect, the Servicer shall use its reasonable
best efforts to obtain a comparable replacement policy or bond from an insurer
or issuer meeting the requirements set forth above as of the date of such
replacement. Any such policy or fidelity bond shall by its terms not be
cancelable without thirty days' prior written notice to the Trustee and the
Certificate Administrator. The Servicer shall be deemed to have complied with
this provision if an Affiliate of the 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 Servicer.
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to make any Advance, to deposit
in the Collection Account or the Certificate Account or remit to the Certificate
Administrator any payment (excluding a payment required to be made under Section
4.01 hereof) required to be made under the terms of this Agreement, which
failure shall continue unremedied for three Business Days and, with respect to a
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payment required to be made under Section 4.01 hereof, for one Business Day,
after the date on which written notice of such failure shall have been given to
the Servicer by the Certificate Administrator or the Depositor, or to the
Certificate Administrator and the Servicer by the NIMs Insurer or the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by the
Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue in any material respect, which failure or breach shall
continue unremedied for a period of 60 days after the date on which written
notice of such failure shall have been given to the Servicer by the Certificate
Administrator, the Trustee or the Depositor, or to the Certificate
Administrator, the Trustee and the Depositor by the NIMs Insurer or the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) consent by the Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or
(v) admission by a Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations or
(vi) any failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
Agreement, which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by any other party to this
Agreement.
If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00 p.m. on the Servicer Remittance Date, the Trustee may
(with the written consent of the NIMs Insurer, except after a NIMs Insurer
Default), or at the direction of the NIMs Insurer (with the written consent of
the NIMs Insurer, except after a NIMs Insurer Default), shall, by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee or a successor servicer. To the extent the Event of Default resulted
from the failure of the Servicer to make a required Advance, the Trustee shall
thereupon make any Advance described in Section 4.01 hereof subject to Section
3.04 hereof. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
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agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default or an event that, with notice, passage of
time, other action or any combination of the foregoing would be an Event of
Default, such notice to be provided in any event within two Business Days of
such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law,
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, costs and expenses relating to the
Mortgage Loans that the Servicer would have been entitled to if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which successor shall be approved by the NIMs Insurer and which
does not adversely affect the then current rating of the Certificates by each
Rating Agency as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor servicer shall be an institution that is acceptable to
the NIMs Insurer and is a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the Servicer
under Section 7.01), with like effect as if originally named as a party to this
Agreement; and provided further that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment and
delegation. No appointment of a successor to the Servicer hereunder shall be
effective until the Trustee and the NIMs Insurer shall have consented thereto,
prior written consent of the NIMs Insurer is obtained and written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted
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the Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Certificate Administrator shall give prompt written notice
thereof to Certificateholders, the Depositor and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Certificate Administrator shall transmit by mail to all Certificateholders and
the NIMs Insurer notice of each such Event of Default hereunder known to the
Certificate Administrator, unless such Event of Default shall have been cured
or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CERTIFICATE ADMINISTRATOR
SECTION 8.01. Duties of the Trustee and the Certificate Administrator.
The Trustee and the Certificate Administrator, prior to the occurrence of
an Event of Default and after the curing of all Events of Default that may have
occurred, each shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement. In case an Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. In case an Event of
Default or other default by the Servicer or the Depositor hereunder shall occur
and be continuing, the Trustee shall, at the direction of the majority of the
Certificateholders or the NIMs Insurer, or may, proceed to protect and enforce
its rights and the rights of the Certificateholders or the NIMs Insurer under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee, the NIMs
Insurer and the Certificateholders.
Each of the Trustee and the Certificate Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee or the Certificate Administrator that
are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform on their face to
the requirements of this Agreement. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the Trustee
or the Certificate Administrator, as the case may be, shall take such action as
it deems appropriate to have the instrument corrected and if the instrument is
not corrected to the its
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satisfaction, the Certificate Administrator will provide notice to the
Certificateholders and the NIMs Insurer and take such further action as directed
in writing by the Certificateholders and the NIMs Insurer.
No provision of this Agreement shall be construed to relieve the Trustee
or the Certificate Administrator from liability for its own negligent action,
its own negligent failure to act or its own misconduct, its negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided,
however, that:
(i) prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee, and at all times, the duties and obligations of the
Certificate Administrator shall be determined solely by the express provisions
of this Agreement, neither the Trustee nor the Certificate Administrator shall
be liable, individually or as Trustee or Certificate Administrator, as
applicable, except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee or the Certificate
Administrator and, the Trustee and the Certificate Administrator may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee or the Certificate Administrator and conforming to the requirements of
this Agreement that it reasonably believed in good faith to be genuine and to
have been duly executed by the proper authorities respecting any matters arising
hereunder;
(ii) neither the Trustee nor the Certificate Administrator shall,
individually or as Trustee or Certificate Administrator, as applicable, be
liable for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee or the Certificate Administrator unless the
Trustee or Certificate Administrator, as applicable, was negligent or acted in
bad faith or with willful misfeasance;
(iii) the Trustee shall not be liable, individually or as Trustee,
with respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the NIMs Insurer or the Holders in
accordance with this Agreement relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement; and
(iv) no provision in this Agreement shall require the Trustee or
the Certificate Administrator to expend or risk its own funds (including,
without limitation, the making of any Advance by the Trustee as a successor
Servicer) or otherwise incur any personal financial liability in the performance
of any of its duties as Trustee or Certificate Administrator hereunder, or in
the exercise of any of its rights or powers, if the Trustee or the Certificate
Administrator shall have reasonable grounds for believing that repayment of
funds or adequate indemnity against such risk of liability is not reasonably
assured to it and none of the provisions contained in this Agreement shall in
any event require the Trustee or the Certificate Administrator to perform, or be
responsible for the manner or performance of, any of the obligations of a
Servicer under this Agreement, except, with respect to the Trustee, during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, a predecessor Servicer in accordance
with the terms of this Agreement.
