EXHIBIT 99.1
------------
5
EX 99.1
==============================================================================
BELLAVISTA FUNDING CORPORATION,
Depositor
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
----------------------------------
BELLAVISTA MORTGAGE TRUST 2005-2
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-2
==============================================================================
Table of Contents
Page
ARTICLE I DEFINITIONS AND INTERPRETIVE PROVISIONS...........................12
SECTION 1.01. Definitions.........................................12
SECTION 1.02. Interpretive Provisions.............................45
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.....46
SECTION 2.01. Conveyance of Mortgage Loans........................46
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.........50
SECTION 2.03. Representations, Warranties and Covenants of
the Master Servicer and Breach of
Representations under Mortgage Loan Purchase
Agreement or Purchase Agreements....................51
SECTION 2.04. Representations and Warranties of the Depositor
as to the Mortgage Loans............................54
SECTION 2.05. Delivery of Opinion of Counsel in Connection
With Substitutions..................................54
SECTION 2.06. Execution and Delivery of Certificates..............55
SECTION 2.07. Covenants of the Master Servicer....................55
SECTION 2.08. Additional Representations of Depositor.............55
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................57
SECTION 3.01. Master Servicer to Service Mortgage Loans...........57
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Subservicers........................................58
SECTION 3.03. Rights of the Depositor and the Trustee in
Respect of the Master Servicer......................58
SECTION 3.04. Trustee to Act as Master Servicer...................59
SECTION 3.05. Collection of Mortgage Loan Payments;
Certificate Account; Carryover Reserve Fund;
Distribution Account................................59
i
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts..............................62
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans........................63
SECTION 3.08. Permitted Withdrawals From the Certificate
Account, the Distribution Account and the
Carryover Reserve Fund..............................63
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies..........................65
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements..........................................67
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans................68
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.....71
SECTION 3.13. Documents, Records and Funds in Possession of
Master Servicer to Be Held for the Trustee..........72
SECTION 3.14. Servicing Compensation..............................73
SECTION 3.15. Access to Certain Documentation.....................73
SECTION 3.16. Annual Statement as to Compliance...................73
SECTION 3.17. Annual Independent Public Accountants'
Servicing Statement; Financial Statements...........74
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds......74
SECTION 3.19. Notification of Adjustments.........................74
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER................76
SECTION 4.01. Advances............................................76
SECTION 4.02. Priorities of Distribution..........................77
SECTION 4.03. Allocation of Net Deferred Interest.................81
SECTION 4.04. Allocation of Realized Losses.......................81
SECTION 4.05. Cross-Collateralization; Adjustments to
Available Funds.....................................82
SECTION 4.06. Monthly Statements to Certificateholders............83
ii
SECTION 4.07. Determination of Pass-Through Rates for LIBOR
Certificates........................................84
ARTICLE V THE CERTIFICATES..................................................87
SECTION 5.01. The Certificates....................................87
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates........................87
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates........................................92
SECTION 5.04. Persons Deemed Owners...............................92
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses...........................................92
SECTION 5.06. Maintenance of Office or Agency.....................93
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER............................94
SECTION 6.01. Respective Liabilities of the Depositor and the
Master Servicer.....................................94
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer.....................................94
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others..........................94
SECTION 6.04. Limitation on Resignation of Master Servicer........95
ARTICLE VII DEFAULT.........................................................96
SECTION 7.01. Events of Default...................................96
SECTION 7.02. Trustee to Act; Appointment of Successor............97
SECTION 7.03. Notification to Certificateholders..................99
ARTICLE VIII CONCERNING THE TRUSTEE........................................100
SECTION 8.01. Duties of Trustee..................................100
SECTION 8.02. Certain Matters Affecting the Trustee..............101
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans..............................................102
SECTION 8.04. Trustee May Own Certificates.......................102
iii
SECTION 8.05. Trustee's Fees and Expenses........................102
SECTION 8.06. Eligibility Requirements for Trustee...............103
SECTION 8.07. Resignation and Removal of Trustee.................104
SECTION 8.08. Successor Trustee..................................104
SECTION 8.09. Merger or Consolidation of Trustee.................105
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee......105
SECTION 8.11. Tax Matters........................................106
SECTION 8.12. Yield Maintenance Agreements.......................109
ARTICLE IX TERMINATION.....................................................109
SECTION 9.01. Termination Upon Liquidation or Purchase of all
Mortgage Loans.....................................109
SECTION 9.02. Final Distribution on the Certificates.............109
SECTION 9.03. Additional Termination Requirements................111
ARTICLE X MISCELLANEOUS PROVISIONS.........................................112
SECTION 10.01. Amendment..........................................112
SECTION 10.02. Recordation of Agreement; Counterparts.............113
SECTION 10.03. Governing Law......................................114
SECTION 10.04. Intention of Parties...............................114
SECTION 10.05. Notices............................................114
SECTION 10.06. Severability of Provisions.........................115
SECTION 10.07. Assignment.........................................115
SECTION 10.08. Limitation on Rights of Certificateholders.........116
SECTION 10.09. Inspection and Audit Rights........................116
SECTION 10.10. Certificates Nonassessable and Fully Paid..........117
SECTION 10.11. Protection of Assets...............................117
iv
SCHEDULES
Schedule I: Mortgage Loan Schedule.....................................S-I-1
Schedule II: Representations and Warranties of the Master Servicer.....S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans..S-III-1
Schedule IV: Form of Monthly Master Servicer Report....................S-IV-1
EXHIBITS
Exhibit A: Form of Senior Certificate (excluding the Class A-R,
Notional Amount and Class X Certificates)....................A-1
Exhibit B: Form of Subordinated Certificate.............................B-1
Exhibit C: Form of Class A-R Certificate................................C-1
Exhibit D: Form of Notional Amount and Class X Certificate..............D-1
Exhibit E: Form of Reverse of Certificates..............................E-1
Exhibit F: Form of Initial Certification of Trustee.....................F-1
Exhibit G: Form of Delay Delivery Certification of Trustee..............G-1
Exhibit H: Form of Final Certification of Trustee.......................H-1
Exhibit I: Form of Transfer Affidavit...................................I-1
Exhibit J-1: Form of Transferor Certificate (Residual)....................J-1
Exhibit J-2: Form of Transferor Certificate (Private).....................J-2
Exhibit K: Form of Investment Letter [Non-Rule 144A]....................K-1
Exhibit L: Form of Rule 144A Letter.....................................L-1
Exhibit M: Form of Request for Release (for Trustee)....................M-1
Exhibit N: Form of Request for Release (Mortgage Loan) Paid in Full,
Repurchased and Replaced)....................................N-1
Exhibit O: Standard & Poor's LEVELS(R) Version 5.6 Glossary Revised,
Appendix E...................................................O-1
v
THIS POOLING AND SERVICING AGREEMENT, dated as of May 1, 2005 (this
"Agreement"), among BELLAVISTA FUNDING CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), COUNTRYWIDE HOME LOANS SERVICING LP, as master
servicer (in such capacity, the "Master Servicer"), and THE BANK OF NEW YORK,
a banking corporation organized under the laws of the State of New York, as
trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements contained in this Agreement,
and of other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties to this Agreement agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. For federal income tax purposes,
the Trust Fund (excluding the Carryover Shortfall Reserve Fund), will consist
of three real estate mortgage investment conduits (each a "REMIC" or, in the
alternative, the "Lower Tier REMIC," the "Middle Tier REMIC" and the "Master
REMIC," respectively). Each Certificate, other than the Class A-R Certificate,
will represent ownership of one or more regular interests in the Master REMIC
for purposes of the REMIC Provisions. The Class A-R Certificate represents
ownership of the sole class of residual interest in the Lower Tier REMIC, the
Middle Tier REMIC and the Master REMIC. The Master REMIC will hold as assets
the several classes of uncertificated Middle Tier REMIC Interests (other than
the Class MT-A-R Interest). The Middle Tier REMIC will hold as assets the
several classes of uncertificated Lower Tier REMIC Interests (other than the
Class LT-A-R Interest). The Lower Tier REMIC will hold as assets all property
of the Trust Fund. Each Middle Tier REMIC Interest (other than the Class
MT-A-R Interest) is hereby designated as a regular interest in the Middle Tier
REMIC. Each Lower Tier REMIC Interest (other than the Class LT-A-R Interest)
is hereby designated as a regular interest in the Lower Tier REMIC. The latest
possible maturity date of all REMIC regular interests created in this
Agreement shall be the Latest Possible Maturity Date.
