PARK PLACE SECURITIES, INC.
Depositor
HOMEQ SERVICING CORPORATION
Master Servicer
and
XXXXX FARGO BANK, N.A.
Trustee
----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2004
----------------------------------------
Asset-Backed Pass-Through Certificates
Series 2004-WHQ1
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I DEFINITIONS 6
SECTION 1.01. Defined Terms......................................................................6
SECTION 1.02. Allocation of Certain Interest Shortfalls.........................................59
SECTION 1.03. Rights of the Certificate Insurer and the NIMS Insurer............................60
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES 62
SECTION 2.01. Conveyance of Mortgage Loans......................................................62
SECTION 2.02. Acceptance of REMIC I by the Trustee..............................................64
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Seller or the Depositor;
Payment of Prepayment Charge Payment Amounts......................................66
SECTION 2.04. [Reserved]........................................................................68
SECTION 2.05. Representations, Warranties and Covenants of the Master Servicer..................68
SECTION 2.06. Issuance of the REMIC I Regular Interests and the Class R-I Interest..............71
SECTION 2.07. Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II, REMIC III
and REMIC IV by the Trustee.......................................................71
SECTION 2.08. Issuance of Class R Certificates and Class R-X Certificates.......................72
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 73
SECTION 3.01. Master Servicer to Act as Master Servicer.........................................73
SECTION 3.02. Collection of Certain Mortgage Loan Payments......................................75
SECTION 3.03. [Reserved]........................................................................76
SECTION 3.04. Collection Account, Escrow Account and Distribution Account.......................76
SECTION 3.05. Permitted Withdrawals From the Collection Account, Escrow Account and
Distribution Account..............................................................80
SECTION 3.06. Investment of Funds in the Collection Account, the Escrow Account, the
REO Account and the Distribution Account..........................................83
SECTION 3.07. Payment of Taxes, Insurance and Other Charges.....................................84
SECTION 3.08. Maintenance of Hazard Insurance...................................................85
SECTION 3.09. Maintenance of Mortgage Blanket Insurance.........................................85
SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.....................................86
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.........................86
SECTION 3.12. Realization Upon Defaulted Mortgage Loans.........................................87
SECTION 3.13. Title, Management and Disposition of REO Property.................................89
SECTION 3.14. [Reserved]........................................................................92
SECTION 3.15. Reports of Foreclosure and Abandonment of Mortgaged Properties....................92
SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.....................................93
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files...................................94
SECTION 3.18. Servicing Compensation............................................................95
i
SECTION 3.19. Statement as to Compliance........................................................95
SECTION 3.20. Independent Public Accountants' Servicing Report..................................96
SECTION 3.21. Access to Certain Documentation...................................................96
SECTION 3.22. [Reserved]........................................................................97
SECTION 3.23. Advance Facility..................................................................97
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS 99
SECTION 4.01. Distributions.....................................................................99
SECTION 4.02. Statements to Certificateholders.................................................108
SECTION 4.03. Remittance Reports and Other Reports to the Trustee; Advances; Payments in
Respect of Prepayment Interest Shortfalls........................................112
SECTION 4.04. Allocation of Realized Losses....................................................114
SECTION 4.05. Compliance with Withholding Requirements.........................................116
SECTION 4.06. Commission Reporting.............................................................117
SECTION 4.07. [Reserved].......................................................................119
SECTION 4.08. [Reserved].......................................................................119
SECTION 4.09. [Reserved].......................................................................119
SECTION 4.10. Net WAC Rate Carryover Reserve Account...........................................119
SECTION 4.11. The Certificate Insurance Policy.................................................120
SECTION 4.12. Effect of Payments by the Certificate Insurer; Subrogation.......................122
ARTICLE V THE CERTIFICATES 124
SECTION 5.01. The Certificates.................................................................124
SECTION 5.02. Registration of Transfer and Exchange of Certificates............................126
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates................................131
SECTION 5.04. Persons Deemed Owners............................................................132
SECTION 5.05. Certain Available Information....................................................132
SECTION 5.06. Rights of the Certificate Insurer to Exercise Rights of Class A-1
Certificateholders...............................................................132
SECTION 5.07. Certificate Insurer Default......................................................133
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER 134
SECTION 6.01. Liability of the Depositor and the Master Servicer...............................134
SECTION 6.02. Merger or Consolidation of the Depositor or the Master Servicer..................134
SECTION 6.03. Limitation on Liability of the Depositor, the Master Servicer and Others.........134
SECTION 6.04. Limitation on Resignation of the Master Servicer.................................135
SECTION 6.05. Rights of the Depositor in Respect of the Master Servicer........................136
SECTION 6.06. Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers...........137
SECTION 6.07. Successor Sub-Servicers..........................................................138
SECTION 6.08. Liability of the Master Servicer.................................................138
SECTION 6.09. No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the
Certificate Insurer, the Trustee or Certificateholders...........................138
ii
SECTION 6.10. Assumption or Termination of Sub-Servicing Agreements by Trustee.................139
SECTION 6.11. Sub-Servicing Accounts...........................................................139
ARTICLE VII DEFAULT 140
SECTION 7.01. Master Servicer Events of Default................................................140
SECTION 7.02. Trustee to Act; Appointment of Successor.........................................142
SECTION 7.03. Notification to Certificateholders...............................................144
SECTION 7.04. Waiver of Master Servicer Events of Default......................................144
ARTICLE VIII CONCERNING THE TRUSTEE 145
SECTION 8.01. Duties of Trustee................................................................145
SECTION 8.02. Certain Matters Affecting the Trustee............................................146
SECTION 8.03. The Trustee Not Liable for Certificates or Mortgage Loans........................147
SECTION 8.04. Trustee May Own Certificates.....................................................148
SECTION 8.05. Trustee's Fees and Expenses......................................................148
SECTION 8.06. Eligibility Requirements for Trustee.............................................149
SECTION 8.07. Resignation and Removal of the Trustee...........................................149
SECTION 8.08. Successor Trustee................................................................150
SECTION 8.09. Merger or Consolidation of Trustee...............................................151
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee....................................151
SECTION 8.11. Appointment of Custodians........................................................152
SECTION 8.12. Appointment of Office or Agency..................................................152
SECTION 8.13. Representations and Warranties of the Trustee....................................152
ARTICLE IX TERMINATION 154
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans.................154
SECTION 9.02. Additional Termination Requirements..............................................156
ARTICLE X REMIC PROVISIONS 158
SECTION 10.01. REMIC Administration.............................................................158
SECTION 10.02. Prohibited Transactions and Activities...........................................161
SECTION 10.03. Master Servicer and Trustee Indemnification......................................161
ARTICLE XI MISCELLANEOUS PROVISIONS 162
SECTION 11.01. Amendment........................................................................162
SECTION 11.02. Recordation of Agreement; Counterparts...........................................163
SECTION 11.03. Limitation on Rights of Certificateholders.......................................164
SECTION 11.04. Governing Law....................................................................164
SECTION 11.05. Notices..........................................................................165
SECTION 11.06. Severability of Provisions.......................................................165
SECTION 11.07. Notice to Rating Agencies, the Certificate Insurer and the NIMS Insurer..........166
SECTION 11.08. Article and Section References...................................................167
iii
SECTION 11.09. Grant of Security Interest.......................................................167
SECTION 11.10. Third Party Rights...............................................................167
iv
Exhibits
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class A-3 Certificate
Exhibit A-4 Form of Class A-4 Certificate
Exhibit A-5 Form of Class A-5 Certificate
Exhibit A-6 Form of Class M-1 Certificate
Exhibit A-7 Form of Class M-2 Certificate
Exhibit A-8 Form of Class M-3 Certificate
Exhibit A-9 Form of Class M-4 Certificate
Exhibit A-10 Form of Class M-5 Certificate
Exhibit A-11 Form of Class M-6 Certificate
Exhibit A-12 Form of Class M-7 Certificate
Exhibit A-13 Form of Class M-8 Certificate
Exhibit A-14 Form of Class M-9 Certificate
Exhibit A-15 Form of Class M-10 Certificate
Exhibit A-16 Form of Class CE Certificate
Exhibit A-17 Form of Class P Certificate
Exhibit A-18 Form of Class R Certificate
Exhibit A-19 Form of Class R-X Certificate
Exhibit B Form of Lost Note Affidavit
Exhibit C-1 Form of Trustee's Initial Certification
Exhibit C-2 Form of Trustee's Final Certification
Exhibit C-3 Form of Trustee's Receipt of Mortgage Note
Exhibit D Form of Mortgage Loan Purchase Agreement
Exhibit E Request for Release
Exhibit F-1 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of Class CE and Class P Certificates Pursuant to Rule 144A
Under the 1933 Act
Exhibit F-2 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of Residual
Certificates
Exhibit G Form of Certification with respect to ERISA and the Code
Exhibit H Form of Cap Contracts
Exhibit I [Reserved]
Exhibit J-1 Form of Certification to Be Provided by the Depositor with
Form 10-K
Exhibit J-2 Form of Certification to Be Provided to Depositor by the
Trustee
Exhibit J-3 Form of Certification to Be Provided to Depositor by the
Master Servicer
Exhibit K Annual Statement of Compliance pursuant to Section 3.19
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
v
This Pooling and Servicing Agreement, is dated and effective as of
September 1, 2004, among PARK PLACE SECURITIES, INC., as Depositor, HOMEQ
SERVICING CORPORATION, as Master Servicer and XXXXX FARGO BANK, N.A., as
Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates (collectively, the
"Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in each REMIC
(as defined herein) created hereunder. The Trust Fund will consist of a
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement.
REMIC I
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the Mortgage Loans and certain other related assets (other
than any Master Servicer Prepayment Charge Payment Amounts, the Net WAC Rate
Carryover Reserve Account and the Cap Contracts) subject to this Agreement as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC I." The Class R-I Interest will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, the initial Uncertificated Balance and, solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests (as defined herein).
None of the REMIC I Regular Interests will be certificated.
REMIC I Initial Latest Possible
Designation Remittance Rate Uncertificated Balance Maturity Date(1)
----------- --------------- ---------------------- ----------------
I-LTAA Variable(2) $ 979,999,946.82 September 25, 2034
I-LTA1 Variable(2) $ 5,686,600.00 September 25, 2034
I-LTA2 Variable(2) $ 1,000,000.00 September 25, 2034
I-LTA3 Variable(2) $ 667,550.00 September 25, 2034
I-LTA4 Variable(2) $ 317,450.00 September 25, 2034
I-LTA5 Variable(2) $ 218,400.00 September 25, 2034
I-LTM1 Variable(2) $ 385,000.00 September 25, 2034
I-LTM2 Variable(2) $ 300,000.00 September 25, 2034
I-LTM3 Variable(2) $ 200,000.00 September 25, 2034
I-LTM4 Variable(2) $ 175,000.00 September 25, 2034
I-LTM5 Variable(2) $ 150,000.00 September 25, 2034
I-LTM6 Variable(2) $ 150,000.00 September 25, 2034
I-LTM7 Variable(2) $ 125,000.00 September 25, 2034
I-LTM8 Variable(2) $ 100,000.00 September 25, 2034
I-LTM9 Variable(2) $ 100,000.00 September 25, 2034
I-LTM10 Variable(2) $ 100,000.00 September 25, 2034
I-LTZZ Variable(2) $ 10,324,998.91 September 25, 0000
X-XXX Variable(2) $ 100.00 September 25, 2034
I-1SUB Variable(2) $ 30,415.07 September 25, 2034
I-1GRP Variable(2) $ 144,147.08 September 25, 2034
I-2SUB Variable(2) $ 11,784.92 September 25, 2034
I-2GRP Variable(2) $ 55,852.92 September 25, 2034
I-XX Variable(2) $ 999,757,745.74 September 25, 2034
----------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
2
REMIC II
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the REMIC I Regular Interests as a REMIC for federal income
tax purposes, and such segregated pool of assets will be designated as "REMIC
II." The Class R-II Interest will evidence the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, the initial aggregate Certificate Principal Balance and,
solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated
Classes of Certificates.
Initial Aggregate
Certificate Principal Latest Possible Rated Final Maturity
Designation Pass-Through Rate Balance Maturity Date(1) Date(5)
----------- ----------------- --------------------- ---------------- --------------------
Class A-1 Variable(2) $ 1,137,320,000.00 September 25, 2034 September 25, 2034
Class A-2 Variable(2) $ 200,000,000.00 September 25, 2034 September 25, 2034
Class A-3 Variable(2) $ 133,510,000.00 September 25, 2034 September 25, 2013
Class A-4 Variable(2) $ 63,490,000.00 September 25, 2034 September 25, 2034
Class A-5 Variable(2) $ 43,680,000.00 September 25, 2034 September 25, 2034
Class M-1 Variable(2) $ 77,000,000.00 September 25, 2034 September 25, 2034
Class M-2 Variable(2) $ 60,000,000.00 September 25, 2034 September 25, 2034
Class M-3 Variable(2) $ 40,000,000.00 September 25, 2034 September 25, 2034
Class M-4 Variable(2) $ 35,000,000.00 September 25, 2034 September 25, 2034
Class M-5 Variable(2) $ 30,000,000.00 September 25, 2034 September 25, 2034
Class M-6 Variable(2) $ 30,000,000.00 September 25, 2034 September 25, 2034
Class M-7 Variable(2) $ 25,000,000.00 September 25, 2034 September 25, 2034
Class M-8 Variable(2) $ 20,000,000.00 September 25, 2034 September 25, 2034
Class M-9 Variable(2) $ 20,000,000.00 September 25, 2034 September 25, 2034
Class M-10 Variable(2) $ 20,000,000.00 September 25, 2034 September 25, 2034
Class CE Interest Variable(2)(3) $ 64,999,891.46 September 25, 2034 September 25, 2034
Class P Interest N/A(4) $ 100.00 September 25, 2034 September 25, 2034
----------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class CE Interest will accrue interest at its variable Pass-Through
Rate on the Notional Amount of the Class CE Interest outstanding from time
to time which shall equal the Uncertificated Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest I-LTP). The Class
CE Interest will not accrue interest on its Certificate Principal Balance.
(4) The Class P Interest will not accrue interest.
(5) As determined by the Rating Agencies.
3
REMIC III
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the Class CE Interest as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC III."
The Class R-III Interest will evidence the sole class of "residual interests" in
REMIC III for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.
Initial Aggregate
Certificate Principal Latest Possible
Designation Pass-Through Rate Balance Maturity Date(1)
----------- ----------------- --------------------- ----------------
Class CE Interest Variable(2) $ 64,999,891.46 September 25, 2034
------------
1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for the Class CE Certificates.
(2) The Class CE Certificates will receive 100% of amounts received in respect
of the Class CE Interest.
4
REMIC IV
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the Class P Interest as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC IV."
The Class R-IV Interest will evidence the sole class of "residual interests" in
REMIC IV for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.
Initial Aggregate
Certificate Principal Latest Possible
Designation Pass-Through Rate Balance Maturity Date(1)
----------- ----------------- --------------------- ----------------
Class P Interest Variable(2) $100.00 September 25, 2034
-----------
1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for the Class P Certificates.
(2) The Class P Certificates will receive 100% of amounts received in respect
of the Class P Interest.
As of the Cut-off Date, the Group I Mortgage Loans had an aggregate
Scheduled Principal Balance equal to $1,441,470,841.07 and the Group II Mortgage
Loans had an aggregate Scheduled Principal Balance equal to $558,529,150.39.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer and the Trustee agree as follows:
5
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without limitation, in the
Preliminary Statement hereto, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article.
Unless otherwise specified, all calculations described herein shall be made on
the basis of a 360-day year consisting of twelve 30-day months and all
calculations on each Regular Interest shall be made on the basis of a 360-day
year and the actual number of days in the month.
"Accrued Certificate Interest": With respect to any Class of Certificates
(other than the Class P Certificates and the Residual Certificates) and each
Distribution Date, interest accrued during the related Interest Accrual Period
at the Pass-Through Rate for such Certificate for such Distribution Date on the
Certificate Principal Balance, in the case of the Class A Certificates and the
Mezzanine Certificates, or on the Notional Amount, in the case of the Class CE
Certificates, of such Certificate immediately prior to such Distribution Date.
The Class P Certificates are not entitled to distributions in respect of
interest and, accordingly, shall not accrue interest. All distributions of
interest on the Adjustable-Rate Certificates shall be calculated on the basis of
a 360-day year and the actual number of days in the applicable Interest Accrual
Period. All distributions of interest on the Class CE Certificates shall be
based on a 360-day year consisting of twelve 30-day months. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate
or Mezzanine Certificate, shall be reduced by an amount equal to the portion
allocable to such Certificate pursuant to Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to the extent not covered by payments pursuant to Section 4.03(e) or allocated
to the Class CE Certificates and (b) the aggregate amount of any Relief Act
Interest Shortfall, if any, for such Distribution Date not allocated to the
Class CE Certificates pursuant to Section 1.02. Accrued Certificate Interest
with respect to each Distribution Date and any Class CE Certificate shall be
reduced by (a) Prepayment Interest Shortfalls, if any, allocated to such Class
of Certificates pursuant to Section 1.02 hereof and (b) Relief Act Interest
Shortfalls, if any, allocated to such Class of Certificates pursuant to Section
1.02 hereof.
"Adjustable-Rate Certificates": The Class A Certificates and the Mezzanine
Certificates.
"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans identified on
the Mortgage Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage Loan, the
first day of the month in which the Mortgage Rate of such Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following the
Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the
Mortgage Loan Schedule.
6
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer or a successor Master Servicer in respect of any
Distribution Date representing the aggregate of all payments of principal and
interest, net of the Servicing Fee, that were due during the related Due Period
on the Mortgage Loans and that were delinquent on the related Determination
Date, plus certain amounts representing assumed payments not covered by any
current net income on the Mortgaged Properties acquired by foreclosure or deed
in lieu of foreclosure as determined pursuant to Section 4.03.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on such Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date, minus the amount of the
increase in the related Certificate Principal Balance due to the receipt of
Subsequent Recoveries as provided in Section 4.01.
"Applicable Regulations": As to any Mortgage Loan, all federal, state and
local laws, statutes, rules and regulations applicable thereto.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom if applicable, the mortgage
recordation information which has not been returned by the applicable recorder's
office and/or the assignee's name), which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Available Funds": With respect to any Distribution Date, an amount equal
to (1) the sum of (a) the aggregate of the amounts on deposit in the Collection
Account and Distribution Account as of the close of business on the related
Determination Date, including any Subsequent Recoveries, (b) the aggregate of
any amounts received in respect of an REO Property withdrawn from any REO
Account and deposited in the Distribution Account for such Distribution Date
pursuant to Section 3.13, (c) Compensating Interest, if any, deposited in the
Distribution Account by the Master Servicer for such Distribution Date pursuant
to Section 4.03(e), (d) the aggregate of any Advances made by the Master
Servicer for such Distribution Date pursuant to Section 4.03 and (e) the
aggregate of any Advances made by the successor Master Servicer or the Trustee
for such Distribution Date pursuant to Section 7.02(b), reduced (to not less
than zero) by (2) the sum of the portion of the amount described in clause
(1)(a) above that represents (i) Monthly Payments on the Mortgage Loans received
from a Mortgagor on or prior to the Determination Date but due during any Due
Period subsequent to the related
7
Due Period, (ii) Principal Prepayments on the Mortgage Loans received after the
related Prepayment Period (together with any interest payments received with
such Principal Prepayments to the extent they represent the payment of interest
accrued on the Mortgage Loans during a period subsequent to the end of the prior
calendar month), (iii) Liquidation Proceeds, Insurance Proceeds and Subsequent
Recoveries received in respect of the Mortgage Loans after the related
Prepayment Period, (iv) amounts reimbursable or payable to the Depositor, the
Master Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section
3.05, Section 3.06 or Section 7.01 or otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) the Custodian Fee payable from the
Distribution Account pursuant to Section 8.05, (vi) amounts deposited in the
Collection Account or the Distribution Account in error and (vii) the amount of
any Prepayment Charges collected by the Master Servicer and the amount of any
Master Servicer Prepayment Charge Payment Amounts.
"Avoided Payment": As such term is defined in the Certificate Insurance
Policy.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee. Initially, the Book-Entry Certificates shall be the
Class A Certificates and the Mezzanine Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking or savings and loan institutions in the State of California, the State
of New York, the State of New Jersey, the State of Texas, or in any city in
which the Corporate Trust Office of the Trustee is located, are authorized or
obligated by law or executive order to be closed.
"Cap Amount": For each Class of Adjustable-Rate Certificates, an amount
equal to (i) the aggregate amount received by the Trust Fund from the related
Cap Contract, multiplied by (ii) a fraction equal to (a) the Certificate
Principal Balance of such Class immediately prior to the applicable Distribution
Date divided by (b) the aggregate Certificate Principal Balance immediately
prior to the applicable Distribution Date of all Classes of Adjustable-Rate
Certificates, directly benefitting from such Cap Contract.
"Cap Contract Excess": With respect to any Cap Contract and Distribution
Date, the excess, if any, of the then applicable maximum rate set forth in such
Cap Contract over the then applicable strike rate set forth in such Cap
Contract.
"Cap Contracts": The interest rate corridors between Xxxxx Fargo Bank,
N.A., as Trustee, and the counterparty thereunder, for the benefit of the
Holders of (i) the Class A-1 Certificates, (ii) the Group II Certificates,
collectively and (iii) the Mezzanine Certificates, collectively, forms of which
are attached hereto as Exhibit H.
8
"Certificate": Any one of the Depositor's Asset-Backed Pass-Through
Certificates, Series 2004-WHQ1, Class A-1, Class X-0, Xxxxx X-0, 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, Class M-10, Class CE, Class P, Class R and
Class R-X, issued under this Agreement.
"Certificate Factor": With respect to any Class of Regular Certificates as
of any Distribution Date, a fraction, expressed as a decimal carried to six
places, the numerator of which is the aggregate Certificate Principal Balance
(or the Notional Amount, in the case of the Class CE Certificates) of such Class
of Certificates on such Distribution Date (after giving effect to any
distributions of principal and allocations of Realized Losses in reduction of
the Certificate Principal Balance (or the Notional Amount, in the case of the
Class CE Certificates) of such Class of Certificates to be made on such
Distribution Date), and the denominator of which is the initial aggregate
Certificate Principal Balance (or the Notional Amount, in the case of the Class
CE Certificates) of such Class of Certificates as of the Closing Date.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or a Non-United States Person shall not be a Holder of a Residual Certificate
for any purposes hereof and, solely for the purposes of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or the Seller or any Affiliate thereof shall be deemed not to be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.01. The Trustee, the Certificate Insurer and the NIMS
Insurer may conclusively rely upon a certificate of the Depositor or the Seller
in determining whether a Certificate is held by an Affiliate thereof. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee, the Certificate Insurer and the
NIMS Insurer shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
"Certificate Insurance Policy": The Financial Guaranty Insurance Policy
No. CA-O1142A, and all endorsements thereto dated the Closing Date, issued by
the Certificate Insurer for the benefit of the Holders of the Insured
Certificates.
"Certificate Insurer": XL Capital Assurance Inc., a New York monoline
insurance corporation, or its successors in interest.
"Certificate Insurer Default": The occurrence and continuance of any of
the following:
(a) the Certificate Insurer shall have failed to make a required
payment when due under the Certificate Insurance Policy in accordance with
its terms;
(b) the Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code,
9
the New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization, (ii) made a general assignment for the benefit of its
creditors or (iii) had an order for relief entered against it under the
United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization that is final and
nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Certificate Insurer or for
all or any material portion of its property or (ii) authorizing the taking
of possession by a custodian, trustee, agent, or receiver of the
Certificate Insurer (or the taking of possession of all or any material
portion of property of the Certificate Insurer).
"Certificate Margin": With respect to each Adjustable-Rate Certificate
and, for purposes of the Marker Rate, the specified REMIC I Regular Interest, as
follows:
Certificate Margin
REMIC I Regular ------------------
Class Interest (1) (%) (2) (%)
----- --------------- ------- -------
X-0 X-XXX0 0.2925 0.5850
X-0 X-XXX0 0.0000 0.0000
X-0 X-XXX0 0.1500 0.3000
X-0 X-XXX0 0.0000 0.0000
X-0 X-XXX0 0.5500 1.1000
M-1 I-LTM1 0.6300 0.9450
M-2 I-LTM2 0.6600 0.9900
M-3 I-LTM3 0.7000 1.0500
M-4 I-LTM4 1.1500 1.7250
M-5 I-LTM5 1.2000 1.8000
M-6 I-LTM6 1.4000 2.1000
M-7 I-LTM7 1.8500 2.7750
M-8 I-LTM8 1.9500 2.9250
M-9 I-LTM9 3.5000 5.2500
M-10 I-LTM10 2.7500 4.1250
----------
(1) For the Interest Accrual Period for each Distribution Date on or prior to
the Optional Termination Date.
(2) For the Interest Accrual Period for each Distribution Date after the
Optional Termination Date.
"Certificate Owner": With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Depository Participant or on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent.
"Certificate Principal Balance": With respect to each Class A Certificate,
Mezzanine Certificate or Class P Certificate as of any date of determination,
the Certificate Principal Balance of such Certificate on the Distribution Date
immediately prior to such date of determination minus all distributions
allocable to principal made thereon on such Distribution Date and, in the case
of a Mezzanine Certificate, Realized Losses allocated thereto on such
immediately prior Distribution Date plus, with respect to each Mezzanine
Certificate, any
10
increase in the Certificate Principal Balance of such Certificate pursuant to
Section 4.01 due to the receipt of Subsequent Recoveries (or, in the case of any
date of determination up to and including the first Distribution Date, the
initial Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balance of the Class A Certificates, the Mezzanine
Certificates and the Class P Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The register
maintained and the registrar appointed pursuant to Section 5.02.
"Class": Collectively, all of the Certificates bearing the same class
designation.
"Class A Certificate": Any one of the Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates or the
Class A-5 Certificates.
"Class A Principal Distribution Amount": With respect to any Distribution
Date, an amount equal to the sum of (i) the Senior Group I Principal
Distribution Amount and (ii) the Senior Group II Principal Distribution Amount.
"Class A-1 Certificate": Any one of the Class A-1 Certificates executed,
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class A-1 Certificate Deficiency Amount": With respect to any
Distribution Date and the Insured Certificates, an amount equal to the sum of
the following amounts, in each case after giving effect to distributions made on
such date from sources other than the Certificate Insurance Policy:
(i) the excess of (x) the Senior Interest Distribution Amount for
the Insured Certificates for such Distribution Date over (y) the amount of
Available Funds allocated to pay such Senior Interest Distribution Amount
pursuant to Section 4.01;
(ii) the Class A-1 Principal Loss Amount, if any, for such
Distribution Date; and
(iii) without duplication of the amount specified in clause (i)
above, the Certificate Principal Balance of the Insured Certificates on
their Final Scheduled Distribution Date.
"Class A-1 Principal Loss Amount": As to any Distribution Date, the
excess, if any, of the Certificate Principal Balance of the Insured
Certificates, after taking into account distributions in reduction of such
Certificate Principal Balance from sources other than the Certificate Insurance
Policy on such Distribution Date, over the aggregate Stated Principal Balance of
the Group I Mortgage Loans for such Distribution Date.
11
"Class A-2 Certificate": Any one of the Class A-2 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-3 Certificate": Any one of the Class A-3 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-3 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-4 Certificate": Any one of the Class A-4 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-4 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-5 Certificate": Any one of the Class A-5 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-5 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class CE Certificate": Any one of the Class CE Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-16 and evidencing a
Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class CE Interest": An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class CE Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-6 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 65.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due
12
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus $9,999,999.96.
"Class M-2 Certificate": Any one of the Class M-2 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-7 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 71.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $9,999,999.96.
"Class M-3 Certificate": Any one of the Class M-3 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-8 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date) and (iv)
the Certificate Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
75.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the
13
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$9,999,999.96.
"Class M-4 Certificate": Any one of the Class M-4 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-9 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (v) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 79.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$9,999,999.96.
"Class M-5 Certificate": Any one of the Class M-5 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-10 and evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-5 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the Certificate
14
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 82.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $9,999,999.96.
"Class M-6 Certificate": Any one of the Class M-6 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-11 and evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date) and (vii)
the Certificate Principal Balance of the Class M-6 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
85.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus $9,999,999.96.
"Class M-7 Certificate": Any one of the Class M-7 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-12 and evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of
15
the Class M-7 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account the
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the payment of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date) and (viii) the
Certificate Principal Balance of the Class M-7 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 87.50% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $9,999,999.96.
"Class M-8 Certificate": Any one of the Class M-8 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-13 and evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-8 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate
16
Principal Balance of the Class M-7 Certificates (after taking into account the
payment of the Class M-7 Principal Distribution Amount on such Distribution
Date) and (ix) the Certificate Principal Balance of the Class M-8 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 89.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $9,999,999.96.
"Class M-9 Certificate": Any one of the Class M-9 Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-14 and evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-9 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) and the Certificate
Principal Balance of the Class M-8 Certificates (after taking into account the
payment of the Class M-8 Principal Distribution Amount on such Distribution
Date) and (x) the Certificate Principal Balance of the Class M-9 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 91.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $9,999,999.96.
17
"Class M-10 Certificate": Any one of the Class M-10 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-15 and evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-10 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-10 Certificates immediately prior
to such Distribution Date and (II) the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment of
the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the
Certificate Principal Balance of the Class M-9 Certificates immediately prior to
such Distribution Date (after taking into account the payment of the Class M-9
Principal Distribution Amount on such Distribution Date) and (xi) the
Certificate Principal Balance of the Class M-10 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 93.50%
and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $9,999,999.96.
"Class P Certificate": Any one of the Class P Certificates executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-17, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC IV for purposes of the REMIC Provisions.
"Class P Interest": An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class P Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
18
"Class R Certificate": Any one of the Class R Certificates executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-18 and evidencing the
ownership of the Class R-I Interest and the Class R-II Interest.
"Class R-X Certificate": Any one of the Class R-X Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-19 and evidencing the
ownership of the Class R-III Interest and the Class R-IV Interest.
"Class R-I Interest": The uncertificated Residual Interest in REMIC I.
"Class R-II Interest": The uncertificated Residual Interest in REMIC II.
"Class R-III Interest": The uncertificated Residual Interest in REMIC III.
"Class R-IV Interest": The uncertificated Residual Interest in REMIC IV.
"Closing Date": September 7, 2004.
"Combined Loan-to-Value Ratio": As of any date of determination, and with
respect to second lien Mortgage Loans, the fraction, expressed as a percentage,
the numerator of which is (i) the sum of (a) the outstanding principal balance
of the related first-lien mortgage loan plus (b) the Stated Principal Balance of
the related second-lien mortgage loan and the denominator of which is (ii) the
Value of the related Mortgaged Property.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by
the Master Servicer pursuant to Section 3.04(a), which shall be entitled "HomEq
Servicing Corporation, as Master Servicer for Xxxxx Fargo Bank, N.A., as
Trustee, in trust for the registered holders of Park Place Securities, Inc.,
Asset-Backed Pass-Through Certificates, Series 2004-WHQ1." The Collection
Account must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 4.03(e) hereof.
"Corporate Trust Office": The corporate trust office of the Trustee, at
which at any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this Agreement is located at (i) for purposes of the transfer and exchange of
the Certificates, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000,
Attention: Corporate Trust Services - Park Place Securities, Inc. Series
2004-WHQ1, and (ii) for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Client Manager - Park Place Securities, Inc. Series
2004-WHQ1.
"Corresponding Certificate": With respect to each REMIC I Regular
Interest, as follows:
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REMIC I Regular Interest Class
------------------------------- -----
REMIC I Regular Interest I-LTA1 A-1
REMIC I Regular Interest I-LTA2 A-2
REMIC I Regular Interest I-LTA3 A-3
REMIC I Regular Interest I-LTA4 A-4
REMIC I Regular Interest I-LTA5 A-5
REMIC I Regular Interest I-LTM1 M-1
REMIC I Regular Interest I-LTM2 M-2
REMIC I Regular Interest I-LTM3 M-3
REMIC I Regular Interest I-LTM4 M-4
REMIC I Regular Interest I-LTM5 M-5
REMIC I Regular Interest I-LTM6 M-6
REMIC I Regular Interest I-LTM7 M-7
REMIC I Regular Interest I-LTM8 M-8
REMIC I Regular Interest I-LTM9 M-9
REMIC I Regular Interest I-LTM10 M-10
REMIC I Regular Interest I-LTP P
"Credit Enhancement Percentage": For any Distribution Date and Class of
Class A Certificates or Mezzanine Certificates, the percentage equivalent of a
fraction, calculated after taking into account distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Certificates then entitled to distributions of principal on such
Distribution Date, the numerator of which is the sum of the aggregate
Certificate Principal Balances of the Classes of Certificates with a lower
distribution priority than such Class, and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period).
"Cumulative Loss Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
preceding calendar month (reduced by the aggregate amount of Subsequent
Recoveries received from the Cut-off Date through the last day of the related
Due Period) and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
"Custodian": A Custodian, which shall initially be Deutsche Bank National
Trust Company pursuant to the Custodial Agreement.
"Custodial Agreement": The letter agreement dated as of the Closing Date,
among the Master Servicer, the Trustee and the Custodian providing for the
safekeeping of the Mortgage Files on behalf of the Trust in accordance with this
Agreement.
"Custodian Fee": The amount payable to the Custodian on each Distribution
Date pursuant to Section 8.05 as compensation for all services rendered by it
under the Custodial Agreement equal to $0.20 for each Mortgage File in the
Custodian's possession corresponding a Mortgage Loan.
20
"Custodian Fee Rate": The per annum fee paid to the Custodian on each
Distribution Date equal to the Custodian Fee expressed as a percentage of the
aggregate Stated Principal Balance of the Mortgage Loans.
"Cut-off Date": With respect to any Mortgage Loan, the close of business
on September 1, 2004. With respect to all Qualified Substitute Mortgage Loans,
their respective dates of substitution. References herein to the "Cut-off Date,"
when used with respect to more than one Mortgage Loan, shall be to the
respective Cut-off Dates for such Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding Stated Principal Balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
"Delinquency Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of all Mortgage Loans as of the last day of the
previous calendar month that, as of such last day of the previous calendar
month, are 60 or more days delinquent (measured under the Office of Thrift
Supervision delinquency calculation methodology and with respect to
modifications, measured as set forth below), are in foreclosure, have been
converted to REO Properties or have been discharged by reason of bankruptcy, and
the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties as of the last day of the previous calendar
month; provided, however, that any Mortgage Loan purchased by the Master
Servicer or the NIMS Insurer pursuant to Section 3.16 shall not be included in
either the numerator or the denominator for purposes of calculating the
Delinquency Percentage.
With respect to modified Mortgage Loans, a Mortgage Loan is delinquent by
the number of days that have elapsed since the due date from the oldest unpaid
monthly payment that became due under the terms of the related Mortgage Loan
without regard to any modification of the terms thereof; provided, however, that
if the terms of such Mortgage Loan are modified, delinquency shall be measured
in accordance with the modified terms of such Mortgage Loan when and if four
consecutive full monthly payments due pursuant to the modified terms shall have
been made, in each case no later than 30 days following the due date for such
monthly payment.
"Depositor": Park Place Securities, Inc., a Delaware corporation, or its
successor in interest.
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"Depository": The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Xxxxx'x, "F-1" by Fitch and "A-1" by S&P (or comparable
ratings if Xxxxx'x, Fitch and S&P are not the Rating Agencies).
"Depository Participant": A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to each Distribution Date, the 18th day
of the calendar month in which such Distribution Date occurs or, if such 18th
day is not a Business Day, the Business Day immediately preceding such 18th day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by REMIC I other than through an
Independent Contractor; provided, however, that the Trustee (or the Master
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master Servicer on behalf of
the Trustee) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for Xxxxxxx Mac, a majority of its board of directors is not
selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any Trust REMIC or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms
22
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(e), which shall be entitled
"Xxxxx Fargo Bank, N.A., as Trustee, in trust for the registered holders of Park
Place Securities, Inc., Asset-Backed Pass-Through Certificates, Series
2004-WHQ1." The Distribution Account must be an Eligible Account.
"Distribution Date": The 25th day of any month, or if such 25th day is not
a Business Day, the next succeeding Business Day, commencing in October 2004.
"Due Date": With respect to each Distribution Date, the first day of the
calendar month in which such Distribution Date occurs, which is the day of the
month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
"Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month immediately preceding the month in which such
Distribution Date occurs and ending on the related Due Date.
"Eligible Account": Any of (i) an account or accounts maintained with a
Depository Institution or trust company, the short-term unsecured debt
obligations of which are rated "P-1" by Xxxxx'x, "F-1" by Fitch and "A-1+" by
S&P (or comparable ratings if Xxxxx'x, Fitch and S&P are not the Rating
Agencies) at the time any amounts are held on deposit therein, (ii) an account
or accounts the deposits in which are fully insured by the FDIC or (iii) a trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company acting in its
fiduciary capacity. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Escrow Account": The account or accounts created and maintained pursuant
to Section 3.04(c).
"Escrow Payments": The amounts constituting taxes, and/or fire and hazard
insurance premiums escrowed by the Mortgagor with the mortgagee pursuant to a
voluntary escrow agreement related to any Mortgage Loan.
"Estate in Real Property": A fee simple estate or leasehold estate in a
parcel of land.
"Excess Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
(calculated for this purpose only after assuming that 100% of the Principal
Remittance Amount on such Distribution Date has been distributed) over (ii) the
Overcollateralization Target Amount for such Distribution Date.
23
"Expense Adjusted Net Mortgage Rate": With respect to any Mortgage Loan
(or the related REO Property), as of any date of determination, a per annum rate
of interest equal to the applicable Mortgage Rate thereon as of the first day of
the month preceding the month in which the Distribution Date occurs minus the
Servicing Fee Rate, the Custodian Fee Rate and the Trustee Fee Rate, if any.
"Expense Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Maximum Mortgage Rate (or the Mortgage
Rate for such Mortgage Loan in the case of any Fixed-Rate Mortgage Loan) as of
the first day of the month preceding the month in which the Distribution Date
occurs minus the Servicing Fee Rate, the Custodian Fee Rate and the Trustee Fee
Rate, if any.
"Extraordinary Trust Fund Expense": Any amounts reimbursable to the
Trustee, or any director, officer, employee or agent of the Trustee, from the
Trust Fund pursuant to Section 8.05, any amounts payable from the Distribution
Account in respect of taxes pursuant to Section 10.01(g)(iii) and any amounts
payable by the Trustee for the recording of the Assignments pursuant to Section
2.01.
"Xxxxxx Mae": Xxxxxx Xxx, formally known as the Federal National Mortgage
Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03, Section 3.16(a) or Section 9.01), a determination
made by the Master Servicer that all Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which the Master Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Master Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination made thereby.
"Final Scheduled Distribution Date": The Distribution Date occurring in
September 2034.
"Fitch": Fitch Ratings, or its successor in interest.
"Fixed-Rate Mortgage Loan": Each of the Mortgage Loans identified on the
Mortgage Loan Schedule as having a fixed Mortgage Rate.
"Formula Rate": For any Distribution Date and each Class of
Adjustable-Rate Certificates, the lesser of (i) LIBOR plus the related
Certificate Margin and (ii) the related Maximum Cap Rate.
"Xxxxxxx Mac": Xxxxxxx Mac, formally known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
24
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the Mortgage Rate for such Adjustable-Rate Mortgage
Loan.
"Group I Allocation Percentage": With respect to the Group I Certificates
and any Distribution Date, the percentage equivalent of a fraction, the
numerator of which is (x) the Group I Principal Remittance Amount for such
Distribution Date and the denominator of which is (y) the Principal Remittance
Amount for such Distribution Date.
"Group I Certificates": The Class A-1 Certificates.
"Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date that
represents interest received or advanced on the Group I Mortgage Loans.
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan Group I; all
Group I Mortgage Loans have a principal balance at origination that conforms to
Xxxxxx Xxx and Xxxxxxx Mac loan limits.
"Group I Principal Distribution Amount": With respect to any Distribution
Date, the sum of: (i) the principal portion of each Monthly Payment on the Group
I Mortgage Loans due during the related Due Period, to the extent received on or
prior to the related Determination Date or advanced prior to that Distribution
Date; (ii) the Stated Principal Balance of any Group I Mortgage Loan that was
purchased during the related Prepayment Period pursuant to or as contemplated by
Section 2.03, Section 3.16(a) or Section 9.01 and the amount of any shortfall
deposited in the Collection Account in connection with the substitution of a
Deleted Mortgage Loan in Loan Group I pursuant to Section 2.03 during the
related Prepayment Period; (iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal Prepayments, Subsequent
Recoveries, Insurance Proceeds, Liquidation Proceeds and REO Principal
Amortization) received during the related Prepayment Period on the Group I
Mortgage Loans, net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer pursuant to
Section 4.03 in respect of a preceding Distribution Date; (iv) [reserved]; and
(v) the Group I Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Distribution Date; MINUS (vi) the Group I Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date. In no event will the Group I Principal Distribution Amount
with respect to any Distribution Date be (x) less than zero or (y) greater than
the then outstanding aggregate Certificate Principal Balance of the Class A and
Mezzanine Certificates.
"Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of the amounts described in clauses (i) through (iii) of the
definition of Group I Principal Distribution Amount.
"Group II Allocation Percentage": With respect to the Group II
Certificates and any Distribution Date, the percentage equivalent of a fraction,
the numerator of which is (x) the
25
Group II Principal Remittance Amount for such Distribution Date and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Group II Certificates": The Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates and the Class A-5 Certificates.
"Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date that
represents interest received or advanced on the Group II Mortgage Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan Group II with a
principal balance at origination that may or may not conform to Xxxxxx Mae or
Xxxxxxx Mac loan limits.
"Group II Principal Distribution Amount": With respect to any Distribution
Date, the sum of: (i) the principal portion of each Monthly Payment on the Group
II Mortgage Loans due during the related Due Period, to the extent received on
or prior to the related Determination Date or advanced prior to that
Distribution Date; (ii) the Stated Principal Balance of any Group II Mortgage
Loan that was purchased during the related Prepayment Period pursuant to or as
contemplated by Section 2.03, Section 3.16(a) or Section 9.01 and the amount of
any shortfall deposited in the Collection Account in connection with the
substitution of a Deleted Mortgage Loan in Loan Group II pursuant to Section
2.03 during the related Prepayment Period; (iii) the principal portion of all
other unscheduled collections (including, without limitation, Principal
Prepayments, Subsequent Recoveries, Insurance Proceeds, Liquidation Proceeds and
REO Principal Amortization) received during the related Prepayment Period on the
Group II Mortgage Loans, net of any portion thereof that represents a recovery
of principal for which an advance was made by the Master Servicer pursuant to
Section 4.03 in respect of a preceding Distribution Date; (iv) [reserved]; and
(v) the Group II Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date; MINUS (vi) the
Group II Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date. In no event will the Group II
Principal Distribution Amount with respect to any Distribution Date be (x) less
than zero or (y) greater than the then outstanding aggregate Certificate
Principal Balance of the Class A and Mezzanine Certificates.
"Group II Principal Remittance Amount": With respect to any Distribution
Date, the sum of the amounts described in clauses (i) through (iii) of the
definition of Group II Principal Distribution Amount.
"Highest Priority" As of any date of determination, the Class of Mezzanine
Certificates then outstanding with a Certificate Principal Balance greater than
zero, with the highest priority for payments pursuant to Section 4.01, in the
following order of decreasing priority: the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates,
the Class M-8 Certificates, the Class M-9 Certificates and the Class M-10
Certificates.
"HOEPA": The Home Ownership and Equity Protection Act of 1994.
26
"Indenture": An indenture relating to the issuance of notes secured by all
or a portion of the Class CE Certificates, the Class P Certificates and/or the
Residual Certificates, which may or may not be guaranteed by the NIMS Insurer.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer, the
Seller and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor, the
Seller, the Master Servicer or any Affiliate thereof and (c) is not connected
with the Depositor, the Seller, the Master Servicer or any Affiliate thereof as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, however, that a Person shall not
fail to be Independent of the Depositor, the Seller, the Master Servicer or any
Affiliate thereof merely because such Person is the beneficial owner of 1% or
less of any class of securities issued by the Depositor or the Master Servicer
or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of the Code if such REMIC were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as such REMIC
does not receive or derive any income from such Person and provided that the
relationship between such Person and such REMIC is at arm's length, all within
the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other
Person (including the Master Servicer) if the Trustee and the Certificate
Insurer has received an Opinion of Counsel to the effect that the taking of any
action in respect of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise herein contemplated to be taken by an
Independent Contractor shall not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and each
related Adjustment Date, the average of the interbank offered rates for
six-month United States dollar deposits in the London market as published in THE
WALL STREET JOURNAL and as most recently available as of the first business day
45 days or more prior to such Adjustment Date, as specified in the related
Mortgage Note.
"Insurance Agreement": The Insurance and Indemnity Agreement, dated as of
the Closing Date, among the Certificate Insurer, the Master Servicer and the
Depositor.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan, to the extent such proceeds are not
to be applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Insured Certificates": The Class A-1 Certificates.
27
"Interest Accrual Period": With respect to any Distribution Date and the
Adjustable-Rate Certificates, the period commencing on the Distribution Date in
the month immediately preceding the month in which such Distribution Date occurs
(or, in the case of the first Distribution Date, commencing on the Closing Date)
and ending on the day preceding such Distribution Date. With respect to any
Distribution Date and the Class CE Certificates, the REMIC I Regular Interests,
the one-month period ending on the last day of the calendar month preceding the
month in which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any Distribution Date and
any Class of Class A Certificates or Mezzanine Certificates, the sum of (i) the
amount, if any, by which (a) the Interest Distribution Amount for such Class of
Certificates as of the immediately preceding Distribution Date exceeded (b) the
actual amount distributed on such Class of Certificates in respect of interest
on such immediately preceding Distribution Date and (ii) the amount of any
Interest Carry Forward Amount for such Class of Certificates remaining
undistributed from the previous Distribution Date, plus accrued interest thereon
calculated at the related Pass-Through Rate for the most recently ended Interest
Accrual Period.
"Interest Determination Date": With respect to the Adjustable-Rate
Certificates, and solely for purposes of calculating the Marker Rate, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest
I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10 and any Interest Accrual Period therefor (other
than the first Interest Accrual Period), the second LIBOR Business Day preceding
the commencement of such Interest Accrual Period.
"Interest Distribution Amount": With respect to any Distribution Date and
any Class of Class A Certificate or Mezzanine Certificate and the Class CE
Certificates, the aggregate Accrued Certificate Interest on the Certificates of
such Class for such Distribution Date.
"Late Collections": With respect to any Mortgage Loan and any Due Period,
all amounts received subsequent to the Determination Date immediately following
such Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
"LIBOR Business Day": Any day on which banks in the City of London and
City of New York are open and conducting transactions in United States dollars.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from REMIC I by reason of its being purchased, sold or replaced pursuant
to or as contemplated by Section 2.03, Section
28
3.16(a) or Section 9.01. With respect to any REO Property, either of the
following events: (i) a Final Recovery Determination is made as to such REO
Property; or (ii) such REO Property is removed from REMIC I by reason of its
being purchased pursuant to Section 9.01.
"Liquidation Proceeds": The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the Master Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise or (iii) the repurchase,
substitution or sale of a Mortgage Loan or an REO Property pursuant to or as
contemplated by Section 2.03, Section 3.13, Section 3.16(a) or Section 9.01.
"Loan Group": Loan Group I or Loan Group II, as the context requires.
"Loan Group I": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group II.
"Loan-to-Value Ratio": As of any date of determination and with respect to
first lien Mortgage Loans, the fraction, expressed as a percentage, the
numerator of which is the Stated Principal Balance of the related Mortgage Loan
at such date and the denominator of which is the Value of the related Mortgaged
Property.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost, misplaced or destroyed and has
not been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note) and indemnifying the Trust Fund against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note, in
the form of Exhibit B hereto.
"Marker Rate": With respect to the Class CE Interest and any Distribution
Date, a per annum rate equal to two (2) times the weighted average of the REMIC
I Remittance Rate for REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC
I Regular Interest I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest I-LTM10 and REMIC I Regular Interest
I-LTZZ, with the rate on each such REMIC I Regular Interest (other than REMIC I
Regular Interest I-LTZZ) subject to the lesser of (i) LIBOR plus the related
Certificate Margin and (ii) the related Net WAC Pass-Through Rate for the
purpose of this calculation for such Distribution Date and with the rate on
REMIC I Regular Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that solely for this purpose, calculations of
the REMIC I Remittance Rate and the related caps with respect to REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Xxxxxxxx
X-XXX0,
00
REMIC I Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I Regular
Interest I-LTM10 shall be multiplied by a fraction, the numerator of which is
the actual number of days in the Interest Accrual Period and the denominator of
which is 30.
"Master Servicer": HomEq Servicing Corporation or any successor master
servicer appointed as herein provided, in its capacity as Master Servicer
hereunder.
"Master Servicer Event of Default": One or more of the events described in
Section 7.01.
"Master Servicer Prepayment Charge Payment Amount": The amounts payable by
the Master Servicer pursuant to Section 2.03(b) in respect of any waived
Prepayment Charges.
"Master Servicer Remittance Date": With respect to any Distribution Date,
1:00 p.m. New York time on the last Business Day preceding the related
Distribution Date.
"Master Servicer Reporting Date": With respect to any Distribution Date,
1:00 p.m. New York time on the 18th day of the calendar month in which such
Distribution Date occurs or, if such 18th day is not a Business Day, the
Business Day immediately succeeding such 18th day.
"Maximum Cap Rate": For any Distribution Date with respect to the Class
A-1 Certificates, a per annum rate equal to the sum of (i) the product of (x)
(a) the weighted average of the Expense Adjusted Net Maximum Mortgage Rates of
the Group I Mortgage Loans, weighted on the basis of the outstanding Stated
Principal Balances of the Group I Mortgage Loans as of the first day of the
month preceding the month in which such Distribution Date occurs (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus (b) the product of (i) the
Premium Rate and (ii) a fraction, the numerator of which is equal to the
Certificate Principal Balance of the Insured Certificates and the denominator of
which is equal to the outstanding Stated Principal Balance of the Group I
Mortgage Loans and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period and (ii) the related Cap Contract Excess. If the
Certificate Principal Balance of the applicable Certificates exceeds the
applicable notional balance for such Distribution Date, the Cap Contract Excess
is to be adjusted by multiplying the applicable Cap Contract Excess by a
fraction, the numerator of which is the applicable notional balance for such
Distribution Date and the denominator of which is the Certificate Principal
Balance of the Class A-1 Certificates immediately prior to such Distribution
Date.
For any Distribution Date with respect to the Group II Certificates, a per
annum rate equal to the sum of (i) the product of (x) the weighted average of
the Expense Adjusted Net
30
Maximum Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of
the outstanding Stated Principal Balances of the Group II Mortgage Loans as of
the first day of the month preceding the month in which such Distribution Date
occurs (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period and (ii)
the related Cap Contract Excess. If the Certificate Principal Balance of the
applicable Certificates exceeds the applicable notional balance for such
Distribution Date, the Cap Contract Excess is to be adjusted by multiplying the
applicable Cap Contract Excess by a fraction, the numerator of which is the
applicable notional balance for such Distribution Date and the denominator of
which is the aggregate Certificate Principal Balance of the Group II
Certificates immediately prior to such Distribution Date.
For any Distribution Date with respect to the Mezzanine Certificates, a
per annum rate equal to the sum of (i) the product of (x) the weighted average,
weighted on the basis of the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group the current Certificate Principal Balance
of the related Class A Certificates, of the weighted average Expense Adjusted
Net Maximum Mortgage Rates of the Group I Mortgage Loans (minus the product of
(i) the Premium Rate and (ii) a fraction, the numerator of which is equal to the
Certificate Principal Balance of the Insured Certificates and the denominator of
which is equal to the outstanding Stated Principal Balance of the Group I
Mortgage Loans) and the Group II Mortgage Loans and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Interest Accrual Period and (ii) the related Cap
Contract Excess. If the Certificate Principal Balance of the applicable
Certificates exceeds the applicable notional balance for such Distribution Date,
the Cap Contract Excess is to be adjusted by multiplying the applicable Cap
Contract Excess by a fraction, the numerator of which is the applicable notional
balance for such Distribution Date and the denominator of which is the aggregate
Certificate Principal Balance of the Mezzanine Certificates immediately prior to
such Distribution Date.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With respect to
any Distribution Date, the excess of (i) accrued interest at the REMIC I
Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest
I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10 for such Distribution Date, with the rate on
each such REMIC I Regular Interest subject to a cap equal to the lesser of (i)
LIBOR plus the related Certificate Margin and (ii) the related Net WAC
Pass-Through Rate; provided, however, that solely for this purpose, calculations
of the REMIC I Remittance Rate and the related caps with respect to each such
REMIC I Regular Interest (other
31
than REMIC I Regular Interest I-LTZZ) shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Interest Accrual Period
and the denominator of which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Mezzanine Certificate": Any of the Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates and Class M-10 Certificates.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.02; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc., or its successor in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien or second lien on a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as held
from time to time as a part of REMIC I, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Seller and
the Depositor, regarding the transfer of the Mortgage Loans by the Seller to or
at the direction of the Depositor, substantially in the form of Exhibit D
annexed hereto.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC I on such date, separately identifying the Group I Mortgage
Loans and the Group II Mortgage Loans, attached hereto as Schedule 1. The
Mortgage Loan Schedule shall set forth the following information with respect to
each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
32
(2) [Reserved];
(3) the state and zip code of the Mortgaged Property;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
(7) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio at
origination;
(8) the Mortgage Rate in effect immediately following the Cut-off
Date;
(9) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(10) the stated maturity date;
(11) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date;
(12) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(13) the original principal amount of the Mortgage Loan;
(14) the Scheduled Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(15) with respect to the Adjustable-Rate Mortgage Loans, the Gross
Margin;
(16) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase, refinance debt consolidation cashout, or refinance debt
consolidation no cashout);
(17) with respect to the Adjustable-Rate Mortgage Loans, the Maximum
Mortgage Rate;
(18) with respect to the Adjustable-Rate Mortgage Loans, the Minimum
Mortgage Rate;
(19) the Mortgage Rate at origination;
(20) with respect to the Adjustable-Rate Mortgage Loans, the
Periodic Rate Cap and the maximum first Adjustment Date Mortgage Rate
adjustment;
(21) a code indicating the documentation program (I.E., Full
Documentation, Limited Documentation or Stated Income);
33
(22) with respect to the Adjustable-Rate Mortgage Loans, the first
Adjustment Date immediately following the Cut-off Date;
(23) the risk grade;
(24) the Value of the Mortgaged Property;
(25) the sale price of the Mortgaged Property, if applicable; and
(26) the FICO score of the primary Mortgagor.
The Mortgage Loan Schedule shall set forth the following information with
respect to the Mortgage Loans by Loan Group and in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current Stated Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Schedule 1 from
time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate (i) with respect to
each Fixed-Rate Mortgage Loan shall remain constant at the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (ii) with respect to the Adjustable-Rate Mortgage Loans, (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such
Adjustable-Rate Mortgage Loan on any Adjustment Date shall never be more than
the lesser of (i) the sum of the Mortgage Rate in effect immediately prior to
the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall never be less than the greater of (i)
the Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
34
"Mortgaged Property": The underlying property identified in the related
Mortgage as securing a Mortgage Loan, including any REO Property, consisting of
an Estate in Real Property improved by a Residential Dwelling (excluding for
purposes of construing the representations or warranties made in the Mortgage
Loan Purchase Agreement, any improvements thereupon not considered by the
appraiser in determining the Value of such Mortgaged Property).
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any Distribution Date, the
sum of (i) any Overcollateralization Reduction Amount for such Distribution Date
and (ii) the excess of (x) the Available Funds for such Distribution Date over
(y) the sum for such Distribution Date of (A) the Senior Interest Distribution
Amount, (B) the Interest Distribution Amounts payable to the Mezzanine
Certificates, (C) the Principal Remittance Amount and (D) any amount paid to the
Certificate Insurer pursuant to Sections 4.01(a)(2) and 4.01(a)(3).
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related REO
Property) as of any date of determination, a per annum rate of interest equal to
the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee
Rate.
"Net WAC Pass-Through Rate": For any Distribution Date with respect to the
Class A-1 Certificates, a per annum rate equal to the product of (x) (a) the
weighted average of the Expense Adjusted Net Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the outstanding Stated Principal
Balances of the Group I Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus (b) the product of (i) the Premium Rate and
(ii) a fraction, the numerator of which is equal to the Certificate Principal
Balance of the Insured Certificates and the denominator of which is equal to the
outstanding Stated Principal Balance of the Group I Mortgage Loans and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of the REMIC I Remittance Rate on REMIC I
Regular Interest I-LT1GRP, weighted on the basis of the Uncertificated Balance
of such REMIC I Regular Interest minus the Premium Rate multiplied by a
fraction, the numerator of which is the Certificate Principal Balance of the
Class A-1 Certificates and the denominator of which is the aggregate Stated
Principal Balance of the Group I Mortgage Loans.
For any Distribution Date with respect to the Group II Certificates, a per
annum rate equal to the product of (x) the weighted average of the Expense
Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on the
basis of the outstanding Stated Principal Balances of the Group II Mortgage
Loans as of the first day of the month preceding the month of such Distribution
Date (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed
35
as the weighted average of the REMIC I Remittance Rate on REMIC I Regular
Interest I-LT2GRP, weighted on the basis of the Uncertificated Balance of such
REMIC I Regular Interest.
For any Distribution Date with respect to the Mezzanine Certificates, a
per annum rate equal to the product of (x) the weighted average (weighted on the
basis of the results of subtracting from the aggregate Stated Principal Balance
of each Loan Group the current Certificate Principal Balance of the related
Class A Certificates) of (i) (a) the weighted average of the Expense Adjusted
Net Mortgage Rates of the Group I Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus (b) the product of (i) the Premium Rate and
(ii) a fraction, the numerator of which is equal to the Certificate Principal
Balance of the Insured Certificates and the denominator of which is equal to the
outstanding Stated Principal Balance of the Group I Mortgage Loans and (ii) the
weighted average of the Expense Adjusted Net Mortgage Rates of the Group II
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (y) a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days elapsed in the related Interest Accrual
Period. For federal income tax purposes, the economic equivalent of such rate
shall be expressed as the weighted average of the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1SUB, subject to a cap and a floor equal to the
Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans and (b) REMIC
I Regular Interest I-LT2SUB, subject to a cap and a floor equal to the Expense
Adjusted Net Mortgage Rates of the Group II Mortgage Loans weighted on the basis
of the Uncertificated Balance of each such REMIC I Regular Interest minus (b)
the product of (i) the Premium Rate and (ii) a fraction, the numerator of which
is equal to the Certificate Principal Balance of the Insured Certificates and
the denominator of which is equal to the outstanding Stated Principal Balance of
the Group I Mortgage Loans.
"Net WAC Rate Carryover Amount": With respect to any Class of Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the excess of (i) the amount of interest such Certificates would have
accrued for such Distribution Date had the applicable Pass-Through Rate been
calculated at the related Formula Rate, over (ii) the amount of interest accrued
on such Certificates at the related Net WAC Pass-Through Rate for such
Distribution Date and (B) the related Net WAC Rate Carryover Amount for the
previous Distribution Date not previously paid, together with interest thereon
at a rate equal to the related Formula Rate applicable for such Class in each
case for the Interest Accrual Period for the current Distribution Date.
"Net WAC Rate Carryover Reserve Account": The Net WAC Rate Carryover
Reserve Account established and maintained pursuant to Section 4.10.
"New Lease": Any lease of REO Property entered into on behalf of REMIC I,
including any lease renewed or extended on behalf of REMIC I, if REMIC I has the
right to renegotiate the terms of such lease.
36
"NIMS Insurer": Any insurer that is guaranteeing certain payments under
notes secured by collateral which includes, among other things, all or a portion
of the Class CE Certificates, the Class P Certificates and/or the Residual
Certificates.
"Nonrecoverable Advance": Any Advance previously made or proposed to be
made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Master Servicer, will not or, in the case of a proposed
Advance, would not be ultimately recoverable from related Late Collections,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
as provided herein.
"Nonrecoverable Servicing Advance": Any Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Servicing Advance, would not be ultimately recoverable from
related Late Collections, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
"Non-United States Person": Any Person other than a United States Person.
"Notional Amount": With respect to the Class CE Interest and any
Distribution Date, the Uncertificated Balances of the REMIC I Regular Interests
(other than REMIC I Regular Interest I-LTP), immediately prior to such
Distribution Date.
"Officers' Certificate": With respect to the Depositor, a certificate
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President or a vice president (however denominated), and by the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries. With
respect to the Master Servicer, any officer who is authorized to act for the
Master Servicer in matters relating to this Agreement, and whose action is
binding upon the Master Servicer, initially including those individuals whose
names appear on the list of authorized officers delivered at the closing.
"Offered Certificate": Any one of the Class A Certificates and the
Mezzanine Certificates (other than the Class M-10 Certificates) issued under
this Agreement.
"One-Month LIBOR": With respect to the Adjustable-Rate Certificates, REMIC
I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest
I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10 and any Interest Accrual Period therefor, the
rate determined by the Trustee on the related Interest Determination Date on the
basis of the offered rate for one-month U.S. dollar deposits, as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date shall be determined on the basis of the offered
rates of the Reference Banks for one-month U.S. dollar deposits, as of 11:00
a.m. (London time) on such Interest Determination Date. In such event, the
Trustee will request the principal London office of each of the Reference Banks
to provide a
37
quotation of its rate. If on such Interest Determination Date, two or more
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards, if necessary, to the nearest whole multiple of 1/16%). If on
such Interest Determination Date, fewer than two Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest Accrual Period
shall be the higher of (i) LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the
foregoing, if, under the priorities described above, LIBOR for an Interest
Determination Date would be based on LIBOR for the previous Interest
Determination Date for the third consecutive Interest Determination Date, the
Trustee shall select, after consultation with the Depositor, the NIMS Insurer
and the Certificate Insurer, an alternative comparable index (over which the
Trustee has no control), used for determining one-month Eurodollar lending rates
that is calculated and published (or otherwise made available) by an independent
party.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor or the Master Servicer
acceptable to the Trustee, if such opinion is delivered to the Trustee and the
Certificate Insurer, if such opinion is delivered to the Certificate Insurer,
except that any opinion of counsel relating to (a) the qualification of any
Trust REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to an amount
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
"Originators": Collectively, Argent Mortgage Company, LLC and Olympus
Mortgage Company.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only
after assuming that 100% of the Principal Remittance Amount on such Distribution
Date has been distributed).
"Overcollateralization Increase Amount": With respect to any Distribution
Date, the lesser of (a) the Overcollateralization Deficiency Amount as of such
Distribution Date and (b) the Net Monthly Excess Cashflow for such Distribution
Date.
"Overcollateralization Reduction Amount": With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Overcollateralized Amount
on such Distribution Date and (b) the Principal Remittance Amount on such
Distribution Date.
"Overcollateralization Target Amount": With respect to any Distribution
Date (i) prior to the Stepdown Date, 3.25% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, (ii) on or after the
Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
6.50% of the aggregate Stated Principal Balance of the Mortgage
38
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced and unscheduled collections of principal received during
the related Prepayment Period) and (y) $9,999,999.96, or (iii) on or after the
Stepdown Date and if a Trigger Event is in effect, the Overcollateralization
Target Amount for the immediately preceding Distribution Date. Notwithstanding
the foregoing, on and after any Distribution Date following the reduction of the
aggregate Certificate Principal Balance of the Class A Certificates and the
Mezzanine Certificates to zero, the Overcollateralization Target Amount shall be
zero.
"Overcollateralized Amount": With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balances of the Mortgage
Loans and REO Properties immediately following such Distribution Date (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period), over (b) the sum of
the aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates as of such Distribution Date
(after giving effect to distributions to be made on such Distribution Date).
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to any Class of Adjustable-Rate
Certificates and any Distribution Date, the lesser of (x) the related Formula
Rate for such Distribution Date and (y) the related Net WAC Pass-Through Rate
for such Distribution Date. For federal income tax purposes, the Pass-Through
Rate for the Adjustable-Rate Certificates will be calculated without respect to
any Cap Contract Excess, which such amounts, if any, shall have been paid in
respect of Net WAC Rate Carryover Amounts and paid outside of any REMIC created
herein.
With respect to the Class CE Interest and any Distribution Date, a rate
per annum equal to the percentage equivalent of a fraction, the numerator of
which is the sum of the amounts calculated pursuant to clauses (A) through (R)
below, and the denominator of which is the aggregate Uncertificated Balance of
REMIC I Regular Interests X-XXXX, X-XXX0, X-XXX0, X-XXX0, X-XXX0, X-XXX0,
I-LTM1, I-LTM2, I-LTM3, X-XXX0, X-XXX0, X-XXX0, X-XXX0, X-XXX0, X-XXX0 and
I-LTM10. For purposes of calculating the Pass-Through Rate for the Class CE
Certificates, the numerator is equal to the sum of the following components:
(A) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTAA
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTAA;
(B) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTA1;
39
(C) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTA2;
(D) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA3
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTA3;
(E) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA4
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTA4;
(F) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA5
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTA5;
(G) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM1;
(H) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM2;
(I) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM3
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM3;
(J) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM4
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM4;
(K) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM5
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM5;
(L) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM6
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM6;
(M) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM7
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM7;
(N) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM8
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM8;
40
(O) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM9
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM9;
(P) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM10
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTM10;
(Q) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTZZ
minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LTZZ; and
(R) 100% of the interest on REMIC I Regular Interest I-LTP.
With respect to the Class CE Certificates, 100% of the interest
distributable to the Class CE Interest, expressed as a per annum rate.
"Percentage Interest": With respect to any Class of Certificates (other
than the Residual Certificates), the undivided percentage ownership in such
Class evidenced by such Certificate, expressed as a percentage, the numerator of
which is the initial Certificate Principal Balance or Notional Amount
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. The Class A Certificates and the Mezzanine
Certificates (other than the Class M-10 Certificates) are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof.
The Class M-10 Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $50,000 and
integral multiples of $1.00 in excess thereof. The Class P Certificates are
issuable only in minimum Percentage Interests corresponding to minimum initial
Certificate Principal Balances of $20 and integral multiples thereof. The Class
CE Certificates are issuable only in minimum Percentage Interests corresponding
to minimum initial Notional Amount of $10,000 and integral multiples of $1.00 in
excess thereof; provided, however, that a single Certificate of such Class of
Certificates may be issued having a Percentage Interest corresponding to the
remainder of the aggregate initial Certificate Principal Balance or Notional
Amount of such Class or to an otherwise authorized denomination for such Class
plus such remainder. With respect to any Residual Certificate, the undivided
percentage ownership in such Class evidenced by such Certificate, as set forth
on the face of such Certificate. The Residual Certificates are issuable in
Percentage Interests of 20% and multiples thereof.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
41
"Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued by the Depositor, the Master Servicer, the NIMS Insurer, the
Trustee or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market funds
managed or advised by the Trustee or an Affiliate thereof, that have been
rated "Aaa" by Moody's, "AAA" by Fitch and "AAAm" by S&P (if rated by the
respective Rating Agency); and
(vii) if previously confirmed in writing to the Trustee and
consented to by the NIMS Insurer and the Certificate Insurer, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a permitted
investment of funds backing securities having ratings equivalent to its
highest initial rating of the Class A Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual Certificate other
than a Disqualified Organization or Non-United States Person.
42
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Xxxxx
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Policy Payment": With respect to any Distribution Date, the amount, if
any, paid under the Certificate Insurance Policy for such Distribution Date.
"Policy Payment Account": The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.11 in the name of the Trustee
for the benefit of the Class A-1 Certificateholders and the Certificate Insurer,
and designated "Xxxxx Fargo Bank, N.A., as Trustee, in trust for the registered
holders of Park Place Securities, Inc., Asset-Backed Pass-Through Certificates,
Series 2004-WHQ1, Class A-1 Certificates."
"Premium Amount": As to any Distribution Date, the product of (x) the
Premium Rate and (y) the Certificate Principal Balance of the Class A-1
Certificates immediately prior to such Distribution Date.
"Premium Rate": The per annum rate at which the "Premium" is determined as
described in the Premium Letter, dated September 7, 2004, among the Certificate
Insurer, the Seller, the Master Servicer, the Trustee and the Depositor (a copy
of which has been provided by the Depositor to the Trustee).
"Prepayment Assumption": As defined in the Prospectus Supplement.
"Prepayment Charge": With respect to any Prepayment Period, any prepayment
premium, fee or charge payable by a Mortgagor in connection with any Principal
Prepayment pursuant to the terms of the related Mortgage Note as from time to
time held as a part of the Trust Fund, the Prepayment Charges so held being
identified in the Prepayment Charge Schedule (other than any Master Servicer
Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges included in the Trust Fund on such date, attached hereto as Schedule 2
(including the prepayment charge summary attached thereto). The Prepayment
Charge Schedule shall set forth the following information with respect to each
Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on the
related Mortgage Loan;
43
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related Mortgage
Loan; and
(vi) the Stated Principal Balance of the related Mortgage Loan as of
the Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to time by the
Master Servicer in accordance with the provisions of this Agreement and a copy
of such amended Prepayment Charge Schedule shall be furnished by the Master
Servicer to the Trustee and the NIMS Insurer.
"Prepayment Interest Excess": With respect to any Distribution 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 Distribution Date occurs and the 15th day of
the calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. To the extent not otherwise retained by the Master Servicer, the
Master Servicer may withdraw such Prepayment Interest Excess from the Collection
Account in accordance with Section 3.05(a)(iv).
"Prepayment Interest Shortfall": With respect to any Distribution 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 related Prepayment Period and the last day of the calendar month
preceding the month in which such Distribution Date occurs, an amount equal to
interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the day after the last date on
which interest is collected from the related Mortgagor and ending on the last
day of the calendar month preceding such Distribution Date. The obligations of
the Master Servicer in respect of any Prepayment Interest Shortfall are set
forth in Section 4.03(e). The Certificate Insurance Policy will not cover any
such Prepayment Interest Shortfalls.
"Prepayment Period": With respect to any Distribution Date and any
Principal Prepayment in full, the period commencing on the 16th day in the
calendar month preceding the calendar month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, commencing on September
1, 2004) and ending on the 15th day in the calendar month in which such
Distribution Date occurs. With respect to any Distribution Date and any
Principal Prepayment in part, the calendar month preceding the month in which
such Distribution Date occurs.
"Principal Prepayment": Any payment of principal made by the Mortgagor on
a Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
44
"Principal Remittance Amount": With respect to any Distribution Date, the
sum of the (i) the Group I Principal Remittance Amount and (ii) the Group II
Principal Remittance Amount.
"Prospectus Supplement": The Prospectus Supplement, dated September 2,
2004, relating to the public offering of the Offered Certificates.
"PTCE": A Prohibited Transaction Class Exemption.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03, Section 3.16(a) or
Section 9.01, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.01,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.05(a)(v) and 3.16(a) and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer, the NIMS
Insurer, the Certificate Insurer or the Trustee in respect of the breach or
defect giving rise to the purchase obligation, as well as any costs and damages
incurred by the Trust Fund in connection with any violation by such loan of any
predatory or abusive lending law.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding Stated Principal Balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Scheduled Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less
45
than (and not more than one percentage point in excess of) the Mortgage Rate of
the Deleted Mortgage Loan, (iii) with respect to any Adjustable-Rate Mortgage
Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on
the Deleted Mortgage Loan, (iv) with respect to any Adjustable-Rate Mortgage
Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of
the Deleted Mortgage Loan, (v) with respect to Adjustable-Rate Mortgage Loan,
have a Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi)
with respect to any Adjustable-Rate Mortgage Loan, have a next Adjustment Date
not more than two months later than the next Adjustment Date on the Deleted
Mortgage Loan, (vii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (viii) have the
same Due Date as the Due Date on the Deleted Mortgage Loan, (ix) have a
Loan-to-Value Ratio or Combined Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Deleted Mortgage Loan, (xi)
have been underwritten or reunderwritten by the Seller in accordance with the
same underwriting criteria and guidelines as the Deleted Mortgage Loan, (xii)
have a Prepayment Charge provision at least equal to the Prepayment Charge
provision of the Deleted Mortgage Loan and (xiii) conform to each representation
and warranty set forth in Section 6 of the Mortgage Loan Purchase Agreement
applicable to the Deleted Mortgage Loan. In the event that one or more mortgage
loans are substituted for one or more Deleted Mortgage Loans, the amounts
described in clause (i) hereof shall be determined on the basis of aggregate
Stated Principal Balances, the Mortgage Rates described in clause (ii) hereof
shall be determined on the basis of weighted average Mortgage Rates, the terms
described in clause (vii) hereof shall be determined on the basis of weighted
average remaining terms to maturity, the Loan-to-Value Ratios described in
clause (ix) hereof shall be satisfied as to each such mortgage loan, the risk
gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xiii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.
"Rating Agency" or "Rating Agencies": Xxxxx'x, Fitch and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee, the Certificate Insurer and the
Master Servicer.
"Realized Loss": With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid Stated Principal Balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Master Servicer with respect to such Mortgage Loan
pursuant to Section 3.05(a)(ii). If the Master Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount
46
of Realized Losses with respect to that Mortgage Loan shall be reduced to the
extent such recoveries are applied to principal distributions on any
Distribution Date.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus
(v) the aggregate of all Advances made by the Master Servicer in respect of such
REO Property or the related Mortgage Loan for which the Master Servicer has been
or, in connection with such Final Recovery Determination, shall be reimbursed
pursuant to Section 3.13 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, shall be transferred to the Distribution
Account pursuant to Section 3.13.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the Stated Principal Balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
Stated Principal Balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to each Distribution Date and any
Adjustable-Rate Certificate that is a Book-Entry Certificate, the Business Day
immediately preceding such Distribution Date. With respect to each Distribution
Date and any other Class of Certificates, including any Definitive Certificates,
the last Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Reference Banks": Xxxxx Fargo, Xxxxxxx'x Bank PLC, The Tokyo Mitsubishi
Bank and National Westminster Bank PLC and their successors in interest;
provided, however, that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Trustee (after
consultation with the Depositor, the NIMS Insurer and the
47
Certificate Insurer) which are engaged in transactions in Eurodollar deposits in
the international Eurocurrency market (i) with an established place of business
in London, (ii) not controlling, under the control of or under common control
with the Depositor or any Affiliate thereof and (iii) which have been designated
as such by the Trustee.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine Certificate,
Class P Certificate or Class CE Certificate.
"Regular Interest": A "regular interest" in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
"Reimbursement Amount": As to any Distribution Date, the sum of (i) all
Policy Payments previously received by the Trustee and all Avoided Payments
previously paid by the Certificate Insurer and in each case not previously
repaid to the Certificate Insurer pursuant to Section 4.11, plus (ii) interest
accrued on each such Policy Payment and Avoided Payment not previously repaid
calculated at the Late Payment Rate (as such term is defined in the Insurance
Agreement), from the date the Trustee received the related Policy Payment or the
date the related Avoided Payment was paid by the Certificate Insurer, as
applicable, through the day prior to such Distribution Date, plus (iii) all
other amounts due and payable to the Certificate Insurer under the Insurance
Agreement, as certified to the Trustee by the Certificate Insurer plus (ii)
interest on such amounts at the Late Payment Rate.
"Relief Act": The Servicemembers Civil Relief Act or any applicable state
law providing similar relief.
"Relief Act Interest Shortfall": With respect to any Distribution Date and
any Mortgage Loan, any reduction in the amount of interest collectible on such
Mortgage Loan for the most recently ended calendar month as a result of the
application of the Relief Act. The Certificate Insurance Policy will not cover
any such Relief Act Interest Shortfalls.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of: (i) such Mortgage Loans and
Prepayment Charges as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto, and together with all collections
thereon and proceeds thereof, (ii) any REO Property, together with all
collections thereon and proceeds thereof, (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) to the extent conveyed pursuant to Section
2.01 and (v) the Collection Account (other
48
than any amounts representing any Master Servicer Prepayment Charge Payment
Amounts), the Distribution Account (other than any amounts representing any
Master Servicer Prepayment Charge Payment Amounts) and any REO Account and such
assets that are deposited therein from time to time and any investments thereof,
together with any and all income, proceeds and payments with respect thereto.
Notwithstanding the foregoing, however, REMIC I specifically excludes any Master
Servicer Prepayment Charge Payment Amounts, the Net WAC Rate Carryover Reserve
Account, the Cap Contracts, all payments and other collections of principal and
interest due on the Mortgage Loans on or before the Cut-off Date and all
Prepayment Charges payable in connection with Principal Prepayments made before
the Cut-off Date.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Interest Accrual Periods for the indicated
Regular Interests for such Distribution Date) equal to (a) the product of (i)
50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then outstanding and (ii) the REMIC I Remittance Rate for REMIC I
Regular Interest I-LTAA minus the Marker Rate, divided by (b) 12.
"REMIC I Marker Allocation Percentage": 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest
I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTZZ and REMIC I Regular Interest I-LTP.
"REMIC I Overcollateralization Target Amount": 0.50% of the
Overcollateralization Target Amount.
"REMIC I Overcollateralized Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Balance of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular
Interest I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9 and REMIC I Regular Interest I-LTM10 in each case as of such date of
determination.
"REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) 50% of the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) one minus a fraction, the numerator of which is two times
the aggregate Uncertificated Balance of REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular
Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest
49
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9 and REMIC I Regular Interest I-LTM10 and the
denominator of which is the aggregate Uncertificated Balance of REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC
I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTM10 and REMIC I Regular Interest I-LTZZ.
"REMIC I Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto. The following is a
list of each of the REMIC I Regular Interests: REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular
Interest I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular Interest I-LTZZ, REMIC
I Regular Interest I-LTXX, REMIC I Regular Interest I-LTP, REMIC I Regular
Interest I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest
I-LT2SUB and REMIC I Regular Interest II-LT2GRP.
"REMIC I Remittance Rate": With respect to REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC
I Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular
Interest I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular Interest I-LTZZ, REMIC
I Regular Interest I-LTP, REMIC I Regular Interest I-LT1SUB, REMIC I Regular
Interest I-LT2SUB and REMIC I Regular Interest I-LTXX, the weighted average of
the Expense Adjusted Net Mortgage Rates of the Mortgage Loans. With respect to
REMIC I Regular Interest I-LT1GRP, the weighted average of the Expense Adjusted
Net Mortgage Rates of the Group I Mortgage Loans and with respect REMIC I
Regular Interest I-LT2GRP, the weighted average of the Expense Adjusted Net
Mortgage Rates of the Group II Mortgage Loans.
"REMIC I Sub WAC Allocation Percentage": 50% of any amount payable from or
loss attributable to the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular
Interest I-LT2SUB, REMIC I Regular Interest I-LT2GRP and REMIC I Regular
Interest I-LTXX.
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"REMIC I Subordinated Balance Ratio": The ratio among the Uncertificated
Balances of each REMIC I Regular Interest ending with the designation "SUB,"
equal to the ratio among, with respect to each such REMIC I Regular Interest,
the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans
in the related Loan Group over (y) the current Certificate Principal Balance of
Class A Certificates in the related Loan Group.
"REMIC II": The segregated pool of assets consisting of all of the REMIC I
Regular Interests conveyed in trust to the Trustee, for the benefit of the REMIC
I Certificateholders pursuant to Section 2.09, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
"REMIC II Certificate": Any Regular Certificate (other than a Class CE
Certificate or Class P Certificate) or Class R Certificate.
"REMIC II Regular Interest": Any Class A Certificate, Mezzanine
Certificate, the Class CE Interest or Class P Interest.
"REMIC III": The segregated pool of assets consisting of the Class CE
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificate (in respect of the Class
R-III Interest), pursuant to Article II hereunder, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
"REMIC IV": The segregated pool of assets consisting of all of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificate (in respect of the Class R-IV
Interest), pursuant to Article II hereunder, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of the Code, and related provisions, and proposed, temporary and final
regulations and published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time.
"REMIC Regular Interest": Any REMIC I Regular Interest.
"REMIC Remittance Rate": The REMIC I Remittance Rate.
"Remittance Report": A report in form and substance that is acceptable to
the Trustee and the NIMS Insurer in electronic format prepared by the Master
Servicer pursuant to Section 4.03 with such additions, deletions and
modifications as agreed to by the Trustee and the Master Servicer.
"Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code as being included in
the term "rents from real property."
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"REO Account": Each of the accounts maintained by the Master Servicer in
respect of an REO Property pursuant to Section 3.13, which account may be the
Collection Account subject to Section 3.13.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.13(c) in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Master
Servicer pursuant to Section 3.13(d) for unpaid Servicing Fees in respect of the
related Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be either (i) the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of 1/16%) of
the one-month U.S. dollar lending rates which New York City banks selected by
the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by the
Trustee are quoting on such Interest Determination Date to leading European
banks.
"Residential Dwelling": Any one of the following: (i) an attached or
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project or (iv) a detached or
attached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (unless such mobile or manufactured
home is defined as real property under applicable state law).
52
"Residual Certificate": Any one of the Class R Certificates or the Class
R-X Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any officer
assigned to and working in the Corporate Trust Office or in a similar group and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Scheduled Principal Balance": With respect to any Mortgage Loan: (a) as
of the Cut-off Date, the outstanding Stated Principal Balance of such Mortgage
Loan as of such date, net of the principal portion of all unpaid Monthly
Payments, if any, due on or before such date; (b) as of any Due Date subsequent
to the Cut-off Date up to and including the Due Date in the calendar month in
which a Liquidation Event occurs with respect to such Mortgage Loan, the
Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date, minus
the sum of (i) the principal portion of each Monthly Payment due on or before
such Due Date but subsequent to the Cut-off Date, whether or not received, (ii)
all Principal Prepayments received before such Due Date but after the Cut-off
Date, (iii) the principal portion of all Liquidation Proceeds and Insurance
Proceeds received before such Due Date but after the Cut-off Date, net of any
portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of such REO Property for all previously ended calendar months; and (b)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such REO Property, zero.
"Seller": Ameriquest Mortgage Company, or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Group I Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the excess of (x) the
Certificate Principal Balance of the Class A-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 57.80% and
(ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and
53
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus $7,207,354.21.
"Senior Group II Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the excess of (x) the
aggregate Certificate Principal Balance of the Group II Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
57.80% and (ii) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $2,792,645.75.
"Senior Interest Distribution Amount": With respect to any Distribution
Date, an amount equal to the sum of (i) the Interest Distribution Amount for
such Distribution Date for the Class A Certificates and (ii) the Interest Carry
Forward Amount, if any, for the Class A Certificates.