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SECTION 8.02. Certain Matters Affecting the Trustee and the Certificate
Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Certificate Administrator may request
and conclusively rely upon and shall be fully protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of auditors
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;
(ii) the Trustee and the Certificate Administrator may consult
with counsel of its choice and any advice or Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;
(iii) neither the Trustee nor the Certificate Administrator shall
be liable for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) at all times the Certificate Administrator, and prior to the
occurrence of an Event of Default hereunder and after the curing of all Events
of Default that may have occurred, the Trustee, in each case, shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing so
to do by the NIMs Insurer or the Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class provided,
however, that if the payment within a reasonable time to the Certificate
Administrator of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Certificate
Administrator, not reasonably assured to the Certificate Administrator by the
security afforded to it by the terms of this Agreement, the Certificate
Administrator may require reasonable indemnity against such expense or liability
or payment of such estimated expenses as a condition to so proceeding;
(v) the Trustee and the Certificate Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, accountants or attorneys or
independent contractors and the Trustee and the Certificate Administrator will
not be responsible for any misconduct or negligence on the part of any agent,
custodian, accountant, attorney or independent contractor appointed with due
care by it hereunder;
(vi) neither the Trustee nor the Certificate Administrator shall
be required to expend its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such liability is not assured to it;
(vii) neither the Trustee nor the Certificate Administrator shall
be liable, individually or as Trustee or Certificate Administrator, as
applicable, for any loss on any investment of funds pursuant to this Agreement
(other than as issuer of the investment security);
(viii) the Trustee shall not be charged with knowledge of any
default or Event of Default unless a Responsible Officer of the Trustee assigned
to and working in the Corporate Trust Office obtains actual knowledge of such
default or Event of Default or any officer of the Trustee receives written
notice of such default or Event of Default at its Corporate Trust Office.
In the absence of such
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notice or actual knowledge, the Trustee may conclusively assume that there is no
default or Event of Default;
(ix) the Certificate Administrator shall not be charged with
knowledge of any default (other than a default in payment to the Certificate
Administrator) unless a Responsible Officer of the Certificate Administrator
assigned to and working in the Corporate Trust Office obtains actual knowledge
of such failure or event or any officer of the Certificate Administrator
receives written notice of such failure or event at its Corporate Trust Office
and in the absence of receipt of such notice or actual knowledge, the
Certificate Administrator may conclusively assume that there is no default or
Event of Default;
(x) neither the Trustee nor the Certificate Administrator shall
be under any obligation to exercise any of the trusts or powers vested in it by
this Agreement or to make any investigation of matters arising hereunder or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the NIMs Insurer or the
Certificateholders, pursuant to the provisions of this Agreement, unless the
NIMs Insurer or such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby;
(xi) the right of the Trustee or the Certificate Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee or the Certificate Administrator shall not
be answerable for other than its negligence or willful misconduct in the
performance of such act;
(xii) if requested by the Servicer, the Trustee shall appoint the
Servicer as the trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such power of
attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs, expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and
(xiii) neither the Trustee nor the Certificate Administrator shall
be required to give any bond or surety in respect of the execution of the Trust
created hereby or the powers granted hereunder.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof at
the trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. Neither the Certificate Administrator nor the Trustee shall
have a duty (A) to see to any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any rerecording, refilling or redepositing, as applicable,
thereof, (B) to see to any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund.
SECTION 8.03. Trustee and Certificate Administrator Not Liable for
Certificates or Mortgage Loans.
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The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee and the
Certificate Administrator assume no responsibility for their correctness.
Neither the Trustee nor the Certificate Administrator makes any representation
as to the validity or sufficiency of this Agreement, of any Mortgage Loan, or
any related document other than with respect to the execution and authentication
of the Certificates, if it so executed or authorized the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor,
the Certificate Administrator or the Servicer of any funds paid to the
Depositor, the Certificate Administrator or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor, the Certificate Administrator or the
Servicer.
Neither the Trustee nor the Certificate Administrator shall at any time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority or for or with respect to the sufficiency of the assets
of the Trust Fund or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than if the Trustee shall
assume the duties of a predecessor Servicer pursuant to Section 7.02 and
thereupon only for the acts or omissions of the Trustee as successor Servicer);
the validity of the assignment of any Mortgage Loan to the Trustee or of any
intervening assignment; the completeness of any Mortgage Loan; the performance
or enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of a predecessor Servicer pursuant to Section 7.02 and thereupon only for
the acts or omissions of the Trustee as successor Servicer); the compliance by
the Depositor or the Servicer with any warranty or representation made under
this Agreement or in any related document or the accuracy of any such warranty
or representation; any investment of monies by or at the direction of a Servicer
or any loss resulting therefrom, it being understood that the Trustee and the
Certificate Administrator shall remain responsible for any part of the Trust
Estate that either party may hold in its individual capacity; the acts or
omissions of any of the Depositor, any Servicer (other than if the Trustee shall
assume the duties of a predecessor Servicer pursuant to Section 7.02 and
thereupon only for the acts or omissions of the Trustee as successor Servicer),
any subservicer or any Mortgagor; any action of any Servicer (other than if the
Trustee shall assume the duties of a predecessor Servicer pursuant to Section
7.02 and thereupon only for the acts or omissions of the Trustee as successor
Servicer) or any subservicer taken in the name of the Trustee or the Certificate
Administrator; the failure of any Servicer or any subservicer to act or perform
any duties required of it as agent of the Trustee or the Certificate
Administrator hereunder; or any action by the Trustee or the Certificate
Administrator taken at the instruction of a Servicer (other than if the Trustee
shall assume the duties of a predecessor Servicer pursuant to Section 7.02 and
thereupon only for the acts or omissions of the Trustee as successor Servicer);
provided, however, that the foregoing shall not relieve the Trustee or the
Certificate Administrator of its obligation to perform its duties under this
Agreement.
SECTION 8.04. Trustee and Certificate Administrator May Own Certificates.
Each of the Trustee and the Certificate Administrator in its individual or
any other capacity may become the owner or pledgee of Certificates with the same
rights as it would have if it was not the Trustee or the Certificate
Administrator.
SECTION 8.05. Trustee's Fees and Expenses.
The Certificate Administrator covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing by the Certificate Administrator
and the Trustee (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts
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hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee.
SECTION 8.06. Indemnification and Expenses of Trustee.