The following table set forth characteristics of the Interests in the
Lower Tier REMIC:
Initial
Principal Corresponding
The Lower Tier REMIC Interests Balance Interest Rate Loan Group
------------------------------ ------- ------------- ----------
LT-A-I........................ (1) (2) I
LT-B-I........................ (1) (2) I
LT-C-I........................ (1) (2) I
LT-A-II (1) (2) II
LT-B-II (1) (2) II
LT-C-II (1) (2) II
LT-X-II-PO (3) (4) N/A
LT-Y-II-PO (3) (4) N/A
LT-X-B-PO (3) (4) N/A
LT-Y-B-PO (3) (4) N/A
LT-Z (3) (4) N/A
LT-A-R........................ (5) (5) N/A
-----------
(1) Each Class A Lower Tier REMIC Interest will have an Initial Principal
Balance equal to 0.45% of the Subordinated Portion of its Corresponding
Loan Group. Each Class B Lower Tier REMIC Interest will have an Initial
Principal Balance equal to 0.05% of the Subordinated Portion of its
Corresponding Loan Group. Each Class C Lower Tier REMIC Interest will
have an Initial Principal Balance equal to the excess of 50% its
Corresponding Loan Group over the initial aggregate principal balances
of the Class A and Class B Lower Tier REMIC Interests corresponding to
such Loan Group.
(2) This Lower Tier REMIC Interest will have an Interest Rate equal to the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage
Loans in the Corresponding Loan Group.
(3) Each class LT-X and Class LT-Y Middle Tier REMIC Interests will each
have an Initial Principal Balance equal to 0.5% of the principal balance
of the Mortgage Loans in Loan Group I and Loan Group II (the "Combined
Loan Groups"). The LT-Z Middle Tier REMIC Interest will have an Initial
Principal Balance equal to the excess of (i) 50% of the initial
aggregate Stated Principal Balance of the Mortgage Loans in the Combined
Loan Groups over (ii) the sum of the initial principal balances of the
LT-X and Class LT-Y Interests.
(4) This Class of Lower Tier REMIC Interest will have an Interest Rate equal
to the Weighted Average Adjusted Net Mortgage Rate of the Combined Loan
Groups.
(5) The Class LT-A-R Lower Tier REMIC Interest is the sole class of residual
interest in the Lower Tier REMIC. It has no principal balance and pays
no principal or interest.
On each Distribution Date, the 50% of the Available Funds from Loan
Group I and Loan Group II shall be distributed with respect to the Lower Tier
REMIC A, B and C Interests as provided in paragraphs (1), (2) and (3) and 50%
of the Available Funds from Loan Group I and Loan Group II shall be
distributed with respect to the Lower Tier REMIC X, Y and Z Interests as
provided in paragraphs (4) and (5):
(1) Interest. Interest is to be distributed with respect to each Lower
Tier REMIC A, B and C Interest at the rate, or according to the
formulas, described above;
(2) Principal, if no Cross-Over Situation Exists. If no Cross-Over
Situation exists with respect to any Class of Lower Tier REMIC
Interests, Principal Amounts arising with respect to each Loan Group
will be allocated: first to cause the Loan Group's corresponding Class A
and Class B Lower Tier REMIC Interests to equal, respectively, 0.45% of
the Subordinated Portion and 0.05% of the Subordinated Portion; and
second to the Loan Group's corresponding Class C Lower Tier REMIC
Interest;
(3) Principal, if a Cross-Over Situation Exists. If a Cross-Over
Situation exists with respect to the Class A and Class B Lower Tier
REMIC Interests:
(a) If the Calculation Rate in respect of the outstanding Class A and
Class B Lower Tier REMIC Interests is less than the Subordinate
Pass-Through Rate, then Principal
2
Relocation Payments will be made proportionately to the outstanding Class
A Lower Tier REMIC Interests prior to any other Principal Distributions
from each such Loan Group.
(b) If the Calculation Rate in respect of the outstanding Class A and
Class B Lower Tier REMIC Interests is greater than the Subordinate
Pass-Through Rate, Principal Relocation Payments will be made to the
outstanding Class B Lower Tier REMIC Interests prior to any other
Principal Distributions from each such Loan Group.
In each case, Principal Relocation Payments will be made so as to cause
the Calculation Rate in respect of the outstanding Class A and Class B Lower
Tier REMIC Interests to equal the Subordinate Pass-Through Rate. With respect
to each Loan Group, if (and to the extent that) the sum of (a) the principal
payments comprising the Principal Remittance Amount received during the Due
Period and (b) the Realized Losses, are insufficient to make the necessary
reductions of principal on the Class A and Class B Lower Tier REMIC Interests,
then interest will be added to the Loan Group's Class C Lower Tier REMIC
Interest.
(c) The outstanding aggregate Class A and Class B Lower Tier REMIC
Interests for all Loan Groups will not be reduced below .50 percent of
the excess of (i) the aggregate outstanding Principal Balances of all
Loan Groups as of the end of any Due Period over (ii) the aggregate
Class Certificate Balance of the Senior Certificates for all Loan Groups
as of the related Distribution Date (after taking into account
distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to the Class A and Class B Lower Tier REMIC
Interests of a Loan Group, and if the Loan Group's Class C Lower Tier REMIC
Interest has already been reduced to zero, then the excess principal from that
Loan Group will be paid to the Class C Lower Tier REMIC Interests of the other
Loan Groups the aggregate Class A and Class B Lower Tier REMIC Interests of
which are less than one percent of the Subordinated Portion. If the Loan Group
corresponding to the Class C Lower Tier REMIC Interest that receives such
payment has a Weighted Average Adjusted Net Mortgage Rate below the Weighted
Average Adjusted Net Mortgage Rate of the Loan Group making the payment, then
the payment will be treated by the Lower Tier REMIC as a Realized Loss.
Conversely, if a Loan Group corresponding to the Class C Lower Tier REMIC
Interest that receives such payment has a Weighted Average Adjusted Net
Mortgage Rate above the Weighted Average Adjusted Net Mortgage Rate of the
Loan Group making the payment, then the payment will be treated by the Lower
Tier REMIC as a reimbursement for prior Realized Losses;
(4) Interest. Interest is to be distributed with respect to each Lower
Tier REMIC X, Y and Z Interest at the rate, or according to the formulas,
described above;
(5) For each Distribution Date: Scheduled and unscheduled principal and
Realized Losses from the Combined Loan Groups shall be allocated to: (i)
either (A) the Class LT-X-II-PO, if the Class LT-X-II-PO Target Principal
Balance (as calculated for the Distribution Date) is exceeded by the principal
balance of such Interest for the prior Distribution Date, in such an amount as
to cause the principal balance of the Class LT-X-II-PO Interest to equal the
Class LT-X-II-PO Target Principal Balance (as calculated for the Distribution
Date), or (B) the Class LT-
3
Y-II-PO Interest, if the the Class LT-Y-II-PO Target Principal Balance (as
calculated for the Distribution Date) is exceeded by the principal balance of
such Interest for the prior Distribution Date, in such an amount as to cause
the principal balance of the Class LT-Y-II-PO Interest to equal the Class
LT-Y-II-PO Target Principal Balance (as calculated for the Distribution Date)
and to (ii) either (A) the Class LT-X-B-PO, if the Class LT-X-B-PO Target
Principal Balance (as calculated for the Distribution Date) is exceeded by the
principal balance of such Interest for the prior Distribution Date, in such an
amount as to cause the principal balance of the Class LT-X-B-PO Interest to
equal the Class LT-X-B-PO Target Principal Balance (as calculated for the
Distribution Date), or (B) the Class LT-Y-B-PO Interest, if the the Class
MT-Y-B-PO Target Principal Balance (as calculated for the Distribution Date)
is exceeded by the principal balance of such Interest for the prior
Distribution Date, in such an amount as to cause the principal balance of the
Class LT-Y-B-PO Interest to equal the Class LT-Y-B-PO Target Principal Balance
(as calculated for the Distribution Date). If there are insufficient scheduled
and unscheduled principal collections and Realized Losses from the Combined
Loan Groups for such Distribution Date to make the allocations to the Class
LT-X or Class LT-Y Interest required in the immediately preceding sentence,
interest accrued in respect of the Class LT-Z Interest will be paid as
principal to the Class LT-X or Class LT-Y Interests as required in the
immediately preceding sentence. Any remaining scheduled and unscheduled
principal and Realized Losses from the Combined Loan Groups shall be allocated
pro rata to the Class LT-X Interests, Class LT-Y Interests and LT-Z Interests
based on the Principal Balances of the LT-X and LT-T Interests following the
allocations described in the immediately preceeding two sentences for the
current Distribution Date.