"Servicing Advances": The reasonable "out-of-pocket" costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Master
Servicer in connection with a default, delinquency or other unanticipated event
by the Master Servicer in the performance of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, in respect of a particular Mortgage Loan,
(iii) the management (including reasonable fees in connection therewith) and
liquidation of any REO Property and (iv) the performance of its obligations
under Section 3.01, Section 3.04(d), Section 3.08, Section 3.12 and Section
3.13. Servicing Advances also include any reasonable "out-of-pocket" costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Master 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 recovered from the
related Mortgagor or otherwise payable under this Agreement. The Master Servicer
shall not be required to make any Nonrecoverable Servicing Advance in respect of
a Mortgage Loan or REO Property.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.
54
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any employee of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans, whose
name and specimen signature appear on a list of Servicing Officers furnished by
the Master Servicer to the Trustee, the Certificate Insurer and the Depositor on
the Closing Date, as such list may from time to time be amended.
"Servicing Standard": The standards set forth in the first paragraph of
Section 3.01.
"Single Certificate": With respect to any Class of Certificates (other
than the Class P Certificates and the Residual Certificates), a hypothetical
Certificate of such Class evidencing a Percentage Interest for such Class
corresponding to an initial Certificate Principal Balance or Notional Amount of
$1,000. With respect to the Class P Certificates and the Residual Certificates,
a hypothetical Certificate of such Class evidencing a 20% Percentage Interest in
such Class.
"S&P": Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or its successor in interest.
"Startup Day": With respect to each Trust REMIC, the day designated as
such pursuant to Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as of
any date of determination up to but not including the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, the outstanding principal balance of such Mortgage Loan as
of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of
(i) the principal portion of each Monthly Payment due on a Due Date subsequent
to the Cut-off Date, to the extent received from the Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on or before such
date of determination, (ii) all Principal Prepayments received after the Cut-off
Date, to the extent distributed pursuant to Section 4.01 on or before such date
of determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied
by the Master Servicer as recoveries of principal in accordance with the
provisions of Section 3.12, to the extent distributed pursuant to Section 4.01
on or before such date of determination and (iv) any Realized Loss incurred with
respect thereto as a result of a Deficient Valuation made during or prior to the
Prepayment Period for the most recent Distribution Date coinciding with or
preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer
55
and distributed pursuant to Section 4.01 on or before such date of
determination, and (ii) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the first Distribution Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (a) the Distribution
Date occurring in October 2007 and (b) the first Distribution Date on which the
Credit Enhancement Percentage for the Class A Certificates (calculated for this
purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to any distribution of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount to the
Certificates then entitled to distributions of principal on such Distribution
Date) is equal to or greater than 42.20%.
"Subsequent Recoveries": As of any Distribution Date, unanticipated
amounts received by the Master Servicer (net of any related expenses permitted
to be reimbursed pursuant to Section 3.05) specifically related to a Mortgage
Loan that was the subject of a liquidation or an REO Disposition prior to the
related Prepayment Period that resulted in a Realized Loss.
"Sub-Servicer": Any Person with which the Master Servicer has entered into
a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 6.06.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 6.11 and is otherwise acceptable to
the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 6.06.
"Substitution Shortfall Amount": As defined in Section 2.03(d).
"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of each REMIC in the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on Moneyline
Telerate (or such other page as may replace page 3750 on that report for the
purpose of displaying London interbank offered rates of major banks).
"Termination Price": As defined in Section 9.01.
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"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation,
or other form of assignment of any Ownership Interest in a Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage for the Mortgage Loans exceeds the
applicable percentages of the Credit Enhancement Percentage for the prior
Distribution Date as set forth below for the most senior Class of Class A
Certificates and Mezzanine Certificates then outstanding:
CLASS PERCENTAGE
----------------------- ----------
Class A Certificates 37.90%
Class M-1 Certificates 46.40%
Class M-2 Certificates 56.15%
Class M-3 Certificates 65.30%
Class M-4 Certificates 76.20%
Class M-5 Certificates 88.90%
Class M-6 Certificates 106.65%
Class M-7 Certificates 128.00%
Class M-8 Certificates 152.40%
Class M-9 Certificates 188.25%
Class M-10 Certificates 246.15%
or
(b) the Cumulative Loss Percentage exceeds the applicable percentages set
forth below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
----------------------------------- ----------
October 2007 through September 2008 3.25%
October 2008 through September 2009 5.25%
October 2009 through September 2010 6.75%
October 2010 and thereafter 7.50%
"Trust Fund": Collectively, all of the assets of each Trust REMIC, Master
Servicer Prepayment Charge Payment Amounts and the Net WAC Rate Carryover
Reserve Account (including any payments made under the Cap Contracts deposited
therein).
"Trust REMIC": Each of REMIC I, REMIC II, REMIC III and REMIC IV.
57
"Trustee": Xxxxx Fargo Bank, N.A., a national banking association, or its
successor in interest, or any successor Trustee appointed as herein provided.
"Trustee Fee Rate": As defined in Section 8.08.
"Uncertificated Balance": The amount of any REMIC Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC Regular Interest shall equal the amount set
forth in the Preliminary Statement hereto as its initial uncertificated balance.
On each Distribution Date, the Uncertificated Balance of each REMIC Regular
Interest shall be reduced by all distributions of principal made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.01 and, if and
to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.04. The
Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be increased by
interest deferrals as provided in Section 4.01(a)(1). The Uncertificated Balance
of each REMIC I Regular Interest shall never be less than zero. With respect to
the Class CE Interest as of any date of determination, an amount equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balance of
the REMIC I Regular Interests over (B) the then aggregate Certificate Principal
Balance of the Class A Certificates, Mezzanine Certificates and the Class P
Certificates then outstanding.
"Uncertificated Interest": With respect to any REMIC I Regular Interest
for any Distribution Date, one month's interest at the REMIC I Remittance Rate
applicable to such REMIC I Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of any REMIC I Regular Interest shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest, shall be reduced by an amount equal to the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 4.03(e) and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any allocated, in each
case, to such REMIC I Regular Interest pursuant to Section 1.02. In addition,
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest shall be reduced by Realized Losses, if any, allocated to
such REMIC I Regular Interest pursuant to Section 1.02 and Section 4.04.
"Underwriters": UBS Securities LLC, Deutsche Bank Securities Inc. and
JPMorgan Securities Inc.
"Underwriters' Exemption": As defined in the Prospectus Supplement.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.08.
"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations);
provided that, solely for purposes of the restrictions on the transfer of
58
Residual Certificates, no partnership or other entity treated as a partnership
for United States federal income tax purposes shall be treated as a United
States Person unless all persons that own an interest in such partnership either
directly or through any entity that is not a corporation for United States
federal income tax purposes are required by the applicable operative agreement
to be United States Persons, or an estate whose income is subject to United
States federal income tax regardless of its source, or a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan,
provided, however, in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely upon the value determined by an appraisal
made for the originator of such Refinanced Mortgage Loan at the time of
origination of such Refinanced Mortgage Loan by an appraiser who met the minimum
requirements of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 or, subject to the applicable Originator's underwriting guidelines, an
insured automated valuation model.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights shall be allocated among the Holders of
the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights shall be
allocated to the Holders of the Class P Certificates and 1% of all Voting Rights
shall be allocated among the Holders of the Residual Certificates. The Voting
Rights allocated to each Class of Certificate shall be allocated among Holders
of each such Class in accordance with their respective Percentage Interests as
of the most recent Record Date. Notwithstanding any of the foregoing, unless a
Certificate Insurer Default is continuing, on any date on which any Insured
Certificates are outstanding, or any amounts are owed to the Certificate Insurer
under the Insurance Agreement or this Agreement, the Certificate Insurer will
have all Voting Rights of the Insured Certificates. So long as the Certificate
Insurer has the Voting Rights pursuant to the preceding sentence, the reference
to holders of the Insured Certificates shall be deemed to refer to the
Certificate Insurer.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate Interest and
the amount of the Interest Distribution Amount for the Class A Certificates, the
Mezzanine
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Certificates and the Class CE Certificates for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 4.03(e)) and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to reduce the interest accrued on
the Class CE Certificates to the extent of one month's interest at the
applicable Pass-Through Rate on the Notional Amount of such Certificate and
thereafter, among the Class A Certificates and the Mezzanine Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance of each such Certificate.
For purposes of calculating the amount of Uncertificated Interest for the
REMIC I Regular Interests for any Distribution Date:
(A) The REMIC I Marker Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 4.03(e)) and the REMIC
I Marker Allocation Percentage of any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall
be allocated among REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest
I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10
and REMIC I Regular Interest I-LTZZ, PRO RATA, based on, and to the extent
of, one month's interest at the then applicable respective REMIC I
Remittance Rate on the respective Uncertificated Balance of each such
REMIC I Regular Interest; and
(B) The REMIC I Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 4.03(e)) and the REMIC
I Sub WAC Allocation Percentage of any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall
be allocated to Uncertificated Interest payable to REMIC I Regular
Interest I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular
Interest I-LT2SUB, REMIC I Regular Interest I-LT2GRP and REMIC I Regular
Interest I-LTXX, PRO RATA, based on, and to the extent of, one month's
interest at the then applicable respective REMIC I Remittance Rate on the
respective Uncertificated Balance of each such REMIC I Regular Interest.
SECTION 1.03. Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this Agreement shall
exist so long as (i) the NIMS Insurer has undertaken to guarantee certain
payments of notes issued pursuant to an Indenture and (ii) any series of notes
issued pursuant to one or more Indentures remain outstanding or the NIMS Insurer
is owed amounts in respect of its guarantee of payment on such notes; provided,
however, the NIMS Insurer shall not have any rights hereunder (except pursuant
to Section 11.01 in the case of clause (ii) below) during the period of time, if
any, that
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(i) the NIMS Insurer has not undertaken to guarantee certain payments of notes
issued pursuant to the Indenture or (ii) any default has occurred and is
continuing under the insurance policy issued by the NIMS Insurer with respect to
such notes.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee without
recourse for the benefit of the Certificateholders and the Certificate Insurer
all the right, title and interest of the Depositor, including any security
interest therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement, all other assets included or to be included in
REMIC I (including any payments made under the Cap Contracts). Such assignment
includes all interest and principal received by the Depositor or the Master
Servicer on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement and the Trustee, on behalf of the
Certificateholders and the Certificate Insurer, acknowledges receipt of the
same.
In connection with such transfer and assignment, the Depositor does hereby
deliver to, and deposit with the Custodian on behalf of the Trustee the
following documents or instruments with respect to each Mortgage Loan so
transferred and assigned the following documents or instruments (a "Mortgage
File"):
(i) the original Mortgage Note, endorsed in blank, without recourse,
or in the following form: "Pay to the order of Xxxxx Fargo Bank, N.A., as
Trustee under the applicable agreement, without recourse," with all prior
and intervening endorsements showing a complete chain of endorsement from
the originator to the Person so endorsing to the Trustee, or with respect
to any lost Mortgage Note, an original Lost Note Affidavit; provided
however, that such substitutions of Lost Note Affidavits for original
Mortgage Notes may occur only with respect to Mortgage Loans, the
aggregate Cut-off Date Principal Balance of which is less than or equal to
2.00% of the Pool Balance as of the Cut-off Date;
(ii) the original Mortgage, with evidence of recording thereon, and
a copy, certified by the appropriate recording office, of the recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, with evidence of recording thereon;
(iii) an original Assignment of the Mortgage assigned in blank,
without recourse;
(iv) the original recorded intervening Assignment or Assignments of
the Mortgage showing a complete chain of assignment from the originator to
the Person assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (iii) or the original unrecorded intervening
Assignments;
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(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original lenders's title insurance policy or an attorney's
opinion of title or similar guarantee of title acceptable to mortgage
lenders generally in the jurisdiction where the Mortgaged Property is
located, together with all endorsements or riders which were issued with
or subsequent to the issuance of such policy, or in the event such
original title policy is unavailable, a written commitment or uniform
binder or preliminary report of title issued by the title insurance or
escrow company.
If any of the documents referred to in Sections 2.01(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee, or to the appropriate Custodian on
behalf of the Trustee, of a copy of each such document certified by the
applicable Originator in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the applicable Originator, delivery to the Trustee, or to the appropriate
Custodian on behalf of the Trustee, promptly upon receipt thereof of either the
original or a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original. If the original lender's
title insurance policy was not delivered pursuant to Section 2.01(vi) above, the
Depositor shall deliver or cause to be delivered to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, promptly after receipt thereof,
the original lender's title insurance policy. The Depositor shall deliver or
cause to be delivered to the Trustee, or to the appropriate Custodian on behalf
of the Trustee, promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
The Seller shall promptly (and in no event later than thirty (30) Business
Days, subject to extension upon a mutual agreement between the Seller and the
Trustee), following the later of (i) the Closing Date, (ii) the date on which
the Seller receives the Assignment from the Custodian and (iii) the date of
receipt by the Seller of the recording information for a Mortgage) submit or
cause to be submitted for recording, at no expense to the Trust Fund or the
Trustee, in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(iii) and (iv) above and shall execute
each original Assignment referred to in Section 2.01(iii) above in the following
form: "Xxxxx Fargo Bank, N.A., as Trustee under the applicable agreement." In
the event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Seller) shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments shall not
be required to be submitted for recording (except with respect to any Mortgage
Loan located in Maryland) unless such failure to record would result in a
withdrawal or a downgrading by any Rating Agency of
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the rating on any Class of Certificates (in the case of the Insured
Certificates, without regard to the Certificate Insurance Policy); provided
further, however, each Assignment of Mortgage shall be submitted for recording
by the Seller (at the direction of the Master Servicer) in the manner described
above, at no expense to the Trust Fund or the Trustee, upon the earliest to
occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, the Certificate Insurer or the NIMS Insurer,
(ii) [reserved], (iii) the occurrence of a bankruptcy or insolvency relating to
the Seller, (iv) the occurrence of a servicing transfer as described in Section
7.02 hereof and (v) with respect to any one Assignment or Mortgage, the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage. Notwithstanding the foregoing, if the Seller is
unable to pay the cost of recording the Assignments, such expense shall be paid
by the Trustee and shall be reimbursable to the Trustee as an Extraordinary
Trust Fund Expense.
All original documents relating to the Mortgage Loans that are not
delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, are and shall be held by or on behalf of the Seller, the Depositor or
the Master Servicer, as the case may be, in trust for the benefit of the Trustee
on behalf of the Certificateholders and the Certificate Insurer. In the event
that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee, or to the appropriate Custodian on behalf of the
Trustee. Any such original document delivered to or held by the Depositor that
is not required pursuant to the terms of this Section to be a part of a Mortgage
File, shall be delivered promptly to the Master Servicer.
The parties hereto understand and agree that it is not intended that any
mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined by HOEPA or any other applicable predatory or abusive lending laws.
SECTION 2.02. Acceptance of REMIC I by the Trustee.
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trustee
acknowledges receipt (or, with respect to Mortgage Loans subject to a Custodial
Agreement, receipt by the respective Custodian as the duly appointed agent of
the Trustee) of the documents referred to in Section 2.01 (other than such
documents described in Section 2.01(v)) above and all interests and all other
assets included in the definition of "REMIC I" under clauses (i), (iii), (iv)
and (v) (to the extent of amounts deposited into the Distribution Account) and
declares that it, or such Custodian as its agent, holds and shall hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or shall hold all such assets and such other assets included
in the definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders and the Certificate Insurer.
On or prior to the Closing Date, the Trustee agrees, for the benefit of
the Certificateholders and the Certificate Insurer, to execute and deliver (or
cause the Custodian to execute and deliver) to the Depositor, the Master
Servicer, the Certificate Insurer and the NIMS Insurer an acknowledgment of
receipt of the Mortgage Note (with any exceptions noted), substantially in the
form attached as Exhibit C-3 hereto.
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The Trustee agrees, for the benefit of the Certificateholders and the
Certificate Insurer, to review (or cause a Custodian on its behalf to review)
each Mortgage Note within 45 days of the Closing Date and to certify in
substantially the form attached hereto as Exhibit C-1 (or cause the Custodian to
certify in the form of the Initial Certification attached to the Custodial
Agreement) that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being covered by such
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(v)) required to be delivered to it
pursuant to this Agreement are in its possession, (ii) such documents have been
reviewed by it or such Custodian and are not mutilated, torn or defaced unless
initialed by the related borrower and relate to such Mortgage Loan, (iii) based
on its or the Custodian's examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(1) through (3), (6), (9), (10), (13), (15) and (19) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee or such Custodian was under no duty or obligation (i) to inspect, review
or examine any such documents, instruments, certificates or other papers to
determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to determine whether
any Mortgage File should include any of the documents specified in clause (v) of
Section 2.01.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver to the Depositor, the Master Servicer, the Certificate Insurer and the
NIMS Insurer a final certification in the form annexed hereto as Exhibit C-2 (or
shall cause the Custodian to deliver to the Trustee, the Depositor, the Master
Servicer, the Certificate Insurer and the NIMS Insurer a final certification in
the form attached to the Custodial Agreement) evidencing the completeness of the
Mortgage Files, with any applicable exceptions noted thereon, with respect to
all of the Mortgage Loans. Upon the request of the Master Servicer or the
Certificate Insurer, any exception report related to the final certification
shall be provided in an electronic computer readable format as mutually agreed
upon by the Master Servicer and the Trustee (or the Custodian on behalf of the
Trustee).
If in the process of reviewing the Mortgage Files and making or preparing,
as the case may be, the certifications referred to above, the Trustee or any
Custodian finds any document or documents constituting a part of a Mortgage File
to be missing, mutilated, torn or defaced or does not conform to the
requirements identified above, at the conclusion of its review the Trustee (or
the Custodian on behalf of the Trustee) shall so notify the Depositor, the NIMS
Insurer, the Certificate Insurer and the Master Servicer. In addition, upon the
discovery by the Depositor, the NIMS Insurer, the Master Servicer, the
Certificate Insurer or the Trustee of a breach of any of the representations and
warranties made by the Seller in the Mortgage Loan Purchase Agreement in respect
of any Mortgage Loan which materially adversely affects such Mortgage Loan or
the interests of the related Certificateholders or the Certificate Insurer in
such Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties and the Certificate Insurer.
The Trustee (or the Custodian on behalf of the Trustee) shall, at the
written request and expense of any Certificateholder, any Certificate Owner or
the Certificate Insurer,
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provide a written report to such Certificateholder, such Certificate Owner or
the Certificate Insurer, of all Mortgage Files released to the Master Servicer
for servicing purposes.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Seller
or the Depositor; Payment of Prepayment Charge Payment
Amounts.
(a) Upon discovery or receipt of notice (including notice under Section
2.02) of any materially defective document in, or that a document is missing
from, the Mortgage File or of the breach by the Seller of any representation,
warranty or covenant under the Mortgage Loan Purchase Agreement in respect of
any Mortgage Loan which materially adversely affects the value of such Mortgage
Loan or the interest therein of the Certificateholders or the Certificate
Insurer, the Trustee shall promptly notify the Seller, the NIMS Insurer, the
Certificate Insurer and the Master Servicer of such defect, missing document or
breach and request that the Seller deliver such missing document or cure such
defect or breach within 90 days from the date the Seller had knowledge or was
notified of such missing document, defect or breach, and if the Seller does not
deliver such missing document or cure such defect or breach in all material
respects during such period the Trustee shall enforce the obligations of the
Seller under the Mortgage Loan Purchase Agreement to repurchase such Mortgage
Loan from REMIC I at the Purchase Price within 90 days after the date on which
the Seller was notified (subject to Section 2.03(d)) of such missing document,
defect or breach, if and to the extent that the Seller is obligated to do so
under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection Account, and the
Trustee, upon receipt of written certification from the Master Servicer of such
deposit, shall release to the Seller the related Mortgage File and execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall furnish to it and as shall be necessary to vest in
the Seller any Mortgage Loan released pursuant hereto, and the Trustee shall not
have any further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be
removed from REMIC I (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(c). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Trustee on behalf of the Certificateholders.
(b) (i) Promptly upon the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.05, which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.
(ii) Notwithstanding the provisions of Section 2.03(b)(i) above, on the
later of (x) the Master Servicer Remittance Date next following the earlier of
discovery by the Master Servicer or receipt of notice by the Master Servicer of
the breach of the covenant made by the
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Master Servicer in Section 2.05(viii), which breach materially and adversely
affects the interests of the Holders of the Class P Certificates to any
Prepayment Charge and (y) the Master Servicer Remittance Date next following the
Prepayment Period relating to such a breach, the Master Servicer shall deposit
into the Collection Account, as a Master Servicer Prepayment Charge Payment
Amount, the amount of the waived Prepayment Charge.
(c) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a), in the case of the Seller, or
Section 2.03(b), in the case of the Depositor, must be effected prior to the
date which is two years after the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which the Seller or the Depositor
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller or the Depositor, as the case may be, delivering
to the Trustee (or the Custodian on behalf of the Trustee), for such Qualified
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the
Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Trustee (or the Custodian on behalf of the Trustee) shall acknowledge receipt
for such Qualified Substitute Mortgage Loan or Loans and, within ten Business
Days thereafter, review such documents as specified in Section 2.02 and deliver
to the Depositor, the NIMS Insurer, the Certificate Insurer, the Trustee and the
Master Servicer, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit C-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee (or the Custodian on behalf of the Trustee) shall
deliver to the Depositor, the NIMS Insurer, the Certificate Insurer and the
Master Servicer a certification substantially in the form of Exhibit C-2 hereto
with respect to such Qualified Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and shall be retained by the Depositor or the Seller, as the case may
be. For the month of substitution, distributions to Certificateholders shall
reflect the Monthly Payment due on such Deleted Mortgage Loan on or before the
Due Date in the month of substitution, and the Depositor or the Seller, as the
case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders, the Master Servicer,
the NIMS Insurer and the Certificate Insurer that such substitution has taken
place, shall amend the Mortgage Loan Schedule and, if applicable, the Prepayment
Charge Schedule, to reflect the removal of such Deleted Mortgage Loan from the
terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee, the Master Servicer, the Certificate Insurer and the
NIMS Insurer. Upon such substitution, such Qualified Substitute Mortgage Loan or
Loans shall constitute part of the Mortgage Pool and shall be subject in all
respects to the terms of this Agreement and, in the case of a substitution
effected by the Seller, the Mortgage Loan Purchase Agreement, including all
applicable representations and warranties thereof.
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For any month in which the Depositor or the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer shall determine the amount (the "Substitution Shortfall
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate of, as to each such Qualified Substitute
Mortgage Loan, the Scheduled Principal Balance thereof as of the date of
substitution, together with one month's interest on such Scheduled Principal
Balance at the applicable Net Mortgage Rate. On the date of such substitution,
the Depositor or the Seller, as the case may be, shall deliver or cause to be
delivered to the Master Servicer for deposit in the Collection Account an amount
equal to the Substitution Shortfall Amount, if any, and the Trustee, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans and
certification by the Master Servicer of such deposit, shall cause the Custodian
to release to the Depositor or the Seller, as the case may be, the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Depositor or the
Seller, as the case may be, shall deliver to it and as shall be necessary to
vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Depositor or the Seller, as the case may be, shall obtain
at its own expense and deliver to the Trustee, the NIMS Insurer and the
Certificate Insurer an Opinion of Counsel to the effect that such substitution
shall not cause (a) any federal tax to be imposed on any Trust REMIC, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on "contributions after the startup date"
under Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to qualify
as a REMIC at any time that any Certificate is outstanding.
(d) Upon discovery by the Depositor, the NIMS Insurer, the Certificate
Insurer, the Seller, the Master Servicer or the Trustee that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering such fact shall within two
Business Days give written notice thereof to the other parties. In connection
therewith, the Seller or the Depositor shall repurchase or, subject to the
limitations set forth in Section 2.03(c), substitute one or more Qualified
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Such repurchase or substitution shall be made by the Seller. Any
such repurchase or substitution shall be made in the same manner as set forth in
Section 2.03(a). The Trustee shall reconvey to the Depositor or the Seller, as
the case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
SECTION 2.04. [Reserved].
SECTION 2.05. Representations, Warranties and Covenants of the Master
Servicer.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee, the Certificateholders and to
the Depositor that as of the Closing Date or as of such date specifically
provided herein:
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(i) The Master Servicer is a corporation duly organized, validly
existing and 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 Master Servicer in
any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to
the extent necessary to ensure its ability to enforce each Mortgage Loan
and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(ii) The Master Servicer has the full power and authority to service
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary corporate action on the part of the
Master Servicer the execution, delivery and performance of this Agreement;
and this Agreement, assuming the due authorization, execution and delivery
thereof by the Depositor and the Trustee, constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable against the Master
Servicer in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer
hereunder, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Master Servicer and shall
not (A) result in a breach of any term or provision of the organizational
documents of the Master Servicer or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of
any other material agreement or instrument to which the Master Servicer is
a party or by which it may be bound, or any statute, order or regulation
applicable to the Master Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Master Servicer; and the Master Servicer is not a party to, bound by, or
in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Master Servicer's knowledge, would in the future materially and adversely
affect, (x) the ability of the Master Servicer to perform its obligations
under this Agreement or (y) the business, operations, financial condition,
properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for Xxxxxx
Xxx or Xxxxxxx Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this
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Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance
with the terms hereof;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date;
(vii) The Master Servicer shall furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information
company or their successors on a monthly basis;
(viii) The Master Servicer shall not waive any Prepayment Charge or
part of a Prepayment Charge unless, (i) the enforceability thereof shall
have been limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally or (ii) the
collectability thereof shall have been limited due to acceleration in
connection with a foreclosure or other involuntary payment or otherwise
limited or prohibited by applicable law, (iii) in the Master 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 Charge would be
considered "predatory" pursuant to written guidance published or issued by
any applicable federal, state or local regulatory authority acting in its
official capacity and having jurisdiction over such matters. In no event
shall the Master 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;
(ix) The information set forth in the monthly tape provided to the
Trustee or any of its Affiliates shall be true and correct in all material
respects; and
(x) The Master Servicer shall transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Mae Guide Announcement
95-19 and that for each Mortgage Loan, Master Servicer agrees it shall
report one of the following statuses each month as follows: new
origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or
charged-off.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee or to a Custodian, as the case may be, and shall inure to
the benefit of the Trustee, the Depositor and the Certificateholders. Upon
discovery by any of the Depositor, the NIMS Insurer, the Master Servicer or the
Trustee of a breach of any of the foregoing representations, warranties and
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covenants which materially and adversely affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the NIMS Insurer, the
Certificate Insurer and the Trustee. Subject to Section 7.01, the obligation of
the Master Servicer set forth in Section 2.03(b) to cure breaches (or in the
case of the representations, warranties and covenants set forth in Section
2.05(vii) and Section 2.05(viii) above, to otherwise remedy such breaches
pursuant to Section 2.03(b)) shall constitute the sole remedies against the
Master Servicer available to the Certificateholders, the Depositor or the
Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05.
SECTION 2.06. Issuance of the REMIC I Regular Interests and the Class R-I
Interest.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Mortgage Files, subject to the provisions of Section
2.01 and Section 2.02, together with the assignment to it of all other assets
included in REMIC I, the receipt of which is hereby acknowledged. Concurrently
with such assignment and delivery and in exchange therefor, the Trustee,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R-I Interest in authorized denominations. The interests
evidenced by the Class R-I Interest, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC I. The
rights of the Class R Certificateholders and REMIC II (as holder of the REMIC I
Regular Interests) to receive distributions from the proceeds of REMIC I in
respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.
SECTION 2.07. Conveyance of the REMIC I Regular Interests; Acceptance of
REMIC II, REMIC III and REMIC IV by the Trustee.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee,
without recourse all the right, title and interest of the Depositor in and to
the REMIC I Regular Interests for the benefit of the Class R Certificateholders
and REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Class R Certificateholders and REMIC II (as holder of the REMIC I
Regular Interests). The rights of the Class R Certificateholders and REMIC II
(as holder of the REMIC I Regular Interests) to receive distributions from the
proceeds of REMIC II in respect of the Class R Certificates and REMIC II
Certificates, respectively, and all ownership interests evidenced or constituted
by the Class R Certificates and the REMIC II Certificates, shall be as set forth
in this Agreement.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests (which are uncertificated) for the benefit
of the Holders of the REMIC III Regular Interests and the Class R
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Certificates (in respect of the Class R-III Interest). The Trustee acknowledges
receipt of the REMIC II Regular Interests and declares that it holds and shall
hold the same in trust for the exclusive use and benefit of the Holders of the
REMIC III Regular Interests and the Class R-X Certificates (in respect of the
Class R-III Interest). The interests evidenced by the Class R-III Interest and
the Class CE Certificates, constitute the entire beneficial ownership interest
in REMIC III.
(c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class P Interest (which is uncertificated) for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-IV Interest). The Trustee acknowledges receipt of the Class P
Interest and declares that it holds and shall hold the same in trust for the
exclusive use and benefit of the Holders of the Class P Certificates and the
Class R-X Certificates (in respect of the Class R-IV Interest). The interests
evidenced by the Class R-IV Interest, together with the Class P Certificates,
constitute the entire beneficial ownership interest in REMIC IV.
SECTION 2.08. Issuance of Class R Certificates and Class R-X Certificates.
(a) The Trustee acknowledges the assignment to it of the REMIC I Regular
Interests and, concurrently therewith and in exchange therefor, pursuant to the
written request of the Depositor executed by an officer of the Depositor or the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R Certificates in authorized denominations. The interests
evidenced by the Class R Certificates, together with the REMIC II Certificates,
constitute the entire beneficial ownership interest in REMIC II.
(b) The Trustee acknowledges the assignment to it of the Class CE Interest
and the Class P Interest and, concurrently therewith and in exchange therefor,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, the Trustee has executed, authenticated and delivered to or upon the
order of the Depositor, the Class R-X Certificates in authorized denominations.
The interests evidenced by the Class R-X Certificates, together with the Class
CE Certificates and the Class P Certificates constitute the entire beneficial
ownership interest in REMIC III and REMIC IV.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders and the Certificate Insurer (as determined by the Master
Servicer in its reasonable judgment) in accordance with (i) the terms of the
respective Mortgage Loans and any insurance policies related thereto, (ii) all
Applicable Regulations, (iii) the terms of this Agreement and (iv) to the extent
consistent with the preceding requirements, in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer or
any Affiliate of the Master Servicer or any Sub-Servicer may have with the
related Mortgagor;
(ii) the ownership of any Certificate by the Master Servicer or any
Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction (the "Servicing Standard").
Subject only to the above-described servicing standards and the terms of
this Agreement and of the respective Mortgage Loans, the Master Servicer shall
have full power and authority, acting alone or through Sub-Servicers as provided
in Section 6.06, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee, in accordance with the servicing standards set forth above, (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, or of forbearance, or of modification and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties, (ii) to institute foreclosure proceedings or obtain a deed-in-lieu
of foreclosure to convert the ownership of such properties, and to hold or cause
to be held title to such properties, in the name of the Trust Fund, on behalf of
the Trustee and the Certificateholders, (iii) to market, sell and transfer title
of REO Properties held in the name of the Trust Fund to third party purchasers
upon terms and conditions the Master Servicer deems reasonable under the
Servicing Standard, (iv) to bring or respond to civil actions or complaints (in
its own name or that of the Trust Fund or the Trustee on behalf of the Trust
Fund) related to any Mortgage Loan, Mortgaged
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Property or REO Property held by the Trust Fund and (v) to execute any other
document necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder consistent with the Servicing
Standard.
At the written request of the Master Servicer, the Trustee shall execute
and furnish to the Master Servicer such documents as are necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. By execution of this Agreement, the Trustee, on
behalf of the Trust Fund, hereby grants to the Master Servicer a power of
attorney to execute any and all documents necessary to carry out any and all
servicing duties described in this Agreement (including the taking of and
transferring title of REO Properties to third parties held in the name of the
Trustee for the benefit of the Trust) and expressly confirms that this paragraph
along with the face page and a copy of the signature page (duly executed) to
this Agreement shall constitute the power of attorney for evidentiary and/or
recording purposes. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.
Subject to Section 3.04(d) hereof, in accordance with the Servicing
Standard, the Master Servicer shall advance or cause to be advanced funds as
necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.04(d), and further as provided in Section
3.05(a). Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
Consistent with the terms of this Agreement, the Master Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if such waiver, modification, postponement or
indulgence is in conformity with the Servicing Standard; provided, however,
that:
(A) the Master Servicer shall not make future advances (except as
provided in Section 4.03);
(B) the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Rate, defer or
forgive the payment of any principal or interest payments, reduce the
outstanding Stated Principal Balance (except for reductions resulting from
actual payments of principal) or extend the final maturity date on such
Mortgage Loan (unless as provided in Section 3.02, (i) the Mortgagor is in
default with respect to the Mortgage Loan or (ii) such default is, in the
judgment of the Master Servicer, reasonably foreseeable); and
(C) the Master Servicer shall not consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of
properties subject to Mortgages, (iv) modification or (v) second mortgage
subordination agreements with respect to any Mortgage Loan that would: (i)
affect adversely the status of any Trust REMIC as a
74
REMIC,(ii) cause any Trust REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions, or
(iii) both (x) effect an exchange or reissuance of such Mortgage Loan
under Section 1001 of the Code (or Treasury regulations promulgated
thereunder) and (y) cause any Trust REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions" after the Startup Day
under the REMIC Provisions.
To the extent consistent with the terms of this Agreement, including
Section 2.03 and Section 2.05, the Master Servicer may waive (or permit a
Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans, (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Master
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan, (iii) the collection of
such Prepayment Charge would be in violation of applicable laws or (iv) the
collection of such Prepayment Charge would be considered "predatory" pursuant to
written guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters.
The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Agreement.
All references to Master Servicer in this Agreement shall be deemed to include
any Sub-Servicer duly appointed by the Master Servicer pursuant to this
Agreement.
SECTION 3.02. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing, the
Master Servicer may in its discretion (i) waive any late payment charge or, if
applicable, penalty interest, (ii) waive any provisions of any Mortgage Loan
requiring the related Mortgagor to submit to mandatory arbitration with respect
to disputes arising thereunder or (iii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to clause (iii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder. The NIMS Insurer's prior written consent shall be required for any
modification, waiver or amendment 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 (iii) above, the Master Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to Section
4.03 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements.
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Notwithstanding the foregoing, in the event that any Mortgage Loan is in
default or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the Servicing Standard, 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"). The Master Servicer's analysis supporting
any forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 shall be reflected in writing in the Mortgage File and shall be
provided to the Certificate Insurer upon request.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
SECTION 3.03. [Reserved].
SECTION 3.04. Collection Account, Escrow Account and Distribution Account.
(a) Collection Account. On behalf of the Trust Fund, the Master Servicer
shall segregate and hold all funds collected and received pursuant to each
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain in the name of the Trustee one or more accounts
(such account or accounts, the "Collection Account") in accordance with this
Section 3.04, held in trust for the benefit of the Trustee, the Certificate
Insurer and the Certificateholders.
(b) Deposits to the Collection Account. On behalf of the Trust Fund, the
Master Servicer shall deposit in the Collection Account, in no event more than
two Business Days after the Master Servicer's receipt thereof, the following
payments and collections received or made by it subsequent to the Cut-off Date
with respect to the Mortgage Loans, or payments (other than Principal
Prepayments) received by it on or prior to the Cut-off Date but allocable to a
Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans and REO Properties;
76
(ii) all payments on account of interest (excluding Prepayment
Interest Excess collected on any Mortgage Loan during the related
Prepayment Period) on the Mortgage Loans and REO Properties adjusted to
the Net Mortgage Rate;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds to be held in the Escrow Account and applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with the Servicing Standard), Subsequent Recoveries and any
amounts received in respect of the rental of any REO Property prior to REO
Disposition;
(iv) all proceeds related to the purchase, substitution or
repurchase of any Mortgage Loan or REO Property in accordance with Section
2.03;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.09 in connection with the deductible clause in any
blanket hazard insurance policy, such deposit being made from the Master
Servicer's own funds, without reimbursement therefor;
(vi) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with any losses realized on
Permitted Investments with respect to funds held in the Collection
Account;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage Loans
pursuant to Section 2.03 (for purposes of this clause (vii), the Cut-off
Date with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the date of substitution);
(viii) any amounts required to be deposited by the Master Servicer
pursuant to Section 4.03(b); and
(ix) all Prepayment Charges collected by the Master Servicer, all
Prepayment Charges payable by the Master Servicer pursuant to Section
2.03(b).
The foregoing requirements for deposit to the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of Prepayment Interest Excess, late
payment charges, assumption fees, insufficient funds charges, modification fees
and other ancillary fees (but not Prepayment Charges) need not be deposited by
the Master Servicer in the Collection Account and shall upon collection, belong
to the Master Servicer as additional compensation for its servicing activities.
In the event the Master Servicer shall deposit in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(c) Escrow Account. The Master Servicer shall segregate and hold all funds
collected and received pursuant to each Mortgage Loan which constitute Escrow
Payments separate and apart from any of its own funds and general assets and
shall establish and maintain in the name of the Trustee one or more accounts
(such account or accounts, the "Escrow
77
Account") held in trust for the benefit of the Certificateholders, the
Certificate Insurer and the Trustee.
(d) Deposits to the Escrow Account. The Master Servicer shall deposit or
cause to be deposited in the clearing account (which account must be an Eligible
Account) in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Master Servicer's
receipt thereof, and shall thereafter deposit in the Escrow Account, in no event
more than two Business Days after the deposit of such funds into the clearing
account, as and when received or as otherwise required hereunder, and retain
therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property.
(e) Distribution Account. On behalf of the Trust Fund, the Trustee shall
segregate and hold all funds collected and received pursuant to this Agreement
separate and apart from any of its own funds and general assets and shall
establish and maintain in the name of the Trustee one or more segregated
accounts (such account or accounts, the "Distribution Account"), held in trust
for the benefit of the Certificateholders and the Certificate Insurer.
(f) Trustee Deposits to the Distribution Account. Upon receipt, the
Trustee shall deposit or cause to be deposited into the Distribution Account all
payments of any nature received from the Master Servicer in accordance with this
Agreement. The Trustee shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.06 in connection with losses
realized on Permitted Investments with respect to funds held in the Distribution
Account.
(g) Master Servicer Transfer of Funds to the Distribution Account. On
behalf of the Trust Fund, the Master Servicer shall deliver to the Trustee in
immediately available funds for deposit in the Distribution Account by 1:00 p.m.
(New York time) on the Master Servicer Remittance Date, (i) that portion of
Available Funds (calculated without regard to the references in clause (2) of
the definition thereof to amounts that may be withdrawn from the Distribution
Account) for the related Distribution Date then on deposit in the Collection
Account, (ii) without duplication, the amount of all Prepayment Charges
collected by the Master Servicer, all Prepayment Charges payable by the Master
Servicer pursuant to Section 2.03(b)(ii) (to the extent not related to Principal
Prepayments occurring after the related Prepayment Period) and (iii) any amounts
reimbursable to an Advancing Person pursuant to Section 3.23 and the terms of
the related Advance Facility.
In addition, the Master Servicer shall deliver to the Trustee from time to
time as required by this Agreement, for deposit and the Trustee shall so
deposit, in the Distribution Account:
78
(i) any Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section 3.13
in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 3.16 and Section
9.01;
(iv) any Compensating Interest as required pursuant to Section
4.03(e);
(v) [reserved];
(vi) any amounts required to be paid by the Master Servicer pursuant
to Section 3.06 in connection with any losses realized on Permitted
Investments with respect to funds held in the Collection Account; and
(vii) any amounts required to be paid to the Trustee from the assets
of the Trust Fund on deposit in the Collection Account pursuant to this
Agreement, including but not limited to amounts required to be paid to the
Trustee pursuant to Section 7.02 and Section 8.05.
Funds held in the Collection Account pursuant to Section 3.04(b) may at
any time be delivered by the Master Servicer to the Trustee for deposit into the
Distribution Account and for all purposes of this Agreement shall be deemed to
be a part of the Collection Account until the Business Day prior to the
Distribution Date; provided, however, that the Trustee shall have the sole
authority to withdraw any funds held pursuant to this paragraph. In the event
the Master Servicer shall deliver to the Trustee for deposit in the Distribution
Account any amount not required to be deposited therein, it may at any time
request that the Trustee withdraw such amount from the Distribution Account and
remit to it any such amount, any provision herein to the contrary
notwithstanding.
(h) Investment of Account Funds. Funds on deposit in the Collection
Account, the Distribution Account, any REO Account and any Escrow Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.06. Any investment earnings or interest paid on funds deposited in the
Collection Account, any REO Account and any Escrow Account (subject to Section
3.05(b)) shall accrue to the benefit of the Master Servicer and the Master
Servicer shall be entitled to retain and withdraw such interest from each such
account on a daily basis. Any investment earnings or interest paid on funds
deposited in the Distribution Account, shall accrue to the benefit of the
Trustee and the Trustee shall be entitled to retain and withdraw such interest
from each such account on a daily basis.
Funds on deposit in the Net WAC Rate Reserve Carryover Account may be
invested in Permitted Investments in accordance with Section 3.06 subject to any
limitations set forth in Section 4.10 and any investment earnings or interest
paid shall accrue to the benefit of the party designated in such section.
(i) Creation, Location and Subsequent Transfers of Accounts. Each account
created pursuant to this Agreement must be an Eligible Account. On or prior to
the Closing
79
Date, the Master Servicer and the Trustee shall give notice, to each other, the
NIMS Insurer, the Certificate Insurer and the Depositor of the location of any
account created by it pursuant to this Agreement. From time to time, the Master
Servicer and the Trustee may each transfer any account created by it to a
different depository institution provided that upon such transfer the written
notice is provided to all other parties listed in the preceding sentence.