(a) The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Trust Fund for any loss,
liability or expense incurred in connection with any legal proceeding or
incurred without negligence or willful misconduct on their part, arising out
of, or in connection with the acceptance or administration of the trusts
created hereunder or in connection with the performance of their duties
hereunder, including any applicable fees and expenses payable hereunder, and
the costs and expenses of defending themselves against any claim in connection
with the exercise or performance of any of their powers or duties hereunder,
provided that:
(i) with respect to any such claim, the Trustee shall have given
the Depositor and the Holders written notice thereof promptly after the Trustee
shall have knowledge thereof; provided that failure to so notify shall not
relieve the Trust Fund of the obligation to indemnify the Trustee; however, any
reasonable delay by the Trustee to provide written notice to the Depositor and
the Holders promptly after the Trustee shall have obtained knowledge of a claim
shall not relieve the Trust Fund of the obligation to indemnify the Trustee
under this Section 8.06;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Depositor in preparing such defense;
(iii) notwithstanding anything to the contrary in this Section
8.06, the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld; and
(iv) any such loss, liability or expense to be indemnified by the
Trust Fund must constitute an "unanticipated expense" of the Trust Fund within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
(b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advancements incurred or made by the Trustee in accordance
with this Agreement (including fees and expenses of its counsel and all persons
not regularly in its employment), except any such expenses, disbursements and
advancements that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
(c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $300,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home loans or any
predatory or abusive lending laws, which amounts shall in no case be subject to
any such limitation; provided, however, that such cap shall apply only if NIM
Notes have been issued and shall cease to apply after the date on which any NIM
Notes are paid in full and all amounts which the NIMs Insurer is entitled to be
paid or reimbursed shall have been paid or reimbursed. Any amounts not in
excess of this cap may be withdrawn by the Trustee from the Certificate Account
at any time
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SECTION 8.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction) and reasonably acceptable to the NIMs
Insurer. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.07
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 8.07, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.08 hereof. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Depositor, the
Certificate Administrator, the NIMs Insurer and their respective Affiliates;
provided, however, that such corporation cannot be an Affiliate of the Servicer
other than the Trustee in its role as successor to the Servicer.
SECTION 8.08. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Servicer, the NIMs Insurer and the Certificate Administrator by mailing notice
of resignation by first class mail, postage prepaid, to the Certificateholders
at their addresses appearing on the Certificate Register and each Rating Agency,
not less than 60 days before the date specified in such notice when, subject to
Section 8.09, such resignation is to take effect, and (2) acceptance of
appointment by a successor trustee acceptable to the NIMs Insurer in accordance
with Section 8.09 and meeting the qualifications set forth in Section 8.07. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice or resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer or (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the NIMs
Insurer may remove the Trustee and the Depositor with the consent of the NIMS
insurer shall promptly appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Certificate Administrator and one copy
of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, with the consent of the NIMs Insurer, or the NIMs Insurer upon
failure of the Trustee to perform its obligations hereunder may at any time
remove the Trustee and the Depositor shall appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIMs Insurer), one complete
set of which instruments shall be delivered by the
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successor Trustee to the Servicer, one complete set to the Trustee so removed
and one complete set to the successor so appointed. Notice of any removal of the
Trustee shall be given to the NIMs Insurer and each Rating Agency by the
successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.09 hereof.
SECTION 8.09. Successor Trustee.
Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the NIMs Insurer and the Certificate Administrator an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.10. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and the NIMs Insurer to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
Any such co-trustee or separate trustee shall be subject to the written approval
of the Servicer and the NIMs Insurer. The Trustee shall not be liable for the
actions of any co-trustee; provided the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Servicer and the NIMs
Insurer
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shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.07 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Servicer shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee, with the consent of the NIMs Insurer, may at
any time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer, the NIMs Insurer, the Certificate Administrator and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.12. Tax Matters.
(a) It is intended that each of the REMICs provided for herein shall
constitute a REMIC, and that the affairs of the Trust Fund shall be conducted
so as to allow each such REMIC to qualify as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, the Certificate Administrator covenants and
agrees that it shall act as agent (and the Certificate Administrator is hereby
appointed to act as agent) on behalf of each of the REMICs provided for herein
and that in such capacity it shall: (a) prepare and file, or cause
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to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted
by the Internal Revenue Service) and prepare and file or cause to be prepared
and filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each of the REMICs provided for herein, containing such information
and at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby; (b) within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Forms 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code for each of
the REMICs provided for herein; (c) make or cause to be made elections, on
behalf of each of the REMICs provided for herein to be treated as a REMIC on
the federal tax return of such REMICs for their first taxable years (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the
REMIC Provisions, including without limitation, the calculation of any original
issue discount using the Prepayment Assumption; (e) provide information
necessary for the computation of tax imposed on the transfer of a Class R
Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost
of computing and furnishing such information may be charged to the Person
liable for such tax); (f) to the extent that they are under its control conduct
the affairs of each of the REMICs provided for herein at all times that any
Certificates are outstanding so as to maintain the status of each of the REMICs
provided for herein as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of tax upon any such REMIC; (h) pay, from the sources
specified in the last paragraph of this Section 8.12, the amount of any
federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Certificate Administrator from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings); (i) sign or cause
to be signed federal, state or local income tax or information returns; (j)
maintain records relating to each of the REMICs provided for herein, including
but not limited to the income, expenses, assets and liabilities of each of the
REMICs provided for herein, and the fair market value and adjusted basis of the
Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent each of the REMICs provided for herein in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year
of any of the REMICs provided for herein, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of any of the REMICs provided for herein, and otherwise act on
behalf of each of the REMICs provided for herein in relation to any tax matter
involving any of such REMICs or any controversy involving the Trust Fund.
In order to enable the Certificate Administrator to perform its duties as
set forth herein, the Depositor shall provide, or cause to be provided, to the
Certificate Administrator within 10 days after the Closing Date all information
or data that the Certificate Administrator requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without
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limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Certificate Administrator promptly upon written request therefor, any
such additional information or data that the Certificate Administrator may, from
time to time, request in order to enable the Certificate Administrator to
perform its duties as set forth herein. The Depositor hereby agrees to indemnify
the Certificate Administrator for any losses, liabilities, damages, claims or
expenses of the Certificate Administrator arising from any errors or
miscalculations of the Certificate Administrator that result from any failure of
the Depositor to provide, or to cause to be provided, accurate information or
data to the Certificate Administrator on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any
of the REMICs provided for herein as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of the any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, if not paid as otherwise provided for herein, such tax shall be paid
by (i) the Certificate Administrator, if any such other tax arises out of or
results from a breach by the Certificate Administrator of any of its obligations
under this Agreement or as a result of the location of the Certificate
Administrator, (ii) any party hereto (other than the Certificate Administrator)
to the extent any such other tax arises out of or results from a breach by such
other party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts (other than amounts
derived by the Trust Fund from a payment on the Swap Agreement) otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts (other than amounts derived by the Trust Fund from
a payment on the Swap Agreement) otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class X
Certificates (pro rata), second, to the Class M-11 Certificates (pro rata),
third, to the Class M-10 Certificates (pro rata), fourth, to the Class M-9
Certificates (pro rata), fifth, to the Class M-8 Certificates (pro rata), sixth,
to the Class M-7 Certificates (pro rata), seventh, to the Class M-6 Certificates
(pro rata), eighth, to the Class M-5 Certificates (pro rata), ninth, to the
Class M-4 Certificates (pro rata), tenth, to the Class M-3 Certificates (pro
rata), eleventh, to the Class M-2 Certificates (pro rata), twelfth, to the Class
M-1 Certificates (pro rata) and thirteenth, to the Class A and Class R
Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificate, the
Certificate Administrator is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holders of the Class R Certificate
(and, if necessary, from the Holders of all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Certificate Administrator
agrees to promptly notify in writing the party liable for any such tax of the
amount thereof and the due date for the payment thereof.