The following table set forth characteristics of the Interests in
the Middle Tier REMIC (the "Middle Tier REMIC Interests"):
-------------------------------------------------------------------------------
Middle Tier REMIC Initial Principal Interest Rate Corresponding Master
Interest Balance REMIC Certificate
-------------------------------------------------------------------------------
MT-I-A (1) (2) Class I-A
-------------------------------------------------------------------------------
MT-I-Accrual (1) (2) N/A
-------------------------------------------------------------------------------
MT-I-$100 $100.00 (2) Class A-R
-------------------------------------------------------------------------------
MT-II-A-1 (3) (4) Class II-A-1
-------------------------------------------------------------------------------
MT-II-A-2 (3) (4) Class II-A-2
-------------------------------------------------------------------------------
MT-II-Accrual (3) (4) N/A
-------------------------------------------------------------------------------
MT-II-PO $50.00 (5) II-PO
-------------------------------------------------------------------------------
MT-B-1 (6) (7) Class B-1
-------------------------------------------------------------------------------
MT-B-2 (6) (7) Class B-2
-------------------------------------------------------------------------------
MT-B-3 (6) (7) Class B-3
-------------------------------------------------------------------------------
MT-B-4 (6) (7) Class B-4
-------------------------------------------------------------------------------
MT-B-5 (6) (7) Class B-5
-------------------------------------------------------------------------------
MT-B-6 (6) (7) Class B-6
-------------------------------------------------------------------------------
4
-------------------------------------------------------------------------------
MT-B-7 (6) (7) Class B-7
-------------------------------------------------------------------------------
MT-B-Accrual (6) (7) N/A
-------------------------------------------------------------------------------
MT-B-PO $50.00 (5) B-PO
-------------------------------------------------------------------------------
MT-A-R (8) (8) N/A
-------------------------------------------------------------------------------
------------
(1) This Middle Tier REMIC Interest has a principal balance that is
initially equal to 50% of its Corresponding Certificate Class issued by
the Master REMIC. Principal payments, both scheduled and prepaid,
Realized Losses, Subsequent Recoveries and interest accruing on the
MT-I-Accrual Interest will be allocated to the MT-I-A Interest to
maintain its size relative to its Corresponding Certificate Class (that
is, 50%) with any excess payments of principal, Realized Losses and
Subsequent Recoveries being allocated to the MT-I-Accrual Interest in
such manner as to cause the principal balance of the MT-I-Accrual
Interest to have a principal balance equal to the principal balance of
the Class MT-I-A Interest (the "MT-I-A Interests" and together with the
MT-I-Accrual Interest, the "MT-I Interests") plus (b) 100% of the net
deferred interest (if any) allocated to the Class I-A-X Certificates.
(2) The interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for this Middle Tier REMIC Interest is a per
annum rate equal to the Weighted Average Adjusted Net Mortgage Rate of
Loan Group I (the "Group I Net Rate Cap").
(3) This Middle Tier REMIC Interest has a principal balance that is
initially equal to 50% of its Corresponding Certificate Class issued by
the Master REMIC. Principal payments, both scheduled and prepaid,
Realized Losses, Subsequent Recoveries and interest accruing on the
MT-II-Accrual Interest will be allocated to this class to maintain its
size relative to its Corresponding Certificate Class (that is, 50%) with
any excess payments of principal, Realized Losses and Subsequent
Recoveries being allocated to the MT-II-Accrual Interest in such manner
as to cause the principal balance of the MT-II-Accrual Accrual Interest
to have a principal balance equal to the principal balance of the Class
MT-II-A-1 and Class MT-II-A-2 Interests (the "MT-II-A Interests" and
together with the MT-II Accrual Interest, the "MT-II Interests") plus
(b) 100% of the net deferred interest allocated to the Class II-PO
Certificates.
(4) The interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for this Middle Tier REMIC Interest is a per
annum rate equal to the Group II Tax Adjusted Cap Rate.
(5) The Class MT-II-PO Interest will accrue interest at a rate equal to the
excess of the Net WAC Cap for Group II over the Group II Tax Adjusted
Rate Cap for such Distribution Date and the Class MT-B-PO Interest will
accrue interest at a rate equal to the excess of the Net WAC Cap for the
Subordinated Certificates over the Class B-PO Tax Adjusted Rate Cap for
such Distribution Date. Any amount accrued and unpaid for such
Distribution Date will not accrue interest
(6) This Middle Tier REMIC Interest has a principal balance that is
initially equal to 50% of its Corresponding Certificate Class issued by
the Master REMIC. Principal payments, both scheduled and prepaid,
Realized Losses, Subsequent Recoveries and interest accruing on the
MT-B-Accrual Interest will be allocated to this class to maintain its
size
5
relative to its Corresponding Certificate Class (that is, 50%) with
any excess payments of principal, Realized Losses and Subsequent
Recoveries being allocated to the MT-B-Accrual Interest in such manner
as to cause the principal balance of the MT-B Accrual Interest to have a
principal balance equal to the principal balance of the Class MT-B-1,
Class XX-X-0, Xxxxx XX-X-0, XX-X-0, Class MT-B-5, Class MT-B-6, Class
and MT-B-7 Interests (the "MT-B-S Interests" and together with the
MT-B-X Accrual Interest, the "MT-B Interests") plus (b) 100% of the net
deferred interest allocated to the Class B-PO Certificates.
(7) The interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for this Middle Tier REMIC Interest is a per
annum rate equal to the Subordinate Tax Adjusted Cap Rate.
(8) The MT-A-R is the sole Class of residual interest in the Middle Tier
REMIC. It pays no interest or principal.
On each Distribution Date, the Available Funds payable with respect to
the Lower Tier REMIC Regular Interests shall be distributed with respect to
the Middle Tier REMIC Interests in the following manner:
(1) Interest is to be distributed with respect to each Middle Tier REMIC
Interest at the rate, or according to the formulas, described above; and
(2) Principal is to be distributed with respect to each Middle Tier REMIC
Interest in the manner described above.
On each Distribution Date, Realized Losses (and increases in Principal
Balances attributable to Subsequent Recoveries) shall be allocated among the
Middle Tier REMIC Interests in the manner described above.
The following table sets forth characteristics of the Certificates,
together with minimum denominations and integral multiples in excess thereof
in which such Classes shall be issued (except that one Certificate of each
Class of Certificates may be issuable in a different amount and, in addition,
one Residual Certificate representing the Tax Matters Person Certificate may
be issued in a different amount):
6
===============================================================================
Integral
Initial Class Pass-Through Multiples
Class Certificate Rate Minimum in Excess of
Designation Balance (per annum) Denomination Minimum
-------------------------------------------------------------------------------
Class I-A $88,882,000 (1) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class II-A-1 $269,536,000 (2) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class II-A-2 $67,384,000 (3) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class I-A-X (4) (5) $25,000.00(14) $1,000.00(14)
-------------------------------------------------------------------------------
Class A-R $100 (6) (7) (7)
-------------------------------------------------------------------------------
Class II-A-X (8) (9) $25,000.00(14) $1,000.00(14)
-------------------------------------------------------------------------------
Class II-PO $50 (10) $0.01 $0.01
-------------------------------------------------------------------------------
Class B-X (11) (12) $25,000.00(14) $1,000.00(14)
-------------------------------------------------------------------------------
Class B-PO $50 (10) $0.01 $0.01
-------------------------------------------------------------------------------
Class B-1 $7,414,000 (13) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class B-2 $5,617,000 (13) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class B-3 $4,269,000 (13) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class B-4 $898,000 (13) $25,000.00 $1,000.00
-------------------------------------------------------------------------------
Class B-5 $1,797,000 (13) $100,000.00 $1,000.00
-------------------------------------------------------------------------------
Class B-6 $2,246,000 (13) $100,000.00 $1,000.00
-------------------------------------------------------------------------------
Class B-7 $1,351,984.15 (13) $100,000.00 $1,000.00
-------------------------------------------------------------------------------
(1) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class I-A Certificates will be equal to the
least of (a) 10.50%, (b) LIBOR plus the applicable Pass-Through Margin
and (c) the related Net WAC Cap.
(2) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class II-A-1 Certificates will be equal to the
least of (a) 11.00%, (b) LIBOR plus the applicable Pass-Through Margin
and (c) the related Net WAC Cap.
(3) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class II-A-2 Certificates will be equal to the
least of (a) 10.50%, (b) LIBOR plus the applicable Pass-Through Margin
and (c) the related Net WAC Cap.
(4) The Class I-A-X Certificates will have no Class Certificate Balance and
will bear interest on its Notional Amount (initially, $88,882,000).