(j) In order to comply with its duties under the U.S. Patriot Act, the
Trustee shall obtain and verify certain information and documentation from the
owners of the accounts that the Trustee establishes pursuant to this Agreement
including, but not limited to, each account owner's name, address, and other
identifying information.
SECTION 3.05. Permitted Withdrawals From the Collection Account, Escrow
Account and Distribution Account.
(a) Collection Account. The Master Servicer may, from time to time,
withdraw from the Collection Account for the following purposes or as described
in Section 4.03:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(g) or
permitted to be so remitted pursuant to the last paragraph of Section
3.04(g);
(ii) subject to Section 3.12(c), to reimburse itself for (a) any
unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and (c) any
unreimbursed Advances, the Master Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to any Late Collections,
Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds
received on the related Mortgage Loan and any amounts received in respect
of the rental of the related REO Property prior to an REO Disposition that
represent payments of principal and/or interest respecting which any such
advance was made;
(iii) to reimburse itself for (a) any unpaid Servicing Fees to the
extent not recoverable under Section 3.05(a)(ii) and (b) any unpaid
Advances or Servicing Advances that have been deemed Nonrecoverable
Advances or Nonrecoverable Servicing Advances;
(iv) to pay to itself any Prepayment Interest Excess to the extent
not otherwise retained;
(v) to reimburse itself for any amounts paid pursuant to Section
3.12(b) (and not otherwise previously reimbursed);
(vi) to pay to itself as servicing compensation any interest earned
on funds in the Collection Account;
(vii) subject to Section 4.03(b), to reimburse the Master Servicer
in respect of any unreimbursed Advances to the extent of funds held in the
Collection Account
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for future distribution that were not included in Available Funds for the
preceding Distribution Date;
(viii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the
Depositor, as the case may be, pursuant to Section 6.03;
(ix) to remit to the Trustee any amounts that the Trustee is
permitted to be paid or reimbursed from the assets of the Trust Fund
pursuant to the terms of this Agreement, including the terms of Section
7.02(a) and Section 8.05;
(x) to reimburse the NIMS Insurer, the Certificate Insurer, the
Master Servicer (if the Master Servicer is not an Affiliate of the Seller)
or the Trustee, as the case may be, for enforcement expenses reasonably
incurred in respect of the breach or defect giving rise to the purchase
obligation under Section 2.03 that were included in the Purchase Price of
the Mortgage Loan, including any expenses arising out of the enforcement
of the purchase obligation;
(xi) to pay to the Master Servicer, the Depositor or the Seller, as
the case may be, with respect to each Mortgage Loan that has previously
been purchased or replaced pursuant to Section 2.03 or Section 3.16(a) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(xii) to transfer funds in the Collection Account maintained at a
particular depository to the Collection Account maintained at a different
depository, pursuant to Section 3.04(i); and
(xiii) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection Account
shall be exclusive. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (vii), (viii) and (xi)
above. The Master Servicer shall provide written notification to the Trustee,
the Certificate Insurer and the NIMS Insurer on or prior to the next succeeding
Master Servicer Reporting Date, upon making any withdrawals from the Collection
Account pursuant to subclause (viii) above.
(b) Escrow Account. The Master Servicer may, from time to time, withdraw
from the Escrow Account for the following purposes:
(i) to effect payments of ground rents, taxes, assessments, water
rates, hazard insurance premiums and comparable items;
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(ii) to reimburse the Master Servicer for any Servicing Advance made
by the Master Servicer with respect to a related Mortgage Loan but only
from amounts received on the related Mortgage Loan which represent late
payments or Late Collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to
be overages;
(iv) for transfer to the Collection Account in accordance with the
terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Master Servicer, or to the Mortgagor to the
extent required by the related Mortgage Loan or Applicable Regulations,
any interest paid on the funds deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination
of this Agreement; and
(viii) to transfer to the Collection Account any Insurance Proceeds.
In the event the Master Servicer shall deposit in an Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from such Escrow Account, any provision herein to the contrary
notwithstanding. As part of its servicing duties, the Master Servicer shall pay
to the Mortgagor interest on funds in the Escrow Account, to the extent required
by the related Mortgage Loan or Applicable Regulations, and to the extent that
interest earned on funds in the Escrow Account is insufficient, shall pay such
interest from its own funds, without any reimbursement therefor. The Master
Servicer may pay to itself any excess interest on funds in the Escrow Account,
to the extent such action is in conformity with the Servicing Standard, is
permitted by law and such amounts are not required to be paid to Mortgagors or
used for any of the other purposes set forth above.
(c) Distribution Account. The Trustee shall, from time to time, make
withdrawals from the Distribution Account, for any of the following purposes:
(i) to make distributions to Certificateholders and the Certificate
Insurer in accordance with Section 4.01;
(ii) to pay to itself and the Custodian amounts to which either is
entitled pursuant to Section 8.05;
(iii) to pay itself any interest income earned on funds deposited in
the Distribution Account pursuant to Section 3.06;
(iv) to reimburse itself pursuant to Section 7.01 and Section
7.02(b);
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(v) to pay any amounts in respect of taxes pursuant to Section
10.01(g)(iii); and
(vi) to clear and terminate the Distribution Account pursuant to
Section 9.01.
SECTION 3.06. Investment of Funds in the Collection Account, the Escrow
Account, the REO Account and the Distribution Account.
(a) The Master Servicer may direct any depository institution maintaining
the Collection Account, the Escrow Account (subject to Section 3.05(b)) and the
REO Account and the Trustee may direct any depository institution maintaining
the Distribution Account (for purposes of this Section 3.06, each an "Investment
Account"), to invest the funds in such Investment Account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee is the
obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such Investment Account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account, the Escrow Account, and the REO Account)
over each such investment and (except with respect to the income on funds held
in the Collection Account, the Escrow Account and the REO Account) the income
thereon, and any certificate or other instrument evidencing any such investment
shall be delivered directly to the Trustee or its agent, together with any
document of transfer necessary to transfer title to such investment to the
Trustee or its nominee. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
Trustee shall:
(i) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the lesser
of (1) all amounts then payable thereunder and (2) the amount required to
be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such Permitted
Investment would not constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income in the nature of interest from the investment of funds in
the Collection Account, the Escrow Account (subject to Section 3.05(b)) and the
REO Account shall be for the benefit of the Master Servicer as compensation for
the Master Servicer's services pursuant to this Agreement. The Master Servicer
shall deposit in the Collection Account, the Escrow Account, and the REO
Account, as applicable, from its own funds the amount of any
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loss incurred in respect of any such Permitted Investment made with funds in
such account immediately upon realization of such loss.
(c) All income in the nature of interest or earnings from the investment
of funds in the Distribution Account shall be for the benefit of the Trustee as
compensation for the Trustee's services pursuant to this Agreement. The Trustee
shall deposit in the Distribution Account from its own funds the amount of any
loss incurred on Permitted Investments in the Distribution Account.
(d) Funds on deposit in the Net WAC Rate Carryover Reserve Account may be
invested in Permitted Investments in accordance with this Section 3.06 subject
to any limitations set forth in Section 4.10 and any investment earnings or
interest paid shall accrue to the benefit of the party designated in such
section 4.10 and the party so designated shall deposit in the related account
from its own funds the amount of any loss incurred on Permitted Investments in
such account.
(e) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the NIMS Insurer, the Certificate Insurer or the Holders of
Certificates representing more than 50% of the Voting Rights allocated to any
Class of Certificates, shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
SECTION 3.07. Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Master Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and, as to those
Mortgage Loans subject to a voluntary escrow agreement, shall obtain, from time
to time, all bills for the payment of such charges (including renewal premiums)
and shall effect payment thereof prior to the applicable penalty or termination
date and at a time appropriate for securing maximum discounts allowable,
employing for such purpose deposits of the Mortgagor in the Escrow Account which
shall have been estimated and accumulated by the Master Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage or
Applicable Regulations. The Master Servicer assumes full responsibility for the
timely payment of all such bills and shall effect timely payments of all such
bills irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments and shall make Servicing Advances from
its own funds to effect such payments. To the extent that the Mortgage does not
provide for Escrow Payments, the Master Servicer shall use reasonable efforts
consistent with the Servicing Standard to determine that any such payments are
made by the Mortgagor at the time they first become due and shall ensure that
the Mortgaged Property is not lost to a tax lien as a result of nonpayment and
that such Mortgaged Property is not left uninsured.
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SECTION 3.08. Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage on the related Mortgaged Property in an
amount which is at least equal to the least of (i) the current Stated Principal
Balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding Stated Principal Balance of the related Mortgage Loan,
plus accrued interest at the Mortgage Rate and related Servicing Advances (each
measured at the time it became an REO Property). The Master Servicer shall
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to be
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing loans held for its
own account, subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.05, if received in respect of a Mortgage Loan,
or in the REO Account, subject to withdrawal pursuant to Section 3.13, if
received in respect of an REO Property. Any cost incurred by the Master Servicer
in maintaining any such insurance shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid Stated Principal
Balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the Master
Servicer shall cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid Stated Principal Balance of the related Mortgage Loan, (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program) and (iii) the
maximum insurable value of the improvements which are part of the related
Mortgaged Property.
SECTION 3.09. Maintenance of Mortgage Blanket Insurance.
In the event that the Master Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:V or better in Best's
Key Rating Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of Section 3.08, it being understood and agreed that such
policy may contain a deductible clause, in which case the Master Servicer shall,
in the event that there shall
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not have been maintained on the related Mortgaged Property or REO Property a
policy complying with the first two sentences of Section 3.08, and there shall
have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.
The Master Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the Master Servicer's obligations under this Agreement, which
policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Xxxxxx Mae or Xxxxxxx Mac, unless the Master Servicer has obtained a waiver
of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall
provide the Trustee, the NIMS Insurer (upon reasonable request) and the
Certificate Insurer (upon reasonable request) with copies of any such insurance
policies and fidelity bond. The Master Servicer shall be deemed to have complied
with this provision if an Affiliate of the Master Servicer has such errors and
omissions and fidelity bond coverage and, by the terms of such insurance policy
or fidelity bond, the coverage afforded thereunder extends to the Master
Servicer. Any such errors and omissions policy and fidelity bond shall by its
terms not be cancelable without thirty days' prior written notice to the
Trustee. The Master Servicer shall also cause each Sub-Servicer to maintain a
policy of insurance covering errors and omissions and a fidelity bond which
would meet such requirements.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
The Master Servicer shall, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not exercise any such rights if prohibited by law
from doing so. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer is authorized to enter into an assumption and modification agreement
from or with the person to whom such property has been conveyed or is proposed
to be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no
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such substitution shall be effective unless such person satisfies the
underwriting criteria of the Master Servicer. In connection with any assumption
or substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy, or a new policy meeting
the requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of an assumption or substitution of liability agreement
shall be retained by the Master Servicer as additional servicing compensation.
In connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof or otherwise permitted under Section 3.01. The
Master Servicer shall notify the Trustee and any respective Custodian that any
such substitution or assumption agreement has been completed by forwarding to
the Trustee or to such Custodian, as the case may be, the executed original of
such substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.11, the term
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall, consistent with the Servicing Standard,
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.02. The Master Servicer shall be responsible for
all costs and expenses incurred by it in any such proceedings; provided,
however, that such costs and expenses shall be recoverable as Servicing Advances
by the Master Servicer as contemplated in Section 3.05 and Section 3.13. The
foregoing is subject to the provision that: (i) in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its discretion that such restoration shall
increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself for such expenses and (ii) with respect to any second
lien Mortgage Loan for which the related first lien mortgage loan is not
included in the Trust Fund, if, after such Mortgage Loan becomes 180 days or
more delinquent and the Master Servicer, after making a Final Recovery
Determination, determines that a net recovery that would eliminate or reduce a
Realized Loss by more than an immaterial amount is not possible through
foreclosure, such
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Mortgage Loan may be charged off and such Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss.
(b) Notwithstanding the foregoing provisions of this Section 3.12 or any
other provision of this Agreement, with respect to any Mortgage Loan as to which
the Master Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Master Servicer shall not, on behalf of the Trustee, either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Certificate Insurer, the Trust Fund or the Certificateholders
would be considered to hold title to, to be a "mortgagee-in-possession" of, or
to be an "owner" or "operator" of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Master
Servicer has also previously determined, based on its reasonable judgment and a
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such
action could be required, that it would be in the best economic interest
of the Trust Fund to take such actions with respect to the affected
Mortgaged Property.
Notwithstanding the foregoing, if such environmental audit reveals, or if
the Master Servicer has actual knowledge or notice, that such Mortgaged Property
contains such toxic or hazardous wastes or substances, the Master Servicer shall
not foreclose or accept a deed in lieu of foreclosure without the prior written
consent of the NIMS Insurer and the Certificate Insurer (which consent shall not
be unreasonably withheld).
The cost of the environmental audit report contemplated by this Section
3.12 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.05(a)(v), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it is in the
best economic interest of the Trust Fund to take such actions as are necessary
to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged
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Property, then the Master Servicer shall take such action as it deems to be in
the best economic interest of the Trust Fund; provided, however, that the Master
Servicer shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure if the estimated costs of the environmental clean up, as estimated
in the environmental audit report, together with the Advances made by the Master
Servicer and the estimated costs of foreclosure or acceptance of a deed in lieu
of foreclosure, exceeds the estimated value of the Mortgaged Property. The cost
of any such compliance, containment, cleanup or remediation shall be advanced by
the Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Collection Account as provided in Section 3.05(a)(v), such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.
(c) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds, Subsequent Recoveries or Liquidation Proceeds, in respect of any
Mortgage Loan, shall be applied in the following order of priority: FIRST, to
reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed
Servicing Advances and Advances, pursuant to Section 3.05(a)(ii); SECOND, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and THIRD, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery shall be allocated by the Master Servicer as follows: FIRST, to
unpaid Servicing Fees; and SECOND, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.05(a)(ii).
SECTION 3.13. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall be taken in
the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders and the Certificate Insurer. Pursuant to the power of
attorney granted in Section 3.01, the Master Servicer is hereby authorized to
transfer the title of any REO Property taken in the name of the Trustee to a
third party purchaser pursuant to this Section 3.13 without further
documentation of its authority as attorney-in-fact for the Trustee on behalf of
the Trust. The Master Servicer, on behalf of the Trust Fund (and on behalf of
the Trustee for the benefit of the Certificateholders and the Certificate
Insurer), shall either sell any REO Property before the close of the third
taxable year after the year the Trust Fund acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMS Insurer, the Certificate Insurer and the Depositor an Opinion of
Counsel, addressed to the Trustee, the NIMS Insurer, the Certificate Insurer and
the Depositor, to the effect that the holding by the Trust Fund of such REO
Property subsequent to three years after its acquisition shall not result in the
imposition on any Trust REMIC of taxes on "prohibited transactions" thereof, as
defined in Section 860F of the Code, or cause any Trust REMIC to fail to qualify
as a REMIC under Federal law at any time that any Certificates are outstanding.
The Master Servicer shall
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manage, conserve, protect and operate each REO Property for the benefit of the
Certificateholders and solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain with
respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders and the Certificate Insurer (the "REO
Account"), which shall be an Eligible Account. The Master Servicer shall be
permitted to allow the Collection Account to serve as the REO Account, subject
to separate ledgers for each REO Property. The Master Servicer shall be entitled
to retain or withdraw any interest income paid on funds deposited in the REO
Account.
(c) The Master Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with the manner
in which the Master Servicer manages and operates similar property owned by the
Master Servicer or any of its Affiliates, all on such terms and for such period
as the Master Servicer deems to be in the best interests of Certificateholders
and appropriate to effect the prompt disposition and sale of the REO Property.
In connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to
an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Master Servicer shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, the Master Servicer would make such advances if the Master Servicer
owned the REO Property and if in the Master Servicer's judgment, the payment of
such amounts shall be recoverable from the rental or sale of the REO Property.
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Notwithstanding the Master Servicer's obligation to the Certificateholders
to manage and operate (including the collection of rents from existing tenants
and management of any leases acquired with the REO property to the extent
applicable) the REO Property from the date of acquisition until the date of
sale, neither the Master Servicer nor the Trustee shall knowingly:
(i) authorize the Trust Fund to enter into, renew or extend any New
Lease with respect to any REO Property, if the New Lease by its terms
shall give rise to any income that does not constitute Rents from Real
Property;
(ii) authorize any amount to be received or accrued under any New
Lease other than amounts that shall constitute Rents from Real Property;
(iii) authorize any construction on any REO Property, other than the
completion of a building or other improvement thereon, and then only if
more than ten percent of the construction of such building or other
improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the
Code; or
(iv) authorize any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust
Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, the Certificate Insurer and the NIMS Insurer,
to the effect that such action shall not cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code at any time that it is held by the Trust Fund, and (B) the Master
Servicer has received written notice from the Trustee that it has received
written consent from the NIMS Insurer and the Certificate Insurer (which consent
shall not be unreasonably withheld) that the specific action may be taken.
The Master Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net
of such costs and expenses) to the Master Servicer as soon as practicable,
but in no event later than thirty days following the receipt thereof by
such Independent Contractor;
(iii) none of the provisions of this Section 3.13(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Master Servicer of any of its duties and
obligations to the Trustee on behalf of the Certificateholders with
respect to the operation and management of any such REO Property; and
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(iv) the Master Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees. The Master Servicer shall not engage an Independent Contractor to
engage in any activities that the Master Servicer would not be permitted to
engage in itself in accordance with the other provisions of this Agreement.
(d) In addition to the withdrawals permitted under Section 3.13(c), the
Master Servicer may from time to time make withdrawals from the REO Account for
any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.04(g)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.13(c) or this Section 3.13(d).
(e) Subject to the time constraints set forth in Section 3.13(a)
(including the constraint that the Master Servicer hold and manage each REO
Property "solely for the purpose of its prompt disposition"), each REO
disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as shall be normal and usual in its general servicing
activities for similar properties.
(f) The proceeds from the REO Disposition, net of any amount required by
law to be remitted to the Mortgagor under the related Mortgage Loan and net of
any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.04(g)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution Date
in accordance with Section 4.01. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).
SECTION 3.14. [Reserved].
SECTION 3.15. Reports of Foreclosure and Abandonment of Mortgaged
Properties.
The Master Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of
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any Mortgaged Property and cancellation of indebtedness income with respect to
any Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the
Code, respectively. Such reports shall be in form and substance sufficient to
meet the reporting requirements imposed by such Sections 6050H, 6050J and 6050P
of the Code.
SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.
(a) (i) The NIMS Insurer may, at its option, purchase a Mortgage Loan
which has become 90 or more days delinquent or for which the Master Servicer has
accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this
Section 3.16(a)(i), the Master Servicer shall be required to continue to make
Advances pursuant to Section 4.03. The NIMS Insurer shall not use any procedure
in selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The NIMS Insurer shall purchase such
delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage
Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(a)(i)
shall be accomplished by remittance to the Master Servicer for deposit in the
Collection Account of the amount of the Purchase Price. The Trustee shall
effectuate the conveyance of such delinquent Mortgage Loan to the NIMS Insurer
to the extent necessary, as requested, and the Trustee shall promptly deliver
all documentation to the NIMS Insurer.
(ii) During the first full calendar month (but excluding the last Business
Day thereof) following a Mortgage Loan or related REO Property becoming 90 days
or more delinquent, the Master Servicer shall have the option, but not the
obligation to purchase from the Trust Fund any such Mortgage Loan or related REO
Property that is then still 90 days or more delinquent, which the Master
Servicer determines in good faith shall otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan or related REO Property purchased hereunder shall be
deposited in the Collection Account, and the Trustee, upon written certification
of such deposit, shall release or cause to be released to the Master Servicer
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Master Servicer shall furnish and as shall be necessary to vest in the Master
Servicer title to any Mortgage Loan or related REO Property released pursuant
hereto.
(b) If with respect to any delinquent Mortgage Loan or related REO
Property, the option of the Master Servicer set forth in the preceding paragraph
shall have arisen but the Master Servicer shall have failed to exercise such
option on or before the Business Day preceding the last Business Day of the
calender month following the calender month during which such Mortgage Loan or
related REO Property first became 90 days or more delinquent, then such option
shall automatically expire; provided, however, that if any such Mortgage Loan or
related REO Property shall cease to be 90 days or more delinquent but then
subsequently shall again become 90 days or more delinquent, then the Master
Servicer shall be entitled to another repurchase option with respect to such
Mortgage Loan or REO Property as provided in the preceding paragraph.
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SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer shall promptly notify
the Trustee and any related Custodian by a certification in the form of Exhibit
E or such other form supplied by the Master Servicer provided that it does not
differ from the substantive content of Exhibit E (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.04(b) have been or shall be so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. Upon receipt of such certification and request, the Trustee or
such Custodian, as the case may be, shall promptly release (and in no event more
than three (3) Business Days thereafter) the related Mortgage File to the Master
Servicer. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Collection Account or the
Distribution Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E or such other form supplied by the Master Servicer provided that it
does not differ from the substantive content of Exhibit E, release the related
Mortgage File to the Master Servicer, and the Trustee shall, at the direction of
the Master Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings and the Master Servicer shall retain such
Mortgage File in trust for the benefit of the Certificateholders. Such Request
for Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee or to such Custodian
when the need therefor by the Master Servicer no longer exists, unless the
Mortgage Loan has been charged off or liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account or
the Mortgage File or such document has been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was charged off or liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, upon request, a copy of the Request for Release
shall be released by the Trustee or such Custodian to the Master Servicer.
(c) Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity.
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Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee shall not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
(d) The Trustee (or the Custodian on behalf of the Trustee) and the Master
Servicer may mutually agree on policies and procedures (commercially reasonable
in nature) to allow the submission of any and all requests for the release of a
Mortgage File electronically with a digital signature or other identifier to
designate the Servicing Officer of the Master Servicer requesting such
collateral.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder, the
Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 4.03(e). In addition, the Master Servicer
shall be entitled to recover unpaid Servicing Fees out of Insurance Proceeds,
Subsequent Recoveries or Liquidation Proceeds to the extent permitted by Section
3.05(a)(ii), out of general funds in the Collection Account to the extent
permitted by Section 3.05(a) and out of amounts derived from the operation and
sale of an REO Property to the extent permitted by Section 3.13. The right to
receive the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement.
Additional servicing compensation in the form of Prepayment Interest
Excess, assumption fees, late payment charges, insufficient funds fees,
reconveyance fees and other similar fees and charges (other than Prepayment
Charges) shall be retained by the Master Servicer only to the extent such
amounts, fees or charges are received by the Master Servicer. The Master
Servicer shall also be entitled pursuant to Section 3.05(a)(vi) to withdraw from
the Collection Account, pursuant to Section 3.04(h) to withdraw from any Escrow
Account and pursuant to Section 3.13(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.06. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including premiums for the insurance required by Section 3.08,
Section 3.09 and Section 3.10, to the extent such premiums are not paid by the
related Mortgagors or by a Sub-Servicer, servicing compensation of each
Sub-Servicer, and to the extent provided in Section 8.05, the fees and expenses
of the Trustee) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
SECTION 3.19. Statement as to Compliance.
The Master Servicer shall deliver to the Trustee (who shall deliver to the
Certificate Insurer to the extent received), the NIMS Insurer, the Depositor and
each Rating Agency on or before March 15th of each calendar year commencing in
2005, an Officers' Certificate, in a form similar to Exhibit M attached hereto
agreeable to the parties hereto, stating, as to each signatory thereof, that (i)
a review of the activities of the Master Servicer during the
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preceding calendar year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of any such
statement shall be provided by the Trustee to the Certificate Insurer and any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon the request and at the expense of the
requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
SECTION 3.20. Independent Public Accountants' Servicing Report.
Not later than March 15th of each calendar year commencing in 2005, the
Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Trustee, the NIMS Insurer
and each Rating Agency. Copies of such statement shall be provided by the
Trustee to any Certificateholder upon request at the expense of the requesting
party, provided that such statement is delivered by the Master Servicer to the
Trustee. In the event such firm of independent certified public accountants
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee shall deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
has not made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.
SECTION 3.21. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder or Certificate Owner,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and
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during normal business hours at the offices of the Master Servicer designated by
it. In addition, access to the documentation regarding the Mortgage Loans shall
be provided to the NIMS Insurer and the Trustee upon reasonable request during
normal business hours at the offices of the Master Servicer designated by it at
the expense of the Person requesting such access. In each case, access to any
documentation regarding the Mortgage Loans may be conditioned upon the
requesting party's acknowledgment in writing of a confidentiality agreement
reasonably satisfactory to the Master Servicer regarding any information that is
required to remain confidential under the Xxxxx-Xxxxx-Xxxxxx Act of 1999.
Nothing in this Section 3.21 shall limit the obligation of the Master Servicer
to observe any applicable law prohibiting disclosure of information regarding
the borrowers and the failure of the Master Servicer to provide access as
provided in this Section 3.21 as a result of such obligation shall not
constitute a breach of this Section 3.21.
SECTION 3.22. Certificate Insurer Access.
Upon the occurrence of a Trigger Event, the Master Servicer shall afford
the Certificate Insurer access to its books and record concerning the servicing
of the Mortgage Loans, and shall make servicing officers available to the
Cerificate Insurer to discuss the servicing of the Mortgage Loans, upon
reasonable prior notice to the Master Servicer and during the Master Servicer's
normal business hours.
SECTION 3.23. Advance Facility.
(a) The Master Servicer and/or the Trustee on behalf of the Trust Fund, in
either case, with the consent of the NIMS Insurer and the Master Servicer in the
case of the Trustee, is hereby authorized to enter into a facility (an "Advance
Facility") with any Person which provides that such Person (an "Advancing
Person") may fund Advances and/or Servicing Advances to the Trust Fund under
this Agreement, although no such facility shall reduce or otherwise affect the
Master Servicer's obligation to fund such Advances and/or Servicing Advances. If
the Master Servicer enters into such an Advance Facility pursuant to this
Section 3.23, upon reasonable request of the Advancing Person, the Trustee shall
execute a letter of acknowledgment, confirming its receipt of notice of the
existence of such Advance Facility. To the extent that an Advancing Person funds
any Advance or any Servicing Advance and provides the Trustee with notice
acknowledged by the Master Servicer that such Advancing Person is entitled to
reimbursement directly from the Trustee pursuant to the terms of the Advance
Facility, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.23(b). Such notice from the Advancing Person must specify the amount of the
reimbursement, the Section of this Agreement that permits the applicable Advance
or Servicing Advance to be reimbursed and the section(s) of the Advance Facility
that entitle the Advancing Person to request reimbursement from the Trustee,
rather than the Master Servicer, and include the Master Servicer's
acknowledgment thereto or proof of an Event of Default under the Advance
Facility. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.23. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Section 6.06 hereof and shall not be deemed to be
a Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Person by the Trust Fund would not
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materially and adversely affect the interests of any Certificateholder, then the
NIMS Insurer shall not withhold its consent to the Trust Fund's entering such
facility.
(b) If, pursuant to the terms of the Advance Facility, an Advancing Person
is entitled to reimbursement directly from the Trustee, then the Master Servicer
shall not reimburse itself therefor under Section 3.05(a)(ii), Section
3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) prior to the remittance
to the Trust Fund, but instead the Master Servicer shall include such amounts in
the applicable remittance to the Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to the
Advancing Person reimbursements for Advances and Servicing Advances from the
Distribution Account, to the extent permitted under the terms of the Advance
Facility, to the same extent the Master Servicer would have been permitted to
reimburse itself for such Advances and/or Servicing Advances in accordance with
Section 3.05(a)(ii), Section 3.05(a)(iii) or Section 3.05(a)(v), as the case may
be, had the Master Servicer itself funded such Advance or Servicing Advance. The
Trustee is hereby authorized to pay directly to the Advancing Person such
portion of the Servicing Fee as the parties to any advancing facility agree to
in writing delivered to the Trustee.
(c) All Advances and Servicing Advances made pursuant to the terms of this
Agreement shall be deemed made and shall be reimbursed on a "first in first out"
(FIFO) basis.
(d) In the event the Master Servicer is terminated pursuant to Section
7.01, the Advancing Person shall succeed to the terminated Master Servicer's
right of reimbursement set forth in Section 7.02(c) to the extent of such
Advancing Person's financing of Advances or Servicing Advances hereunder then
remaining unreimbursed.
(e) Any amendment to this Section 3.23 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.23, including amendments to
add provisions relating to a successor master servicer, may be entered into by
the Trustee and the Master Servicer without the consent of any Certificateholder
but with the consent of the NIMS Insurer and written confirmation from each
Rating Agency that the amendment shall not result in the reduction or withdrawal
of the then-current ratings of any outstanding Class of Certificates (and with
respect to the Insured Certificates, without regard to the Certificate Insurance
Policy) or any other notes secured by collateral which includes all or a portion
of the Class CE Certificates, the Class P Certificates and/or the Residual
Certificates, notwithstanding anything to the contrary in this Agreement.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) (1) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC I to REMIC II on account of the
REMIC I Regular Interests or withdrawn from the Distribution Account and
distributed to the Holders of the Class R Certificates (in respect of the Class
R-I Interest), as the case may be:
(i) first, to the Holders of REMIC I Regular Interest I-LTAA, REMIC
I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular
Interest I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I
Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTZZ and REMIC I Regular Interest I-LTP, PRO RATA, in an amount
equal to (A) the Uncertificated Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Interest in respect
of REMIC I Regular Interest I-LTZZ shall be reduced and deferred when the
REMIC I Overcollateralized Amount is less than the REMIC I
Overcollateralization Target Amount, by the lesser of (x) the amount of
such difference and (y) the Maximum I-LTZZ Uncertificated Interest
Deferral Amount and such amount will be payable to the Holders of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest
I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9 and REMIC I Regular Interest I-LTM10 in the same proportion as the
Overcollateralization Increase Amount is allocated to the Corresponding
Certificates and the Uncertificated Principal Balance of the REMIC I
Regular Interest I-LTZZ shall be increased by such amount;
(ii) to the Holders of REMIC I Regular Interest I-LT1SUB, REMIC I
Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I
Regular Interest I-LT2GRP and REMIC I Regular Interest I-LTXX, PRO RATA,
in an amount equal to (A) the Uncertificated Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates;
(iii) to the Holders of REMIC I Regular Interests, in an amount
equal to the remainder of the REMIC I Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made
pursuant to clause (i) above, allocated as follows:
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(a) 98.00% of such remainder (other than amounts payable under
clause (c) below), to the Holders of REMIC I Regular Interest I-LTAA
and REMIC I Regular Interest I-LTP, until the Uncertificated Balance
of such REMIC I Regular Interest is reduced to zero, provided,
however, that REMIC I Regular Interest I-LTP shall not be reduced
until the Distribution Date immediately following the expiration of
the latest Prepayment Charge as identified on the Prepayment Charge
Schedule or any Distribution Date thereafter, at which point such
amount shall be distributed to REMIC I Regular Interest I-LTP, until
$100 has been distributed pursuant to this clause;
(b) 2.00% of such remainder (other than amounts payable under
clause (c) below) first, to the Holders of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest
I-LTA5, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I Regular Interest
I-LTM10, 1.00% and in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the
Uncertificated Balances of such REMIC I Regular Interests are
reduced to zero and second, to the Holders of REMIC I Regular
Interest I-LTZZ, 1.00% of such remainder (other than amounts payable
under clause (c) below), until the Uncertificated Balance of such
REMIC I Regular Interest is reduced to zero; and
(c) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-I Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to the Holders of (i) REMIC I Regular Interest I-LTAA and REMIC I Regular
Interest I-LTP, in that order and (ii) REMIC I Regular Interest I-LTZZ,
respectively; provided that REMIC I Regular Interest I-LTP shall not be reduced
until the Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter, at which point such amount shall be distributed to
REMIC I Regular Interest I-LTP, until $100 has been distributed pursuant to this
clause; and
(iv) to the Holders of REMIC I Regular Interests, in an amount equal
to the remainder of the REMIC I Sub WAC Allocation Percentage of Available
Funds for such Distribution Date after the distributions made pursuant to
clause (i) above, such that distributions of principal shall be deemed to
be made to the REMIC I Regular Interests FIRST, so as to keep the
Uncertificated Balance of each REMIC I Regular Interest ending with the
designation "GRP" equal to 0.01% of the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group; SECOND, to each REMIC I
Regular Interest ending with the designation "SUB," so that the
Uncertificated Balance of each such REMIC I Regular Interest is equal to
0.01% of the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the current
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Certificate Principal Balance of the Class A Certificate in the related
Loan Group (except that if any such excess is a larger number than in the
preceding distribution period, the least amount of principal shall be
distributed to such REMIC I Regular Interests such that the REMIC I
Subordinated Balance Ratio is maintained); and THIRD, any remaining
principal to REMIC I Regular Interest I-LTXX.
Notwithstanding the priorities and amounts of distribution of funds
pursuant to this Section 4.01(a)(1), actual distributions of Available Funds
shall be made only in accordance with Section 4.01(a)(2), (3) and (4).
(2) (I) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account an amount equal to the Group I Interest Remittance Amount
and distribute to the Certificateholders the following amounts, in the following
order of priority:
(i) to the Certificate Insurer, the amount owing to the Certificate
Insurer under the Insurance Agreement for the Premium Amount;
(ii) to the Holders of the Group I Certificates, the Senior Interest
Distribution Amount related to such Certificates;
(iii) to the Certificate Insurer, the Reimbursement Amount for such
Distribution Date; and
(iv) concurrently, to the Holders of each Class of Group II
Certificates, on a PRO RATA basis based on the entitlement of each such
Class, the Senior Interest Distribution Amount for each such Class, to the
extent remaining undistributed after the distribution of the Group II
Interest Remittance Amount, as set forth in Section 4.01(a)(2)(II)(i)
below.
(II) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account an amount equal to the Group II Interest Remittance Amount
and distribute to the Certificateholders the following amounts, in the following
order of priority:
(i) concurrently, to the Holders of each Class of Group II
Certificates, on a PRO RATA basis based on the entitlement of each such
Class, the Senior Interest Distribution Amount related to such
Certificates;
(ii) to the holders of the Group I Certificates any undistributed
Senior Interest Distribution Amount related to such Certificates, to the
extent remaining undistributed after the distributions of the Group I
Interest Remittance Amount, as set forth in Section 4.01(a)(2)(I)(ii)
above;
(iii) to the Certificate Insurer, the amount owing to the
Certificate Insurer under the Insurance Agreement for the Premium Amount,
to the extent remaining undistributed after the distribution of the Group
I Interest Remittance Amount, as set forth in Section 4.01(a)(2)(I)(i);
and
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(iv) to the Certificate Insurer, the Reimbursement Amount for such
Distribution Date, to the extent not paid pursuant to Section
4.01(a)(2)(I)(iii).
(III) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a)(2)(I) and (II) above, the Trustee shall
withdraw from the Distribution Account an amount equal to any remaining
Group I Interest Remittance Amount and Group II Interest Remittance Amount
and will be distributed 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 and
Class M-10 Certificates, in that order, in an amount equal to the Interest
Distribution Amount for each such Class.
(3) (I) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Group I Principal Distribution Amount
shall be distributed in the following order of priority:
(i) to the Holders of the Group I Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(ii) to the Certificate Insurer, the Reimbursement Amount for such
Distribution Date, to the extent not paid pursuant to Sections
4.01(a)(2)(I)(iii) and 4.01(a)(2)(II)(iv); and
(iii) to the Holders of the Group II Certificates (allocated among
the Classes of Group II Certificates in the priority described in Section
4.01(a)(5) below), after taking into account the distribution of the Group
II Principal Distribution Amount, as described in Section 4.01(a)(3)(II)
below, until the Certificate Principal Balances of such Classes have been
reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Group II Principal Distribution Amount
shall be distributed in the following order of priority:
(i) to the Holders of the Group II Certificates (allocated among the
Classes of Group II Certificates in the priority described in Section
4.01(a)(5) below), until the Certificate Principal Balances of such
Classes have been reduced to zero; and
(ii) to the Holders of the Group I Certificates, after taking into
account the distribution of the Group I Principal Distribution Amount
already distributed as set forth in Section 4.01(a)(3)(I) above until the
Certificate Principal Balance thereof has been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Trustee shall withdraw from the
Distribution Account an amount equal to the sum of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount remaining
undistributed for such Distribution Date will be distributed 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 and Class M-10 Certificates, in that order, in each case,
until the Certificate Principal Balance of such Class has been reduced to zero.
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(IV) On each Distribution Date (a) on or after the Stepdown Date and (b)
on which a Trigger Event is not in effect, the Group I Principal Distribution
Amount shall be distributed in the following order of priority:
(i) to the Holders of the Group I Certificates, the Senior Group I
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) to the Certificate Insurer, the Reimbursement Amount for such
Distribution Date, to the extent not paid pursuant to the foregoing
provisions; and
(iii) to the Holders of the Group II Certificates (allocated among
the Classes of Group II Certificates in the priority described in Section
4.01(a)(5) below), after taking into account the distribution of the Group
II Principal Distribution Amount, as described in Section 4.01(a)(3)(V)(i)
below, up to an amount equal to the Senior Group II Principal Distribution
Amount remaining undistributed, until the Certificate Principal Balances
of such Classes have been reduced to zero.
(V) On each Distribution Date (a) on or after the Stepdown Date and (b) on
which a Trigger Event is not in effect, the Group II Principal Distribution
Amount shall be distributed in the following order of priority:
(i) to the Holders of the Group II Certificates (allocated among the
Classes of Group II Certificates in the priority described in Section
4.01(a)(5) below), the Senior Group II Principal Distribution Amount,
until the Certificate Principal Balances of such Classes have been reduced
to zero; and
(ii) to the Holders of the Group I Certificates after taking into
account the distribution of the Group I Principal Distribution Amount, as
set forth in Section 4.01(a)(3)(IV) above, up to an amount equal to the
Senior Group I Principal Distribution Amount remaining undistributed,
until the Certificate Principal Balance thereof has been reduced to zero.
(VI) On each Distribution Date (a) on or after the Stepdown Date and (b)
on which a Trigger Event is not in effect, the sum of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount remaining
undistributed for such Distribution Date shall be distributed in the following
order of priority:
(i) to the Holders of the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) to the Holders of the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
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(iii) to the Holders of the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(iv) to the Holders of the Class M-4 Certificates, the Class M-4
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(v) to the Holders of the Class M-5 Certificates, the Class M-5
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(vi) to the Holders of the Class M-6 Certificates, the Class M-6
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(vii) to the Holders of the Class M-7 Certificates, the Class M-7
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(viii) to the Holders of the Class M-8 Certificates, the Class M-8
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(ix) to the Holders of the Class M-9 Certificates, the Class M-9
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero; and
(x) to the Holders of the Class M-10 Certificates, the Class M-10
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero.
(4) On each Distribution Date, the Net Monthly Excess Cashflow shall be
distributed as follows:
(i) to the Holders of the Class or Classes of Certificates then
entitled to receive distributions in respect of principal, in an amount
equal to the Overcollateralization Increase Amount, applied as part of the
Group I Principal Distribution Amount or the Group II Principal
Distribution Amount, as applicable, to reduce the Certificate Principal
Balance of such Certificates until the aggregate Certificate Principal
Balance of such Certificates is reduced to zero;
(ii) sequentially, to the Holders of the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class M-10, in that order, the related Interest Carry Forward Amount
allocable to such Classes of Certificates;
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(iii) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9 and Class M-10, in that order, the related Allocated Realized Loss
Amount allocable to such Classes of Certificates;
(iv) to the Net WAC Rate Carryover Reserve Account, the amount
required by Section 4.10(b), after taking into account amounts, if any,
received under the Cap Contracts;
(v) to the Holders of the Class CE Certificates, (a) the Monthly
Interest Distributable Amount and any Overcollateralization Release Amount
for such Distribution Date and (b) on any Distribution Date on which the
Certificate Principal Balances of the Class A Certificates and the
Mezzanine Certificates have been reduced to zero, any remaining amounts in
reduction of the Certificate Principal Balance of the Class CE
Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; and
(vi) to the Holders of the Class R Certificates, any remaining
amounts; provided that if such Distribution Date is the Distribution Date
immediately following the expiration of the latest Prepayment Charge term
as identified on the Mortgage Loan Schedule or any Distribution Date
thereafter, then any such remaining amounts shall be distributed first, to
the Holders of the Class P Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and second, to the Holders of
the Class R Certificates.
(5) With respect to the Group II Certificates, all principal distributions
will be distributed concurrently, on a PRO RATA basis (based on (i) the
Certificate Principal Balance of the Class A-2 Certificates and (ii) the
aggregate Certificate Principal Balance of the Class A-3 Certificates, the Class
A-4 Certificates and the Class A-5 Certificates, respectively) to (a) the Class
A-2 Certificates and (b) sequentially, to the Class A-3 Certificates, the Class
A-4 Certificates and the Class A-5 Certificates, in that order, until their
respective Certificate Principal Balances have been reduced to zero; provided,
however, on any Distribution Date on which the aggregate Certificate Principal
Balances of the Class CE Certificates and the Mezzanine Certificates have been
reduced to zero, notwithstanding anything contained herein to the contrary, all
distributions of principal to the Group II Certificates will be distributed
concurrently, on a PRO RATA basis based on the Certificate Principal Balance of
each such Class.