(b) Each of the Depositor, Certificate Administrator and the Trustee
agrees not to take or omit to take knowingly or intentionally, any action or
omit to take any action that would cause the termination of the REMIC status of
any of the REMICs provided for herein or result in the imposition of a tax upon
any of the REMICs provided for herein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer, the Certificate Administrator, the Custodian and
the Trustee created hereby with respect to the Trust Fund shall terminate upon
the earlier of (a) an Optional Termination and (b) the later of (i) the
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maturity or other liquidation of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof and
(ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Optional
Termination Date, the Class X Certificateholder may, at its option, terminate
the Trust Fund by purchasing all of the Mortgage Loans and REO Properties at a
price equal to the Optional Termination Price. In connection with such
termination, the Optional Termination Price shall be delivered to the
Certificate Administrator no later than the Business Day immediately preceding
the related Distribution Date. Notwithstanding anything to the contrary herein,
the Optional Termination Amount paid to the Certificate Administrator by the
Class X Certificateholder shall be deposited by the Certificate Administrator
directly into the Certificate Account immediately upon receipt. Upon any
termination pursuant to this Section 9.01(b), the Certificate Administrator
shall, out of the Optional Termination Amount deposited into the Certificate
Account, pay to the Trustee, the Certificate Administrator or the Servicer, as
applicable, the aggregate amount of any unreimbursed out-of-pocket costs and
expenses owed to the Trustee, the Certificate Administrator or the Servicer and
any unpaid or unreimbursed Servicing Fees, Certificate Administrator Fees,
Advances and Servicing Advances.
Notwithstanding anything to the contrary in this Article IX, the parties
hereto intend that the portion of any amount received upon an Optional
Termination that is attributable to clause (D) of the definition of Optional
Termination Price shall be treated for federal income tax purposes as having
been paid by the Class X Certificateholder directly to the Swap Counterparty
(rather than having been paid to any REMIC) pursuant to the Swap Agreement.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Certificate Administrator determines
based on information provided in writing by the Servicer that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Certificate Administrator shall
send a final distribution notice promptly to each Certificateholder and the NIMs
Insurer or (ii) the Certificate Administrator determines that a Class of
Certificates shall be retired after a final distribution on such Class, the
Certificate Administrator shall notify the Certificateholders within seven (7)
Business Days after such Determination Date that the final distribution in
retirement of such Class of Certificates is scheduled to be made on the
immediately following Distribution Date. Any final distribution made pursuant to
the immediately preceding sentence will be made only upon presentation and
surrender of the Certificates at the office of the Certificate Administrator
specified in such notice.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
Certificate Administrator by letter to Certificateholders mailed no later than
the last calendar day of the month immediately preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the location of
the office or agency at which such presentation and surrender must be made, and
(c) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Certificate Administrator will
give such notice to the NIMs Insurer and each Rating Agency at the time such
notice is given to Certificateholders.
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In the event such notice is given, the Certificate Administrator shall
cause all funds in the Collection Account to be deposited in the Certificate
Account on the Business Day prior to the applicable Distribution Date in an
amount equal to the final distribution in respect of the Certificates. Upon such
final deposit with respect to the Trust Fund, certification to the Custodian
that such required amount has been deposited in the Trust Fund and the receipt
by the Custodian of a Request for Release therefor, the Custodian shall promptly
release to the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Certificate
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Certificate Account in
the order and priority set forth in Section 4.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Certificate Administrator shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Certificate
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto. Upon
payment to the Class R Certificateholders of such funds and assets, neither the
Certificate Administrator nor the Trustee shall have any further duties or
obligations with respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Class X Certificateholder completes an Optional
Termination as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee and
the Certificate Administrator have been supplied with an Opinion of Counsel, at
the expense of the NIMs Insurer or Servicer, as applicable to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of any of the REMICs provided for herein as defined in Section
860F of the Code, or (ii) cause any of the REMICs provided for herein to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation period
and notify the Trustee and the Certificate Administrator thereof, and the
Certificate Administrator shall in turn specify the first day of such period in
a statement attached to the final tax returns of each of the REMICs provided for
herein pursuant to Treasury Regulation Section 1.860F-1. The Depositor shall
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Servicer;
(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Certificate Administrator shall distribute or credit, or cause
to be distributed or credited, to the Class R Certificateholders all cash on
hand (other than cash retained to meet outstanding claims), and the Trust Fund
shall terminate at that time, whereupon neither the Certificate Administrator
nor the Trustee shall
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have any further duties or obligations with respect to sums distributed or
credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) Upon the written request of the Depositor, the Trustee as agent
for each REMIC hereby agrees to adopt and sign such a plan of complete
liquidation as provided to it by the Depositor. The Trustee's obligation to
adopt and sign such plan of complete liquidation is subject to the Trustee's
receipt of the Opinion of Counsel referred to in Section 9.03(a)(i). In
addition, the Trustee shall take such other action in connection therewith as
may be reasonably requested by the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer, the Certificate Administrator and the Trustee, with the consent of the
NIMs Insurer and without the consent of any of the Certificateholders to,
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which
may be inconsistent with any other provision herein or to cause the provisions
herein to conform to or be consistent with or in furtherance of the statements
made with respect to the Certificates, the Trust Fund or this Agreement in any
Prospectus or Private Placement Memorandum related to ay of the Certificates,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement, provided, however, that, in the case
of clauses (iii) and (iv), such amendment will not, as evidenced by an Opinion
of Counsel addressed to the Trustee and the Certificate Administrator to such
effect, adversely affect in any material respect the interests of any Holder;
provided, further, however, that such amendment will be deemed to not adversely
affect in any material respect the interest of any Holder if the Person
requesting such amendment obtains a letter from each Rating Agency stating that
such amendment will not result in a reduction or withdrawal of its rating of any
Class of the Certificates, it being understood and agreed that any such letter
in and of itself will not represent a determination as to the materiality of any
such amendment and will represent a determination only as to the credit issues
affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer, the Certificate Administrator
and the Trustee may at any time and from time to time amend this Agreement to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or appropriate to maintain the qualification of any of the REMICs
provided for herein as REMICs under the Code or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund or any of the REMICs provided for
herein pursuant to the Code that would be a claim against the Trust Fund at any
time prior to the final redemption of the Certificates, provided that the
Trustee, the NIMs Insurer and the
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Certificate Administrator shall have been provided an Opinion of Counsel
addressed to the Trustee and the Certificate Administrator, which opinion shall
be an expense of the party requesting such amendment but in any case shall not
be an expense of the Trustee, the NIMs Insurer or the Certificate Administrator,
to the effect that such action is necessary or appropriate to maintain such
qualification or to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor, the
Servicer, the Certificate Administrator and the Trustee and the Holders of the
Certificates affected thereby evidencing not less than 66% of the Voting Rights,
with the consent of the NIMs Insurer, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment without the consent of
the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee and the Certificate
Administrator, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment is permitted hereunder and will not cause the imposition of
any tax on the Trust Fund, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding. A copy of
such Opinion of Counsel shall be provided to the NIMs Insurer.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Certificate Administrator shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Certificate Administrator may prescribe.