(5) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class I-A-X Certificates will be a per annum
rate equal to the greater of (i) the Weighted.
7
Average Adjusted Net Mortgage Rate of the Group I Mortgage Loans, minus
the Pass-Through Rate of the Class I-A Certificates for that Distribution
Date (in the case of the first Distribution Date, adjusted to reflect the
accrual of interest on the basis of a 360-day year consisting of twelve
30-day months) and (ii) zero. For income tax purposes, the Class I-A-X
Certificates are entitled to, for each Interest Accrual Period, the
"Class I-A-X Distributable Amount," which is a specified portion of the
interest on the MT-I Interests equal to the excess of the Loan Group I
Net Rate Cap over the product of two and the weighted average interest
rate of the MT-I Interests with each Interest (other than the Class
MT-I-Accrual Interest) subject to a cap equal to the Pass-Through Rate of
the corresponding Certificate Class and the MT-I-Accrual Interest subject
to a cap of 0.00%. The Pass-Through Rate of the Class I-A-X Certificates
shall be a rate sufficient to entitle the Class I-A-X Certificate to all
interest accrued on the MT-I (but not the MT-$100) Interests less the
interest accrued on the Class I-A Certificates. The Class I-A-X
Distributable Amount for any Distribution Date is payable from current
interest on the Group I Mortgage Loans.
(6) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class A-R Certificates will be the Weighted
Average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group I.
The Pass-Through Rate for the Class A-R Certificates for the Interest
Accrual Period for the first Distribution Date will be 4.351% per annum.
(7) The Class A-R Certificate will be issued as two separate certificates,
one with an initial Certificate Balance of $99.99 and the Tax Matters
Person Certificate with an initial Certificate Balance of $0.01.
(8) The Class II-A-X Certificates will have no Class Certificate Balance and
will bear interest on its Notional Amount (initially, $336,920,050).
(9) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class II-A-X Certificates will be a per annum
rate equal to the greater of (i) the Weighted Average Adjusted Net
Mortgage Rate of the Group II Mortgage Loans, minus the weighted average
Pass-Through Rate of the Class II-A-1, Class II-A-2 and Class II-PO
Certificates for that Distribution Date (weighted on the basis of the
Class Certificate Balances of the Class II-A-1, Class II-A-2 and Class
II-PO Certificates and adjusted to reflect the accrual of interest on the
basis of a 360-day year consisting of twelve 30-day months) and (ii)
zero. For income tax purposes, the Class II-A-X Certificates are
entitled to, for each Interest Accrual Period, the "Class II-A-X
Distributable Amount," which is a specified portion of the interest on
the MT-II-A Interests equal to the excess of the Group II Tax Adjusted
Cap Rate over the product of two and the weighted average interest rate
of the MT-II Interests with each Interest (other than the Class
MT-II-Accrual Interest) subject to a cap and a floor equal to the
Pass-Through Rate of the corresponding Certificate Class and the Class
MT-II-Accrual Interest subject to a cap of 0.00%. The Pass-Through Rate
of the Class II-A-X Certificates shall be a rate sufficient to entitle
the Class II-A-X Certificate to all interest accrued on the MT-II-A
Interests less the interest accrued on the Class II-A-1 and Class II-A-2
Certificates. The Class II-A-X Distributable Amount for any Distribution
Date is payable from current interest on the Group II Mortgage Loans.
8
(10) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rates for the Class II-PO and Class B-PO Certificates will
be 0% per annum. Any amount accrued and unpaid for such Distribution Date
will not accrue interest. For income tax purposes, the Class II-PO and
Class B-PO Certificates will be entitled to all amount payable on the
Class MT-II-PO and Class MT-B-PO Interests, respectively.
(11) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for the Class B-X Certificates will be a per annum rate
equal to the greater of (i) the Net WAC Cap for the Subordinated
Certificates (adjusted to reflect the accrual of interest on the basis of
a 360-day year consisting of twelve 30-day months), minus the weighted
average Pass-Through Rate of the Subordinated and Class B-PO Certificates
for that Distribution Date (weighted on the basis of the Class
Certificate Balances of the Subordinated and Class B-PO Certificates and
adjusted to reflect the accrual of interest on the basis of a 360-day
year consisting of twelve 30-day months) and (ii) zero. For income tax
purposes, the Class B-X Certificates are entitled to, for each Interest
Accrual Period, the "Class B-X Distributable Amount," which is a
specified portion of the interest on the MT-B-S Interests equal to the
excess of the Subordinate Tax Adjusted Cap Rate over the product of two
and the weighted average interest rate of the MT-B-S Interests with each
Interest (other than the Class MT-B-Accrual Interest) subject to a cap
and a floor equal to the Pass-Through Rate of the corresponding
Certificate Class and the MT-B-Accrual Interest subject to a cap of
0.00%. The Pass-Through Rate of the Class B-X Certificates shall be a
rate sufficient to entitle the Class B-X Certificate to all interest
accrued on the MT-B-S Interests less the interest accrued on the Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6 and Class B-7
Certificates. The Class B-X Distributable Amount for any Distribution
Date is payable from current interest on the Mortgage Loans in Group I
and Group II.
(12) For each Interest Accrual Period for any Distribution Date, the
Pass-Through Rate for each Class of Subordinated Certificates will be a
per annum rate equal to the least of (a) 10.50%, (b) LIBOR plus the
applicable Pass-Through Margin and (c) the related Net WAC Cap.
(13) Based on Notional Amount.
The Trustee will treat the entitlements and obligations with respect to
Net Rate Carryover as described in Section 8.11 herein.
The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Master REMIC as cash flow on a REMIC
regular interest, without creating any shortfall--actual or potential (other
than for credit losses) to any REMIC regular interest. It is not intended that
the Class A-R Certificates be entitled to any cash flow pursuant to this
Agreement except as provided in Section 4.02(a)(1)(iv)(A) hereunder.
For any purpose for which the Pass-Through Rates is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the
9
monthly day count convention of the Mortgage Loans and the monthly day count
convention of the regular interests issued by each of the REMICs.
Set forth below are designations of Classes or Components of
Certificates to the categories used in this Agreement:
Accretion Directed
Certificates............ None.
Accrual Certificates.... None.
Accrual Components...... None.
Book Entry Certificates. All Classes of Certificates other than the
Physical Certificates.
Class X Certificates... Class I-A-X, Class II-A-X and Class B-X
Certificates.
COFI Certificates....... None.
Component Certificates.. None.
Components.............. None.
Delay Certificates...... None.
ERISA Restricted
Certificates............ The Residual Certificates and Private
Certificates; and any Certificate of a Class
that does not or no longer satisfies the
applicable rating requirement under the
Underwriter's Exemption.
Group I Certificates.... Group I Senior Certificates, the Class B-X
Certificates to the extent related to the
Mortgage Loans in Loan Group I and the
Subordinated Portion related to Loan Group I.
Group I
Senior Certificates..... Class I-A, Class I-A-X and Class A-R
Certificates.
Group II Certificates... Group II Senior Certificates, the Class B-X
Certificates to the extent related to the
Mortgage Loans in Loan Group II and the
Subordinated Portion related to Loan Group II.
Group II Senior
Certificates............ Class II-A-1, Class II-A-2, Class II-A-X and
Class B-PO Certificates.
LIBOR Certificates...... Class I-A, Class II-A-1, Class II-A-2 and the
Subordinated Certificates.
10
Non-Delay Certificates.. None.
Notional Amount
Certificates............ Class I-A-X, Class II-A-X and Class B-X
Certificates.
Notional Amount
Component............... None.
Offered Certificates.... All Classes of Certificates other than the
Private Certificates.
Physical Certificates... Private and Residual Certificates.
Planned Principal Classes None.
Planned Principal
Components.............. None.
Private Certificates.... Class B-5, Class B-6 and Class B-7 Certificates.
Rating Agencies......... S&P and Xxxxx'x.
Regular Certificates.... All Classes of Certificates, other than the
Residual Certificates.
Residual Certificates... Class A-R Certificates.
Senior Certificate Group Group I Senior Certificates and Group II
Senior Certificates, as applicable.
Senior Certificates..... Class I-A, Class II-A-1, Class II-A-2, Class
I-A-X, Class II-A-X, Class B-X, Class II-PO,
Class B-PO and Class A-R Certificates.
Subordinated Certificates Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5, Class B-6 and Class B-7 Certificates.
Support Classes......... None.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions in this
Agreement relating solely to such designations shall be of no force or effect,
and any calculations in this Agreement incorporating references to such
designations shall be interpreted without reference to such designations and
amounts. Defined terms and provisions in this Agreement relating to
statistical rating agencies not designated above as Rating Agencies shall be
of no force or effect.