On each Distribution Date, following the foregoing distributions, an
amount equal to the amount of Subsequent Recoveries deposited into the
Collection Account pursuant to Section 3.05 and included in the Available Funds
for such Distribution Date shall be applied to increase the Certificate
Principal Balance of the Class of Certificates with the Highest Priority up to
the extent of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.04. An amount equal to the amount of any
remaining Subsequent Recoveries shall be applied to increase the Certificate
Principal Balance of the Class of Certificates with the next Highest Priority,
up to the amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.04, and so on. Holders of such Certificates
will not be entitled to any distribution in respect of interest on the amount of
such increases for any Interest Accrual
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Period preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Certificate Principal Balance of each
Certificate of such Class in accordance with its respective Percentage Interest.
(b) On each Distribution Date, after making the distributions of the
Available Funds as set forth above, the Trustee shall FIRST, withdraw from the
Net WAC Rate Carryover Reserve Account all net income from the investment of
funds in the Net WAC Rate Carryover Reserve Account and distribute such amount
to the Holders of the Class CE Certificates and SECOND, withdraw from the Net
WAC Rate Carryover Reserve Account, to the extent of amounts remaining on
deposit therein, the amount of any Net WAC Rate Carryover Amount for such
Distribution Date and distribute such amount as follows:
FIRST, concurrently, to each Class of Class A Certificates, the related
Cap Amount, in each case up to the related Net WAC Rate Carryover Amount for
such Distribution Date;
SECOND, 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 and Class M-10
Certificates, in that order, the related Cap Amount, in each case up to a
maximum amount equal to the related Net WAC Rate Carryover Amount for such
Distribution Date;
THIRD, concurrently, to each Class of Class A Certificates, the related
Net WAC Rate Carryover Amount remaining unpaid pursuant to clause first above,
on a PRO RATA basis based on such respective remaining Net WAC Rate Carryover
Amounts; and
FOURTH, 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 and Class M-10
Certificates, in that order, the related Net WAC Rate Carryover Amount remaining
unpaid pursuant to clause second above.
On each Distribution Date, after the payment of any Net WAC Rate Carryover
Amounts on the Adjustable-Rate Certificates, any amounts remaining in the Net
WAC Rate Reserve Account (representing payments received by the Trustee under
the Cap Contracts), shall be payable to the Trustee. For so long as any
Adjustable-Rate Certificates are held by the Seller or any of its Affiliates,
the Trustee shall not distribute any Cap Amounts for such Certificates to the
Seller or any of its Affiliates and the Trustee will retain any such amounts as
additional compensation for its role in administering the Cap Contracts.
On each Distribution Date, the Trustee shall withdraw any amounts then on
deposit in the Distribution Account that represent Prepayment Charges collected
by the Master Servicer, Prepayment Charges payable by the Master Servicer
pursuant to Section 2.03(b)(ii), to the extent not related to Principal
Prepayments occurring after the related Prepayment Period, and the Trustee shall
distribute such amounts to the Holders of the Class P Certificates. Such
distributions shall not be applied to reduce the Certificate Principal Balance
of the Class P Certificates.
(c) All distributions made with respect to each Class of Certificates on
each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates
106
on each Distribution Date shall be made to the Holders of the respective Class
of record on the related Record Date (except as otherwise provided in Section
4.01(e) or Section 9.01 respecting the final distribution on such Class), based
on the aggregate Percentage Interest represented by their respective
Certificates, and shall be made by wire transfer of immediately available funds
to the account of any such Holder at a bank or other entity having appropriate
facilities therefor, if such Holder shall have so notified the Trustee in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date, or otherwise by check mailed by first class mail to
the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of the Trustee
maintained for such purpose pursuant to Section 8.12 or such other location
specified in the notice to Certificateholders of such final distribution.
Payments to the Certificate Insurer on any Distribution Date shall be made by
wire transfer of immediately available funds to the account designated by the
Certificate Insurer in Section 4.11(f).
Each distribution with respect to a Book-Entry Certificate shall be paid
to the Depository, as Holder thereof, and the Depository shall be responsible
for crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(d) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. Neither the Holders of
any Class of Certificates nor the Trustee nor the Master Servicer shall in any
way be responsible or liable to the Holders of any other Class of Certificates
in respect of amounts properly previously distributed on the Certificates.
(e) Except as otherwise provided in Section 9.01, whenever the Trustee
expects that the final distribution with respect to any Class of Certificates
shall be made on the next Distribution Date, the Trustee shall, no later than
five (5) days after the related Determination Date, mail to the Certificate
Insurer and each Holder on such date of such Class of Certificates a notice to
the effect that:
(i) the Trustee expects that the final distribution with respect to
such Class of Certificates shall be made on such Distribution Date, but
only upon presentation and surrender of such Certificates at the office of
the Trustee therein specified or its agent; and
(ii) no interest shall accrue on such Certificates from and after
the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their
107
Certificates shall, on such date, be set aside and held in trust by the Trustee
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
4.01(e) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall, directly or through an
agent, mail a final notice to remaining non-tendering Certificateholders
concerning surrender of their Certificates but shall continue to hold any
remaining funds for the benefit of non-tendering Certificateholders. The costs
and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, any amounts which were paid by the
Certificate Insurer under the Certificate Insurance Policy shall be reimbursed
to the Certificate Insurer (but only if the non-surrendered Certificates are
Insured Certificates) and the Trustee shall pay to the Underwriters all
remaining amounts, and all rights of non-tendering Certificateholders in or to
such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on any amount held in trust by the Trustee as a result of
such Certificateholder's failure to surrender its Certificate(s) for final
payment thereof in accordance with this Section 4.01(e).
(f) Notwithstanding anything to the contrary herein, (i) in no event shall
the Certificate Principal Balance of a Class A Certificate or a Mezzanine
Certificate be reduced more than once in respect of any particular amount both
(a) allocated to such Certificate in respect of Realized Losses pursuant to
Section 4.04 and (b) distributed to the Holder of such Certificate in reduction
of the Certificate Principal Balance thereof pursuant to this Section 4.01 from
Net Monthly Excess Cashflow and (ii) in no event shall the Uncertificated
Balance of a REMIC I Regular Interest to be reduced more than once in respect of
any particular amount both (a) allocated to such REMIC I Regular Interest in
respect of Realized Losses pursuant to Section 4.04 and (b) distributed on such
REMIC I Regular Interest in reduction of the Uncertificated Balance thereof
pursuant to this Section 4.01.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, the Trustee shall prepare and make available to
each Holder of the Regular Certificates, the Certificate Insurer and the NIMS
Insurer, a statement as to the distributions made on such Distribution Date
setting forth:
(i) the amount of the distribution made on such Distribution Date to
the Holders of the Certificates of each Class allocable to principal, and
the amount of distribution made on such Distribution Date to the Holders
of the Class P Certificates allocable to Prepayment Charges or Master
Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of the Certificates of each Class allocable to interest;
108
(iii) the aggregate Servicing Fee received by the Master Servicer
during the related Due Period;
(iv) the aggregate amount of Advances for such Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage Loans and
any REO Properties as of the close of business on such Distribution Date;
(vi) the number, aggregate Stated Principal Balance, weighted
average remaining term to maturity and weighted average Mortgage Rate of
the Mortgage Loans as of the related Due Date;
(vii) the number and aggregate unpaid Stated Principal Balance of
Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days, (c)
delinquent 90 or more days, in each case, as of the last day of the
preceding calendar month, (d) as to which foreclosure proceedings have
been commenced and (e) with respect to which the related Mortgagor has
filed for protection under applicable bankruptcy laws, with respect to
whom bankruptcy proceedings are pending or with respect to whom bankruptcy
protection is in force;
(viii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such Mortgage
Loan, the unpaid Stated Principal Balance and the Stated Principal Balance
of such Mortgage Loan as of the date it became an REO Property;
(ix) the book value and the Stated Principal Balance of any REO
Property as of the close of business on the last Business Day of the
calendar month preceding the Distribution Date;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during the
related Prepayment Period (or, in the case of Bankruptcy Losses allocable
to interest, during the related Due Period), separately identifying
whether such Realized Losses constituted Bankruptcy Losses and the
aggregate amount of Realized Losses incurred since the Closing Date and
the aggregate amount of Subsequent Recoveries received during the related
Prepayment Period and the cumulative amount of Subsequent Recoveries
received since the Closing Date (to the extent reported to the Trustee);
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Collection Account or the Distribution Account for such
Distribution Date;
(xiii) the aggregate Certificate Principal Balance of each Class of
Certificates, after giving effect to the distributions, and allocations of
Realized Losses, made on such Distribution Date, separately identifying
any reduction thereof due to allocations of Realized Losses (to the extent
reported to the Trustee);
109
(xiv) the Certificate Factor for each such Class of Certificates
applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for
such Distribution Date and the Interest Carry Forward Amount, if any, with
respect to the Class A Certificates and the Mezzanine Certificates on such
Distribution Date, and in the case of the Class A Certificates, the
Mezzanine Certificates and the Class CE Certificates, separately
identifying any reduction thereof due to allocations of Realized Losses,
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls;
(xvi) the aggregate amount of any Prepayment Interest Shortfall for
such Distribution Date, to the extent not covered by payments by the
Master Servicer pursuant to Section 4.03(e) or allocated to the Class CE
Certificates;
(xvii) the aggregate amount of Relief Act Interest Shortfalls for
such Distribution Date;
(xviii) the Overcollateralization Target Amount and the Credit
Enhancement Percentage for such Distribution Date;
(xix) the Overcollateralization Increase Amount, if any, for such
Distribution Date;
(xx) the Overcollateralization Reduction Amount, if any, for such
Distribution Date;
(xxi) with respect to any Mortgage Loan as to which foreclosure
proceedings have been concluded, the loan number and unpaid Stated
Principal Balance of such Mortgage Loan as of the date of such conclusion
of foreclosure proceedings;
(xxii) with respect to Mortgage Loans as to which a Final
Liquidation has occurred, the number of Mortgage Loans, the unpaid Stated
Principal Balance of such Mortgage Loans as of the date of such Final
Liquidation and the amount of proceeds (including Liquidation Proceeds and
Insurance Proceeds) collected in respect of such Mortgage Loans;
(xxiii) the respective Pass-Through Rates applicable to the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for
such Distribution Date and the Pass-Through Rate applicable to the
Adjustable-Rate Certificates for the immediately succeeding Distribution
Date;
(xxiv) the amount on deposit in the Net WAC Rate Carryover Reserve
Account as of the Determination Date;
(xxv) whether a Trigger Event is in effect;
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(xxvi) the Net WAC Rate Carryover Amount for the Class A
Certificates and the Mezzanine Certificates, if any, for such Distribution
Date, the amount remaining unpaid after reimbursements therefor on such
Distribution Date and any amounts due and received under the Cap
Contracts;
(xxvii) the Class A-1 Certificate Deficiency Amount and the Policy
Payment for such Distribution Date; and
(xxviii) the amount of the Reimbursement Amount for such
Distribution Date and the amount received by the Certificate Insurer in
respect thereof on such Distribution Date.
With respect to the items described in (v), (vi), (vii), (viii), (x), (xi)
and (xxii) above, the Trustee shall set forth such information with respect to
each Loan Group and with respect to the Mortgage Pool.
The Trustee may make such statement available and certain other
information, including, without limitation, information required to be provided
by the Trustee, to Certificateholders, the Certificate Insurer, the NIMS
Insurer, the Master Servicer, the Rating Agencies and to beneficial owners of
the Certificates through the Trustee's web site. Such web site is currently
located at "xxx.xxxxxxx.xxx." Assistance in using the web site can currently be
obtained by calling the Trustee's investor relations desk at (000) 000-0000.
Parties unable to use this distribution method may request that a paper copy be
mailed to them via first class mail by calling the investor relations desk. The
location of such web page and the procedures used therein are subject to change
from time to time at the Trustee's discretion. The Trustee shall have the right
to change the way monthly distribution statements are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties. The Trustee shall 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
Trustee's website, the Trustee may require registration and the acceptance of a
disclaimer. Notwithstanding anything to the contrary set forth in this
Agreement, the parties hereto acknowledge that in connection with the Trustee's
preparation of the foregoing reports, the Trustee will rely solely upon the
information provided to it in the Remittance Reports.
In the case of information furnished pursuant to subclauses (i) through
(ii) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to the NIMS Insurer, the Certificate Insurer and each
Person who at any time during the calendar year was a Holder of a Regular
Certificate a statement containing the information set forth in subclauses (i)
through (iii) above, aggregated for such calendar year or applicable portion
thereof during which such person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time are in force.
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Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to the NIMS Insurer, the Certificate Insurer and each
Person who at any time during the calendar year was a Holder of a Residual
Certificate a statement setting forth the amount, if any, actually distributed
with respect to the Residual Certificates, as appropriate, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared by the Trustee and furnished to such Holders pursuant to the rules and
regulations of the Code as are in force from time to time.
The Trustee shall, upon written request, furnish to each
Certificateholder, Certificate Owner, the Certificate Insurer and the NIMS
Insurer, during the term of this Agreement, such periodic, special, or other
reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder or Certificate Owner in accordance with
such reasonable and explicit instructions and directions as the
Certificateholder or Certificate Owner may provide. For purposes of this Section
4.02, the Trustee's duties are limited to the extent that the Trustee receives
timely reports as required from the Master Servicer.
On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.
SECTION 4.03. Remittance Reports and Other Reports to the Trustee;
Advances; Payments in Respect of Prepayment Interest
Shortfalls.
(a) On the Master Servicer Reporting Date, the Master Servicer shall
deliver to the Trustee (who shall deliver to the Certificate Insurer to the
extent received), Ameriquest Mortgage Company and the NIMS Insurer by telecopy
(or by such other means as the Master Servicer, the Trustee, Ameriquest Mortgage
Company and the NIMS Insurer may agree from time to time) a Remittance Report
with respect to the related Distribution Date. Such Remittance Report will
include (i) the amount of Advances to be made by the Master Servicer in respect
of the related Distribution Date, the aggregate amount of Advances outstanding
after giving effect to such Advances, and the aggregate amount of Nonrecoverable
Advances in respect of such Distribution Date and (ii) such other information
with respect to the Mortgage Loans as the Trustee may reasonably require to
perform the calculations necessary to make the distributions contemplated by
Section 4.01 and to prepare the statements to Certificateholders contemplated by
Section 4.02. The Trustee shall not be responsible to recompute, recalculate or
verify any information provided to it by the Master Servicer.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee (who shall deliver to the Certificate
Insurer to the extent received), Ameriquest Mortgage Company, the NIMS Insurer a
statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement information regarding the
Collection
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Account that is mutually agreed upon by the Master Servicer and the Seller.
Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.03(d), the sum of (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.13 for
distribution on such Distribution Date.
On or before 1:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds, (ii)
from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it shall cause to be made an appropriate entry in
the records of the Collection Account that amounts held for future distribution
have been, as permitted by this Section 4.03, used by the Master Servicer in
discharge of any such Advance) or (iii) in the form of any combination of (i)
and (ii) aggregating the total amount of Advances to be made by the Master
Servicer with respect to the Mortgage Loans and REO Properties. Any amounts held
for future distribution used by the Master Servicer to make an Advance as
permitted in the preceding sentence or withdrawn by the Master Servicer as
permitted in Section 3.05(a)(vii) in reimbursement of Advances previously made
shall be appropriately reflected in the Master Servicer's records and replaced
by the Master Servicer by deposit in the Collection Account on or before any
future Master Servicer Remittance Date to the extent that the Available Funds
for the related Distribution Date (determined without regard to Advances to be
made on the Master Servicer Remittance Date) shall be less than the total amount
that would be distributed to the Classes of Certificateholders pursuant to
Section 4.01 on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances. The Trustee shall provide
notice to the Master Servicer, the Certificate Insurer, Ameriquest Mortgage
Company and the NIMS Insurer by telecopy by the close of business on any Master
Servicer Remittance Date in the event that the amount remitted by the Master
Servicer to the Trustee on such date is less than the Advances required to be
made by the Master Servicer for the related Distribution Date.
(c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from REMIC I pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.
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(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance or Nonrecoverable Servicing Advance. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or a Nonrecoverable Servicing
Advance or that any proposed Advance or Servicing Advance, if made, would
constitute a Nonrecoverable Advance or Nonrecoverable Servicing Advance,
respectively, shall be evidenced by an Officers' Certificate of the Master
Servicer delivered to the Trustee, the Certificate Insurer and the NIMS Insurer.
(e) The Master Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 1:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount ("Compensating Interest") equal to
the lesser of (i) the aggregate of the Prepayment Interest Shortfalls for the
related Distribution Date resulting solely from Principal Prepayments during the
related Prepayment Period and (ii) the amount of its aggregate Servicing Fee for
the most recently ended calendar month. The Master Servicer shall not have the
right to reimbursement for any amounts remitted to the Trustee in respect of
Prepayment Interest Shortfalls. Such amounts so remitted shall be included in
the Available Funds and distributed therewith on the next Distribution Date. The
Master Servicer shall not be obligated to pay any amounts with respect to Relief
Act Interest Shortfalls.
SECTION 4.04. Allocation of Realized Losses.
(a) On or before each Determination Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. On or before each Determination Date, the Master
Servicer shall also determine as to each Mortgage Loan: (A) the total amount of
Realized Losses, if any, incurred in connection with any Deficient Valuations
made during the related Prepayment Period; and (B) the total amount of Realized
Losses, if any, incurred in connection with Debt Service Reductions in respect
of Monthly Payments due during the related Due Period. The information described
in the two preceding sentences that is to be supplied by the Master Servicer
shall be evidenced by an Officers' Certificate delivered to the Trustee (who
shall forward a copy to the Certificate Insurer to the extent received) by the
Master Servicer on the Master Servicer Reporting Date immediately following the
end of (x) in the case of Bankruptcy Losses allocable to interest, the Due
Period during which any such Realized Loss was incurred, and (y) in the case of
all other Realized Losses, the Prepayment Period during which any such Realized
Loss was incurred.
(b) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: FIRST, in reduction of interest
accrued on and otherwise distributable to the Class CE Certificates to the
extent of Net Monthly Excess Cashflow used to pay principal on the Class A
Certificates and the Mezzanine Certificates under clause (i) under Section 4.01
hereof; SECOND, in reduction of interest accrued on and otherwise distributable
to the Class CE Certificates to the extent of Net Monthly Excess Cashflow
available for distribution pursuant to clauses (ii) through (vi) of Section
4.01(a)(4) hereof; and THIRD, in reduction of the Certificate Principal Balance
of the Class CE Certificates (determined after
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taking into account all distributions made on the Certificates on such
Distribution Date), until the Certificate Principal Balance thereof has been
reduced to zero. If on any Distribution Date, after all distributions are made
by the Trustee pursuant to Section 4.01 hereof, the aggregate Certificate
Principal Balance of the Class A Certificates, the Mezzanine Certificates and
the Class P certificates exceeds the sum of the Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after taking into
account prepayments during the related Prepayment Period), the amount of such
excess shall be allocated: FIRST, to the Class M-10 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; SECOND, to the
Class M-9 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; THIRD, to the Class M-8 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; FOURTH, to the Class M-7
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; FIFTH, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; SIXTH, to the Class M-5 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
SEVENTH, to the Class M-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, EIGHTH, to the Class M-3 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero, NINTH, to
the Class M-2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero and TENTH, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
Any such allocation to a Class of Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof (after the actual distributions to be made on such Distribution Date
pursuant to Section 4.01 hereof) by the amount so allocated; any allocation of
Realized Losses to a Class CE Certificate shall be made by reducing the amount
otherwise payable in respect thereof pursuant to Section 4.01(a)(4)(V). No
allocations of any Realized Losses shall be made to the Certificate Principal
Balances of the Class A Certificates or the Class P Certificates.
As used herein, an allocation of a Realized Loss on a "PRO RATA basis"
among two or more specified Classes of Certificates means an allocation on a PRO
RATA basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder shall be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
(c) (i) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee on each Distribution Date to
the following REMIC I Regular Interests in the specified percentages, as
follows: FIRST, to Uncertificated Interest payable to the REMIC I Regular
Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate amount
equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively;
SECOND, to the Uncertificated Balances of the REMIC I Regular Interest I-LTAA
and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC
I Principal Loss Allocation Amount, 98% and 2%, respectively; THIRD, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM10 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM10 has been reduced to zero; FOURTH, to the Uncertificated
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Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM9 has been reduced to
zero; FIFTH, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM8 and REMIC I Regular Interest I-LTZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM8 has been reduced to zero; SIXTH, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM7 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM7 has been reduced to zero; SEVENTH, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM6 has been reduced to zero; EIGHTH, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM5 has been reduced to zero; ninth, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM4 has been reduced to zero; TENTH, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM3 has been reduced to zero; ELEVENTH, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero; and TWELFTH, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM1 has been reduced to zero.
(ii) The REMIC I Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date: FIRST, so as to keep the Uncertificated Balance of each
REMIC I Regular Interest ending with the designation "GRP" equal to 0.01%
of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group; SECOND, to each REMIC I Regular Interest ending with
the designation "SUB," so that the Uncertificated Balance of each such
REMIC I Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related
Loan Group over (y) the current Certificate Principal Balance of the Class
A Certificate in the related Loan Group (except that if any such excess is
a larger number than in the preceding distribution period, the least
amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is maintained);
and THIRD, any remaining Realized Losses shall be allocated to REMIC I
Regular Interest I-LTXX.
SECTION 4.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee shall
comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The
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consent of Certificateholders shall not be required for such withholding. In the
event the Trustee does withhold any amount from interest or original issue
discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Trustee shall indicate the amount withheld
to such Certificateholders.
SECTION 4.06. Commission Reporting.
(a) The Trustee shall reasonably cooperate with the Depositor in
connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee
shall prepare on behalf of the Trust any Forms 8-K and 10-K (or other comparable
required form containing the same or comparable information or other information
mutually agreed upon) customary for similar securities as required by the
Exchange Act and the Rules and Regulations of the Commission thereunder, and the
Depositor shall sign (or shall cause another entity acceptable to the Commission
to sign) and the Trustee shall file (via the Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Depositor (or such
other entity). The Depositor hereby grants to the Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Depositor. Such power of attorney shall continue until the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust. Notwithstanding anything
herein to the contrary, the Depositor, and not the Trustee, shall be responsible
for executing each Form 10-K filed on behalf of the Trust.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after each
Distribution Date, with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to March 30th of each year
(or such earlier date as may be required by the Exchange Act and the Rules and
Regulations of the Commission), the Trustee shall file a Form 10-K, in substance
as required by applicable law or applicable Commission staff's interpretations.
Such Form 10-K shall include as exhibits the Master Servicer's annual statement
of compliance described under Section 3.19 and the accountant's report described
under Section 3.20, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence or willful misconduct. The
Form 10-K shall also include a certification in the form attached hereto as
Exhibit J-1 (the "Certification"), which shall be signed by the senior officer
of the Depositor in charge of securitization.
(c) In addition, (x) the Trustee shall sign a certification (in the form
attached hereto as Exhibit J-2) for the benefit of the Depositor and its
officers, directors and Affiliates regarding certain aspects of items 1 through
3 of the Certification (the "Trustee's Certification") (provided, however, that
the Trustee shall not undertake an analysis of the accountant's report attached
as an exhibit to the Form 10-K) and (y) the Master Servicer shall sign a
certification (in the form attached hereto as Exhibit J-3) for the benefit of
the Depositor, the Trustee and their officers, directors and Affiliates
regarding certain aspects of the Certification (the "Master Servicer
Certification"). The Master Servicer Certification shall be delivered to the
Depositor and the Trustee no later than March 15th of each year (or if such day
is not a Business Day, the
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immediately preceding Business Day). The Trustee's Certification shall be
delivered to the Depositor by no later than March 18th of each year (or if such
day is not a Business Day, the immediately preceding Business Day) and the
Depositor shall deliver the Certification to the Trustee for filing no later
than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day).
In addition, the Trustee shall indemnify and hold harmless the Depositor
and its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 4.06 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith. The
Depositor shall indemnify and hold harmless the Trustee and its officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Depositor's obligations under this Section 4.06 or the Depositor's negligence,
bad faith or willful misconduct in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
Depositor or the Trustee, as applicable, then the other party, in connection
with a breach of its respective obligations under this Section 4.06 or its
respective negligence, bad faith or willful misconduct in connection therewith,
agrees that it shall contribute to the amount paid or payable by the other party
as a result of the losses, claims, damages or liabilities of the other party in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other.
(d) Upon any filing with the Commission, the Trustee shall promptly
deliver to the Depositor and the Certificate Insurer a copy of any executed
report, statement or information.
(e) Prior to January 30th of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
(f) To the extent that, following the Closing Date, the Depositor
certifies that reports and certifications differing from those required under
this Section 4.06 comply with the reporting requirements under the Exchange Act,
the Trustee hereby agrees that it shall reasonably cooperate to amend the
provisions of this Section 4.06 (in accordance with Section 11.01) in order to
comply with such amended reporting requirements and such amendment of this
Section 4.06. Any such amendment may result in the reduction of the reports
filed by the Depositor under the Exchange Act. Notwithstanding the foregoing,
the Trustee shall not be obligated to enter into any amendment pursuant to this
Section that adversely affects its obligations and immunities under this
Agreement.
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SECTION 4.07. [Reserved].
SECTION 4.08. [Reserved].
SECTION 4.09. [Reserved].
SECTION 4.10. Net WAC Rate Carryover Reserve Account.
(a) No later than the Closing Date, the Trustee shall establish and
maintain with itself, as agent for the Trustee, a separate, segregated trust
account titled, "Net WAC Rate Carryover Reserve Account, Xxxxx Fargo Bank, N.A.,
as Trustee, in trust for the registered Holders of Park Place Securities Inc.,
Asset-Backed Pass-Through Certificates, Series 2004-WHQ1." The Trustee shall
deposit into the Net WAC Rate Carryover Reserve Account any payments received by
it (i) under the Cap Contracts for the benefit of the Holders of the
Adjustable-Rate Certificates and (ii) pursuant to Section 4.01(a)(4)(iv).
(b) On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class CE Certificateholders
to, and therefore shall, deposit into the Net WAC Rate Carryover Reserve Account
the amount of such Net WAC Rate Carryover Amount, after taking into account
amounts received under the Cap Contracts, rather than distributing such amounts
to the Class CE Certificateholders. On each such Distribution Date, the Trustee
shall hold all such amounts for the benefit of the Holders of the Class A
Certificates and the Mezzanine Certificates, and shall distribute such amounts
to the Holders of the Class A Certificates and the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(b).
(c) For federal and state income tax purposes, the Class CE
Certificateholders shall be deemed to be the owners of the Net WAC Rate
Carryover Reserve Account and all amounts deposited into the Net WAC Rate
Carryover Reserve Account shall be treated as amounts distributed by REMIC II to
the Holders of the Class CE Interest and by REMIC III to the Holders of the
Class CE Certificates. Upon the termination of the Trust, or the payment in full
of the Class A Certificates and the Mezzanine Certificates, all amounts
remaining on deposit in the Net WAC Rate Carryover Reserve Account shall be
released by the Trust and distributed to the Class CE Certificateholders or
their designees. The Net WAC Rate Carryover Reserve Account shall be part of the
Trust but not part of any REMIC and any payments to the Holders of the Class A
Certificates or the Mezzanine Certificates of Net WAC Rate Carryover Amounts
shall not be payments with respect to a "regular interest" in a REMIC within the
meaning of Code Section 860(G)(a)(1).
(d) By accepting a Class CE Certificate, each Class CE Certificateholder
hereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Net WAC Rate Carryover Reserve Account the amounts described
above on each Distribution Date as to which there is any Net WAC Rate Carryover
Amount rather than distributing such amounts to the Class CE Certificateholders.
By accepting a Class CE Certificate, each Class CE Certificateholder further
agrees that such direction is given for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by such acceptance.
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(e) At the written direction of the Holders of a majority in Percentage
Interest in the Class CE Certificates, the Trustee shall direct any depository
institution maintaining the Net WAC Rate Carryover Reserve Account to invest the
funds in such account in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class CE Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds pursuant to clause (vi) of the definition of Permitted
Investments. Interest earned on such investment shall be deposited into the Net
WAC Rate Carryover Reserve Account.
(f) For federal tax return and information reporting, the right of the
Holders of the Class A-1 Certificates, Group II Certificates and the Mezzanine
Certificates to receive payments from the Net WAC Rate Carryover Reserve Account
in respect of any Net WAC Rate Carryover Amount will be $332,994, $164,481 and
$500,525, respectively.
SECTION 4.11. The Certificate Insurance Policy.
(a) The Trustee shall establish a separate non-interest bearing trust
account which shall be an Eligible Account for the benefit of Holders of the
Class A-1 Certificates and the Certificate Insurer referred to herein as the
"Policy Payment Account" over which the Trustee shall have exclusive control and
sole right of withdrawal. The Trustee shall deposit upon receipt any amount paid
under the Certificate Insurance Policy in the Policy Payment Account and
distribute such amount only for purposes of payment to the Insured Certificates
of the Policy Payment for which a claim was made and such amount may not be
applied to satisfy any costs, expenses or liabilities of the Master Servicer,
the Trustee or the Trust Fund or to pay any other Class of Certificates. Amounts
paid under the Certificate Insurance Policy, to the extent needed to pay any
Class A-1 Certificate Deficiency Amount, shall be transferred to the
Distribution Account on the related Distribution Date, and the portion thereof
representing the Class A-1 Certificate Deficiency Amount shall be disbursed by
the Trustee to the Class A-1 Certificateholders, in each case as if it were a
distribution to the Holders of such Certificates pursuant to Section 4.01. It
shall not be necessary for such payments to be made by checks or wire transfers
separate from the checks or wire transfers used to pay other distributions to
the Class A-1 Certificateholders, as applicable, with other funds available to
make such payment. However, the amount of any payment of principal or of
interest on the Insured Certificates to be paid from funds transferred from the
Policy Payment Account shall be noted as provided in paragraph (d) below and in
the statement to be furnished to Holders of such Class of Certificates pursuant
to Section 4.02. Funds held in the Policy Payment Account shall not be invested.
Any funds remaining in the Policy Payment Account on the first Business Day
following a Distribution Date shall be returned to the Certificate Insurer
pursuant to the written instructions of the Certificate Insurer by the end of
such Business Day.
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(b) If the Trustee has determined that a Class A-1 Certificate Deficiency
Amount is required to be paid under the Certificate Insurance Policy with
respect to such Distribution Date, it shall deliver a Notice of Claim (in the
form attached as Exhibit A to the Certificate Insurance Policy) to the
Certificate Insurer no later than noon, New York, New York time on the second
Business Day preceding such Distribution Date and shall provide a copy thereof
to the Master Servicer at or prior to the time such Notice of Claim is received
by the Certificate Insurer. The Notice of Claim shall constitute a claim
therefor pursuant to the Certificate Insurance Policy.
(c) If the Trustee receives a certified copy of an order of the
appropriate court (an "Order") that any prior distribution made on the Insured
Certificates constitutes an Avoided Payment, the Trustee shall so notify the
Certificate Insurer, shall comply with the provisions of the Certificate
Insurance Policy to obtain payment by the Certificate Insurer of such Avoided
Payment and shall, at the time it provides notice to the Certificate Insurer,
notify each holder of the affected Insured Certificates by mail that (i) subject
to the terms of the Certificate Insurance Policy, the Certificate Insurer will
disburse the Avoided Payment directly to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order on the fourth
Business Day following such Certificateholder's making timely delivery to the
Trustee of (a) a certificate of such Certificateholder that such Order has been
entered and is not subject to any stay, (b) an opinion of counsel satisfactory
to the Certificate Insurer that such Order is final and is not subject to appeal
and (c) an assignment duly executed and delivered by such Certificateholder, in
such from as is reasonably required by the Certificate Insurer and provided to
such Certificateholder by the Certificate Insurer, irrevocably assigning to the
Certificate Insurer all rights and claims of such Certificateholder relating to
or arising under the affected Insured Certificates against the debtor that made
a payment of such Avoided Payment, or otherwise with respect to such payment,
provided that if such documents are received after 10:00 a.m., New York time, on
such Business Day, they will be deemed to be received on the following Business
Day, and (ii) if any such Avoided Payment is recovered from such
Certificateholder pursuant to such Order, such Certificateholder will be
entitled to payment pursuant to the Certificate Insurance Policy. A copy of the
Certificate Insurance Policy shall be made available to each affected
Certificateholder through the Trustee, and the Trustee shall furnish to the
Certificate Insurer or its fiscal agent, if any, a copy of its records
evidencing the payments that have been made by the Trustee and subsequently
recovered from Certificateholders and the dates on which such payments were
made.
(d) The Trustee shall keep a complete and accurate record of the amount of
interest and principal paid in respect of any Insured Certificates from moneys
received under the Certificate Insurance Policy. The Certificate Insurer shall
have the right to inspect such records at reasonable times during normal
business hours upon two Business Day's prior notice to the Trustee.
(e) The Holders of the Insured Certificates are not entitled to institute
proceedings directly against the Certificate Insurer. Each Holder of the Insured
Certificates, by its purchase of Insured Certificates hereby agrees that the
Certificate Insurer may at any time during the continuation of any proceeding
relating to an Avoided Payment, direct all matters relating to such Avoided
Payment on their behalf, including, without limitation, the direction of
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any appeal of any order relating to such preference claim and the posting of any
surety, supersedeas or performance bond pending any such appeal.
(f) Any payments to the Certificate Insurer shall be made by wire transfer
of immediately available funds to the following Federal Reserve Account (unless
and until the Certificate Insurer notifies the Trustee of a change in such
account information in writing):
Fleet Bank, N.A.
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
ABA Number: 000000000
For the Account of: XL Capital Assurance Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Account #: 000-000-0000
Reference: Policy Number CA01142A-PPSI 2004-WHQ1
(g) The Trustee shall, upon retirement of the Insured Certificates,
furnish to the Certificate Insurer a notice of such retirement, and, after
retirement of the Insured Certificates and the expiration of the term of the
Certificate Insurance Policy, surrender the Certificate Insurance Policy to the
Certificate Insurer for cancellation.
(h) The Trustee shall hold the Certificate Insurance Policy in trust as
agent for the Holders of the Class A Certificates for the purpose of making
claims thereon and distributing the proceeds thereof. Neither the Certificate
Insurance Policy nor the amounts paid on the Certificate Insurance Policy shall
constitute part of the Trust Fund created by this Agreement. Each Holder of
Insured Certificates, by accepting its Insured Certificates, appoints the
Trustee as attorney-in-fact for the purpose of making claims on the Certificate
Insurance Policy.
SECTION 4.12. Effect of Payments by the Certificate Insurer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect
to principal of or interest on the Insured Certificates which is made with
moneys received pursuant to the terms of the Certificate Insurance Policy shall
not be considered payment of the Insured Certificates from the Trust Fund. The
Depositor, the Master Servicer and the Trustee acknowledge, and each Holder by
its acceptance of an Insured Certificate agrees, that without the need for any
further action on the part of the Certificate Insurer, the Depositor, the Master
Servicer, the Trustee or the Certificate Registrar (a) to the extent the
Certificate Insurer makes payments, directly or indirectly, on account of
principal of or interest on the Insured Certificates to the Holders of such
Class of Certificates, the Certificate Insurer shall be fully subrogated to, and
each such Certificateholder, the Master Servicer and the Trustee hereby delegate
and assign to the Certificate Insurer, to the fullest extent permitted by law,
the rights of such Holders to receive such principal and interest (in the manner
set forth in the Insurance Agreement) from the Trust Fund, and (b) the
Certificate Insurer shall be paid such amounts from the sources and in the
manner provided herein for the payment of such amounts and as provided in this
Agreement until full reimbursement of all Policy Payments (together with
interest thereon at the Late Payment Rate from the date paid by the Certificate
Insurer until the date of reimbursement
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thereof). The Trustee and the Master Servicer shall cooperate in all respects
with any reasonable request by the Certificate Insurer for action to preserve or
enforce the Certificate Insurer's rights or interests under this Agreement
without limiting the rights or affecting the interests of the Holders of the
Insured Certificates as otherwise set forth herein.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate shall represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates shall equal the aggregate Stated Principal Balance
of the Mortgage Loans.
The Certificates shall be substantially in the forms annexed hereto as
Exhibits A-1 through A-19. The Certificates of each Class shall be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate shall share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed and delivered by
the Trustee and the Trustee shall cause the Certificates to be authenticated by
the Certificate Registrar to or upon the order of the Depositor. The
Certificates shall be executed and attested by manual or facsimile signature on
behalf of the Trustee by an authorized signatory. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Trustee shall bind the Trustee notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Certificate Registrar by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates held by the Book-Entry Custodian
or, if appointed to hold such Certificates as provided below, the Depository,
and registered in the name of the Depository or its nominee and, except as
provided below, registration of such Certificates may not be transferred by the
Trustee except to another Depository that agrees to hold such Certificates for
the respective Certificate Owners with Ownership Interests therein. The
Certificate Owners shall hold their respective Ownership Interests in and to
such Certificates through the book-entry facilities of the Depository and,
except as provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and if it is
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no longer qualified to act as such, the Book-Entry Custodian shall, appoint, by
a written instrument delivered to the Depositor, the Master Servicer, the
Trustee (if the Trustee is not the Book-Entry Custodian) and any other transfer
agent (including the Depository or any successor Depository), to act as
Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of its
duties or responsibilities by reason of any such appointment of other than the
Depository. If the Trustee resigns or is removed in accordance with the terms
hereof, if it so elects, the Depository shall immediately succeed to its
predecessor's duties as Book-Entry Custodian. The Depositor shall have the right
to inspect, and to obtain copies of, any Certificates held as Book-Entry
Certificates by the Book-Entry Custodian.
The Trustee, the Master Servicer and the Depositor may for all purposes
(including the making of payments due on the Book-Entry Certificates) deal with
the Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates for the purposes of exercising the rights
of Certificateholders hereunder. The rights of Certificate Owners with respect
to the Book-Entry Certificates shall be limited to those established by law and
agreements between such Certificate Owners and the Depository Participants and
brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of the Book-Entry
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Certificateholders and shall give notice to the
Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository, and (B) the Depositor is unable to locate a qualified successor or
(ii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates shall be issued in minimum denominations of $25,000
($50,000 in the case of the Class M-10 Certificates), except that any beneficial
ownership that was represented by a Book-Entry Certificate in an amount less
than $25,000 immediately prior to the issuance of a Definitive Certificate shall
be issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate. None of the Depositor, the Master Servicer or the
Trustee shall be liable for any delay in the delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates,
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and the Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies
to be appointed by the Trustee in accordance with the provisions of Section 8.12
a Certificate Register for the Certificates in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided. The Trustee shall initially serve as Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided. The Certificate Registrar may appoint, by a written
instrument delivered to the Master Servicer and the Depositor, any other bank or
trust company to act as Certificate Registrar under such conditions as the
predecessor Certificate Registrar may prescribe, provided that the predecessor
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.
(b) No transfer of any Class M-10 Certificate, Class CE Certificate, Class
P Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class M-10 Certificate, Class CE Certificate,
Class P Certificate or Residual Certificate is to be made without registration
or qualification (other than in connection with the initial transfer of any such
Certificate by the Depositor to an affiliate of the Depositor), the Trustee and
the Certificate Registrar shall each require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration (which Opinion of Counsel shall not be an expense of the Depositor,
the Trustee, the Master Servicer, in its capacity as such, or the Trust Fund),
together with copies of the written certification(s) of the Certificateholder
desiring to effect the transfer and/or such Certificateholder's prospective
transferee upon which such Opinion of Counsel is based, if any. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class M-10 Certificates, the Class CE Certificates, the Class P
Certificates or the Residual Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. If a transfer of an Ownership Interest in the Class M-10
Certificates is to be made without registration under the 1933 Act (other than
in connection with the initial issuance thereof or a transfer thereof by the
Depositor or one of its Affiliates), then the Certificate Registrar shall refuse
to register such transfer unless it receives (and upon receipt, may conclusively
rely upon) a certificate from the Certificateholder desiring to effect such
transfer and a certificate from such Certificateholder's prospective transferee
(which in the case of the Book-Entry Certificates, the
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Certificateholder and the Certificateholder's prospective transferee will be
deemed to have represented such certification), to the effect that, among other
things, the transfer is being made to a qualified institutional buyer as defined
in Rule 144A under the Securities Act in accordance with Rule 144A. Any
Certificateholder desiring to effect the transfer of a Class M-10 Certificate,
Class CE Certificate, Class P Certificate or Residual Certificate shall, and
does hereby agree to, indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
Notwithstanding the foregoing, no certification or Opinion of Counsel
described in this Section 5.02(b) shall be required in connection with the
transfer, on the Closing Date, of any Class R Certificate by the Depositor to an
"accredited investor" within the meaning of Rule 501(d) of the 1933 Act.
(c) No transfer of a Class M-10 Certificate, Class CE Certificate, Class P
Certificate or Residual Certificate or any interest therein shall be made to any
Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly
or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as
certified by such transferee in the form of Exhibit G, unless either (i) the
Trustee is provided with an Opinion of Counsel for the benefit of the Trust
Fund, the Depositor, the Trustee, the NIMS Insurer, the Certificate Insurer and
the Master Servicer and on which they may rely, which shall be to the effect
that the purchase and holding of such Certificates is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the NIMS Insurer, the Certificate Insurer, the
Trustee or the Trust Fund to any obligation or liability (including obligations
or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Master Servicer, the NIMS Insurer, the Certificate
Insurer, the Trustee or the Trust Fund or (ii) solely in the case of the Class
M-10 Certificates, the Trustee receives a certification from the prospective
transferee in the form of Exhibit G that the Class M-10 Certificates have been
offered in an underwriting or placement within the meaning of Prohibited
Transaction Exemption 2002-41, as amended ("PTE 2002-41"). Neither an Opinion of
Counsel nor any certification will be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.