Nothing in this Agreement shall require the Trustee or the Certificate
Administrator to enter into an amendment without receiving an Opinion of
Counsel, satisfactory to the Trustee or the Certificate Administrator that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.
SECTION 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
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SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices.
(a) The Certificate Administrator shall use its best efforts to
promptly provide notice to each Rating Agency and the NIMs Insurer with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Trustee, the
Certificate Administrator or the Servicer and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03 and 3.12;
(v) The final payment to Certificateholders; and
(vi) Any change in the location of the Certificate Account.
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(b) The Certificate Administrator shall promptly furnish or make
available to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.05;
(ii) Each annual statement as to compliance described in Section
3.17; and
(iii) Each annual independent public accountants' servicing report
described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Wachovia Mortgage Loan Trust, LLC, 000 X. Xxxxxxx Xxxxxx,
XX0000-Xxxxx X, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: General Counsel and
Chief Financial Officer; (b) in the case of the Rating Agencies, (i) Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (ii) Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the case of the
Servicer, HomEq Servicing Corporation, 0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx,
Xxxxxxxxxx 00000-0000, Attention: Portfolio Management, Facsimile No. (916)
339-6995, with a copy to HomEq Servicing Corporation, 0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 000, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Legal
Department, Facsimile No. (000) 000-0000; (d) in the case of the Certificate
Administrator, Wachovia Bank, National Association, 000 Xxxxx Xxxxx Xxxxxx, 00xx
Xxxxx, (XX 1179), Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Client Services
Manager - Wachovia Mortgage Loan Trust, Series 2005-WMC1; (e) in the case of the
Trustee, U.S. Bank National Association, 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx.
Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance/WMLT 2005-WMC1, and in the
case of any of the foregoing persons, such other addresses as may hereafter be
furnished by any such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment; Advance Facility.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Certificate Administrator, the
Trustee and Depositor; provided, however, the Servicer is hereby authorized to
enter into an Advance Facility under which (l) the Servicer sells, assigns or
pledges to an Advancing Person the Servicer's rights under this Agreement to be
reimbursed for any Advances or Servicing Advances and/or (2) an Advancing Person
agrees to fund some or all Advances or Servicing Advances required to be made by
the Servicer pursuant to this Agreement. No consent of the Certificate
Administrator, the Trustee, Certificateholders, NIMs Insurer or any other party
is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.
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Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that
such reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan-by-loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all Advances and Servicing Advances funded by the Servicer to the
extent the related rights to be reimbursed therefor have not been sold, assigned
or pledged to an Advancing Person.
Any amendment to this Section 10.07 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 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Certificate Administrator, the Trustee and the Servicer, without the consent of
any Certificateholder or the NIMs Insurer, notwithstanding anything to the
contrary in this Agreement, upon receipt by the Trustee and the Certificate
Administrator of an Opinion of Counsel that such amendment has no material
adverse effect on the Certificateholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the
Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee and the Trust are not otherwise obligated or
liable to repay any Advances financed by the lender; (b) the Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
- 121 -
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor, the Certificate Administrator or the Trustee
during the Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the Depositor,
the Certificate Administrator or the Trustee and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor, the Certificate Administrator or the
Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the
Servicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Certificate Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
SECTION 10.11. Third Party Rights.
- 122 -
The NIMs Insurer shall 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.
SECTION 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and any successor
thereto shall furnish to the NIMs Insurer a copy of any notice, direction,
demand, opinion, schedule, list, certificate, report, statement, filing,
information, data or other communication provided by it or on its behalf to any
other Person pursuant to this Agreement at the same time, in the same form and
in the same manner as such communication is so provided and shall address or
cause such communication to be addressed to the NIMs Insurer in addition to any
other addressee thereof. The Servicer shall cause the NIMs Insurer to be an
addressee of any report furnished pursuant to this Agreement. With respect to
the Certificate Administrator, such obligation shall be satisfied with the
provision of access to the NIMs Insurer to the Certificate Administrator's
website.
(b) Wherever in this Agreement there shall be a requirement that there
be no downgrade, reduction, withdrawal or qualification of or other effect on
the rating of any Class of Certificates by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIMs Insurer to make a required payment under the policy
insuring the NIM Notes (such event, a "NIMs Insurer Default"), wherever in this
Agreement there shall be a requirement that any Person or any communication,
object or other matter be acceptable or satisfactory to or otherwise receive
the consent or other approval of any other Person (whether as a condition to
the eligibility of such Person to act in any capacity, as a condition to any
circumstance or state of affairs related to such matter, or otherwise), there
also shall be deemed to be a requirement that such Person or matter be approved
in writing by the NIMs Insurer, which approval shall not be unreasonably
withheld or delayed.