11
ARTICLE I
DEFINITIONS AND INTERPRETIVE PROVISIONS
SECTION 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: Not applicable.
Accrual Termination Date: Not applicable.
Acknowledgment: With respect to the Countrywide Mortgage Loans, the
Countrywide Acknowledgement and with respect to the Commercial Capital
Mortgage Loans, the Commercial Capital Acknowledgement.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time, the
per annum rate equal to the Mortgage Rate less the Master Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any time,
the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjusted Cap Rate: As to any Distribution Date and the Class II-A-1,
Class II-A-2 and Subordinated Certificates, the per annum rate equal to the
related Net WAC Cap, computed for this purpose by first reducing the Weighted
Average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group II by a
per annum rate equal to: (i) the product of (a) the Net Deferred Interest for
the Mortgage Loans in Loan Group II for that Distribution Date and (b) 12,
divided by (ii) the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group II as of the first day of the month prior to the month of such
Distribution Date.
As to any Distribution Date and the Class II-A-X Certificates, the per
annum rate equal to the Pass-Through Rate for the Class II-A-X Certificates,
computed for this purpose by (i) reducing the Weighted Average Adjusted Net
Mortgage Rate of the Mortgage Loans in Loan Group II by a per annum rate equal
to: (a) the product of (1) the Net Deferred Interest for the Mortgage Loans in
Loan Group II for that Distribution Date and (2) 12, divided by (b) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group II as
of the first day of the month prior to month of such Distribution Date and
(ii) computing the Pass-Through Rate of
12
the Class II-A-1 and Class II-A-2 Certificates by substituting "Adjusted Cap
Rate" for "Net WAC Cap" in the calculation thereof.
As to any Distribution Date and the Class B-X Certificates, the per
annum rate equal to the Pass-Through Rate for the Class B-X Certificates,
computed for this purpose by (i) reducing the Weighted Average Adjusted Net
Mortgage Rate of the Mortgage Loans in Loan Group II by a per annum rate equal
to: (a) the product of (1) the Net Deferred Interest for the Mortgage Loans in
Loan Group II for that Distribution Date and (2) 12, divided by (b) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group II as
of the first day of the month prior to the month of such Distribution Date and
(ii) computing the Pass-Through Rate of the Subordinated Certificates by
substituting "Adjusted Cap Rate" for "Net WAC Cap" in the calculation thereof.
Adjustment Date: A date specified in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan will be adjusted.
Advance: As to a Loan Group, the payment required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such payment being equal to the aggregate of payments
of principal and interest (net of the Master Servicing Fee) on the Mortgage
Loans in such Loan Group that were due on the related Due Date and not
received by the Master Servicer as of the close of business on the related
Determination Date, together with an amount equivalent to interest on each
Mortgage Loan as to which the related Mortgaged Property is an REO Property
(net of any net income on such REO Property), less the aggregate amount of any
such delinquent payments that the Master Servicer has determined would
constitute a Nonrecoverable Advance if advanced.
Aggregate Subordinated Percentage: As to any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is equal to the
aggregate Class Certificate Balance of the Subordinated Certificates
immediately prior to such Distribution Date and the denominator of which is
the aggregate Stated Principal Balance of all the Mortgage Loans as of the Due
Date in the month preceding the month of such Distribution Date.
Agreement: This Pooling and Servicing Agreement.
Allocable Share: As to any Distribution Date, any Loan Group and any
Class or Component of Certificates, the ratio that the amount calculated with
respect to such Distribution Date (A) with respect to the Senior Certificates
of the related Senior Certificate Group, pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving
effect to any reduction of such amount pursuant to Section 4.02(c)) and (B)
with respect to the Subordinated Certificates, pursuant to the definition of
Assumed Interest Amount for such Class or after the first Senior Termination
Date, pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amount
pursuant to Section 4.02(c)) bears to the aggregate amount calculated with
respect to such Distribution Date for each such related Class of Certificates
pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amounts
pursuant to Section 4.02(c)) or the definition of Assumed Interest Amount for
such Loan Group and Class, as applicable.
13
Amount Held for Future Distribution: As to any Distribution Date and the
Mortgage Loans in a Loan Group, the aggregate amount held in the Certificate
Account at the close of business on the related Determination Date on account
of (i) Principal Prepayments received after the related Prepayment Period and
Liquidation Proceeds and Subsequent Recoveries received in the month of such
Distribution Date relating to the Mortgage Loans in such Loan Group and (ii)
all Scheduled Payments due after the related Due Date relating to the Mortgage
Loans in such Loan Group.
Applicable Credit Support Percentage: As defined in Section 4.02(d).
Appraised Value: With respect to a (i) Mortgage Loan other than a
Refinancing Mortgage Loan, the lesser of the (a) value of the Mortgaged
Property based upon the appraisal made at the time of the origination of such
Mortgage Loan and (b) sales price of the Mortgaged Property at the time of the
origination of such Mortgage Loan; (ii) Refinancing Mortgage Loan other than a
Streamlined Documentation Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such
Refinancing Mortgage Loan; and (iii) Streamlined Documentation Mortgage Loan,
if the loan to value ratio with respect to the Original Mortgage Loan at the
time of the origination thereof was (a) 80% or less and the loan amount of the
new mortgage loan is $650,000 or less, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of the Original
Mortgage Loan and (b) greater than 80% or the loan amount of the new mortgage
loan is greater than $650,000, the value of the Mortgaged Property based upon
the appraisal (which may be a drive by appraisal) made at the time of the
origination of such Streamlined Documentation Mortgage Loan.
Assumed Interest Amount: With respect to any Distribution Date, any
Class of Subordinated Certificates and the related Loan Group, one month's
interest accrued during the related Interest Accrual Period at the
Pass-Through Rate for such Class on the related Subordinated Portion
immediately prior to that Distribution Date.
Available Funds: As to any Distribution Date and each Loan Group, the
sum of (a) the aggregate amount held in the Certificate Account at the close
of business on the related Determination Date in respect of the related
Mortgage Loans pursuant to Section 3.05(b), net of the related Amount Held for
Future Distribution and net of amounts permitted to be withdrawn from the
Certificate Account pursuant to clauses (i)-(viii), inclusive, of Section
3.08(a) in respect of the Mortgage Loans in such Loan Group and amounts
permitted to be withdrawn from the Distribution Account pursuant to clauses
(i)-(v) inclusive of Section 3.08(b) in respect of the Mortgage Loans in such
Loan Group, (b) the amount of the related Advance, (c) in connection with
Defective Mortgage Loans in such Loan Group, as applicable, the aggregate of
the Purchase Prices and Substitution Adjustment Amounts deposited on the
related Distribution Account Deposit Date and (d) the Transfer Payment
Received plus interest thereon as provided in Section 4.05 for such Loan Group
less the Transfer Payment Made plus interest thereon as provided in Section
4.05 for such Loan Group; provided, however, that with respect to any Loan
Group on the first Senior Termination Date, Available Funds with respect to
the Loan Group relating to the remaining Senior Certificate Group shall
include the Available Funds from the other Loan Groups after all distributions
are made on the Senior Certificates of the other Senior Certificate Groups and
on any Distribution Date thereafter, Available Funds shall be calculated based
on all
14
the Mortgage Loans in all Loan Groups, as opposed to the Mortgage Loans in the
related Loan Group.
Bankruptcy Code: Title 11 of the United States Code.
Benefit Plan Opinion: As defined in Section 5.02(b).
Book Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than a Saturday, Sunday or day on which
banking institutions in the City of New York, New York, or the States of
California or Texas or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
Calculation Rate: For each Distribution Date, the product of (i) 10 and
(ii) the weighted average rate of the outstanding Class A and Class B
Interests, treating each Class A Interest as capped at zero or reduced by a
fixed percentage of 100% of the interest accruing on such Class A Interest.
Cap Counterparty: The Royal Bank of Scotland plc.
Cap Strike Rate: For any Distribution Date, the amount set forth under
the heading "Strike Rate" in Annex III of the Prospectus Supplement.
Carryover Reserve Fund: The separate fund created and initially
maintained by the Trustee pursuant to Section 3.05(c) in the name of the
Trustee for the benefit of the Holders of the LIBOR Certificates and
designated "The Bank of New York in trust for registered holders of BellaVista
Mortgage Trust 2005-2, Mortgage Pass-Through Certificates, Series 2005-2."
Funds in the Carryover Reserve Fund shall be held in trust for the Holders of
the LIBOR Certificates for the uses and purposes set forth in this Agreement.