Each beneficial owner of the Mezzanine Certificates or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of that Certificate or interest therein, that either (i) it is not a
Plan or acting, directly or indirectly, on behalf of a Plan or with Plan Assets,
(ii) for Mezzanine Certificates other than the Class M-10 Certificates (unless
the Trustee has received the certification referred to in clause (ii) of the
preceding paragraph in which case it shall apply to the Class M-10 Certificates)
it has acquired and is holding such Mezzanine Certificates (other than the Class
M-10 Certificates) in reliance on the Underwriters' Exemption, and that it
understands that there are certain conditions to the availability of the
Underwriters'
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Exemption, including that the Certificates (other than the Class M-10
Certificates) must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Xxxxx'x, Fitch or S&P or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in PTCE 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.
If any Class CE Certificate, Class P Certificate, Residual Certificate or
Mezzanine Certificate or any interest therein is acquired or held in violation
of the provisions of the preceding paragraphs, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Master Servicer,
the Trustee, the NIMS Insurer, the Certificate Insurer, and the Trust Fund from
and against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.
(d)(i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Certificate Registrar or its designee under
clause (iii)(A) below to deliver payments to a Person other than such Person and
to negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of Transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Certificate Registrar shall
require delivery to it and shall not register the Transfer of any Residual
Certificate until its receipt of an affidavit and agreement (a "Transfer
Affidavit and Agreement"), in the form attached hereto as Exhibit F-2 from
the proposed Transferee, in form and substance satisfactory to the
Certificate Registrar, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not acquiring
its Ownership Interest in the Residual Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for any Person that
is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it shall endeavor to remain
a Permitted Transferee, and that it has reviewed the provisions of this
Section 5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Certificate Registrar who is assigned to this
transaction has actual knowledge that the proposed
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Transferee is not a Permitted Transferee, no Transfer of an Ownership
Interest in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer
its Ownership Interest in a Residual Certificate and (y) not to transfer
its Ownership Interest unless it provides a Transferor Affidavit (in the
form attached hereto as Exhibit F-2), to the Certificate Registrar stating
that, among other things, it has no actual knowledge that such other
Person is not a Permitted Transferee.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Certificate Registrar written notice that
it is a "pass-through interest holder" within the meaning of temporary
Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring
an Ownership Interest in a Residual Certificate, if it is, or is holding
an Ownership Interest in a Residual Certificate on behalf of, a
"pass-through interest holder."
(ii) The Certificate Registrar shall register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and Agreement
and all of such other documents as shall have been reasonably required by the
Certificate Registrar as a condition to such registration. In addition, no
Transfer of a Residual Certificate shall be made unless the Certificate
Registrar shall have received a representation letter from the Transferee of
such Certificate to the effect that such Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a Holder of a Residual
Certificate in violation of the provisions of this Section 5.02(d), then the
last preceding Permitted Transferee shall be restored, to the extent permitted
by law, to all rights as Holder thereof retroactive to the date of registration
of such Transfer of such Residual Certificate. The Certificate Registrar shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this Section 5.02(d) or
for making any payments due on such Certificate to the Holder thereof or for
taking any other action with respect to such Holder under the provisions of this
Agreement.
(B) If any purported Transferee shall become a Holder of a Residual
Certificate in violation of the restrictions in this Section 5.02(d) and
to the extent that the retroactive restoration of the rights of the Holder
of such Residual Certificate as described in clause (iii)(A) above shall
be invalid, illegal or unenforceable, then the Certificate Registrar shall
have the right, without notice to the Holder or any prior Holder of such
Residual Certificate, to sell such Residual Certificate to a purchaser
selected by the Certificate Registrar on such terms as the Certificate
Registrar may choose. Such purported Transferee shall promptly endorse and
deliver each Residual Certificate in accordance with the instructions of
the Certificate Registrar. Such purchaser may be the Certificate Registrar
itself or any Affiliate of the Certificate Registrar. The proceeds of such
sale, net of the commissions (which may include commissions payable to the
Certificate Registrar or its Affiliates), expenses and taxes due, if any,
shall be remitted by
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the Certificate Registrar to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined in
the sole discretion of the Certificate Registrar, and the Certificate
Registrar shall not be liable to any Person having an Ownership Interest
in a Residual Certificate as a result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue Service and
those Persons specified by the REMIC Provisions all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is a Disqualified Organization,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess inclusions" of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that holds an
Ownership Interest in a Residual Certificate having as among its record Holders
at any time any Person which is a Disqualified Organization. Reasonable
compensation for providing such information may be accepted by the Trustee.
(v) The provisions of this Section 5.02(d) set forth prior to this
subsection (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee at the expense of the party seeking to
modify, add to or eliminate any such provision the following:
(A) written notification from each Rating Agency to the effect that
the modification, addition to or elimination of such provisions shall not
cause such Rating Agency to downgrade its then-current ratings of any
Class of Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory to the
Trustee, to the effect that such modification of, addition to or
elimination of such provisions shall not cause any Trust REMIC to cease to
qualify as a REMIC and shall not cause any Trust REMIC, as the case may
be, to be subject to an entity-level tax caused by the Transfer of any
Residual Certificate to a Person that is not a Permitted Transferee or (y)
a Person other than the prospective transferee to be subject to a
REMIC-tax caused by the Transfer of a Residual Certificate to a Person
that is not a Permitted Transferee.
The Trustee shall forward to the NIMS Insurer and the Certificate Insurer
a copy of the items delivered to it pursuant to (A) and (B) above.
(e) Subject to the preceding subsections, upon surrender for registration
of transfer of any Certificate at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the
designated Transferee or Transferees, one or more new Certificates of the same
Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be exchanged
for other Certificates of the same Class with authorized denominations and a
like aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12. Whenever any Certificates are so surrendered for
exchange the Trustee, shall execute and cause the Certificate Registrar to
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authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing. In addition, with respect to
each Residual Certificate, the Holder thereof may exchange, in the manner
described above, the Class R Certificate for three separate Certificates, each
representing such Holder's respective Percentage Interest in the Class R-I
Interest and the Class R-II Interest, respectively, in each case that was
evidenced by the Class R Certificate being exchanged.
(g) No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Certificate Registrar in accordance with its
customary procedures.
(i) The Trustee shall cause the Certificate Registrar (unless the Trustee
is acting as Certificate Registrar) to provide notice to the Trustee of each
transfer of a Certificate and to provide the Trustee with an updated copy of the
Certificate Register on the first Business Day in March and August of each year,
commencing in March 2005.
(j) Any attempted or purported transfer of any Certificate in violation of
the provisions of Section 5.02(c) hereof shall be void AB INITIO and such
Certificate shall be considered to have been held continuously by the prior
permitted Holder.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee, the NIMS Insurer, the
Certificate Insurer and the Certificate Registrar such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
actual knowledge by the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser or the Trustee shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the same Class and
of like denomination and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the applicable REMIC created hereunder, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee, the NIMS Insurer, the
Certificate Insurer, the Certificate Registrar and any agent of any of them may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
4.01 and for all other purposes whatsoever, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar, the NIMS Insurer, the
Certificate Insurer or any agent of any of them shall be affected by notice to
the contrary.
SECTION 5.05. Certain Available Information.
On or prior to the date of the first sale of any Class M-10 Certificate,
Class CE Certificate, Class P Certificate or Residual Certificate to an
Independent third party, the Depositor shall provide to the Trustee ten copies
of any private placement memorandum or other disclosure document used by the
Depositor in connection with the offer and sale of the Class M-10 Certificates,
the Class CE Certificates, the Class P Certificates or the Residual
Certificates. In addition, if any such private placement memorandum or
disclosure document is revised, amended or supplemented at any time following
the delivery thereof to the Trustee, the Depositor promptly shall inform the
Trustee of such event and shall deliver to the Trustee ten copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Trustee shall maintain at its Corporate Trust Office and shall
make available free of charge during normal business hours for review by any
Holder of a Certificate, Certificate Owner or any Person identified to the
Trustee as a prospective transferee of a Certificate, originals or copies of the
following items: (i) in the case of a Holder or prospective transferee of a
Class M-10 Certificate, a Class CE Certificate, a Class P Certificate or a
Residual Certificate, the private placement memorandum or other disclosure
document relating to such Certificate, if any, in the form most recently
provided to the Trustee; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date, (C) all
certifications delivered by a Responsible Officer of the Trustee since the
Closing Date pursuant to Section 10.01(h), (D) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date to evidence the Master Servicer's determination that any Advance or
Servicing Advance was, or if made, would be a Nonrecoverable Advance or
Nonrecoverable Servicing Advance, respectively, and (E) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date pursuant to Section 4.04(a). Copies and mailing of any and all of the
foregoing items shall be available from the Trustee upon request at the expense
of the person requesting the same.
SECTION 5.06. Rights of the Certificate Insurer to Exercise Rights of
Class A-1 Certificateholders.
(a) By accepting its Certificate, each Class A-1 Certificateholder agrees
that, unless a Certificate Insurer Default exists, the Certificate Insurer shall
be deemed to be the Class A-1 Certificateholders for all purposes (other than
with respect to the receipt of payment on such Class of Certificates except
payments with respect to which the Certificate Insurer has
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subrogation rights as set forth herein) and shall have the right to exercise all
rights of such Certificateholders under this Agreement and under the Class A-1
Certificates without any further consent of such Certificateholders.
(b) All notices, statement reports, certificates or opinions required by
this Agreement to be sent to any Class A-1 Certificateholder shall also be sent
to the Certificate Insurer.
(c) (x) On the Distribution Date immediately after the expiration of the
Term of the Certificate Insurance Policy (as such term is defined in the
Certificate Insurance Policy) or (y) during the occurrence of a Certificate
Insurer Default (until such time as it has been cured), the rights, consents and
notifications granted to the Certificate Insurer in this Agreement shall be
extinguished.
SECTION 5.07. Certificate Insurer Default.
Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if (i) a Certificate Insurer Default exists and is
continuing or (ii) if and to the extent the Certificate Insurer has delivered
its written renunciation of all of its rights under this Agreement, all
provisions of this Agreement which (a) permit the Certificate Insurer to
exercise rights of the Class A-1 Certificateholders, (b) restrict the ability of
the Certificateholders, the Master Servicer or the Trustee to act without the
consent or approval of the Certificate Insurer, (c) provide that a particular
act or thing must be acceptable to the Certificate Insurer, (d) permit the
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee, the Master Servicer or the Certificateholders, (e) provide that any
action or omission taken with the consent, approval or authorization of the
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Certificates. Nothing in the foregoing sentence,
nor any action taken pursuant thereto or in compliance therewith, shall be
deemed (x) to have released the Certificate Insurer from any obligation or
liability it may have to any party or to the Class A-1 Certificateholders
hereunder, under any other agreement, instrument or document (including, without
limitation, the Certificate Insurance Policy) or under applicable law or (y) to
have terminated (1) the Certificate Insurer's right to receive Reimbursement
Amounts under this Agreement or the Insurance Agreement, (2) the Certificate
Insurer's right to receive reports and distributions as described in this
Agreement or (3) the requirement that the Certificate Insurer approve any
amendments to this Agreement that would adversely affect the aforementioned
rights. At such time as the Class A-1 Certificates are no longer outstanding
hereunder, and no amounts owed to the Certificate Insurer hereunder with respect
to such Class of Certificates remain unpaid, the Certificate Insurer's rights
hereunder with respect to such Class of Certificates shall terminate.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master Servicer.
The Depositor and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed by this
Agreement and undertaken hereunder by the Depositor and the Master Servicer
herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Master
Servicer.
Subject to the following paragraph, the Depositor shall keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the jurisdiction of its incorporation and its
qualification as an approved conventional seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing. The Depositor and the Master Servicer each shall
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Depositor or the Master Servicer may be merged or consolidated with or
into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Mae or Xxxxxxx Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates (without regard to the Certificate Insurance
Policy) and the Mezzanine Certificates in effect immediately prior to such
merger or consolidation shall not be qualified, reduced or withdrawn as a result
thereof (as evidenced by a letter to such effect from the Rating Agencies).
SECTION 6.03. Limitation on Liability of the Depositor, the Master
Servicer and Others.
None of the Depositor, the NIMS Insurer, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the 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 NIMS Insurer, the Master
Servicer or any such person against any breach of warranties, representations or
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covenants made herein, or against any specific liability imposed on the Master
Servicer pursuant hereto, or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the NIMS Insurer, the Master Servicer or the
Trustee and any director, officer, employee or agent of the Depositor, the NIMS
Insurer, the Master Servicer or the Trustee may rely in good faith on any
document of any kind which, PRIMA FACIE, is properly executed and submitted by
any Person respecting any matters arising hereunder.
The Depositor, the NIMS Insurer, the Master Servicer and any director,
officer, employee or agent of the Depositor, the NIMS Insurer or the Master
Servicer shall be indemnified and held harmless by the Trust Fund against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Certificates and any breach of a representation or
warranty regarding the Mortgage Loans, other than in the case of the Depositor
and the Master Servicer, any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the NIMS Insurer or the Master Servicer shall
be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and,
in its opinion, does not involve it in any expense or liability; provided,
however, that each of the Depositor, the NIMS Insurer and the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, unless the Depositor or the Master Servicer acts without the consent of
the Holders of Certificates entitled to at least 51% of the Voting Rights (which
consent shall not be necessary in the case of litigation or other legal action
by either to enforce their respective rights or defend themselves hereunder),
the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder) shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor, the NIMS
Insurer and the Master Servicer shall be entitled to be reimbursed therefor from
the Collection Account as and to the extent provided in Section 3.05, any such
right of reimbursement being prior to the rights of the Certificateholders to
receive any amount in the Collection Account.
SECTION 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder are
no longer permissible under applicable law or (ii) with the written consent of
the Trustee, the NIMS Insurer, the Certificate Insurer and written confirmation
from each Rating Agency (which confirmation shall be furnished to the Depositor,
the NIMS Insurer, the Certificate Insurer and the Trustee) that such resignation
shall not cause such Rating Agency to reduce the then current rating of the
Class A Certificates (without regard to the Certificate Insurance Policy) or the
Mezzanine Certificates. Any such determination pursuant to clause (i) of the
preceding sentence, permitting the resignation of the Master Servicer, shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee, the Certificate
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Insurer and the NIMS Insurer. No resignation of the Master Servicer shall become
effective until the Trustee or a successor servicer acceptable to the NIMS
Insurer and the Certificate Insurer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Master Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, nor delegate to or subcontract with, nor authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer hereunder. Further, except as expressly provided herein, the
Master Servicer shall not assign or transfer any of its rights, benefits or
privileges hereunder without the prior consent of the Certificate Insurer (such
consent not to be unreasonably withheld). If, pursuant to any provision hereof,
the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.
SECTION 6.05. Rights of the Depositor in Respect of the Master Servicer.
The Master Servicer shall afford (and any Sub-Servicing Agreement shall
provide that each Sub-Servicer shall afford) the Depositor, the NIMS Insurer and
the Trustee, upon reasonable advance notice in writing, during normal business
hours at the office designated by the Master Servicer, access to all records
maintained by the Master Servicer (and any such Sub-Servicer) in respect of the
Master Servicer's rights and obligations with respect to the Mortgage Loans
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. To the extent such information
is not otherwise available to the public, the Depositor, the NIMS Insurer, the
Certificate Insurer and the Trustee shall not disseminate any information
obtained pursuant to the preceding sentence (or with respect to the Certificate
Insurer, Section 3.22) without the Master Servicer's (or any such
Sub-Servicer's) written consent, except as required pursuant to this Agreement
or to the extent that it is appropriate to do so (i) in working with legal
counsel, auditors, taxing authorities or other governmental agencies, rating
agencies or reinsurers or (ii) pursuant to any law, rule, regulation, order,
judgment, writ, injunction or decree of any court or governmental authority
having jurisdiction over the Depositor, the Trustee or the Trust Fund, and in
either case, the Depositor, the NIMS Insurer, the Certificate Insurer or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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SECTION 6.06. Sub-Servicing Agreements Between the Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements (provided
that such agreements would not result in a withdrawal or a downgrade by any
Rating Agency of the ratings on any Class of Certificates (without regard to the
Certificate Insurance Policy) and the NIMS Insurer shall have consented to such
Sub-Servicing Agreement) with Sub-Servicers, for the servicing and
administration of the Mortgage Loans.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts in which
are insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 6.11 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer shall examine each Sub-Servicing Agreement and shall be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement shall
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 6.11, provisions relating to insurance in
Section 3.10 or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub-Servicing Accounts or the timing and amount of remittances by
the Sub-Servicers to the Master Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Master Servicer
shall deliver to the Trustee, the Certificate Insurer and the NIMS Insurer
copies of all Sub-Servicing Agreements, and any amendments or modifications
thereof, promptly upon the Master Servicer's execution and delivery of such
instruments.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee, the Certificate Insurer and the
Certificateholders, shall enforce the obligations of each Sub-Servicer under the
related Sub-Servicing Agreement, including, without limitation, any obligation
to make advances in respect of delinquent payments as required by a
Sub-Servicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Sub-Servicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement, to the extent, if any, that such recovery
exceeds all amounts due in respect of the
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related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
SECTION 6.07. Successor Sub-Servicers.
The Master Servicer, with the consent of the NIMS Insurer, shall be
entitled to terminate any Sub-Servicing Agreement and the rights and obligations
of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with
the terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Master Servicer without any act or deed
on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer
either shall service directly the related Mortgage Loans or shall enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 6.06.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).
SECTION 6.08. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 6.09. No Contractual Relationship Between Sub-Servicers and the
NIMS Insurer, the Certificate Insurer, the Trustee or
Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any transactions
or services relating to the Mortgage Loans involving a Sub-Servicer in its
capacity as such shall be deemed to be between the Sub-Servicer and the Master
Servicer alone, and the NIMS Insurer, the Certificate Insurer, the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 6.10. The Master Servicer shall be solely liable
for all fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.
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SECTION 6.10. Assumption or Termination of Sub-Servicing Agreements by
Trustee.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including termination due to a Master Servicer Event of
Default), the Trustee or its designee shall thereupon assume (or cause its
designee or the successor master servicer for the Trustee appointed pursuant to
Section 7.02 to assume) all of the rights and obligations of the Master Servicer
under each Sub-Servicing Agreement that the Master Servicer may have entered
into, unless the Trustee elects to terminate any Sub-Servicing Agreement in
accordance with its terms as provided in Section 6.07. Upon such assumption, the
Trustee, its designee or the successor servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 6.07, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any successor Master Servicer shall be deemed to have assumed any
liability or obligation of the Master Servicer that arose before it ceased to be
the Master Servicer.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
SECTION 6.11. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant
to a Sub-Servicing Agreement, the Sub-Servicer shall be required to establish
and maintain one or more accounts (collectively, the "Sub-Servicing Account").
The Sub-Servicing Account shall be an Eligible Account. The Sub-Servicer shall
deposit in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Sub-Servicer's receipt thereof,
all proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the deposit of such funds into the clearing
account. The Sub-Servicer shall thereafter deposit such proceeds in the
Collection Account or remit such proceeds to the Master Servicer for deposit in
the Collection Account not later than two Business Days after the deposit of
such amounts in the Sub-Servicing Account. For purposes of this Agreement, the
Master Servicer shall be deemed to have received payments on the Mortgage Loans
when the Sub-Servicer receives such payments.
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ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein, means any one of
the following events:
(i) any failure by the Master Servicer to remit to the Trustee for
distribution to the Certificateholders any payment (other than an Advance
required to be made from its own funds on any Master Servicer Remittance
Date pursuant to Section 4.03) required to be made under the terms of the
Certificates and this Agreement which continues unremedied for a period of
one Business Day after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer by the Depositor or the Trustee (in which case notice shall be
provided by telecopy), or to the Master Servicer, the Depositor and the
Trustee by the NIMS Insurer, the Certificate Insurer or the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to observe
or perform in any material respect any of the covenants or agreements on
the part of the Master Servicer contained in the Certificates or in this
Agreement (or, if the Master Servicer is the Seller, the failure of the
Seller to repurchase a Mortgage Loan as to which a breach has been
established that requires a repurchase pursuant to the terms of Section 7
of the Mortgage Loan Purchase Agreement) which continues unremedied for a
period of 45 days after the earlier of (i) the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Master Servicer by the Depositor or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the NIMS Insurer, the
Certificate Insurer or the Holders of Certificates entitled to at least
25% of the Voting Rights and (ii) actual knowledge of such failure by a
Servicing Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or similar
law or the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs,
shall have been entered against the Master Servicer and if such proceeding
is being contested by the Master Servicer in good faith, such decree or
order shall have remained in force undischarged or unstayed for a period
of 60 days or results in the entry of an order for relief or any such
adjudication or appointment; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or substantially
all of its property; or
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(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) [reserved]; or
(vii) any failure of the Master Servicer to make any Advance on any
Master Servicer Remittance Date required to be made from its own funds
pursuant to Section 4.03 which continues unremedied until 1:00 p.m. New
York time on the Business Day immediately following the Master Servicer
Remittance Date.
If a Master Servicer Event of Default described in clauses (i) through
(vi) of this Section shall occur, then, and in each and every such case, so long
as such Master Servicer Event of Default shall not have been remedied, the
Depositor, the NIMS Insurer or the Trustee may, and at the written direction of
the Holders of Certificates entitled to at least 51% of Voting Rights or at the
direction of the NIMS Insurer, the Trustee shall, by notice in writing to the
Master Servicer, the Certificate Insurer and the Depositor, terminate all of the
rights and obligations of the Master Servicer in its capacity as Master Servicer
under this Agreement, to the extent permitted by law, and in and to the Mortgage
Loans and the proceeds thereof. If a Master Servicer Event of Default described
in clause (vii) hereof shall occur, the Trustee shall, by notice in writing to
the Master Servicer, the Certificate Insurer and the Depositor, terminate all of
the rights and obligations of the Master Servicer in its capacity as Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof and the Trustee or a successor Master Servicer appointed in accordance
with Section 7.02, shall immediately make such Advance (subject to its own
determination as to recoverability, which Advance shall be part of Available
Funds for such Distribution Date) and assume, pursuant to Section 7.02, the
duties of a successor Master Servicer. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates (other than as a
Holder of any Certificate) or the Mortgage Loans or otherwise, shall pass to and
be vested in the Trustee pursuant to and under this Section and, without
limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact
or otherwise, to execute and deliver on behalf of and at the expense of the
Master Servicer, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Escrow Account held by
or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts
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accrued or owing to it under this Agreement on or prior to the date of such
termination, whether in respect of Advances or otherwise, and shall continue to
be entitled to the benefits of Section 6.03, notwithstanding any such
termination, with respect to events occurring prior to such termination). For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of a Master Servicer Event of Default unless a Responsible Officer of the
Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice is received by the Trustee of
any such event and such notice references the Certificates, REMIC I or this
Agreement.
The Trustee shall be entitled to be reimbursed by the Master Servicer (or
by the Trust Fund if the Master Servicer is unable to fulfill its obligations
hereunder) for all costs associated with the transfer of servicing from the
predecessor servicer, including without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.06) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make Advances pursuant to Section 4.03; and provided further, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by Section 7.01 shall not be considered
a default by the Trustee as successor to the Master Servicer hereunder;
provided, however, it is understood and acknowledged by the parties that there
shall be a period of transition (not to exceed 90 days) before the servicing
transfer is fully effected. As compensation therefor, effective from and after
the time the Master Servicer receives a notice of termination or immediately
upon assumption of the obligations to make Advances, the Trustee shall be
entitled to the Servicing Fee and all funds relating to the Mortgage Loans to
which the Master Servicer would have been entitled if it had continued to act
hereunder (other than amounts which were due or would become due to the Master
Servicer prior to its termination or resignation). Notwithstanding the above and
subject to the next paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans, or if the Holders of
Certificates entitled to at least 51% of the Voting Rights, the Certificate
Insurer or the NIMS Insurer so request in writing to the Trustee promptly
appoint or petition a court of competent jurisdiction to appoint, an established
mortgage loan servicing institution acceptable to each Rating Agency, the
Certificate Insurer and the NIMS Insurer and having a net worth of not less than
$15,000,000 as the successor to the Master Servicer under this Agreement in the
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assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement. If no Certificate Insurer Default has
occurred and is continuing, the Certificate Insurer, subject to (d) below, shall
have the right to consent to any successor Master Servicer which the Trustee may
propose to appoint except with respect to a proposed successor to be appointed
by a court of competent jurisdiction. No appointment of a successor to the
Master Servicer under this Agreement shall be effective until the assumption by
the successor of all of the Master Servicer's responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer as such hereunder. The Depositor, the Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. Pending appointment of a
successor to the Master Servicer under this Agreement, the Trustee shall act in
such capacity as hereinabove provided.
(b) [reserved]
(c) If the Master Servicer is terminated pursuant to Section 7.01, then
the successor Master Servicer shall not be permitted to reimburse itself
directly for Advances or Servicing Advances under Section 3.05(a)(ii), Section
3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) if the Master Servicer
has not been fully reimbursed for its Advances and Servicing Advances, but
instead the successor Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to the
terminated Master Servicer (or the related Advancing Person in accordance with
Section 3.23) and the successor Master Servicer, as applicable, reimbursements
for Advances and Servicing Advances from the Distribution Account to the same
extent each such Master Servicer would have been permitted to reimburse itself
for such Advances and/or Servicing Advances in accordance with Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii),
as the case may be. All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis. At such time as the Master Servicer (or related
Advancing Person) has been reimbursed for all Advances and Servicing Advances
made by it, the successor Master Servicer shall no longer be required to remit
in accordance with the first sentence of this Section 7.02(c) and shall then be
permitted to reimburse itself directly for Advances and Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii).
(d) Notwithstanding anything contained herein, the parties hereto hereby
agree that Ameriquest Mortgage Company shall immediately succeed as successor
Master Servicer if HomEq Servicing Corporation resigns or is removed as Master
Servicer under this Agreement, subject to removal by the Trustee upon failure to
provide to the Trustee within 60 days, written notification from each Rating
Agency to the effect that such appointment shall not cause such Rating Agency to
downgrade its then-current ratings of any Class of Certificates.
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SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to Section 7.01
above or any appointment of a successor to the Master Servicer pursuant to
Section 7.02 above, the Trustee shall give prompt written notice thereof to
Certificateholders, the Certificate Insurer and the NIMS Insurer at their
respective addresses appearing in the Certificate Register.
(b) Not later than the later of 60 days after the occurrence of any event,
which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Event of Default or five days after a Responsible
Officer of the Trustee becomes aware of the occurrence of such an event, the
Trustee shall transmit by mail to the NIMS Insurer, the Certificate Insurer and
to all Holders of Certificates notice of each such occurrence, unless such
default or Master Servicer Event of Default shall have been cured or waived.
SECTION 7.04. Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights (with the
consent of the NIMS Insurer) evidenced by all Classes of Certificates affected
by any default or Master Servicer Event of Default hereunder may waive such
default or Master Servicer Event of Default; provided, however, that a default
or Master Servicer Event of Default under clause (i) or (vii) of Section 7.01
may be waived only by all of the Holders of the Regular Certificates (with the
consent of the NIMS Insurer). Upon any such waiver of a default or Master
Servicer Event of Default, such default or Master Servicer Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Master Servicer Event of Default or impair any right consequent thereon except
to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer Event of Default
and after the curing of all Master Servicer Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. During a Master Servicer Event of
Default, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which 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 on its face to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to its respective satisfaction, such dissatisfied party shall provide
notice thereof to the Certificateholders, the Certificate Insurer and the NIMS
Insurer.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event of Default,
and after the curing of all such Master Servicer Events of Default which
may have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee that conform to the requirements of this
Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the NIMS Insurer or the Holders of
Certificates entitled to at least 25% of the Voting
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Rights 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 it, under this Agreement.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require it
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall not be under any obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, the
Certificate Insurer or the NIMS Insurer, pursuant to the provisions of
this Agreement, unless such Certificateholders, the Certificate Insurer or
the NIMS Insurer, as applicable, shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of a Master Servicer Event of Default (which has not
been cured or waived), to exercise such of the rights and powers vested in
it by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(iv) The Trustee shall not be personally 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;
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(v) Prior to the occurrence of a Master Servicer Event of Default
hereunder and after the curing of all Master Servicer Events of Default
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the NIMS Insurer, the Certificate Insurer
or the Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee
not reasonably assured to the Trustee by such Certificateholders, the
Trustee may require reasonable indemnity against such expense, or
liability from such Certificateholders or the NIMS Insurer as a condition
to taking any such action;
(vi) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys; and
(vii) The Trustee shall not be personally liable for any loss
resulting from the investment of funds held in the Collection Account, the
Escrow Account or the REO Account made at the direction of the Master
Servicer pursuant to Section 3.06.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in the name of the Trustee for the
benefit of all the Holders of such Certificates, subject to the provisions of
this Agreement.
(c) The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations under the Cap Contracts on the Closing Date and
thereafter on behalf of the Holders of the Class A-1 Certificates, the Group II
Certificates and the Mezzanine Certificates. The Seller, the Depositor, the
Master Servicer and the Holders of the Class A-1 Certificates, the Group II
Certificates and the Mezzanine Certificates by their acceptance of such
Certificates, acknowledge and agree that the Trustee shall execute, deliver and
perform its obligations under the Cap Contracts and shall do so solely in its
capacity as Trustee of the Trust Fund and not in its individual capacity.
SECTION 8.03. The Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Certificate Registrar on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.13) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement (other than as specifically set forth
with respect to such party in Section 8.13) or of the Certificates (other than
the signature of the Trustee and authentication of the Certificate Registrar on
the Certificates) or of any Mortgage Loan or related document. The Trustee shall
not be accountable for the use or application by the
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Depositor of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Master Servicer, other than, subject to Section 8.01,
any funds held by or on behalf of the Trustee in accordance with Section 3.04.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
(a) On each Distribution Date reinvestment earnings on funds on deposit in
the Distribution Account, which have been earned during the period commencing on
the related Master Servicer Remittance Date and ending on such Distribution
Date, shall be paid to the Trustee as compensation for its duties and
obligations under this Agreement and the Trustee shall withdraw from the
Distribution Account (but not from such reinvestment earnings) amounts required
to pay the Custodian the Custodian Fee or to reimburse the Custodian for
expenses, costs and liabilities incurred or reimbursable to it, as such
Custodian Fee and expenses (listed separately) are set forth in writing by the
Custodian to the Trustee by the related Determination Date pursuant to the
Custodial Agreement. The Trustee, or any director, officer, employee or agent of
the Trustee shall be indemnified by REMIC I and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee (including the compensation and the expenses and
disbursements of its agents and counsel) in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) incurred by the
Trustee arising out of or in connection with the acceptance or administration of
its obligations and duties under this Agreement, other than any loss, liability
or expense (i) resulting from a breach of the Master Servicer's obligations and
duties under this Agreement and the Mortgage Loans (for which the Master
Servicer shall indemnify pursuant to Section 8.05(b)), (ii) that constitutes a
specific liability of the Trustee pursuant to Section 10.01(c) or (iii) any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or negligence in the performance of its duties hereunder or by reason of
reckless disregard of its obligations and duties hereunder or as a result of a
breach of its obligations under Article X hereof. Any amounts payable to the
Trustee, or any director, officer, employee or agent of the Trustee in respect
of the indemnification provided by this paragraph (a), or pursuant to any other
right of reimbursement from the Trust Fund that the Trustee, or any director,
officer, employee or agent of the Trustee may have hereunder in its capacity as
such, may be withdrawn by the Trustee from the Distribution Account at any time.
(b) The Master Servicer agrees to indemnify the Trustee from, and hold it
harmless against, any loss, liability or expense resulting from a breach of the
Master Servicer's obligations and duties under this Agreement. Such indemnity
shall survive the termination or discharge of this Agreement and the resignation
or removal of the Trustee. Any payment hereunder made by the Master Servicer to
the Trustee shall be from the Master Servicer's own funds, without reimbursement
from the Trust Fund therefor.
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(c) The Seller shall pay any annual rating agency fees of the Rating
Agencies for ongoing surveillance from its own funds without right or
reimbursement.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or an
association (other than the Depositor, the Seller, the Master Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice thereof to the Depositor, the NIMS Insurer, the
Certificate Insurer, the Master Servicer and the Certificateholders. Upon
receiving such notice of resignation of the Trustee, the Depositor shall, with
the Certificate Insurer's consent, promptly appoint a successor trustee
acceptable to the NIMS Insurer by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders,
the Certificate Insurer, the Trustee and the Master Servicer by the Depositor.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor, the Certificate Insurer or the NIMS Insurer, or if at
any time the Trustee shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its respective
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its respective property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor or the NIMS
Insurer may remove the Trustee and appoint a successor trustee acceptable to the
NIMS Insurer and the Certificate Insurer by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the
Certificateholders, the Certificate Insurer and the Master Servicer by the
Depositor.
If no successor Trustee shall have been so appointed and having accepted
appointment within 25 days after the giving of such notice of resignation, then
the Certificate Insurer may appoint a successor Trustee acceptable to the NIMS
Insurer. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
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The Holders of Certificates entitled to at least 51% of the Voting Rights
(or the NIMS Insurer upon failure of the Trustee to perform its obligations
hereunder) may at any time remove the Trustee and appoint a successor trustee
acceptable to the NIMS Insurer and the Certificate Insurer by written instrument
or instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the NIMS Insurer, the Certificate
Insurer (with a copy to the Master Servicer) and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
predecessor trustee shall deliver to the successor trustee all Mortgage Files
and related documents and statements, as well as all moneys, held by it
hereunder (other than any Mortgage Files at the time held by a Custodian, which
Custodian shall become the agent of any successor trustee hereunder), and the
Depositor and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations.
No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
trustee shall not result in a downgrading of any Class of Certificates (without
regard to the Certificate Insurance Policy) by each Rating Agency, as evidenced
by a letter from each Rating Agency.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Depositor shall mail notice of the succession of such trustee
hereunder to the Certificate Insurer and all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
In the event that a successor trustee is appointed as provided in Section
8.07, the parties hereto agree that, as compensation for such services, such
successor trustee may be entitled to receive a fee on each Distribution Date in
an amount up to 0.005% per annum (the "Trustee Fee Rate") accrued for one month
multiplied by the sum of the aggregate Scheduled Principal Balance of the
Mortgage Loans and any REO Properties as of the second preceding
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Due Date (or, in the case of the initial Distribution Date, as of the Cut-off
Date), calculated on the basis of a 360-day year consisting of twelve 30-day
months.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee shall be the successor of the Trustee hereunder, provided such
corporation or association shall be eligible under the provisions of Section
8.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of REMIC
I or property securing the same may at the time be located, the Master 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,
the Certificate Insurer 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 REMIC I, and to vest in such Person or Persons, in such
capacity, such title to REMIC I, or any part thereof, and, subject to the other
provisions of this Section 8.10, such powers, duties, obligations, rights and
trusts as the Master 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 Master Servicer, the Certificate Insurer and the NIMS
Insurer. If the Master Servicer, the Certificate Insurer and the NIMS Insurer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case a Master Servicer Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to the Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this
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Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trust conferred, shall be vested with the
estates or property specified in its instrument of appointment, either jointly
with the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Depositor, the Master Servicer, the
Certificate Insurer and the NIMS Insurer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Depositor and the Master Servicer
appoint one or more Custodians to hold all or a portion of the Mortgage Files as
agent for the Trustee, by entering into a Custodial Agreement. The appointment
of any Custodian may at any time be terminated and a substitute Custodian
appointed therefor upon the reasonable request of the Master Servicer to the
Trustee, the consent to which shall not be unreasonably withheld. The Trustee,
on behalf of the Trust Fund, shall pay any and all fees and expenses of the
Custodian in accordance with Section 8.05 and the Custodial Agreement. The
Trustee initially appoints the Custodian as Custodian, and the Depositor and the
Master Servicer consent to such appointment. Subject to Article VIII hereof, the
Trustee agrees to comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custodian for the benefit
of the Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution approved by the
Certificate Insurer or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $10,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement may be amended only as provided in
Section 11.01. In no event shall the appointment of any Custodian pursuant to a
Custodial Agreement diminish the obligations of the Trustee hereunder.
SECTION 8.12. Appointment of Office or Agency.
The Trustee shall designate an office or agency where the Certificates may
be surrendered for registration of transfer or exchange, and presented for final
distribution, and where notices and demands to or upon the Trustee in respect of
the Certificates and this Agreement may be delivered. As of the Closing Date,
the Trustee designates its Corporate Trust Office in Minneapolis, Minnesota.
SECTION 8.13. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants, to the Master Servicer, the
Certificate Insurer and the Depositor, as of the Closing Date, that:
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(i) It is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
(ii) The execution and delivery of this Agreement by it, and the
performance and compliance with the terms of this Agreement by it, shall
not violate its charter or bylaws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material agreement or other
instrument to which it is a party or which is applicable to it or any of
its assets.
(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) It is not in violation of, and its execution and delivery of
this Agreement and its performance and compliance with the terms of this
Agreement shall not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which
violation, in its good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of it to perform its
obligations under this Agreement or its financial condition.
(vi) No litigation is pending or, to the best knowledge, threatened
against it which would prohibit it from entering into this Agreement or,
in its good faith reasonable judgment, is likely to materially and
adversely affect either its ability to perform its obligations under this
Agreement or its financial condition.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage
Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligation of the Trustee to make certain payments
to Certificateholders after the final Distribution Date and the obligation of
the Master Servicer to send certain notices as hereinafter set forth) shall
terminate upon payment to the Certificateholders and the deposit of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid or
deposited on the Distribution Date coinciding with or following the earlier to
occur of (i) the purchase by the Terminator (as defined below) of all Mortgage
Loans and each REO Property remaining in REMIC I and (ii) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in REMIC I; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof. The purchase by the Terminator of all Mortgage Loans and each REO
Property remaining in REMIC I shall be at a price (the "Termination Price")
equal to greater of (A) the aggregate fair market value of all of the assets of
REMIC I and (B) the sum of the Stated Principal Balance of the Mortgage Loans
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and the appraised fair
market value of the REO Properties plus accrued interest through the end of the
calendar month preceding the month of the final Distribution Date and any
unreimbursed Servicing Fees, Advances and Servicing Advances (in the case of
fair market values required to be determined under (A) or (B) above, as
determined by the Terminator, the Trustee and, if the Terminator is not the NIMS
Insurer, the NIMS Insurer, as of the close of business on the third Business Day
next preceding the date upon which notice of any such termination is furnished
to Certificateholders pursuant to the third paragraph of this Section 9.01);
provided, however, such option may only be exercised if the Termination Price is
sufficient to pay (i) any amounts owed to the Certificate Insurer under the
Insurance Agreement and (ii) all interest accrued on, as well as amounts
necessary to retire the note balance of, each class of notes issued pursuant to
the Indenture and any amounts owed to the NIMS Insurer at the time the option is
exercised. If a termination pursuant to this Section 9.01(a) or Section 9.01(b)
will result in a claim under the Certificate Insurance Policy or if any amount
owed to the Certificate Insurer will not be fully reimbursed after such
termination, the consent of the Certificate Insurer shall be required prior to
the Terminator exercising such option.
(b) Holders of at least 76% of the Voting Rights of the Class CE
Certificates, the Master Servicer (or if the Master Servicer fails to exercise
such right, the NIMS Insurer), in that order, shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates shall be
retired; provided, however,
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that the Terminator may elect to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) above only (A) if the
aggregate Stated Principal Balance of the Mortgage Loans and each REO Property
remaining in the Trust Fund at the time of such election is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
and (B) if the Terminator is the Master Servicer and is an affiliate of the
Seller, the Master Servicer shall have delivered to the Trustee, the Certificate
Insurer and the NIMS Insurer a written certification that the burdens of
servicing the Mortgage Loans and REO Properties remaining in REMIC I exceed the
benefits of the Servicing Fees that would be realized by the Master Servicer if
it continued to service such assets on behalf of the Trust Fund. By acceptance
of the Residual Certificates, the Holders of the Residual Certificates agree, in
connection with any termination hereunder, to assign and transfer any amounts in
excess of par, and to the extent received in respect of such termination, to pay
any such amounts to the Holders of the Class CE Certificates.