- 123 -
IN WITNESS WHEREOF, the Depositor, the Trustee, the Certificate
Administrator and the Servicer have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
WACHOVIA MORTGAGE LOAN TRUST, LLC,
as Depositor
By: _________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:__________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Certificate Administrator
By:__________________________________
Name:
Title:
HOMEQ SERVICING CORPORATION,
as Servicer
By:__________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Custodian
By: _________________________________
Name:
Title:
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
X-0
XXXXXXX X
XXXXXXXX
X-0
XXXXXXX X
FORM OF CUSTODIAN CERTIFICATION
[DATE]
Wachovia Mortgage Loan Trust, LLC
000 X. Xxxxxxx Xxxxxx, XX0000-Xxxxx X
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 28288
U.S. Bank National Association
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of September 1, 2005 among Wachovia Mortgage Loan Trust, LLC, as
depositor, Wachovia Bank, National Association, as certificate administrator and
as custodian, U.S. Bank National Association, as trustee and HomEq Servicing
Corporation, as servicer (the "Pooling and Servicing Agreement"), the
undersigned, as custodian, hereby certifies that [, except as set forth in
Schedule A hereto,] as to each Mortgage Loan listed in the Mortgage Loan
Schedule attached hereto (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to the
Custodian pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan.
The custodian has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number, the name of the Mortgagor, the street address (excluding zip code), the
mortgage interest rate at origination, the gross margin (if
D-1
applicable), the lifetime rate cap (if applicable), the periodic rate cap (if
applicable), the original principal balance, the first payment due date and the
original maturity date in each Mortgage File conform to the respective Mortgage
Loan number and name listed on the Mortgage Loan Schedule and (ii) the existence
in each Mortgage File of each of the documents listed in subparagraphs (i)(A)
through (F), inclusive, or (ii)(A) through (K), inclusive, as applicable, of
Section 2.01 in the Agreement. The custodian makes no representations or
warranties as to the validity, legality, recordability, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
Loan or the collectibility, insurability, 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-referenced Pooling and Servicing
Agreement.
WACHOVIA BANK, NATIONAL ASSOCIATION
as Custodian
By:__________________________________
Name: _______________________________
Title: ______________________________
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 12th Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
Ladies and Gentlemen:
We propose to purchase Wachovia Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-WMC1, Class R, described in the
Prospectus Supplement, dated September 27, 2005, and Prospectus, dated September
27, 2005. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated September 1, 2005
relating to the issuance of the Wachovia Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-WMC1 (the "Pooling and Servicing
Agreement").
1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we intend
to pay any taxes associated with holding the Class R Certificate as they become
due and (e) we will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)
__________ The Class R Certificate will be registered in our name.
__________ The Class R Certificate will be held in the name of our
nominee,
________________, which is not a disqualified organization.
__________________________
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-1
4. We certify that we are not an employee benefit plan subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
a plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code (each, a "Plan"), and are not directly or indirectly
acquiring the Class R Certificate on behalf of or with any assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and have furnished the transferor and the Certificate
Administrator with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code; for
this purpose the term "U.S. person" means a citizen or resident of the United
States, a corporation, or partnership (unless, in the case of a partnership,
Treasury regulations are adopted that provide otherwise) created or organized in
or under the laws of the United States, any State thereof or the District of
Columbia, including an entity treated as a corporation or partnership for
federal income tax purposes, an estate whose income is subject to United States
federal income tax regardless of the source of its income, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such U.S. persons have the authority
to control all substantial decisions of the trust (or, to the extent provided in
applicable Treasury regulations, certain trusts in existence on August 20, 1996
which are eligible to elect to be treated as U.S. Persons. We agree that any
breach by us of this certification shall render the transfer of any interest in
the Class R Certificate to us absolutely null and void and shall cause no rights
in the Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Certificate
Administrator with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code and
(iii) has delivered to the Certificate Administrator a letter in the form of
this letter (including the affidavit appended hereto) and, we will provide the
Certificate Administrator a written statement substantially in the form of
Exhibit E-2 to the Pooling and Servicing Agreement.
7. We hereby designate _______________________ as our fiduciary to act
as the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement.
Very truly yours,
[PURCHASER]
By:___________________________________
Name:
Title:
Accepted as of __________ __, 200__
WACHOVIA MORTGAGE LOAN TRUST, LLC
By:_______________________________
E-1-2
Name:
Title:
E-1-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)
(4) of the Internal Revenue Code of 1986,
as amended, and (ii) certain provisions of
the Pooling and Servicing Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________ (the
"Transferee"),
2. the Transferee's Employer Identification number is
__________,
3. the Transferee is not a "disqualified organization" (as
defined below), has no plan or intention of becoming a
disqualified organization, and is not acquiring any of its
interest in the Wachovia Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-WMC1, Class R
Certificate on behalf of a disqualified organization or any
other entity,
4. unless Wachovia Mortgage Loan Trust, LLC ("WMLT") has
consented to the transfer to the Transferee by executing the
form of Consent affixed as Appendix B to the Transferee's
Letter to which this Certificate is affixed as Appendix A,
the Transferee is a "U.S. person" (as defined below),
5. that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
6. the Transferee has historically paid its debts as they
became due,
7. the Transferee intends, and believes that it will be able,
to continue to pay its debts as they become due in the
future,
8. the Transferee understands that, as beneficial owner of the
Class R Certificate, it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificate,
9. the Transferee intends to pay any taxes associated with
holding the Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by WMLT
(upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class R Certificate will not
be owned directly or indirectly by a disqualified
organization, and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE
[the transfer is not a direct or indirect transfer of the
Class R Certificate to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax
treaty) of the Transferee, and as to each of the residual
interests represented by the Class R Certificate, the
present value of
E-1-4
the anticipated tax liabilities associated with holding such
residual interest does not exceed the sum of:
A. the present value of any consideration given to the
Transferee to acquire such residual interest;
B. the present value of the expected future distributions
on such residual interest; and
C. the present value of the anticipated tax savings
associated with holding such residual interest as the
related REMIC generates losses.
For purposes of this declaration, (i) the Transferee is assumed to pay
tax at a rate equal to the highest rate of tax specified in Section
11(b)(1) of the Code, but the tax rate specified in Section 55(b)(1)(B)
of the Code may be used in lieu of the highest rate specified in
Section 11(b)(1) of the Code if the Transferee has been subject to the
alternative minimum tax under Section 55 of the Code in the preceding
two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate, and (ii) present values
are computed using a discount rate equal to the Federal short-term rate
prescribed by Section 1274(d) of the Code for the month of the transfer
and the compounding period used by the Transferee;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year
of transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class R Certificate will be to
another eligible corporation in a transaction that satisfies
Treasury regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be
a direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a
domestic corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
E-1-5
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
________________________________________________
By: ___________________________________________
___________________________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
___________________________________________
___________________________________________ , Secretary
E-1-6
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this day of ,
200_ .