Carryover Shortfall Amount: For each class of LIBOR Certificates and any
Distribution Date, an amount equal to sum of (i) the excess, if any, of the
(a) amount of interest that such Class would have been entitled to receive
pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount on such Distribution Date had its Pass-Through Rate not
been subject to the related Net WAC Cap up to but not exceeding the related
Maximum Rate, in each case, prior to any reduction (x) described in Section
4.02(c) or (y) for Net Deferred Interest, as applicable, described in Section
4.03, over (b) actual amount of interest provided for such Class for such
Distribution Date (prior to any reduction (x) described in Section 4.02(c) or
(y) for Net Deferred Interest, as applicable, described in Section 4.03) by
clause (i) of the definition of Class Optimal Interest Distribution Amount and
(ii) with respect to each Class of LIBOR Certificates the unpaid portion of
any such excess from prior Distribution Dates (and interest accrued thereon
15
at the then applicable Pass-Through Rate, without giving effect to the related
Net WAC Cap (up to the related Maximum Rate)).
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached this Agreement as exhibits.
Certificate Account: The separate Eligible Account or Accounts created
and maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of Certificateholders and designated "Countrywide Home
Loans Servicing LP in trust for the registered holders of BellaVista Mortgage
Trust 2005-2, Mortgage Pass Through Certificates, Series 2005-2."
Certificate Balance: With respect to any Certificate (other than the
Notional Amount Certificates) at any date, the maximum dollar amount of
principal to which the Holder thereof is then entitled under this Agreement,
such amount being equal to the Denomination of that Certificate plus (i) any
increase in the Certificate Balance of such Certificate pursuant to Section
4.02 due to the receipt of Subsequent Recoveries, minus (ii) the sum of all
(a) distributions of principal previously made with respect to that
Certificate and (b) Realized Losses allocated to that Certificate and all
other reductions in Certificate Balance previously allocated to that
Certificate pursuant to Section 4.04 without duplication and plus (iii) in the
case of the Group II Certificates only, the amount of Net Deferred Interest as
of the Due Date in the month of determination and allocated to the applicable
Class pursuant to Section 4.03. The Notional Amount Certificates do not have
Certificate Balances.
Certificate Group: The Group I or Group II Certificates, as the context
may require.
Certificate Owner: With respect to a Book Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate. With respect to a
Physical Certificate, the Person who is named in such Physical Certificate.
For the purposes of this Agreement, in order for a Certificate Owner to
enforce any of its rights under this Agreement, it shall first have to provide
evidence of its beneficial ownership interest in a Certificate that is
reasonably satisfactory to the Trustee, the Depositor or the Master Servicer,
as applicable.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed
not to be Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
of this Agreement (other than the second sentence of Section 10.01) that
requires the consent of the Holders of Certificates of a particular Class as a
condition to the taking of any action under this Agreement. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
16
affiliate of the Depositor in determining which Certificates are registered
in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class B-X Portion: With respect to a Loan Group and any Distribution
Date, the excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans in such Loan Group as of the first day of the related Due
Period over the aggregate Class Certificate Balance of the related Classes of
Senior Certificates (other than the Class B-PO Certificates) immediately prior
to such Distribution Date.
Class LT-X-B-PO Target Principal Balance: The quotient of: (a) product
of: (i) the Subordinate Adjusted Cap Rate and (ii) the principal balance of
the Class LT-Y-B-PO Interests for the immediately preceding Distribution Date,
and (b) two times the Weighted Average Adjusted Net Mortgage Rate for the
Combined Loan Groups less the Subordinate Tax Adjusted Cap Rate.
Class LT-Y-B-PO Target Principal Balance : The quotient of: (a) product
of: (i) the Subordinate Adjusted Cap Rate and (ii) the principal balance of
the Class LT-X-B-PO Interests for the immediately preceding Distribution Date,
and (b) two times the Weighted Average Adjusted Net Mortgage Rate for the
Combined Loan Groups less the Subordinate Tax Adjusted Cap Rate.
Class LT-X-II-PO Target Principal Balance: The quotient of: (a) product
of: (i) the Group II Adjusted Cap Rate and (ii) the principal balance of the
Class LT-Y-II-PO Interests for the immediately preceding Distribution Date,
and (b) two times the Weighted Average Adjusted Net Mortgage Rate for Loan
Group II less the Group II Tax Adjusted Cap Rate.
Class LT-Y-II-PO Target Principal Balance: The quotient of: (a) product
of: (i) the Group II Adjusted Cap Rate and (ii) the principal balance of the
Class LT-X-II-PO Interests for the immediately preceding Distribution Date,
and (b) two times the Weighted Average Adjusted Net Mortgage Rate for Loan
Group II less the Group II Tax Adjusted Cap Rate.
Class Certificate Balance: With respect to any Class and as to any date
of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and Class or
Component, the amount by which the amount described in clause (i) of the
definition of Class Optimal Interest Distribution Amount for such Class or
Component exceeds the amount of interest actually distributed on such Class or
Component on such Distribution Date pursuant to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest-bearing Class or any interest-bearing
Component, the sum of (i) one month's interest accrued during the related
Interest Accrual Period at the Pass-Through Rate for such Class or Component
on the related Class Certificate Balance, Notional Amount or Component
Notional Amount, as applicable, immediately prior to such Distribution Date,
subject to reduction (a) as
17
provided in Section 4.02(c) and (b) for any Net Deferred Interest for the
related Distribution Dateallocated to their respective Class Certificate
Balances or Component Principal Balances, as applicable, as described in
Section 4.03 and (ii) any Class Unpaid Interest Amounts for such Class or
Component (other than any Carryover Shortfall Amounts).
Class Subordination Percentage: With respect to any Distribution Date
and each Class of Subordinated Certificates, the quotient (expressed as a
percentage) of the (i) Class Certificate Balance of such Class of Subordinated
Certificates immediately prior to such Distribution Date divided by (ii) the
aggregate of the Class Certificate Balances of all Certificates immediately
prior to such Distribution Date.
Class Unpaid Interest Amounts: As to any Distribution Date and Class of
interest-bearing Certificates or any interest-bearing Component, the amount by
which the aggregate Class Interest Shortfalls for such Class or Component on
prior Distribution Dates exceeds the amount distributed on such Class or
Component on prior Distribution Dates pursuant to clause (ii) of the
definition of Class Optimal Interest Distribution Amount.
Closing Date: May 27, 2005.
Code: The Internal Revenue Code of 1986, as amended.
COFI: The Monthly Weighted Average Cost of Funds Index for the
Eleventh District Savings Institutions published by the Federal Home Loan
Bank of San Francisco.
COFI Certificates: As specified in the Preliminary Statement.
Commercial Capital: Commercial Capital Bank, F.S.B.
Commercial Capital Acknowledgement: The Assignment, Assumption and
Recognition Agreement, dated as of May 1, 2005, among Commercial Capital, the
Seller, the Depositor and the Master Servicer.
Commercial Capital Mortgage Loans: Those certain Mortgage Loans
purchased by the Seller pursuant to the Commercial Capital Sale Agreement and
sold to the Depositor pursuant to the Mortgage Loan Purchase Agreement and
that are identified as such on the Mortgage Loan Schedule.
Commercial Capital Sale Agreement: That certain Master Sale and Interim
Servicing Agreement, dated as of March 31, 2005, between Commercial Capital
and the Seller, including any commitment letters entered into with respect to
the Commercial Capital Mortgage Loans pursuant to such agreement.
Compensating Interest: As to any Distribution Date and Loan Group, an
amount equal to one-half of the Master Servicing Fee for the related Loan
Group for such Distribution Date.
Component: As specified in the Preliminary Statement.
Component Balance: Not applicable.
18
Component Certificates: As specified in the Preliminary Statement.
Component Rate: Not applicable.
Conveyed Assets: As defined in Section 2.01(a).
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Corporation: The entity that holds title (fee or a leasehold
estate) to the real property and improvements constituting the Cooperative
Property and which governs the Cooperative Property, which Cooperative
Corporation must qualify as a Cooperative Housing Corporation under Section
216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in the
State of New York 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 000 Xxxxxxx Xxxxxx, 0X, Xxx
Xxxx, Xxx Xxxx 00000 (Attn: Mortgage Backed Securities Group, BellaVista
Mortgage Trust 2005-2), facsimile no. (000) 000-0000, and which is the address
to which notices to and correspondence with the Trustee should be directed.
Countrywide Acknowledgement: The Assignment, Assumption and
Recognition Agreement, dated as of May 1, 2005, among Countrywide Home Loans,
Inc., the Seller, the Depositor, the Master Servicer and Greenwich Capital
Financial Products, Inc.