(c) Notice of the liquidation of the REMIC I Regular Interests shall be
given promptly by the Trustee by letter to Certificateholders and the
Certificate Insurer mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Terminator,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund shall terminate and final payment in respect of
the REMIC I Regular Interests, the REMIC II Regular Interests and the
Certificates shall be made upon presentation and surrender of the related
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests, the REMIC II Regular Interests or the Certificates
from and after the Interest Accrual Period relating to the final Distribution
Date therefor and (iv) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Trustee. The Trustee
shall give such notice to the Certificate Registrar at the time such notice is
given to Certificateholders. In the event such notice is given in connection
with the purchase of all of the Mortgage Loans and each REO Property remaining
in REMIC I by the Terminator, the Terminator shall deliver to the Trustee for
deposit in the Distribution Account not later than the last Business Day
preceding the final Distribution Date on the Certificates an amount in
immediately available funds equal to the above-described purchase price. Upon
the making of such final deposit, the Trustee shall promptly release or cause to
be released to the Terminator the Mortgage Files for the remaining Mortgage
Loans, and the Trustee shall execute all assignments, endorsements and other
instruments necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the Certificateholders on the
final Distribution Date, the Trustee shall distribute to each Certificateholder
so presenting and surrendering its Certificates the amount otherwise
distributable on such Distribution Date in accordance with Section 4.01 in
respect of the Certificates so presented and surrendered. Any funds not
distributed to any Holder or Holders of Certificates being retired on such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust by the
Trustee and credited to the account of the appropriate non-tendering Holder or
Holders. On the final Distribution Date, the Trustee shall withdraw from
Available Funds to pay to the Certificate Insurer all amounts owed to the
Certificate
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Insurer, if any, pursuant to the priorities set forth in Section 4.01 of this
Agreement. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay any amounts paid by the
Certificate Insurer (but only if the non-surrendered Certificates are Insured
Certificates) to the Certificate Insurer and to the Underwriters all remaining
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01.
Immediately following the deposit of funds in trust hereunder in respect
of the Certificates, the Trust Fund shall terminate.
SECTION 9.02. Additional Termination Requirements.
(a) In the event that the Terminator purchases all the Mortgage Loans and
each REO Property or the final payment on or other liquidation of the last
Mortgage Loan or REO Property remaining in REMIC I pursuant to Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to each Trust REMIC's final Tax
Return pursuant to Treasury regulation Section 1.860F-1 and shall satisfy
all requirements of a qualified liquidation under Section 860F of the Code
and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period, and at or prior to the
time of making of the final payment on the Certificates, the Trustee shall
sell all of the assets of REMIC I to the Terminator for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Residual Certificates all
cash on hand in the Trust Fund (other than cash retained to meet claims),
and the Trust Fund shall terminate at that time.
(b) At the expense of the applicable Terminator (or in the event of
termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each Trust REMIC
pursuant to this Section 9.02.
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(c) By their acceptance of Certificates, the Holders thereof hereby agree
to authorize the Trustee to specify the 90-day liquidation period for each Trust
REMIC which authorization shall be binding upon all successor
Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee shall elect to treat each Trust REMIC as a REMIC under the
Code and, if necessary, under applicable state law. Each such election shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return or any appropriate state return for the taxable year ending on the last
day of the calendar year in which the Certificates are issued and copies of such
forms and election shall be furnished to the Certificate Insurer. For the
purposes of the REMIC election in respect of REMIC I, (i) the REMIC I Regular
Interests shall be designated as the Regular Interests in REMIC I and the Class
R-I Interest shall be designated as the Residual Interest in REMIC I, (ii) the
Class A Certificates, the Mezzanine Certificates, the Class CE Interest and the
Class P Interest shall be designated as the Regular Interests in REMIC II and
the Class R-II Interest shall be designated as the Residual Interest in REMIC
II, (iii) the Class CE Certificates shall be designated as the Regular Interests
in REMIC III and the Class R-III Interest shall be designated as the Residual
Interest in REMIC III and (iv) the Class P Certificates shall be designated as
the Regular Interests in REMIC IV and the Class R-IV Interest shall be
designated as the Residual Interest in REMIC IV. The Trustee shall not permit
the creation of any "interests" in any Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests, the Class CE
Interest, the Class P Interest and the interests represented by the
Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
caused by the Trustee (including, but not limited to, any professional fees or
any administrative or judicial proceedings with respect to any Trust REMIC that
involve the Internal Revenue Service or state tax authorities), other than the
expense of obtaining any tax related Opinion of Counsel except as specified
herein. The Trustee, as agent for each Trust REMIC's tax matters person, shall
(i) act on behalf of the Trust Fund in relation to any tax matter or controversy
involving any Trust REMIC and (ii) represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Holder of the largest
Percentage Interest of each Class of Residual Certificates shall be designated,
in the manner provided under Treasury regulations section 1.860F-4(d) and
Treasury regulations section 301.6231(a)(7)-1, as the tax matters person of the
related REMIC created hereunder. By their acceptance thereof, the Holder of the
largest Percentage Interest of the Residual Certificates hereby agrees to
irrevocably appoint the Trustee or an Affiliate as its agent to perform all of
the duties of the tax matters person for the Trust Fund.
(d) The Trustee shall prepare, sign and file all of the Tax Returns in
respect of each REMIC created hereunder and furnish copies to the Certificate
Insurer. The expenses of preparing and filing such returns shall be borne by the
Trustee without any right of reimbursement therefor. The Master Servicer shall
provide on a timely basis to the Trustee or its
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designee such information with respect to the assets of the Trust Fund as is in
its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article.
(e) The Trustee shall perform on behalf of each Trust REMIC all reporting
and other tax compliance duties that are the responsibility of such REMIC under
the Code, the REMIC Provisions or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, as required by the Code, the REMIC Provisions or other such compliance
guidance, the Trustee shall provide (i) to any Transferor of a Residual
Certificate such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any Person who is not a
Permitted Transferee, (ii) to the Certificateholders such information or reports
as are required by the Code or the REMIC Provisions including reports relating
to interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who shall serve as the
representative of each Trust REMIC. The Master Servicer shall provide on a
timely basis to the Trustee such information with respect to the assets of the
Trust Fund, including, without limitation, the Mortgage Loans, as is in its
possession and reasonably required by the Trustee to enable each of them to
perform their respective obligations under this subsection. In addition, the
Depositor shall provide or cause to be provided to the Trustee and the
Certificate Insurer within ten (10) days after the Closing Date, all information
or data that the Trustee reasonably determines to be relevant for tax purposes
as to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.
(f) The Trustee shall take such action and shall cause each REMIC created
hereunder to take such action as shall be necessary to create or maintain the
status thereof as a REMIC under the REMIC Provisions (and the Master Servicer
shall assist it, to the extent reasonably requested by it). The Trustee shall
not take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (i) endanger the status of any Trust
REMIC as a REMIC or (ii) result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee, the Certificate Insurer and the NIMS Insurer have received
an Opinion of Counsel, addressed to the Trustee, the NIMS Insurer and the
Certificate Insurer (at the expense of the party seeking to take such action but
in no event at the expense of the Trustee) to the effect that the contemplated
action shall not, with respect to any Trust REMIC, endanger such status or
result in the imposition of such a tax, nor shall the Master Servicer take or
fail to take any action (whether or not authorized hereunder) as to which the
Trustee, the Certificate Insurer and the NIMS Insurer has advised it in writing
that it has received an Opinion of Counsel to the effect that an Adverse REMIC
Event could occur with respect to such action. In addition, prior to taking any
action with respect to any Trust REMIC or the respective assets of each, or
causing any Trust REMIC to take any action, which is not contemplated under the
terms of this Agreement, the Master Servicer shall consult with the Trustee, the
NIMS Insurer, the Certificate Insurer or its designee, in writing, with respect
to whether such action could cause an Adverse REMIC Event to occur with respect
to any Trust REMIC, and the Master Servicer shall not take any such action or
cause any Trust REMIC to
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take any such action as to which the Trustee, the Certificate Insurer or the
NIMS Insurer has advised it in writing that an Adverse REMIC Event could occur.
The Trustee, the Certificate Insurer or the NIMS Insurer may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. The Trustee, upon discovery
that any of the Mortgage Loans is not a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, shall enforce the Seller's obligation to
repurchase or substitute such Mortgage Loan in accordance with the terms and
provisions of the Mortgage Loan Purchase Agreement. The Trustee shall at all
times ensure that all of the assets of any Trust REMIC (other than the Mortgage
Loans) are "permitted investments" as defined in Section 860G(a)(5) of the Code,
as applicable.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.
(h) On or before April 15th of each calendar year, commencing April 15,
2005, the Trustee shall deliver to the Master Servicer, the NIMS Insurer, the
Certificate Insurer and each Rating Agency a Certificate from a Responsible
Officer of the Trustee stating, without regard to any action taken by any party
other than the Trustee, the Trustee's compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each Trust REMIC on a calendar year and on an accrual
basis. The Trustee shall apply for an Employer Identification Number for the
Trust Fund from the Internal Revenue Service via a Form SS-4 or such other form
as is appropriate.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any Trust REMIC other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund shall not cause the related REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any Trust REMIC shall receive a fee or other compensation
for services nor permit any such REMIC to receive any income from assets other
than the Mortgage Pool
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which are deemed to constitute "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
SECTION 10.02. Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of REMIC I
pursuant to Article IX of this Agreement, (iv) a substitution pursuant to
Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), or acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), or
sell or dispose of any investments in the Collection Account or the Distribution
Account for gain, or accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee, the Certificate Insurer and the NIMS Insurer (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution shall not (a)
affect adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust
REMIC to be subject to a tax on "prohibited transactions" or "contributions"
pursuant to the REMIC Provisions.
SECTION 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the NIMS Insurer, the
Certificate Insurer, the Depositor and the Master Servicer for any taxes and
costs including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, caused solely
by the Trustee's failure to act in accordance with its standard of care set
forth in this Article X or any state, local or franchise taxes imposed upon the
Trust as a result of the location of the Trustee.
(b) The Master Servicer agrees to indemnify the Trust Fund, the
Certificate Insurer, the NIMS Insurer, the Depositor and the Trustee for any
taxes and costs including, without limitation, any reasonable attorneys' fees
imposed on or incurred by the Trust Fund, the Depositor or the Trustee, as a
result of a breach of the Master Servicer's covenants set forth in Article III
or this Article X or any state, local or franchise taxes imposed upon the Trust
as a result of the location of the Master Servicer or any subservicer.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement or any Custodial Agreement may be amended from time to time
by the Depositor, the Master Servicer, the Trustee and, if applicable, the
Custodian, with the consent of the NIMS Insurer and without the consent of any
of the Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct,
modify or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or in any Custodial Agreement, or (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement, the Certificate Insurance Policy or in any Custodial Agreement
which shall not be inconsistent with the provisions of this Agreement or such
Custodial Agreement, provided that such action shall not adversely affect in any
material respect the interests of any Certificateholder, as evidenced by either
(i) an Opinion of Counsel delivered to the Master Servicer, the Certificate
Insurer and the Trustee to such effect or (ii) confirmation from the Rating
Agencies that such amendment shall not result in the reduction or withdrawal of
the rating of any outstanding Class of Certificates (without regard to the
Certificate Insurance Policy). No amendment shall be deemed to adversely affect
in any material respect the interests of any Certificateholder who shall have
consented thereto, and no Opinion of Counsel shall be required to address the
effect of any such amendment on any such consenting Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time to
time by the Depositor, the Master Servicer, the NIMS Insurer, the Trustee and,
if applicable, the Custodian, with the consent of the NIMS Insurer and the
Holders of Certificates entitled to at least 66% of the Voting Rights for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or any Custodial Agreement or of modifying
in any manner the rights of the Holders of Certificates; provided, however, that
no such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates (as evidenced by either (i) an Opinion of
Counsel delivered to the Trustee or (ii) written notice to the Depositor, the
Master Servicer and the Trustee from the Rating Agencies that such action shall
not result in the reduction or withdrawal of the rating of any outstanding Class
of Certificates (without regard to the Certificate Insurance Policy) with
respect to which it is a Rating Agency) in a manner other than as described in
(i), or (iii) modify the consents required by the immediately preceding clauses
(i) and (ii) without the consent of the Holders of all Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Depositor or the Master Servicer or
any Affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent of the Certificate Insurer if such amendment
adversely affects in any respect the rights or interests of the Certificate
Insurer or of the Insured Certificates (without regard to the Certificate
Insurance Policy). The Trustee shall send a copy of any proposed
162
amendment to this Agreement to the Certificate Insurer prior to execution of the
amendment. The Certificate Insurer shall notify the Trustee in writing, within a
reasonable time following its receipt of a copy of the proposed amendment,
whether the Certificate Insurer has determined that its consent to such
amendment is required.
Notwithstanding any contrary provision of this Agreement, none of the
Trustee, the Certificate Insurer or the NIMS Insurer shall consent to any
amendment to this Agreement unless it shall have first received an Opinion of
Counsel satisfactory to the NIMS Insurer and the Certificate Insurer to the
effect that such amendment shall not result in the imposition of any tax on any
Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Notwithstanding any of the other provisions of this Section 11.01, none of
the Depositor, the Master Servicer or the Trustee shall enter into any amendment
of this Agreement that would significantly change the permitted activities of
the Trust Fund without the consent of the NIMS Insurer, the Certificate Insurer
and the holders of Certificates that represent more than 50% of the aggregate
Certificate Principal Balance of all Certificates.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder and the Certificate
Insurer.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to this
Section 11.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any amendment
pursuant to this Section that affects its respective rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Trustee accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number
163
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless (i) such Holder
previously shall have given to the Trustee and the Certificate Insurer a written
notice of default and of the continuance thereof, as hereinbefore provided, and
(ii) the Holders of Certificates entitled to at least 25% of the Voting Rights
shall have made written request upon the Trustee to institute such action, suit
or proceeding in the name of the Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04. Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws excluding the choice of laws
provisions therein.
164
SECTION 11.05. Notices.
All directions, demands, requests, authorizations and notices hereunder
shall be in writing and shall be deemed to have been duly given when received if
personally delivered at or mailed by first class mail, postage prepaid, or by
express delivery service, facsimile, electronic mail or delivered in any other
manner specified herein, to (a) in the case of the Depositor or Ameriquest
Mortgage Company, 0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx
00000, Attention: Capital Markets (telecopy number: (000) 000-0000), or such
other address or telecopy number as may hereafter be furnished to the Master
Servicer, the NIMS Insurer, the Certificate Insurer and the Trustee in writing
by the Depositor, (b) in the case of the Master Servicer, HomEq Servicing
Corporation, 0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000,
Attention: Portfolio Management, Facsimile No. (000) 000-0000 with a copy to
HomEq Servicing Corporation, 0000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, 0xx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Legal Department, Facsimile No. (919)
339-6995, or such other address or telecopy number as may hereafter be furnished
to the Trustee, the NIMS Insurer, the Certificate Insurer and the Depositor in
writing by the Master Servicer, (c) in the case of the Trustee, Xxxxx Fargo
Bank, N.A., X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client
Manager--Park Place 2004-WHQ1, with a copy to Xxxxx Fargo Bank, N.A., 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Park Place Securities,
Inc., Series 2004-WHQ1 , or such other address or telecopy number as may
hereafter be furnished in writing by the Trustee, (d) in the case of the NIMS
Insurer, such address furnished to the Depositor, the Master Servicer, the
Certificate Insurer and the Trustee in writing by the NIMS Insurer, (e) in the
case of the Certificate Insurer, XL Capital Assurance, Inc., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attn: General Counsel, or such other
address or telecopy number as may hereafter be furnished to the Master Servicer,
the NIMS Insurer, the Trustee and the Depositor in writing by the Certificate
Insurer and (f) in the case of Ameriquest Mortgage Company, 0000 Xxxx & Xxxxxxx
Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000. Any notice required or permitted to
be given to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06. 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 or the
rights of the Certificate Insurer.
165
SECTION 11.07. Notice to Rating Agencies, the Certificate Insurer and the
NIMS Insurer.
The Trustee shall use its best efforts promptly to provide notice to the
Rating Agencies, the Certificate Insurer and the NIMS Insurer with respect to
each of the following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has
not been cured or waived;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to or
as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of Certificates;
6. Any change in the location of the Collection Account or the
Distribution Account;
7. Any event that would result in the inability of the Trustee, were
it to succeed as Master Servicer, to make advances regarding delinquent
Mortgage Loans; and
8. The filing of any claim under the Master Servicer's blanket bond
and errors and omissions insurance policy required by Section 3.09 or the
cancellation or material modification of coverage under any such
instrument.
In addition, the Trustee shall promptly furnish to each Rating Agency, the
Certificate Insurer and the NIMS Insurer copies of each report to
Certificateholders described in Section 4.02 and the Master Servicer, as
required pursuant to Section 3.19 and Section 3.20, shall promptly furnish to
each Rating Agency and the Certificate Insurer copies of the following:
1. Each annual statement as to compliance described in Section 3.19;
and
2. Each annual independent public accountants' servicing report
described in Section 3.20.
Any such notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service to Xxxxx'x
Investors Service, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to Fitch Ratings,
Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and to Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or such other addresses as the Rating Agencies may designate in writing to
the parties hereto.
166
SECTION 11.08. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 11.09. Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Depositor to the Trustee be, and be construed as, a sale
of the Mortgage Loans by the Depositor and not a pledge of the Mortgage Loans by
the Depositor to secure a debt or other obligation of the Depositor or the
Seller. However, in the event that, notwithstanding the aforementioned intent of
the parties, the Mortgage Loans are held to be property of the Depositor or the
Seller, then, (a) it is the express intent of the parties that such conveyance
be deemed a pledge of the Mortgage Loans by the Depositor to the Trustee to
secure a debt or other obligation of the Depositor or the Seller and (b)(1) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the Uniform Commercial Code as in effect from time to time
in the State of New York; (2) the conveyance provided for in Section 2.01 hereof
shall be deemed to be a grant by the Seller and the Depositor to the Trustee of
a security interest in all of the Seller's and the Depositor's right, title and
interest in and to the Mortgage Loans and all amounts payable to the holders of
the Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts, other
than investment earnings, from time to time held or invested in the Collection
Account and the Distribution Account, whether in the form of cash, instruments,
securities or other property; (3) the obligations secured by such security
agreement shall be deemed to be all of the Depositor's obligations under this
Agreement, including the obligation to provide to the Certificateholders the
benefits of this Agreement relating to the Mortgage Loans and the Trust Fund;
and (4) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee a security interest in the Mortgage Loans
and all other property described in clause (2) of the preceding sentence, for
the purpose of securing to the Trustee the performance by the Depositor of the
obligations described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
and the transfer pursuant to the Mortgage Loan Purchase Agreement to be a true,
absolute and unconditional sale of the Mortgage Loans and assets constituting
the Trust Fund by the Depositor to the Trustee.
SECTION 11.10. Third Party Rights.
The NIMS Insurer and the Certificate Insurer shall be third-party
beneficiaries of this Agreement to the same extent as if they were a party
hereto, and each shall have the right to enforce the provisions of this
Agreement. Without limiting the generality of the foregoing, provisions herein
that refer to the "benefit" of Certificateholders or the "interests" of the
Certificateholders or actions "for the benefit of" Certificateholders also
include an implicit reference to the benefits or interests of the NIMS Insurer,
if any, and the Certificate Insurer with
167
respect to the Insured Certificates and to the extent a Certificate Insurer
Default has not occurred and is continuing.
168
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.
PARK PLACE SECURITIES, INC.,
as Depositor
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
HOMEQ SERVICING CORPORATION, as Master Servicer
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Trustee
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ___ day of ___________ 2004, before me, a notary public in and for
said State, personally appeared ____________, known to me to be an
________________ of Park Place Securities, Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ___ day of __________ 2004, before me, a notary public in and for
said State, personally appeared __________________, known to me to be a
_________________ of HomEq Servicing Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF )
On the ___ day of ________ 2004, before me, a notary public in and for
said State, personally appeared _________________, known to me to be an
____________________ of Xxxxx Fargo Bank, N.A., one of the entities that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
Series 2004-WHQ1, Class A-1 Aggregate Certificate Principal Balance
of the Class A-1 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $1,137,320,000.00
Date of Pooling and Servicing Agreement Denomination: $1,137,320,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BL 0
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
A-1-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-1-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are
A-1-3
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-1-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
Series 2004-WHQ1, Class A-2 Aggregate Certificate Principal Balance of
the Class A-2 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $ 200,000,000.00
Date of Pooling and Servicing Agreement Denomination: $ 200,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BM 8
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
A-2-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-2-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are
A-2-3
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-2-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
Series 2004-WHQ1, Class A-3 Aggregate Certificate Principal Balance of
the Class A-3 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $133,510,000.00
Date of Pooling and Servicing Agreement Denomination: $133,510,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BN 6
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
A-3-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-3 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-3-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are
A-3-3
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-3-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-3-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-4 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
Series 2004-WHQ1, Class A-4 Aggregate Certificate Principal Balance of
the Class A-4 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $63,490,000.00
Date of Pooling and Servicing Agreement Denomination: $63,490,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BP 1
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
A-4-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-4 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-4 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-4-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are
A-4-3
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-4-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-4-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-5 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
Series 2004-WHQ1, Class A-5 Aggregate Certificate Principal Balance of
the Class A-5 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $43,680,000.00
Date of Pooling and Servicing Agreement Denomination: $43,680,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BQ 9
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
A-5-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-5 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-5 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-5-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are
A-5-3
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-5-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-5-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-5-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
Series 2004-WHQ1, Class M-1 Aggregate Certificate Principal Balance of
the Class M-1 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $77,000,000.00
Date of Pooling and Servicing Agreement Denomination: $77,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BR 7
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-6-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-6-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-6-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-6-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-6-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-6-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Series 2004-WHQ1, Class M-2 Aggregate Certificate Principal Balance of
the Class M-2 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $60,000,000.00
Date of Pooling and Servicing Agreement Denomination: $60,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BS 5
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-7-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-7-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-7-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-7-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-7-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-7-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2004-WHQ1, Class M-3 Aggregate Certificate Principal Balance of
the Class M-3 Certificates as of
the Issue Date:
Pass-Through Rate: Variable $40,000,000.00
Date of Pooling and Servicing Agreement Denomination: $ 40,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BT 3
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-8-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-8-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-8-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-8-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:____________________________
Authorized Signatory
A-8-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-8-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-4 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Series 2004-WHQ1, Class M-4 Aggregate Certificate Principal Balance
of the Class M-4 Certificates as of
the Issue Date:
Pass-Through Rate: Variable $35,000,000.00
Date of Pooling and Servicing Agreement Denomination: $ 35,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BU 0
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-9-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-4 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-9-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-9-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-9-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-9-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-9-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
X-0-0
XXXXXXX X-00
CLASS OF CLASS M-5 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES AND THE CLASS M-4
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2004-WHQ1, Class M-5 Aggregate Certificate Principal Balance
of the Class M-5 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $30,000,000.00
Date of Pooling and Servicing Agreement Denomination: $ 30,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BV 8
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-10-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-5 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-5 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-10-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-10-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-10-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-10-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-10-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-10-7
EXHIBIT A-11
FORM OF CLASS M-6 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4
CERTIFICATES AND THE CLASS M-5 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Series 2004-WHQ1, Class M-6 Aggregate Certificate Principal Balance
of the Class M-6 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $30,000,000.00
Date of Pooling and Servicing Agreement Denomination: $30,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BW 6
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-11-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-6 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-6 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-11-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-11-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-11-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-11-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-11-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-11-7
EXHIBIT A-12
FORM OF CLASS M-7 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4
CERTIFICATES, THE CLASS M-5 CERTIFICATES AND THE CLASS M-6
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2004-WHQ1, Class M-7 Aggregate Certificate Principal Balance of
the Class M-7 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $25,000,000.00
Date of Pooling and Servicing Agreement Denomination: $25,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BX 4
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-12-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-7 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-7 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-7 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-12-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-12-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-12-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-12-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-12-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-12-7
EXHIBIT A-13
FORM OF CLASS M-8 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4
CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6
CERTIFICATES AND THE CLASS M-7 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Series 2004-WHQ1, Class M-8 Aggregate Certificate Principal Balance of
the Class M-8 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $20,000,000.00
Date of Pooling and Servicing Agreement Denomination: $20,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BY 2
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-13-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-8 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-8 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-8 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-13-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-13-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-13-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-13-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-13-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-13-7
EXHIBIT A-14
FORM OF CLASS M-9 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO EACH CLASS OF CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4
CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6
CERTIFICATES, THE CLASS M-7 CERTIFICATES AND THE CLASS M-8
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2004-WHQ1, Class M-9 Aggregate Certificate Principal Balance of
the Class M-9 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $20,000,000.00
Date of Pooling and Servicing Agreement Denomination: $20,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F BZ 9
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
A-14-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-9 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-9 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Park
Place Securities, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Master Servicer and the Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-9 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-14-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02(c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
A-14-3
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-14-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:____________________________
Authorized Signatory
A-14-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-14-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-14-7
EXHIBIT A-15
FORM OF CLASS M-10 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES,
THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE
CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES, THE CLASS M-7
CERTIFICATES, THE CLASS M-8 CERTIFICATES AND THE CLASS M-9
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
Series 2004-WHQ1, Class M-10 Aggregate Certificate Principal Balance of
the Class M-10 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $ 20,000,000.00
Date of Pooling and Servicing Agreement Denomination: $ 20,000,000.00
and Cut-off Date: September 1, 2004
Master Servicer: HomEq Servicing Corporation
First Distribution Date: October 25, 2004
Trustee: Xxxxx Fargo Bank, N.A.
No. 1
Issue Date: September 7, 2004
CUSIP: 70069F CA 3
A-15-1
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT.
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-10 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-10 Certificates created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Park Place
Securities, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-10 Certificates on such Distribution
Date pursuant to the Agreement.
A-15-2
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is the lesser of (a) One-Month LIBOR
plus the Certificate Margin and (b) the Maximum Cap Rate. The Certificate Margin
with respect to this Certificate shall be determined in accordance with the
terms of the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 5.02 (c) of the Agreement.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-15-3
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
A-15-4
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-15-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-15-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-15-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-15-8
EXHIBIT A-16
FORM OF CLASS CE CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND
THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
Series 2004-WHQ1, Class CE Aggregate Notional Amount of the Class CE
Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement $1,999,999,891.46
and Cut-off Date: September 1, 2004
Aggregate Certificate balance of the Class CE
First Distribution Date: October 25, 2004 Certificates as of the Issue Date:
$64,999,891.46
No. 1
Master Servicer: HomEq Servicing Corporation
Issue Date: September 7, 2004
Trustee: Xxxxx Fargo Bank, N.A.
A-16-1
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
CE Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class CE Certificates in a REMIC created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Park Place Securities, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to
A-16-2
such Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
A-16-3
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as
A-16-4
provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the sum of the aggregate Stated Principal
Balance of the Initial Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-16-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-16-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-16-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-16-8
EXHIBIT A-17
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
Series 2004-WHQ1, Class P Aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date: $100.00
Date of Pooling and Servicing Agreement
and Cut-off Date: September 1, 2004 Denomination: $100.00
First Distribution Date: October 25, 2004 Master Servicer: HomEq Servicing Corporation
No. 1
Trustee: Xxxxx Fargo Bank, N.A.
Issue Date: September 7, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
THE DENOMINATION OF THIS CERTIFICATE.
A-17-1
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
P Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class P Certificates in a REMIC created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Park Place Securities, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
A-17-2
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
A-17-3
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer (if any), the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
A-17-4
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-17-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-17-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-17-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-17-8
EXHIBIT A-18
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
A-18-1
511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED
TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER
IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO
A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON
THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 2004-WHQ1, Class R Aggregate Percentage Interest of the
Class R Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement 100.00% Percentage Interest
and Cut-off Date: September 1, 2004
Denomination: 100% Percentage Interest
First Distribution Date: October 25, 2004
Master Servicer: HomEq Servicing Corporation
No. 1
Trustee: Xxxxx Fargo Bank, N.A.
Issue Date: September 7, 2004
A-18-2
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest specified above in that certain
beneficial ownership interest evidenced by all the Class R Certificates in a
REMIC created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Agreement"), among Park Place Securities, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on
A-18-3
the face hereof equal to the denomination specified on the face hereof divided
by the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or
A-18-4
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Certificate Registrar and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as residual
interests in three REMICs, (B) it will include in its income a PRO RATA share of
the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer,
A-18-5
the Trustee, the NIMS Insurer (if any), the Certificate Registrar or any such
agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-18-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-18-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-18-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-18-9
EXHIBIT A-19
FORM OF CLASS R-X CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
A-19-1
511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED
TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER
IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO
A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON
THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 2004-WHQ1, Class R-X Aggregate Percentage Interest of the
Class R-X Certificates as of the Issue
Date: 100.00% Percentage
Date of Pooling and Servicing Agreement and
Cut-off Interest Date: September 1, 2004 Denomination: 100% Percentage Interest
First Distribution Date: October 25, 2004 Master Servicer: HomEq Servicing Corporation
No. 1 Trustee: Xxxxx Fargo Bank, N.A.
Issue Date: September 7, 2004
A-19-2
ASSET-BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by
PARK PLACE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN PARK PLACE SECURITIES, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest specified above in that certain
beneficial ownership interest evidenced by all the Class R-X Certificates in a
REMIC created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Agreement"), among Park Place Securities, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-X Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset-Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on
A-19-3
the face hereof divided by the aggregate Certificate Principal Balance of the
Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the NIMS Insurer (if any),
the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the NIMS Insurer (if any) and the
Trustee with the consent of the NIMS Insurer (if any) and the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or
A-19-4
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Certificate Registrar and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as residual
interests in three REMICs, (B) it will include in its income a PRO RATA share of
the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer (if any) and the Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Trustee, the NIMS Insurer (if any) or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer,
A-19-5
the Trustee, the NIMS Insurer (if any), the Certificate Registrar or any such
agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans at the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
A-19-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September __, 2004
XXXXX FARGO BANK, N.A.
as Trustee
By:_____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, N.A.
as Certificate Registrar
By:_____________________________
Authorized Signatory
A-19-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-19-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to_______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or ____________________________________, as its agent.
A-19-9
EXHIBIT B
FORM OF LOST NOTE AFFIDAVIT
Loan #: ____________
Borrower: _____________
LOST NOTE AFFIDAVIT
I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of Park Place Securities, Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:
1. The Seller's address is: _____________________
_____________________
_____________________
2. The Seller previously delivered to the Purchaser a signed
Initial Certification with respect to such Mortgage and/or
Assignment of Mortgage;
3. Such Mortgage Note and/or Assignment of Mortgage was assigned
or sold to the Purchaser by ________________________, a
____________ corporation pursuant to the terms and provisions
of a Mortgage Loan Purchase Agreement dated as of __________
__, _____;
4. Such Mortgage Note and/or Assignment of Mortgage is not
outstanding pursuant to a request for release of Documents;
5. Aforesaid Mortgage Note and/or Assignment of Mortgage (the
"Original") has been lost;
6. Deponent has made or caused to be made a diligent search for
the Original and has been unable to find or recover same;
7. The Seller was the Seller of the Original at the time of the
loss; and
8. Deponent agrees that, if said Original should ever come into
Seller's possession, custody or power, Seller will immediately
and without consideration surrender the Original to the
Purchaser.
9. Attached hereto is a true and correct copy of (i) the Note,
endorsed in blank by the Mortgagee and (ii) the Mortgage or
Deed of Trust (strike one) which secures the Note, which
Mortgage or Deed of Trust is recorded in the county where the
property is located.
B-1
10. Deponent hereby agrees that the Seller (a) shall indemnify and
hold harmless the Purchaser, its successors and assigns,
against any loss, liability or damage, including reasonable
attorney's fees, resulting from the unavailability of any
Notes, including but not limited to any loss, liability or
damage arising from (i) any false statement contained in this
Affidavit, (ii) any claim of any party that has already
purchased a mortgage loan evidenced by the Lost Note or any
interest in such mortgage loan, (iii) any claim of any
borrower with respect to the existence of terms of a mortgage
loan evidenced by the Lost Note on the related property to the
fact that the mortgage loan is not evidenced by an original
note and (iv) the issuance of a new instrument in lieu thereof
(items (i) through (iv) above hereinafter referred to as the
"Losses") and (b) if required by any Rating Agency in
connection with placing such Lost Note into a Pass-Through
Transfer, shall obtain a surety from an insurer acceptable to
the applicable Rating Agency to cover any Losses with respect
to such Lost Note.
11. This Affidavit is intended to be relied upon by the Purchaser,
its successors and assigns. _____________________, a
______________ corporation represents and warrants that it has
the authority to perform its obligations under this Affidavit
of Lost Note.
Executed this ____ day, of ___________ ______.
SELLER
By: _______________________________
Name:
Title:
On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.
Signature:
[Seal]
B-2
EXHIBIT C-1
FORM OF INITIAL CERTIFICATION
[Date]
Park Place Securities, Inc.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx
Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement, dated as of
September 1, 2004, among Park Place Securities, Inc.,
HomEq Servicing Corporation and Xxxxx Fargo Bank,
N.A., relating to Park Place Securities, Inc.,
Asset-backed Pass-Through Certificates, Series 2004-WHQ1
--------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing
Agreement, dated as of May 1 2004, among Park Place Securities, Inc. as
depositor, HomEq Servicing Corporation as master servicer and Xxxxx Fargo Bank,
N.A. as trustee, we hereby acknowledge that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been reviewed by it or such Custodian and are not
mutilated, torn or defaced unless initialed by the related borrower and relate
to such Mortgage Loan, (iii) based on its or the Custodian's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (1) through (3), (6), (9), (10), (13), (15)
and (19) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File.
The [Trustee/Custodian] has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The
[Trustee/Custodian] makes no representations as to: (i) the validity, legality,
sufficiency, recordability, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule; or (ii) the collectability, insurability,
perfection, priority, effectiveness or suitability of any such Mortgage Loan.
The [Trustee/Custodian] was under no duty or obligation (i) to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face or (ii) to
C-1-1
determine whether any Mortgage File should include any of the documents
specified in clause (v) of Section 2.01.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
[Trustee/Custodian]
By:_____________________________
Name:
Title:
C-1-2
EXHIBIT C-2
FORM OF FINAL CERTIFICATION
[Date]
Park Place Securities, Inc.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx
Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement, dated as of
September 1, 2004, among Park Place Securities, Inc.,
HomEq Servicing Corporation and Xxxxx Fargo Bank,
N.A., relating to Park Place Securities, Inc.,
Asset-Backed Pass-Through Certificates, Series 2004-WHQ1
--------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as [Trustee/Custodian, on behalf of
the Trustee], hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it or a Custodian on its behalf has received each of the
documents listed in Section 2.01.
The [Trustee/Custodian] has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The
[Trustee/Custodian] makes no representations as to: (i) the validity, legality,
sufficiency, recordability, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule; or (ii) the collectability, insurability,
perfection, priority, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
[Trustee/Custodian]
By:______________________________
Name:
Title:
C-2-1
EXHIBIT C-3
FORM OF RECEIPT OF MORTGAGE NOTE
[Date]
Park Place Securities, Inc.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx
Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement, dated as of
September 1, 2004, among Park Place Securities, Inc.,
HomEq Servicing Corporation and Xxxxx Fargo Bank,
N.A., relating to Park Place Securities, Inc.,
Asset-Backed Pass-Through Certificates, Series 2004-WHQ1
--------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing
Agreement, dated as of September 1, 2004, among Park Place Securities, Inc. as
depositor, HomEq Servicing Corporation as master servicer and Xxxxx Fargo Bank,
N.A. as trustee, we hereby acknowledge the receipt of the original Mortgage Note
for each Mortgage Loan with any exceptions thereto listed on Exhibit 1.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
[Trustee/Custodian]
By:______________________________
Name:
Title:
C-3-1
EXHIBIT D
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
D-1
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated September 2, 2004, between Ameriquest Mortgage Company, a Delaware
corporation (the "Seller") and Park Place Securities, Inc., a Delaware
corporation (the "Purchaser").
PRELIMINARY STATEMENT
The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser shall deposit the Mortgage Loans into a
mortgage pool constituting the Trust Fund. The Trust Fund will be evidenced by a
single series of asset-backed pass-through certificates designated as Series
2004-WHQ1 (the "Certificates"). The Certificates will consist of nineteen
classes of certificates. The Class M-10 Certificates, the Class CE Certificates,
the Class P Certificates and the Residual Certificates (collectively, the
"Non-Offered Certificates") will be delivered to the Seller or its designee as
partial consideration for the Mortgage Loans as further described below.
The Certificates will be issued pursuant to a Pooling and
Servicing Agreement relating to the Series 2004-WHQ1 Certificates, dated as of
September 1, 2004 (the "Pooling and Servicing Agreement"), among the Purchaser
as depositor (in such capacity, the "Depositor"), HomEq Servicing Corporation as
master servicer (the "Master Servicer") and Xxxxx Fargo Bank, N.A. as trustee
(in such capacity, the "Trustee"). Pursuant to the Pooling and Servicing
Agreement, the Depositor will assign all of its right, title and interest in and
to the Mortgage Loans, together with its rights under this Agreement, to the
Trustee for the benefit of the Certificateholders. Capitalized terms used but
not defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller hereby sells, and
the Purchaser hereby purchases, on or before September 7, 2004 (the "Closing
Date"), certain adjustable-rate and fixed-rate conventional, one- to
four-family, residential mortgage loans (the "Mortgage Loans"), having an
aggregate principal balance as of the close of business on September 1, 2004
(the "Cut-off Date") of $[__] after giving effect to all payments due on the
Mortgage Loans on or before the Cut-off Date (the "Closing Balance"), whether or
not received, including the right to any Prepayment Charges collected after the
Cut-off Date from the Mortgagors in connection with any Principal Prepayments on
the Mortgage Loans. Any payments (including Prepayment Charges) collected on or
before the Cut-off Date, including all scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date,
shall belong to the Seller. In addition to the sale of the Mortgage Loans, the
Seller will cause the Cap Contracts to be transferred to the Purchaser.
SECTION 2. MORTGAGE LOAN SCHEDULE AND PREPAYMENT CHARGE
SCHEDULE. The Purchaser and the Seller have agreed upon which of the mortgage
loans owned by the Seller are to be purchased by the Purchaser pursuant to this
Agreement, and the Seller shall prepare or cause to be prepared on or prior to
the Closing Date a final schedule (the "Closing Schedule") describing such
Mortgage Loans and setting forth all of the Mortgage Loans to be purchased
-2-
under this Agreement. The Closing Schedule shall conform to the requirements set
forth in this Agreement and to the definition of "Mortgage Loan Schedule" under
the Pooling and Servicing Agreement. The Closing Schedule shall be used as the
Mortgage Loan Schedule under the Pooling and Servicing Agreement. The Seller
shall also prepare or cause to be prepared on or prior to the Closing Date a
final schedule (the "Prepayment Charge Schedule") setting forth each Mortgage
Loan containing a Prepayment Charge and conforming to the definition of
Prepayment Charge Schedule under the Pooling and Servicing Agreement.
SECTION 3. CONSIDERATION.
In consideration for the Mortgage Loans that will be purchased
hereunder, the Purchaser shall, as described in Section 8, (i) pay to or upon
the order of the Seller in immediately available funds an amount equal to the
net sale proceeds of the Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3
Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class
M-6 Certificates, the Class M-7 Certificates, the Class M-8 Certificates and the
Class M-9 Certificates and (ii) deliver to the Seller, or its designee, the
Non-Offered Certificates.
SECTION 4. TRANSFER OF THE MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell to the Purchaser, without recourse but subject to the terms of this
Agreement, all of its right, title and interest in, to and under the Mortgage
Loans, including the related Prepayment Charges collected after the Cut-off
Date. The contents of each Mortgage File not delivered to the Purchaser or to
any assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Seller for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser. Upon the
sale and contribution of the Mortgage Loans, the ownership of each Mortgage
Note, the related Mortgage and the other contents of the related Mortgage File
is vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or that come into the
possession of the Seller on or after the Closing Date shall immediately vest in
the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.
(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller
will, on or prior to the Closing Date, deliver or cause to be delivered to the
Purchaser or any assignee, transferee or designee of the Purchaser each of the
following documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank, without
recourse, or in the following form: "Pay to the order of Xxxxx Fargo
Bank, N.A., as Trustee under the applicable agreement, without
recourse, "with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so
endorsing to the Trustee, or with respect to any lost Mortgage Note, an
original Lost Note Affidavit; provided however, that such substitutions
of Lost Note Affidavits for original Mortgage Notes may occur only with
respect to Mortgage Loans, the aggregate Cut-off Date
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Principal Balance of which is less than or equal to 2.00% of the Pool
Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon,
and a copy, certified by the appropriate recording office, of the
recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon;
(iii) an original Assignment assigned in blank, without
recourse;
(iv) the original recorded intervening Assignment or
Assignments showing a complete chain of assignment from the originator
to the Person assigning the Mortgage to the Trustee as contemplated by
the immediately preceding clause (iii) or the original unrecorded
intervening Assignments;
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy or an
attorney's opinion of title or similar guarantee of title acceptable to
mortgage lenders generally in the jurisdiction where the Mortgaged
Property is located, together with all endorsements or riders which
were issued with or subsequent to the issuance of such policy, insuring
the priority of the Mortgage as a first lien on the Mortgaged Property
represented therein as a fee interest vested in the Mortgagor, or in
the event such original title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued by
the title insurance or escrow company.
If any document referred to in Section 4(b)(ii), 4(b)(iii) or
4(b)(iv) above has been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Seller hereunder shall be deemed to have been satisfied upon
(1) delivery by or on behalf of the Seller promptly upon receipt thereof to the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Seller in the case of (x)
above or the public recording office in the case of (y) above to be a true and
complete copy of the recorded original thereof and (2) if such delivered copy is
certified by the Seller then in addition thereto delivery promptly upon receipt
thereof of either the original or a copy of such document certified by the
public recording office to be a true and complete copy of the original. In the
event that the original lender's title insurance policy has not yet been issued,
the Seller shall deliver to the Purchaser or any assignee, transferee or
designee of the Purchaser a written commitment or interim binder or preliminary
report of title issued by the title insurance or escrow company. Promptly upon
receipt by the Seller of any such original title insurance policy, the Seller
shall deliver such to the Purchaser or any assignee, transferee or designee of
the Purchaser.