______________________________________________
Notary Public
County of_____________________________________
State of______________________________________
My commission expires the ________ day of ______________
By:
Name: _______________________
Title: _______________________
Dated:_______________
E-1-7
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 12th Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
________________________________
Name:
Title:
E-2-1
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 12th Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
RE: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of September 1,
2005, among Wachovia Mortgage Loan Trust, LLC, as depositor, Wachovia Bank,
National Association, as certificate administrator and as custodian, U.S. Bank
National Association, as trustee and HomEq Servicing Corporation, as servicer.
Very truly yours,
_______________________________
Name of Transferor
By:____________________________
Name:
Title
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 12th Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1, Class [____] (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement, dated as of September 1, 2005
(the "Pooling and Servicing Agreement"), among Wachovia Mortgage Loan Trust,
LLC, as depositor (the "Depositor"), Wachovia Bank, National Association as
certificate administrator (the "Certificate Administrator") and as custodian,
U.S. Bank National Association, as trustee (the "Trustee") and HomEq Servicing
Corporation, as servicer (the "Servicer"). [THE PURCHASER INTENDS TO REGISTER
THE TRANSFERRED CERTIFICATE IN THE NAME OF ____________________, AS NOMINEE FOR
_________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Certificate Administrator that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT,
THE 1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
ALSO COMPLIES WITH THE OTHER
G-1
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
ADMINISTRATOR SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO
THE CERTIFICATE ADMINISTRATOR (A) AN INVESTMENT LETTER FROM THE
PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS FROM THE TRANSFEROR
REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.
3. The ERISA Restricted Certificates (other than the Class R
Certificates) will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
ADMINISTRATOR HAS RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
OR A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF
THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING,
A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS
ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL
ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60,
OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE CERTIFICATE ADMINISTRATOR, AND UPON WHICH THE
CERTIFICATE ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT
THE ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED
TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE NIMS
INSURER, THE CERTIFICATE ADMINISTRATOR, THE SERVICER OR THE DEPOSITOR TO
ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE
POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE NIMS INSURER, THE CERTIFICATE ADMINISTRATOR,
THE SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE
CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN
(A) OR (B) ABOVE.
4. The Class R Certificate will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE CERTIFICATE ADMINISTRATOR WITH A REPRESENTATION
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE,
LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE
G-2
CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN.
5. The Purchaser is acquiring the Transferred Certificates for
its own account [FOR INVESTMENT only]* and not with a view to or for sale or
other transfer in connection with any distribution of the Transferred
Certificates in any manner that would violate the Securities Act or any
applicable state securities laws, subject, nevertheless, to the understanding
that disposition of the Purchaser's property shall at all times be and remain
within its control.
6. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
7. The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
8. The Purchaser of an ERISA Restricted Certificate (other than the
Class R Certificate) (A) is not an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code, a plan subject to any state,
local, federal, non-U.S. or other law substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law") and is not directly or
indirectly acquiring such Certificates by, on behalf of, or with any assets of
any such plan, or (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is acquiring the
Certificate with assets of an "insurance company general account," as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under Sections
I and III of PTCE 95-60, or (C) solely in the event the Certificate is a
Definitive Certificate, herewith delivers an Opinion of Counsel satisfactory to
the Certificate Administrator, and upon which the Certificate Administrator
shall be entitled to rely, to the effect that the acquisition and holding of the
Certificate will not constitute or result in a nonexempt prohibited transaction
under Title I of ERISA or Section 4975 of the Code, or a violation of Similar
Law, and will not subject the Trustee, the NIMs Insurer, the Certificate
Administrator, the Servicer or the Depositor to any obligation in addition to
those expressly undertaken in the Pooling and Servicing Agreement, which Opinion
of Counsel shall not be an expense of the Trustee, the NIMs Insurer, the
Certificate Administrator, the Servicer or the Depositor.
_____________________________________
*Not required of a broker/dealer purchaser.
G-3
9. The Purchaser of a Class R Certificate is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a
plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.
10. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
11. The Purchaser agrees to indemnify the Trustee, the Certificate
Administrator, the Servicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:__________________________________
Name:
Title:
G-4
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 12th Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1, Class [____] (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement, dated as of September 1, 2005
(the "Pooling and Servicing Agreement"), among Wachovia Mortgage Loan Trust,
LLC, as depositor (the "Depositor"), Wachovia Bank, National Association as
certificate administrator (the "Certificate Administrator") and as custodian,
U.S. Bank National Association, as trustee (the "Trustee"), HomEq Servicing
Corporation, as servicer (the "Servicer"). [THE PURCHASER INTENDS TO REGISTER
THE TRANSFERRED CERTIFICATE IN THE NAME OF ____________________, AS NOMINEE FOR
_________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d)(A) solely with respect to
ERISA Restricted Certificates, we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code"), a plan subject to any state, local, federal, non-U.S.
or other law substantively similar to the foregoing provisions of ERISA or the
Code ("Similar Law"), or Persons directly or indirectly acting on behalf of or
using any assets of any such plan, or (B) solely with respect to ERISA
Restricted Certificates (other than the Class R Certificates), if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, we are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
H-1
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(C) solely in the event the Certificate is an ERISA Restricted Certificate
(other than a Class R Certificate) and also a Definitive Certificate, we will
herewith deliver an Opinion of Counsel satisfactory to the Certificate
Administrator, and upon which the Certificate Administrator shall be entitled to
rely, to the effect that the acquisition and holding of the Certificate will not
constitute or result in a nonexempt prohibited transaction under Title I of
ERISA or Section 4975 of the Code, or a violation of Similar Law, and will not
subject the Trustee, the NIMs Insurer, the Certificate Administrator, the
Servicer or the Depositor to any obligation in addition to those expressly
undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the NIMs Insurer, the Certificate
Administrator, the Servicer or the Depositor, (e) we have not, nor has anyone
acting on our behalf offered, transferred, pledged, sold or otherwise disposed
of the Certificates, any interest in the Certificates or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
one of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. We are aware that the sale of the Transferred Certificates to us is
being made in reliance on Rule 144A. We are acquiring the Transferred
Certificates for our own account or for resale pursuant to Rule 144A and further
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed by us, based upon certifications of such
purchaser or information we have in our possession, to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
We agree to indemnify the Trustee, the Certificate Administrator, the
Servicer and the Depositor against any liability that may result from any
misrepresentation made herein.