Countrywide Mortgage Loans: Those certain Mortgage Loans purchased by
the Seller pursuant to a Countrywide Purchase Agreement and sold to the
Depositor pursuant to the Mortgage Loan Purchase Agreement and that are
identified as such on the Mortgage Loan Schedule.
Countrywide Purchase Agreements: Collectively, (i) that certain Mortgage
Loan Purchase and Servicing Agreement, dated as of January 29, 2004, between
Countrywide Home Loans, Inc. and the Seller, including any purchase
confirmations entered into with respect to Countrywide Purchase Group I
pursuant to such agreement; (ii) that certain Assignment, Assumption and
Recognition Agreement, dated as of April 20, 2005, among Countrywide Home
Loans, Inc., Greenwich Capital Financial Products, Inc. and the Seller,
pursuant to which the Seller acquired Countrywide Purchase Group II and which
assigned certain rights of Greenwich Capital Financial Products, Inc. under
the Countrywide Underlying Purchase Agreement to the Seller; and (iii) that
certain Assignment, Assumption and Recognition Agreement, dated as of May 20,
2005, among Countrywide Home Loans, Inc., Greenwich Capital Financial
Products, Inc. and the Seller pursuant to which the Seller acquired
Countrywide Purchase Group III and
19
which assigned certain rights of Greenwich Capital Financial Products, Inc.
under the Countrywide Underlying Purchase Agreement to the Seller.
Countrywide Purchase Group I: Those certain Countrywide Mortgage Loans
purchased by the Seller pursuant to the applicable Countrywide Purchase
Agreement on April 27, 2005, and that are identified as being part of such
group on the Mortgage Loan Schedule.
Countrywide Purchase Group II: Those certain Countrywide Mortgage Loans
purchased by the Seller pursuant to the applicable Countrywide Purchase
Agreement on April 20, 2005, and that are identified as being part of such
group on the Mortgage Loan Schedule.
Countrywide Purchase Group III: Those certain Countrywide Mortgage Loans
purchased by the Seller pursuant to the applicable Countrywide Purchase
Agreement on May 20, 2005, and that are identified as being part of such group
on the Mortgage Loan Schedule.
Countrywide Underlying Purchase Agreement: That certain Master
Mortgage Loan Purchase and Servicing Agreement, dated as of April 1, 2003,
between Greenwich Capital Financial Products, Inc. and Countrywide Home
Loans, Inc., as amended, supplemented or otherwise modified from time to time.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership.
Cross-Over Situation: For any Distribution Date and for each Loan Group
(after taking into account principal distributions on such Distribution Date)
a situation in which the Class A and Class B Interests corresponding to any
Loan Group are in the aggregate less than .5% of the Subordinate Portion of
the Loan Group to which they correspond.
Cut-off Date: For each Mortgage Loan, the later of May 1, 2005 and the
date of origination for that Mortgage Loan.
Cut-off Date Pool Principal Balance: $449,395,184.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and non
appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deferred Interest: With respect to any Mortgage Loan in Loan Group II
and any Due Date, the excess, if any, of the (i) amount of interest accrued on
such Mortgage Loan from the preceding Due Date to such Due Date at the
applicable Mortgage Rate over (ii) Scheduled Payment due on such Mortgage Loan
on such Due Date; such excess to be added to the principal balance of such
Mortgage Loan in accordance with the terms of the related Mortgage Note.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in
20
connection with any Scheduled Payment that results in a permanent forgiveness
of principal, which valuation or reduction results from an order of such court
which is final and non appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Delay Delivery Certification: As defined in Section 2.02(a).
Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not delivered to the Trustee on the
Closing Date. With respect to up to 50% of the Mortgage Loans in each Loan
Group, the Depositor may deliver all or a portion of each related Mortgage
File to the Trustee not later than 30 days after the Closing Date. To the
extent that Countrywide Servicing or the Depositor shall be in possession of
any Mortgage Files with respect to any Delay Delivery Mortgage Loan, until
delivery of such Mortgage File to the Trustee as provided in Section 2.01,
Countrywide Servicing or the Depositor, as applicable, shall hold such files
as agent and in trust for the Trustee.
Deleted Mortgage Loan: As defined in Section 2.03(b).
Denomination: With respect to each Certificate, the amount set forth on
the face of that Certificate as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if
neither of the foregoing, the Percentage Interest appearing on the face
thereof.
Depositor: BellaVista Funding Corporation, a Delaware corporation, in
its capacity as depositor hereunder, or its successors in such capacity.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the 15th day of each
month or, if such 15th day is not a Business Day, the preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(e) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of BellaVista Mortgage Trust 2005-2,
Mortgage Pass Through Certificates, Series 2005-2." Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
21
Distribution Account Deposit Date: As to any Distribution Date, 12:30
P.M. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The Business Day immediately following the Master
Servicer Remittance Date, commencing in June 2005.
Due Date: With respect to any Distribution Date, the first day of the
month in which that Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the short
term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest short
term ratings of Moody's or Fitch and one of the two highest short-term ratings
of S&P, if S&P is a Rating Agency at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in
which such account is maintained, or (iii) a trust account or accounts
maintained with (a) the trust department of a federal or state chartered
depository institution or (b) a trust company, acting in its fiduciary
capacity or (iv) any other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.11.
ERISA: The Employee Retirement Income Security Act of 1974.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.06(a).
Event of Default: As defined in Section 7.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan plus any Subsequent Recoveries received with respect
to such Mortgage Loan, net of any amounts previously reimbursed to the Master
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.08(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan became a
22
Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage Rate from
the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Certificateholders up to the Due Date applicable to the
Distribution Date immediately following the calendar month during which such
liquidation occurred.
Exchange Act: Securities Exchange Act of 1934.
Expense Fee Rate: As to each Mortgage Loan and any date of
determination, the sum of (i) the related Master Servicing Fee Rate and (ii)
the Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970.
Final Certification: As defined in Section 2.02(a).
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fitch: Fitch, Inc. If Fitch is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for
notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Residential Mortgage Surveillance Group, or such
other address as Fitch may hereafter furnish to the Depositor and the Master
Servicer.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act.
Gross Margin: With respect to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note that is added to the Mortgage Index on
each Adjustment Date in accordance with the terms of the related Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan.
Group I Certificates: As specified in the Preliminary Statement.
Group I Senior Certificates: As specified in the Preliminary Statement.
Group II Certificates: As specified in the Preliminary Statement.
Group II Senior Certificates: As specified in the Preliminary Statement.
Group II Tax Adjusted Cap Rate: The Weighted Average Adjusted Net
Mortgage Rate of the Group II Mortgage Loans minus the product of (x) 12 and
(y) the Net Deferred Interest for such Distribution Date from the Group II
Mortgage Loans that is allocated to the Class II-PO Certificate, divided by
the aggregate Stated Principal Balance of the Group II Mortgage Loans. For
federal income tax purposes, the Weighted Average Adjusted Net Mortgage Rate
for Loan
23
Group II will equal two times the weighted average of the Class LT-X-II-PO and
Class LT-Y-II-PO Interests, treating the Class LT-Y-II-PO as subject to a cap
equal to zero.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Certification: As defined in Section 2.02(a).
Initial Component Principal Balance: As specified in the Preliminary
Statement.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such
Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to the Class A-R and the Notional
Amount Certificates and any Distribution Date, the calendar month prior to the
month of such Distribution Date. With respect to the Class I-A Certificates
and any Distribution Date, the period commencing on the 20th day of the month
preceding the month in which such Distribution Date occurs (or the Closing
Date, in the case of the initial Interest Accrual Period) and ending on the
19th day of the month of that Distribution Date. With respect to the Class
II-A-1, Class II-A-2 and Subordinated Certificates and any Distribution Date,
the period commencing on the Distribution Date in the month preceding the
month in which such Distribution Date occurs (other than the first
Distribution Date, for which it is the Closing Date) and ending on the day
immediately preceding that Distribution Date. Interest on the Class II-A-1,
Class II-A-2 and Subordinated Certificates shall be calculated on the basis of
a 360-day year and the actual number of days elapsed, and interest on each
other interest-bearing Class of Certificates shall be calculated on the basis
of a 360-day year consisting of twelve 30-day months.
Interest Determination Date: With respect to any Interest Accrual Period
for any LIBOR Certificates, the second Business Day prior to the first day of
such Interest Accrual Period.
Latest Possible Maturity Date: The Distribution Date following the
scheduled maturity date of the Mortgage Loan having the latest scheduled
maturity date as of the Cut-off Date.