The Seller shall promptly (and in no event later than thirty
(30) Business Days, subject to extension upon mutual agreement between the
Seller and the Trustee, following the later of (i) the Closing Date, (ii) the
date on which the Seller receives the Assignment from the
-4-
Trustee and (iii) the date of receipt by the Seller of the recording information
for a Mortgage) submit or cause to be submitted for recording, at no expense to
the Trust Fund or the Trustee, in the appropriate public office for real
property records, each Assignment referred to in (iii) and (iv) above and shall
execute each original Assignment referred to in (iii) in the following form:
"Xxxxx Fargo Bank, N.A., as Trustee under the applicable agreement". In the
event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Seller shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates, without regard to the Policy; provided further,
however, each Assignment shall be submitted for recording by the Seller (at the
direction of the Master Servicer) in the manner described above, at no expense
to the Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights or the NIMS Insurer, (ii) [reserved], (iii) the occurrence of the
bankruptcy or insolvency of the Seller and (iv) the occurrence of a servicing
transfer as described in Section 7.02 of the Pooling and Servicing Agreement and
with respect to any one assignment or Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Each original document relating to any Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.
(c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) RESERVED.
(e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Seller under this Agreement
shall be promptly reimbursed by the Seller.
(f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan or (ii)
-5-
make such Mortgage Files available to the Purchaser or to any assignee,
transferee or designee of the Purchaser for examination at the Custodian's
offices in Santa Ana, California. Such examination may be made by the Purchaser,
and its respective designees, upon reasonable notice to the Seller and the
Trustee during normal business hours before the Closing Date and within sixty
(60) days after the Closing Date. If any such person makes such examination
prior to the Closing Date and identifies any Mortgage Loans that do not conform
to the requirements of the Purchaser as described in this Agreement, such
Mortgage Loans shall be deleted from the Closing Schedule. The Purchaser may, at
its option and without notice to the Seller, purchase all or part of the
Mortgage Loans without conducting any partial or complete examination. The fact
that the Purchaser or any person has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
rights of the Purchaser or any assignee, transferee or designee of the Purchaser
to demand repurchase or other relief as provided herein or under the Pooling and
Servicing Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER.
The Seller hereby represents and warrants to the Purchaser, as
of the date hereof and as of the Closing Date, and covenants, that:
(1) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by the Seller in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure the ability of the
Master Servicer to enforce each Mortgage Loan and to service the Mortgage Loans
in accordance with the terms of the Pooling and Servicing Agreement;
(2) The Seller had the full corporate power and authority to
hold and sell each Mortgage Loan and has the full corporate power and authority
to service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; this Agreement has been
duly executed and delivered by the Seller; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Purchaser, constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;
(3) The execution and delivery of this Agreement by the
Seller, the servicing of the Mortgage Loans by the Seller under the Pooling and
Servicing Agreement, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Seller and will not (A) result in a
breach of any term or provision of the charter or by-laws of the Seller or (B)
-6-
conflict with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument to which
the Seller is a party or by which it may be bound, or any statute, order or
regulation applicable to the Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the Seller;
and the Seller is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which materially and
adversely affects or, to the Seller's knowledge, would in the future materially
and adversely affect, (x) the ability of the Seller to perform its obligations
under this Agreement or (y) the business, operations, financial condition,
properties or assets of the Seller taken as a whole;
(4) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Seller has obtained
the same;
(5) The Seller is an approved originator/servicer for Xxxxxx
Xxx or Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act; and
(6) Except as otherwise disclosed in the Prospectus
Supplement, dated September 2, 2004 (the "Prospectus Supplement"), no litigation
is pending against the Seller that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of the
Seller to service the Mortgage Loans or the Seller to perform any of its other
obligations hereunder in accordance with the terms hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
RELATING TO THE MORTGAGE LOANS.
(a) The Seller hereby represents and warrants to the
Purchaser, with respect to the Mortgage Loans as of the Closing Date or as of
such date specifically provided herein:
(1) The information set forth on the Mortgage Loan
Schedule with respect to each Mortgage Loan is true and correct in all material
respects;
(2) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to any Mortgage Loan has
taken place on the part of any person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;
(3) All payments due prior to the Cut-off Date have
been made and none of the Mortgage Loans will have been contractually delinquent
for more than one calendar month more than once since the origination thereof;
(4) Each Mortgage is a valid and enforceable first or
second lien on the Mortgaged Property, including all improvements thereon,
subject only to (a) the lien of
-7-
nondelinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and (d) in the
case of a second lien, the first lien on such Mortgaged Property;
(5) Immediately prior to the sale of the Mortgage
Loans to the Purchaser, the Seller had good title to, and was the sole legal and
beneficial owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same;
(6) There is no delinquent tax or assessment lien
against any Mortgaged Property;
(7) There is no valid offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal of or interest on such Mortgage Note, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any valid right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such valid right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(8) There are no mechanics' liens or claims for work,
labor or material rendered to the Mortgaged Property affecting any Mortgaged
Property which are or may be a lien prior to, or equal with, the lien of the
related Mortgage, except those which are insured against by the title insurance
policy referred to in (12) below;
(9) Subject to the Escrow Withhold referred to in
(19) below, each Mortgaged Property is free of material damage and is in good
repair;
(10) Each Mortgage Loan at origination complied in
all material respects with applicable local, state and federal laws and
regulations, including, without limitation, usury, equal credit opportunity,
real estate settlement procedures, truth-in-lending, disclosure laws and all
applicable predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;
(11) Neither the Seller nor any prior holder of any
Mortgage has modified, impaired or waived the Mortgage in any material respect
(except that a Mortgage Loan may have been modified by a written instrument
which has been recorded, if necessary, to protect the interests of the Purchaser
and which has been delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related Mortgaged
Property in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction with respect
thereto;
-8-
(12) A lender's policy of title insurance together
with a condominium endorsement, extended coverage endorsement, and an adjustable
rate mortgage endorsement (each as applicable) in an amount at least equal to
the Cut-off Date principal balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and effect,
the transfer of the related Mortgage Loan to the Purchaser will not affect the
validity or enforceability of such policy and each such policy was issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac, which
policy insures the Seller and successor owners of indebtedness secured by the
insured Mortgage, as to the first priority lien of the Mortgage; no claims have
been made under such lender's title insurance policy and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;
(13) Each Mortgage Loan was originated by the Seller
or an Affiliate of the Seller in accordance with the underwriting standards as
set forth in the Prospectus Supplement (or, if generated by an entity other than
the Seller, in accordance with such other underwriting standards as set forth in
the Prospectus Supplement or, if generated on behalf of the Seller by a person
other than the Seller, is subject to the same underwriting standards and
procedures used by the Seller in originating mortgage loans directly as set
forth in the Prospectus Supplement) or by a savings and loan association,
savings bank, commercial bank, credit union, insurance company or similar
institution which is supervised and examined by a federal or state authority
(including a mortgage broker), or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act;
(14) With respect to each Adjustable-Rate Mortgage
Loan, on each adjustment date, the Mortgage Rate will be adjusted to equal the
Index plus the Gross Margin, rounded to the nearest 0.125%, subject to the
Periodic Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The
related Mortgage Note is payable on the first day of each month in
self-amortizing monthly installments of principal and interest, with interest
payable in arrears, and requires a monthly payment which is sufficient to fully
amortize the outstanding principal balance of the Mortgage Loan over its
remaining term and to pay interest at the applicable Mortgage Rate. No Mortgage
Loan is subject to negative amortization;
(15) All of the improvements which were included for
the purpose of determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property, except those, if any, which are insured against by the lender's title
insurance policy referred to in (12) above.
(16) All inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property, including but not limited to certificates of occupancy, have
been made or obtained from the appropriate authorities, and the Mortgaged
Property is lawfully occupied under applicable law except as may otherwise be
insured against by the lender's title insurance policy referred to in (12)
above.
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(17) All parties which have had any interest in the
Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located;
(18) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and with applicable laws. All
parties to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been
duly and properly executed by such parties;
(19) The proceeds of each Mortgage Loan have been
fully disbursed, there is no requirement for future advances thereunder and any
and all requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied with,
except any Mortgaged Property or Mortgage Loan subject to an Escrow Withhold as
defined in the applicable Originator's underwriting guidelines. All costs, fees
and expenses incurred in making, closing or recording the Mortgage Loans were
paid;
(20) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage designated as
a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure.
There is no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(21) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(22) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been capitalized under
the Mortgage or the related Mortgage Note;
(23) The origination, collection and servicing
practices used by the Seller with respect to each Mortgage Loan have been in all
material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business and each of the Mortgage Loans have
been serviced by the Seller since origination;
(24) There is no pledged account or other security
other than real estate securing the Mortgagor's obligations;
(25) No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;
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(26) The improvements upon each Mortgaged Property
are covered by a valid, binding and existing hazard insurance policy that is in
full force and effect with a generally acceptable carrier that provides for fire
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located representing coverage not less than the lesser of
the outstanding principal balance of the related Mortgage Loan or the minimum
amount required to compensate for damage or loss on a replacement cost basis.
All individual insurance policies and flood policies referred to in clause (27)
below contain a standard mortgagee clause naming the Seller or the original
mortgagee, and its successors in interest, as mortgagee, and the Seller has
received no notice that any premiums due and payable thereon have not been paid;
the Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;
(27) If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a valid and binding flood insurance policy that is
in full force and effect in a form meeting the requirements of the current
guidelines of the Flood Insurance Administration is in effect with respect to
such Mortgaged Property with a generally acceptable carrier in an amount
representing coverage not less than the least of (A) the original outstanding
principal balance of the Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or (C) the maximum
amount of insurance that is available under the Flood Disaster Protection Act of
1973;
(28) There is no default, breach, violation or event
of acceleration existing under the Mortgage or the related Mortgage Note; and
the Seller has not waived any default, breach, violation or event of
acceleration;
(29) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which does not include (a) cooperatives or (b)
mobile homes and manufactured homes (as defined in the Xxxxxx Xxx
Seller-Servicer's Guide), except when the appraisal indicates that (i) the
mobile or manufactured home was built under the Federal Manufactured Home
Construction and Safety Standards of 1976 or (ii) otherwise assumes the
characteristics of site-built housing and meets local building codes, is readily
marketable, has been permanently affixed to the site, is not in a mobile home
"park," and is treated as real property under the applicable state law. With
respect to any Mortgage Loan that is secured by a leasehold estate: (a) the
lease is valid, in full force and effect; (b) all rents and other payments due
under the lease have been paid; (c) the lessee is not in default under any
provision of the lease; (d) the term of the lease exceeds the maturity date of
the related Mortgage Loan by at least five (5) years; and (e) the Mortgagee
under the Mortgage Loan is given notice and an opportunity to cure any defaults
under the lease;
(30) There is no obligation on the part of the Seller
or any other party under the terms of the Mortgage or related Mortgage Note to
make payments in lieu of or in addition to those made by the Mortgagor;
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(31) Any future advances made prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan;
(32) The Mortgage File contains an appraisal which
was (i) either performed by an appraiser who satisfied, and which was conducted
in accordance with, all of the applicable requirements of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended or (ii)
conducted in accordance with an insured valuation model;
(33) None of the Mortgage Loans is a graduated
payment mortgage loan, nor is any Mortgage Loan subject to a temporary buydown
or similar arrangement;
(34) No Mortgagor has currently requested any relief
under the Servicemembers Civil Relief Act or similar state laws;
(35) The Mortgage Loans comply in all material
respects with the descriptions set forth under the captions "The Mortgage Pool"
and Annex III in the Prospectus Supplement;
(36) The Mortgage contains an enforceable provision
for the acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the related Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
except as may be limited by applicable law;
(37) The information set forth in the Prepayment
Charge Schedule attached as Schedule 2 to the Pooling and Servicing Agreement
(including the prepayment charge summary attached thereto) is complete, true and
correct in all material respects at the date or dates respecting which such
information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms upon the full and voluntary prepayment
by the Mortgagor under applicable law and complied in all material respects with
applicable local, state and federal laws (except to the extent that (i) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally or
(ii) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary payoff);
(38) Each Mortgage Loan is an obligation that is
principally secured by real property for purposes of the REMIC Provisions of the
Code;
(39) The Mortgage Loans are not subject to the
requirements of the Home Ownership and Equity Protection Act of 1994 ("HOEPA")
and no Mortgage Loan is subject to, or in violation of, any applicable state or
local law, ordinance or regulation similar to HOEPA;
(40) (a) No Mortgage Loan is a High Cost Loan as
defined by HOEPA or any other applicable predatory or abusive lending laws and
(b) no Mortgage Loan is a "high cost home", "covered" (excluding home loans
defined as "covered home loans" in the
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New Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004) , "high risk home" or "predatory" loan under
any other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for resident mortgage loans having high interest
rates, points and/or fees);
(41) No Mortgage Loan originated on or after October
1, 2002 will impose a Prepayment Charge for a term in excess of three years. Any
Mortgage Loans originated prior to such date will not impose a Prepayment Charge
for a term in excess of five (5) years;
(42) No Mortgage Loan that is secured by property
located in the State of Georgia is either a "Covered Loan" or "High Cost Home
Loan" within the meaning of the Georgia Fair Lending Act, as amended (the
"Georgia Act");
(43) The Seller, as servicer for each Mortgage Loan
prior to the Closing Date, has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company or their successors
(the "Credit Repositories") on a monthly basis;
(44) There is no Mortgage Loan that was originated on
or after October 1, 2002 and before March 7, 2003 which is secured by property
located in the State of Georgia;
(45) The Prepayment Charges included in the
transaction are enforceable and originated in compliance with all applicable
federal, state and local law;
(46) No proceeds from any Mortgage Loan were used to
finance single-premium credit insurance policies;
(47) No Mortgage Loan is a high cost loan or a
covered loan, as applicable (as such terms are defined in Standard & Poor's
LEVELS Version 5.6 Glossary Revised, Appendix E);
(48) As of the Closing Date, no Mortgage Loan is the
subject of foreclosure proceedings and no obligor on any of the Mortgage Loans
has filed for bankruptcy protection or is a debtor under proceedings under the
federal Bankruptcy Code and there is no proceeding pending or to the Seller's
knowledge, threatened, for the total or partial condemnation of any Mortgaged
Property, nor is such a proceeding currently occurring;
(49) There are no violations of any local, state or
federal environmental law, rule or regulation with respect to any Mortgaged
Property and there is no pending action or proceeding directly involving a
Mortgaged Property in which compliance with any environmental law, rule or
regulation is in issue, and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation that is a
prerequisite to the use and enjoyment of such Mortgaged Property;
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(51) With respect to any Mortgage Loan originated on
or after August 1, 2004 and underlying the security, neither the related
Mortgage nor the related Mortgage Note requires the borrower to submit to
arbitration to resolve any dispute arising out of or relating in any way to the
mortgage loan transaction; and
(50) None of the Mortgage Loans are cash-out
refinance land contracts.
(b) The Seller hereby represents and warrants to the Purchaser, with
respect to the Group I Mortgage Loans as of the Closing Date or as of such date
specifically provided herein:
(1) Each Group I Mortgage Loan is in compliance with
the anti-predatory lending eligibility for purchase requirements of Xxxxxx Mae's
Selling Guide;
(2) The methodology used in underwriting the
extension of credit for each Group I Mortgage Loan
employs objective mathematical principles which relate the Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting methodology
does not rely on the extent of the Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make timely
payments on the Group I Mortgage Loan;
(3) With respect to any Group I Mortgage Loan that
contains a provision permitting imposition of a charge upon a prepayment prior
to maturity: (i) prior to the Group I Mortgage Loan's origination, the Mortgagor
agreed to such charge in exchange for a monetary benefit, including but not
limited to a rate or fee reduction, (ii) prior to the Group I Mortgage Loan's
origination, the Mortgagor was offered the option of obtaining a mortgage loan
that did not require payment of such a charge, (iii) the prepayment charge is
disclosed to the Mortgagor in the loan documents pursuant to applicable state
and federal law, (iv) the duration of the prepayment period shall not exceed
three (3) years from the date of the Mortgage Note if the Mortgage Loan was
originated on or after September 1, 2004, unless the loan was modified to reduce
the prepayment period to no more than three years from the date of the Mortgage
Note and the borrower was notified in writing of such reduction in the
prepayment period, and (v) notwithstanding any state or federal law to the
contrary, the Master Servicer shall not impose such prepayment charge in any
instance when the mortgage debt is accelerated as the result of the Mortgagor's
default in making the loan payments;
(4) All points and fees related to each Group I
Mortgage Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. Except in the case of a Group I
Mortgage Loan in an original principal amount of less than $60,000 which would
have resulted in an unprofitable origination, no Mortgagor was charged "points
and fees" (whether or not financed) in an amount greater than 5% of the
principal amount of such loan and such 5% limitation is calculated in accordance
with Xxxxxx Mae's anti-predatory lending requirements as set forth in the Xxxxxx
Mae Selling Guide;
(5) All fees and charges (including finance charges)
and whether or not financed, assessed, collected or to be collected in
connection with the origination and
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servicing of each Group I Mortgage Loan haves been disclosed in writing to the
Mortgagor in accordance with applicable state and federal law and regulation;
(6) No Group I Mortgage Loan Mortgagor was encouraged
or required to select a mortgage loan product offered by the Originator which is
a higher cost product designed for a less creditworthy Mortgagor, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt to income ratios for a lower cost credit
product then offered by the Originator;
(7) No Group I Mortgage Loan Mortgagor was required
to purchase any credit life, disability, accident or health insurance product as
a condition of obtaining the extension of credit. No Mortgagor obtained a
prepaid single premium credit life, disability, accident or health insurance
policy in connection with the origination of the Group I Mortgage Loan. No
proceeds from any Group I Mortgage Loan were used to purchase single premium
credit insurance policies as part of the origination of, or as a condition to
closing, such Group I Mortgage Loan
(8) The Master Servicer will transmit full-file
credit reporting data for each Group I Mortgage Loan pursuant to Xxxxxx Xxx
Guide Announcement 95-19 and that for each Group I Mortgage Loan, the Master
Servicer agrees it shall report one of the following statuses each month as
follows: new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off;
(9) No Group I Mortgage Loan is a "High Cost Home
Loan" as defined in New York Banking Law 6-1;
(10) No Group I Mortgage Loan is a "High-Cost Home
Loan" as defined under the Arkansas Home Loan Protection Act, effective as of
July 14, 2003;
(11) No Group I Mortgage Loan is a "High-Cost Home
Loan" as defined under Kentucky State Statute KRS 360.100, effective as of June
25, 2003;
(12) No Group I Mortgage Loan is a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act, effective as of November
27, 2003;
(13) No Group I Mortgage Loan is a "High-Cost Home
Loan" as defined in the New Mexico Home Loan Protection Act, effective as of
January 1, 2004; and
(14) No Group I Mortgage Loan is a "High-Risk Home
Loan" as defined in the Illinois High-Risk Home Loan Act, effective as of
January 1, 2004.
SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
AND FOR BREACH OF REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating
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to the Mortgage Loans or any failure on the part of the Purchaser to review or
examine such documents and shall inure to the benefit of any assignee,
transferee or designee of the Purchaser, including the Trustee for the benefit
of the Certificateholders.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report) as part of, any Mortgage File or of
a breach of any of the representations and warranties contained in Section 5 or
Section 6 that materially and adversely affects the value of any Mortgage Loan
or the interest therein of the Purchaser or the Purchaser's assignee, transferee
or designee (it being understood that with respect to the representations and
warranties set forth in (39), (40), (41), (43), (44), and (46) of Section 6(a)
herein, a breach of any such representation or warranty shall in and of itself
be deemed to materially adversely affect the interest therein of the Purchaser
and the Purchaser's assignee, transferee or designee), the party discovering the
breach shall give prompt written notice to the other. Within ninety (90) days of
its discovery or its receipt of notice of any such missing documentation which
was not transferred to the Purchaser as described above or materially defective
documentation or any such breach of a representation and warranty (it being
understood that with respect to the representations and warranties set forth in
(39), (40), (41), (43), (44) and (46) of Section 6(a) herein, a breach of any
such representation or warranty shall in and of itself be deemed to materially
adversely affect the interest therein of the Purchaser and the Purchaser's
assignee, transferee or designee), the Seller promptly shall deliver such
missing document or cure such defect or breach in all material respects, or in
the event the Seller cannot deliver such missing document or such defect or
breach cannot be cured, the Seller shall, within ninety (90) days of its
discovery or receipt of notice, either (i) repurchase the affected Mortgage Loan
at a price equal to the Purchase Price or (ii) pursuant to the provisions of the
Pooling and Servicing Agreement, cause the removal of such Mortgage Loan from
the Trust Fund and substitute one or more Qualified Substitute Mortgage Loans.
In the event that any Mortgage Loan is subject to a breach of the representation
and warranty in Section 6(a)(39) resulting in the Master Servicer's inability to
collect all or part of the Prepayment Charge from the Mortgagor, in lieu of
repurchase, the Seller shall be obligated to remit to the Master Servicer (for
deposit in the Collection Account) any shortfall in the Prepayment Charge
collected upon the Mortgagor's voluntary Principal Prepayment.
Notwithstanding the foregoing, within ninety (90) days of the
earlier of discovery by the Seller or receipt of notice by the Seller of the
breach of the representation of the Seller set forth in Section 6(a)(45) above
which materially and adversely affects the interests of the Holders of the Class
P Certificates in any Prepayment Charge, the Seller shall pay the amount of the
scheduled Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account, net of any
amount previously collected by the Master Servicer and paid by the Master
Servicer, for the benefit of the Holders of the Class P Certificates, in respect
of such Prepayment Charge.
The Seller shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Seller shall deliver to the Purchaser such amended
Closing Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
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such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase or substitution required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.
In addition, upon discovery by the Seller, the Purchaser, or
any assignee, transferee or designee of the Purchaser that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering the breach shall give prompt
written notice within five (5) Business Days to the others. Within ninety (90)
days of its discovery or its receipt of notice, the Seller promptly shall either
(i) repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.
(b) It is understood and agreed that the obligations of the Seller set forth in
this Section 7 to cure, remit a Prepayment Charge shortfall, repurchase or
substitute for a defective Mortgage Loan constitute the sole remedies of the
Purchaser against the Seller respecting a missing or defective material document
or a breach of the representations and warranties contained in Section 5 or
Section 6.
SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Xxxxxxx Xxxxxxxx & Wood LLP at 10:00 AM New York City time
on the Closing Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller under this Agreement shall be true and correct
in all material respects as of the date as of which
they are made and no event shall have occurred which,
with notice or the passage of time, would constitute
a default under this Agreement;
(b) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this
Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(c) The Seller shall have delivered or caused to be
delivered and released to the Purchaser or to its
designee, all documents (including without
limitation, the Mortgage Loans) required to be so
delivered by the Purchaser pursuant to Section 2.01
of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement
shall have been complied with.
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Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the purchase price.
SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:
(a) (i) An Officers' Certificate of the Seller, dated the
Closing Date, in form satisfactory to and upon which
the Purchaser and the Underwriters may rely, and
attached thereto copies of the certificate of
incorporation, by-laws and certificate of good
standing of the Seller under the laws of Delaware and
stating that the information contained in the
Prospectus Supplement, relating to the Mortgage Loans
and the Seller, and the applicable loan portfolio, is
true and accurate in all material respects and does
not contain any untrue statement of a material fact
or omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading and (ii) if any of the
Non-Offered Certificates are offered on the Closing
Date pursuant to a private placement memorandum, the
Seller shall deliver an Officer's Certificate stating
that the same information contained in such private
placement memorandum is true and accurate in all
material respects;
(b) An Officers' Certificate of the Seller, dated the
Closing Date, in form satisfactory to and upon which
the Purchaser and the Underwriters may rely, with
respect to certain facts regarding the sale of the
Mortgage Loans by the Seller to the Purchaser;
(c) An Opinion of Counsel of each of the Seller and the
Master Servicer, dated the Closing Date, in form
satisfactory to and addressed to the Purchaser, the
Certificate Insurer and the Underwriters;
(d) Such opinions of counsel from the Purchaser's or
Seller's counsel as the Rating Agencies may request
in connection with the sale of the Mortgage Loans by
the Seller to the Purchaser or the Seller's execution
and delivery of, or performance under, this Agreement
and upon which the Underwriters may rely;
(e) An Indemnification Agreement among the Master
Servicer, the Depositor and the Seller;
(f) A letter from Deloitte & Touche LLP, certified public
accountants, dated the date hereof and to the effect
that they have performed certain specified procedures
as a result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the Prospectus
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Supplement, under the captions "Summary of Prospectus
Supplement", "Risk Factors", "The Mortgage Pool",
"Yield on the Certificates", "Description of the
Certificates", "Pooling and Servicing Agreement--The
Seller", Annex II and Annex III agrees with the
records of the Seller;
(g) A letter from KPMG LLP, certified public accountants,
dated the date hereof and to the effect that they
have performed certain specified procedures as a
result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the Prospectus
Supplement, under the caption "Pooling and Servicing
Agreement--The Master Servicer" agrees with the
records of the Master Servicer;
(h) The Seller shall deliver for inclusion in the
Prospectus Supplement under the captions "The
Mortgage Pool--Underwriting Standards of the
Originators" and "Pooling and Servicing
Agreement--The Seller" or for inclusion in other
offering material such publicly available information
regarding its financial condition, underwriting
standards, lending activities and loan sales,
production, and servicing and collection practices,
and any similar nonpublic, unaudited financial
information;
(i) The Master Servicer shall deliver for inclusion in
the Prospectus Supplement under the caption "Pooling
and Servicing Agreement--The Master Servicer" or for
inclusion in other offering material approved by the
Master Servicer certain publicly available
information regarding its financial condition and its
mortgage loan delinquency, foreclosure and loss
experience and servicing and collection practices,
and similar nonpublic, unaudited financial
information; and
(j) Such further information, certificates, opinions and
documents as the Purchaser or the Underwriters may
reasonably request.
SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Seller's in-house accountants
and in-house attorneys, the costs and expenses incurred in connection with
producing the Seller's loan loss, foreclosure and delinquency experience, and
the costs and expenses incurred in connection with obtaining the documents
referred to in Sections 9(d) and 9(e) to the extent such costs and expenses were
not previously paid by the Seller. The Seller shall pay (or shall reimburse the
Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) the costs and expenses of printing (or otherwise reproducing)
and delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus, the Prospectus Supplement, and the private
placement memorandum relating to the Certificates and other related documents,
the initial fees, costs and expenses of the Trustee relating to the issuance of
the initial certification of the Trustee under Section 2.02 of the Pooling and
Servicing Agreement, the fees and expenses of the Seller's counsel in connection
with the preparation of
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all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates, the cost of outside special counsel that may
be required for the Purchaser, the cost of obtaining the documents referred to
in Section 9(g) and the fees charged by any rating agency to rate the
Certificates. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expense.
SECTION 11. [Reserved].
SECTION 12. [Reserved].
SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement, and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the purchase price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the purchase price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 13
shall be deemed to have been released.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 0000 Xxxx & Xxxxxxx Xxxx, Xxxxx
0000,
-00-
Xxxxxx, Xxxxxxxxxx 00000, Facsimile: (000) 000-0000, Attention: General Counsel,
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser; if to the Seller, addressed to the Seller at 0000 Xxxx & Xxxxxxx
Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, Facsimile: (000) 000-0000,
Attention: General Counsel, or to such other address as the Seller may designate
in writing to the Purchaser.
SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 16. AGREEMENT OF PARTIES. The Seller and the Purchaser
agree to execute and deliver such instruments and take such actions as either of
the others may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement and the Pooling and
Servicing Agreement.
SECTION 17. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (EXCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought; provided that if a modification or amendment adversely
affects the rights or interests of the Certificate Insurer or
-21-
the holders of the Insured Certificates, it requires the Certificate Insurer's
prior written consent. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. The
NIMS Insurer, if any, and the Certificate Insurer shall be a third party
beneficiary hereof and may enforce the terms hereof as if a party hereto.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession" for
purposes of perfecting the security interest pursuant to the New York Uniform
Commercial Code; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to Section 4(d)
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser 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 Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.
AMERIQUEST MORTGAGE COMPANY
By: _________________________________
Name:
Title:
PARK PLACE SECURITIES, INC.
By: _________________________________
Name:
Title:
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, N.A.,
Re: Pooling and Servicing Agreement dated as of September 1, 2004
among Park Place Securities, Inc., as depositor, HomEq
Servicing Corporation, as master servicer, and Xxxxx Fargo
Bank, N.A., AS Trustee
In connection with the administration of the Mortgage Loans
held by you as Trustee pursuant to the above-captioned Pooling
and Servicing Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the
Mortgage Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME. ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (check one):
________ 1. Mortgage Paid in Full
________ 2. Foreclosure
________ 3. Substitution
________ 4. Other Liquidation (Repurchases, etc.)
________ 5. Nonliquidation Reason: ______________________
Address to which Trustee should
deliver the Trustee's Mortgage File:
______________________________________
______________________________________
E-1
By: ____________________________________
(authorized signer)
Issuer: ________________________________
Address: _______________________________
Date: __________________________________
TRUSTEE
Xxxxx Fargo Bank, N.A.
Please acknowledge the execution of the above request by your signature
and date below:
______________________________________ ________________________
Signature Date
Documents returned to Trustee:
______________________________________ ________________________
Trustee Date
E-2
EXHIBIT F-1
FORM OF TRANSFEROR REPRESENTATION LETTER
[DATED]
Xxxxx Fargo Bank, N.A.
Re: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WHQ1, [CE] [P] [R], [R-X]
[representing a % Percentage Interest] [with an aggregate
Certificate Principal Balance of _____] [with a Notional
Amount of ______]
---------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the above-captioned
asset-backed pass-through certificates (the "Certificates"), the Transferor
hereby certifies as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
September 1, 2004, among Park Place Securities, Inc. as Depositor, HomEq
Servicing Corporation as Master Servicer and Xxxxx Fargo Bank, N.A. as Trustee
(the "Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.
F-1-1
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:________________________________
Name:
Title:
F-1-2
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Xxxxx Fargo Bank, N.A.
Re: Park Place Securities, Inc., Asset-Backed
Pass-Through Certificates, Series 2004-WHQ1 Class
[CE] [P] [R], [R-X] [representing a ___ % Percentage
Interest] [with an aggregate Certificate Principal
Balance of _____] [With a Notional Amount of ______]
----------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933, as amended (the "1933 Act") and has completed either of the forms
of certification to that effect attached hereto as Annex 1 or Annex 2.
The Transferee is aware that the sale to it is being made in reliance
on Rule 144A. The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the
Pooling and Servicing Agreement referred to below and (d) any credit
enhancement mechanism associated with the Certificates, that it has
requested.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of September 1, 2004, among Park Place Securities, Inc. as
Depositor, HomEq Servicing Corporation as Master Servicer and Xxxxx Fargo Bank,
N.A. as Trustee, pursuant to which the Certificates were issued.
[TRANSFEREE]
By: ______________________________
Name:
Title:
F-1-3
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Xxxxx Fargo Bank, N.A. as Trustee, with
respect to the asset-backed pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933, as amended ("Rule 144A") because (i) the
Transferee owned and/or invested on a discretionary basis
$______________________ in securities (except for the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least 1Transferee must own and/or
invest on a discretionary basis at least $100,000,000 in
securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at
least $10,000,000 in securities.
F-1-4
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934, as
amended.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940, as
amended.
3. The term "Securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
_____ ______ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
F-1-5
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
Print Name of Transferee
By:______________________________
Name:
Title:
F-1-6
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Xxxxx Fargo Bank, N.A., as Trustee, with
respect to the asset-backed pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because the Transferee is part of a Family
of Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, as amended, and (ii) as marked below, the Transferee alone,
or the Transferee's Family of Investment Companies, owned at least $100,000,000
in securities (other than the excluded securities referred to below) as of the
end of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "Securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
F-1-7
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
Print Name of Transferee or Advisor
By: ________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Transferee
F-1-8
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser named below
(the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
as amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on
a discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser _____________________________________________________
By: (Signature) _____________________________________________________
Name of Signatory _____________________________________________________
Title _______________________________________________________________________
Date of this certificate _____________________________________________________
Date of information provided in paragraph 3 ___________________________________
F-1-9
EXHIBIT F-2
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
____________________________, being duly sworn, deposes,
represents and warrants as follows:
1. I am a ______________________ of __________________________
(the "Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Park Place Securities, Inc., Asset-Backed
Pass-Through Certificates, Series 2004-WHQ1, Class [R] [R-X] (the "Residual
Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Residual Certificates were issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 2004 and (ii) is acquiring the Residual Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to disqualified organizations under the
Internal Revenue Code of 1986, as amended that applies to all transfers of the
Residual Certificates after March 31, 1988; (ii) that such tax would be on the
transferor or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a non-Permitted Transferee, on the agent;
(iii) that the person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnishes to such person an affidavit
that the transferee is a Permitted Transferee and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
each of the Residual Certificates may be a "noneconomic residual interest"
within the meaning of proposed Treasury regulations promulgated under the Code
and that the transferor of a "noneconomic residual interest" will remain liable
for any taxes due with respect to the income on such residual interest, unless
no significant purpose of the transfer is to impede the assessment or collection
of tax.
F-2-1
4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if, at any time during the taxable
year of the pass-through entity, a non-Permitted Transferee is the record holder
of an interest in such entity. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is aware that the Certificate Registrar will not
register the transfer of any Class R Certificate unless the transferee, or the
transferee's agent, delivers to the Certificate Registrar, among other things,
an affidavit in substantially the same form as this affidavit. The Owner
expressly agrees that it will not consummate any such transfer if it knows or
believes that any of the representations contained in such affidavit and
agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is ____________.
8. The Owner has reviewed the restrictions set forth on the
face of the Residual Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Residual Certificates were
issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event that the Owner holds such
Certificate in violation of Section 5.02(d)); and that the Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the
Residual Certificates in order to impede the assessment or collection of any
tax.
10. The Owner anticipates that it will, so long as it holds
the Residual Certificates, have sufficient assets to pay any taxes owed by the
holder of such Residual Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Residual Certificates that the
Owner intends to pay taxes associated with holding such Residual Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Residual Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Residual Certificates.
12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
13. The Owner is not acquiring the Residual Certificates with
the intent to transfer the Residual Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Residual Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Residual Certificates remain outstanding.
F-2-2
14. The Owner will, in connection with any transfer that it
makes of the Residual Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. The Owner will, in connection with any transfer that it
makes of the Residual Certificates, deliver to the Certificate Registrar an
affidavit, which represents and warrants that it is not transferring the
Residual Certificates to impede the assessment or collection of any tax and that
it has no actual knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of the Residual
Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding
for so long as the Residual Certificates remains outstanding; and (iii) is not a
"Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.
F-2-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.
[OWNER]
By:_____________________________
Name:
Title: [Vice] President
ATTEST:
By: ______________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ___ day of _______, 200__.
________________________________
Notary Public
County of ______________________
State of _______________________
My Commission expires:
F-2-4
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss. :
COUNTY OF NEW YORK )
_______________________________________, being duly sworn,
deposes, represents and warrants _____________________________ as follows:
1. I am a ____________________ of (the "Owner"), a corporation
duly organized and existing under the laws of ______________, on behalf of whom
I make this affidavit.
2. The Owner is not transferring the Class [R] [R-X] (the
"Residual Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Certificate Registrar a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit F-2. The Owner does
not know or believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.
F-2-5
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.
[OWNER]
By: __________________________
Name:
Title: [Vice] President
ATTEST:
By: ______________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ___ day of _______, 200__.
________________________________
Notary Public
County of ______________________
State of _______________________
My Commission expires:
F-2-6
EXHIBIT G
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 200__
Park Place Securities, Inc. Xxxxx Fargo Bank, N.A.
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx
Xxxxxxxxxx 00000-0000
Re: Park Place Securities, Inc., Asset-Backed Pass-Through Certificates,
Series 2004-WHQ1, Class CE, P, R and R-X__________________
--------------------------------------------------------------------
Dear Ladies and Gentlemen:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") [$____________ Initial
Certificate Principal Balance] [$____________ initial Notional Amount] [_____%
Percentage Interest] of Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WHQ1, Class ___ (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
dated as of September 1, 2004 among Park Place Securities, Inc. as depositor
(the "Depositor"), HomEq Servicing Corporation as master servicer (the "Master
Servicer") and Xxxxx Fargo Bank, N.A. as trustee (the "Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Pooling and Servicing Agreement. The Transferee hereby certifies,
represents and warrants to, and covenants with the Depositor, the Trustee and
the Master Servicer that the following statements in either (1) or (2) are
accurate:
The Certificates either (A) (i) are not being acquired by, and
will not be transferred to, any employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or other retirement arrangement, including individual retirement
accounts and annuities, Xxxxx plans and bank collective investment funds and
insurance company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code") (any of the
foregoing, a "Plan"), (ii) are not being acquired with "plan assets" of a Plan
within the meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss.
2510.3-101, and (iii) will not be transferred to any entity that is deemed to be
investing in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101 or (B) solely in the case of the Class M-9 Certificates,
either (i) are not being acquired by, and will not be transferred to, a Plan or
(ii) [for the first transfer after an offering of Class M-9 Certificates, the
Class M-9Certificates have been offered in an underwriting or placement within
the meaning of Prohibited Transaction Exemption 2002-41, as amended] are being
acquired by an insurance company, the source of funds used to acquire and hold
the Certificate is an "insurance company general account" as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60 and the
conditions in Sections I and III of PTCE 95-60 have been satisfied.
Very truly yours,
By: ______________________________
Name:
Title:
X-0
XXXXXXX X
XXXX XX XXX CONTRACTS
H-1
EXHIBIT I
[Reserved]
I-1
EXHIBIT J-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution or servicing reports filed in
respect of periods included in the year covered by this annual report, of Park
Place Securities, Inc., Asset-Backed Pass-Through Certificates, Series
2004-WHQ1;
2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing
information required to be provided to the trustee by the servicer under the
pooling and servicing, or similar, agreement, for inclusion in these reports is
included in these reports;
4. Based on my knowledge and upon the annual compliance
statement included in the report and required to be delivered to the trustee in
accordance with the terms of the pooling and servicing, or similar, agreement,
and except as disclosed in the reports, the servicer has fulfilled its
obligations under the servicing agreement; and
5. The reports disclose all significant deficiencies relating
to the servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: Xxxxx Fargo
Bank, N.A.. and HomEq Servicing Corporation.
Date: __________________
______________________________
[Signature]
[Title]
X-0-0
XXXXXXX X-0
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: Park Place Securities, Inc.,
ASSET-BACKED CERTIFICATES, SERIES 2004-WHQ1
I, [identify the certifying individual], a [title] of Xxxxx
Fargo Bank, N.A., as Trustee, hereby certify to Park Place Securities, Inc. (the
"Depositor"), and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these distribution reports.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated
September 1, 2004 (the "Pooling and Servicing Agreement"), among the Registrant
as depositor, HomEq Servicing Corporation as master servicer and Xxxxx Fargo
Bank, N.A. as trustee.
XXXXX FARGO BANK, N.A., as Trustee
By:_______________________________
Name:
Title:
Date:
X-0-0
XXXXXXX X-0
FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER WITH FORM 10-K
Re: Park Place Securities, Inc.,
Asset-Backed Certificates, Series 2004-WHQ1
-------------------------------------------
I, [identify the certifying individual], a [title] of HomEq
Servicing Corporation, as Master Servicer, hereby certify to Park Place
Securities, Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;
2. Based on my knowledge, the distribution or servicing
information required to be provided to the trustee by the servicer under the
pooling and servicing, or similar, agreement, for inclusion in these reports is
included in these reports;
4. Based on my knowledge and upon the annual compliance
statement included in the report and required to be delivered to the trustee in
accordance with the terms of the pooling and servicing, or similar, agreement,
and except as disclosed in the reports, the servicers has fulfilled its
obligations under the servicing agreement; and
5. The reports disclose all significant deficiencies relating
to the s compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated
September 1, 2004 (the "Pooling and Servicing Agreement"), among the Registrant
as depositor, HomEq Servicing Corporation as master servicer and Xxxxx Fargo
Bank, N.A. as trustee.
Date: __________________
___________________________
[Signature]
[Title]
J-3-1
EXHIBIT K
[Reserved]
K-1
EXHIBIT L
[Reserved]
L-1
EXHIBIT M
ANNUAL STATEMENT OF COMPLIANCE PURSUANT TO SECTION 3.19
Park Place Securities, Inc.
Asset-Backed Pass-Through Certificates, Series 2004-WHQ1
I, _____________________, hereby certify that I am a duly
appointed __________________________ of HomEq Servicing Corporation (the "Master
Servicer"), and further certify as follows:
1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of September 1, 2004 (the
"Agreement"), among Park Place Securities, Inc., as depositor, the Master
Servicer and Xxxxx Fargo Bank, N.A., as trustee.
2. I have reviewed the activities of the Master Servicer
during the preceding year and the Master Servicer's performance under the
Agreement and to the best of my knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under the Agreement throughout the
year.
Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreements.
Dated: _________________
M-1
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.
By: _____________________________
Name:
Title:
I, _________________________, a (an) __________________ of the
Master Servicer, hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the Master Servicer and that
the signature appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.
By: ______________________________
Name:
Title:
M-2
SCHEDULE 1
MORTGAGE LOAN SCHEDULE
Filed By Paper
Schedule 1-1
SCHEDULE 2
PREPAYMENT CHARGE SCHEDULE
Available Upon Request
Schedule 2-1