Very truly yours,
[PURCHASER]
By: _________________________________
Name:
Title:
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
________ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended.
________ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by Federal, State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of
at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
________ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which
is supervised and examined by a State or Federal authority
having supervision over such institution or is a foreign
savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
________ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the
__________________________
* Buyer must own and/or invest on the discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
H-3
________
Securities Exchange Act of 1934, as amended.
________ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency
of the State, territory or the District of Columbia.
________ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
________ ERISA Plan. The Buyer is an employee benefit plan subject
to Title I of the Employee Retirement Income Security Act
of 1974, as amended.
________ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
________ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958, as amended.
________ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
H-4
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:________________________________________
Name:
Title:
Date:______________________________________
H-5
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
________ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
________ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
H-6
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:______________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date:______________________________________
H-7
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: Wachovia Bank, National Association
000 Xxxxxxxxxx Xxx
Xxxxxxxx X, Xxxx #0
Xxxxxxx, XX 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the Pooling and Servicing Agreement dated as of
September 1, 2005 among Wachovia Mortgage Loan Trust, LLC, as depositor,
Wachovia Bank, National Association, as certificate administrator and as
custodian, U.S. Bank National Association, as trustee and HomEq Servicing
Corporation, as servicer (the "Pooling and Servicing Agreement"), we request the
release, and hereby acknowledge receipt, of the 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
___________
Address to which the Custodian should deliver the Mortgage File:
By:________________________________________
(authorized signer)
Address:___________________________________
Date:______________________________________
I-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
WACHOVIA BANK, NATIONAL ASSOCIATION
as Custodian
By: _________________________________ ____________________________________
Signature Date
Documents returned to Custodian:
By: _________________________________ ____________________________________
Signature Date
I-2
EXHIBIT J
FORM OF TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER TO REGULATION S NOTE
Date:________________
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/WMLT 2005-WMC1
Wachovia Bank, National Association,
as Certificate Administrator
000 Xxxxx Xxxxx Xxxxxx, 12th Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
RE: Wachovia Mortgage Loan Trust, Series 2005-WMC1, Class
[X][P]
Ladies and Gentlemen:
In connection with our disposition of the above Notes and to
effect the transfer pursuant to Regulation S under the Securities Act of 1933,
as amended ("Regulation S") of the above Notes we hereby certify that such
transfer has been effected in accordance with (i) the transfer restrictions set
forth in the Pooling and Servicing Agreement, dated September 1, 2005 between
Wachovia Mortgage Loan Trust, LLC, as depositor, Wachovia Bank, National
Association, as Certificate Administrator and as custodian, HomEq Servicing
Corporation, as servicer, and in the Notes and (ii) in accordance with
Regulation S, and that:
a. the offer of the Notes was not made to a person in the
United States;
b. at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
c. no directed selling efforts have been made in contravention
of the requirements of Rule 903 or 904 of Regulation S, as applicable;
d. the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933, as
amended; and
e. the transferee is not a U.S. Person (as defined by
Regulation S).
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
J-1
Very truly yours,
_________________________________________
Print Name of Transferor
By:______________________________________
Authorized Officer
J-2
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF CERTIFICATE ADMINISTRATOR
[DATE]
Wachovia Mortgage Loan Trust, LLC
000 X. Xxxxxxx Xxxxxx, XX0000-Xxxxx X
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
I, [identify the certifying individual], a [title] of Wachovia Bank,
National Association, as certificate administrator under the Pooling and
Servicing Agreement dated as of September 1, 2005 among Wachovia Mortgage Loan
Trust, LLC, as depositor, Wachovia Bank, National Association, as certificate
administrator and as custodian, U.S. Bank National Association, as trustee and
HomEq Servicing Corporation, as servicer (the "Agreement"), hereby certify to
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 Monthly Statements delivered pursuant to the Agreement
since the last Officer's Certificate executed pursuant to Section 3.21 of
the Agreement [or in the case of the first certification, since the
Cut-off Date] (the "Certificate Administrator Information").
2. Based on my knowledge, the information in the Monthly Statement, 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 date hereof;
3. Based on my knowledge, the Monthly Statements required to be prepared by
the Certificate Administrator under the Agreement has been prepared and
provided in accordance with the Agreement; and
4. I am responsible for reviewing the activities performed by the Certificate
Administrator under the Agreement and the Certificate Administrator has,
as of the date hereof fulfilled its obligations under the Agreement and
there are no significant deficiencies relating to the Certificate
Administrator's compliance with the Agreement.
Date:
Wachovia Bank, National Association,
as Certificate Administrator
By: _____________________________________
Name: __________________________________
Title: _________________________________
K-1
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Wachovia Mortgage Loan Trust, LLC
000 X. Xxxxxxx Xxxxxx, XX0000-Xxxxx X
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, 00xx Floor (NC 1179)
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Client Services Manager - Wachovia Mortgage Loan Trust, Series
2005-WMC1
Re: Wachovia Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,
Series 2005-WMC1
I, [identify the certifying individual], an authorized representative of
HomEq Servicing Corporation, as servicer under the Pooling and Servicing
Agreement dated as of September 1, 2005 among Wachovia Mortgage Loan Trust, LLC,
as depositor, Wachovia Bank, National Association, as certificate administrator
and as custodian, U.S. Bank National Association, as trustee and HomEq Servicing
Corporation, as servicer (the "Agreement"), hereby certify to the Certificate
Administrator and the Depositor, and each of their respective officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. Based on my knowledge, the information in the annual statement of
compliance identified in Section 3.17 of the Agreement, the annual independent
public accountants' report identified in Section 3.18 of the Agreement and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Certificate Administrator and
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 date of this certification;
2. Based on my knowledge, the servicing information required to be
provided to the Certificate Administrator by the Servicer under the Agreement
has been provided to the Certificate Administrator;
3. I am responsible for reviewing the activities performed by the
Servicer under the Agreement and based upon the review required hereunder, and
except as disclosed in the annual statement of compliance identified in Section
3.17 of the Agreement, the annual independent public accountants' report
identified in Section 3.18 of the Agreement and all servicing reports, officer's
certificates and other information relating to the servicing of the Mortgage
Loans submitted to the Certificate Administrator, the Servicer has, as of the
date of this certification, fulfilled its obligations under this Agreement in
all material respects; and
4. I have disclosed to the Certificate Administrator all significant
deficiencies relating to the Servicer's compliance with the minimum servicing
standards in accordance with a review conducted in
L-1
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth under the Agreement.
Date:
HomEq Servicing Corporation, as Servicer
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
L-2
EXHIBIT M
FORM OF SWAP AGREEMENT
[INTENTIONALLY OMITTED]
M-1