Lender PMI Mortgage Loan: Any Mortgage Loan as to which the lender
(rather than the Mortgagor) acquires the Primary Insurance Policy and charges
the related Mortgagor an interest premium.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 4.07.
24
LIBOR Certificates: As specified in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) that was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the Master Servicer has determined (in accordance with this Agreement)
that it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan, including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Master Servicing Fees,
Servicing Advances and Advances.
Loan Group: Any of Loan Group I and Loan Group II, as applicable.
Loan Group I: All Mortgage Loans identified on the Mortgage Loan
Schedule as the Mortgage Loans in Loan Group I.
Loan Group II: All Mortgage Loans identified on the Mortgage Loan
Schedule as the Mortgage Loans in Loan Group II.
Loan to Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator
of which is the principal balance of the related Mortgage Loan at that date of
determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid by the
Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.
Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least
51% of the Percentage Interests evidenced by all Certificates of such Class.
Master Servicer: Countrywide Servicing, in its capacity as master
servicer hereunder, and its successors in such capacity.
Master Servicer Advance Date: As to any Distribution Date, 12:30 P.M.
Pacific time on the Business Day immediately preceding such Distribution Date.
Master Servicer Remittance Date: The 19th day of each calendar month, or
if such 19th day is not a Business Day, the next succeeding Business Day,
commencing in June 2005.
25
Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount payable out of each full payment of interest received on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the Due
Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date), subject to
reduction as provided in Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan and Due
Date, the amount set forth in the Mortgage Loan Schedule for such Due Date.
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Mortgage Rate
thereunder.
Maximum Negative Amortization: With respect to each Mortgage Loan in
Loan Group II, the percentage set forth in the related Mortgage Note as the
percentage of the original principal balance of Mortgage Note, that if
exceeded due to Deferred Interest, will result in a recalculation of the
Scheduled Payment so that the then unpaid principal balance of the Mortgage
Note will be fully amortized over the Mortgage Loan's remaining term to
maturity.
Maximum Rate: With respect to the Class II-A-1 Certificates, 11.00% per
annum, and with respect to each other Class of LIBOR Certificates, 10.50% per
annum.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the greater
of the (i) Gross Margin set forth in the related Mortgage Note and (ii)
percentage set forth in the related Mortgage Note as the minimum Mortgage Rate
thereunder.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.06.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Moody's shall be Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Pass-Through Monitoring, or such other address as Moody's may
hereafter furnish to the Depositor or the Master Servicer.
26
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real 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 delivered to the
Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of May 1, 2005, by and between the Seller and the Depositor, pursuant
to which the Seller sold and the Depositor purchased the Mortgage Loans.
Mortgage Index: As to each Mortgage Loan, the index from time to time in
effect for adjustment of the Mortgage Rate as set forth as such on the related
Mortgage Note.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Master Servicer to reflect the addition of Substitute Mortgage
Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached to this Agreement as Schedule
I, setting forth the following information with respect to each Mortgage Loan
by Loan Group:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan to Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the
time of origination was represented to be owner occupied;
(x) a code indicating whether the residential dwelling is either a
(a) detached or attached single family dwelling, (b) dwelling in a
de minimis PUD, (c) condominium unit or PUD (other than a de
minimis PUD), (d) two to four-unit residential property or (e)
Cooperative Unit;
(xi) the Mortgage Rate in effect as of the Cut-off Date;
27
(xii) the Master Servicing Fee Rate both before and after the
initial Adjustment Date for each Mortgage Loan;
(xiii) a code indicating whether the Mortgage Loan is a Lender PMI
Mortgage Loan and, in the case of any Lender PMI Mortgage Loan, a
percentage representing the amount of the related interest premium
charged to the borrower;
(xiv) the purpose for the Mortgage Loan;
(xv) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(xvi) the direct servicer of such Mortgage Loan as of the Cut-off
Date;
(xvii) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan;
(xviii) with respect to each Mortgage Loan, the Gross Margin, the
Mortgage Index, the Maximum Mortgage Rate, the Minimum Mortgage
Rate, the Maximum Negative Amortization, the Periodic Rate Cap,
the first Adjustment Date and the first Payment Adjustment Date
for such Mortgage Loan;
(xix) a code indicating whether the Mortgage Loan is a Countrywide
Mortgage Loan or a Commercial Capital Mortgage Loan; and
(xx) in the case of a Countrywide Mortgage Loan, a code indicating
whether such Mortgage Loan is part of Countrywide Purchase Group
I, Countrywide Purchase Group II or Countrywide Purchase Group
III.
Such schedule shall also set forth the total of the amounts described
under (iv) and (v) above for all of the Mortgage Loans and for each Loan
Group.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions of this Agreement as from time to time
are held as a part of the Trust Fund (including any REO Property), the
mortgage loans so held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time, net of any interest premium charged by the mortgagee to obtain
or maintain any Primary Insurance Policy.
Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
28
National Cost of Funds Index: The National Monthly Median Cost of
Funds Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
Net Deferred Interest: With respect to each Distribution Date and Loan
Group II, an amount equal to the excess, if any, of the Deferred Interest that
accrued on the Mortgage Loans in such Loan Group for the Due Date occurring in
the month of such Distribution Date over the Principal Prepayment Amount for
the Mortgage Loans in such Loan Group for such Distribution Date.
Net Prepayment Interest Shortfalls: As to any Distribution Date and Loan
Group, the amount by which the aggregate of Prepayment Interest Shortfalls for
such Loan Group for the related Prepayment Period exceeds an amount equal to
the sum of (a) the Compensating Interest for such Loan Group for that
Distribution Date and (b) the excess, if any of the Compensating Interest for
the other Loan Group for that Distribution Date over the Prepayment Interest
Shortfalls experienced by the Mortgage Loans in such other Loan Group during
such Prepayment Period.
Net Prepayments: As to any Distribution Date and Loan Group II, the
amount equal to the excess, if any, of the (i) Principal Prepayment Amount for
such Loan Group for such Distribution Date over (ii) aggregate amount of
Deferred Interest accrued on the Mortgage Loans in such Loan Group from the
preceding Due Date to the Due Date related to that Distribution Date.
Net WAC Cap: With respect to any Class of (i) Class I-A, Class II-A-1
and Class II-A-2 Certificates for any Distribution Date, the Weighted Average
Adjusted Net Mortgage Rates of the Mortgage Loans in the related Loan Group
for such Distribution Date, adjusted for the related Interest Accrual Period
and (ii) Subordinated Certificates for any Distribution Date, the sum for all
of the Loan Groups of the product for each Loan Group of (a) the Weighted
Average Adjusted Net Mortgage Rates of the Mortgage Loans in such Loan Group
for such Distribution Date, adjusted for the related Interest Accrual Period
and (b) a fraction, the numerator of which is the related Subordinated Portion
for such Loan Group immediately prior to that Distribution Date, and the
denominator of which is the aggregate Class Certificate Balance of the
Subordinated Certificates immediately prior to that Distribution Date.
Non-Delay Certificates: As specified in the Preliminary Statement.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Notional Amount: As specified in the Preliminary Statement.
Notional Amount Certificates: As specified in the Preliminary
Statement.
29
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by (i) in the case of the
Depositor, the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the
Assistant Treasurers or Assistant Secretaries of the Depositor, (ii) in the
case of the Master Servicer, the President, an Executive Vice President, a
Vice President, an Assistant Vice President, the Treasurer, or one of the
Assistant Treasurers or Assistant Secretaries of Countrywide GP, Inc. (its
general partner) or (iii) if provided for in this Agreement, a Servicing
Officer, as the case may be, and delivered to the Depositor and the Trustee,
as the case may be, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, the Seller or the Master Servicer, including in house counsel,
reasonably acceptable to the Trustee; provided, however, that with respect to
the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor, the Seller and the Master
Servicer, (ii) not have any direct financial interest in the Depositor, the
Seller or the Master Servicer or in any affiliate of either and (iii) not be
connected with the Depositor, the Seller or the Master Servicer as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the trust created under this
Agreement in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01.
Optional Termination Date: The Distribution Date on which the Pool
Stated Principal Balance is less than or equal to 10% of the Cut-off Date Pool
Principal Balance.
Original Applicable Credit Support Percentage: With respect to each of
the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class B-1 5.25%
Class B-2 3.60%
Class B-3 2.35%
Class B-4 1.40%
Class B-5 1.20%
Class B-6 0.80%
Class B-7 0.30%
Original Mortgage Loan: The mortgage loan refinanced in connection
with the origination of a Refinancing Mortgage Loan.
Original Subordinate Principal Balance: For the Certificates, on or
prior to the first Senior Termination Date, the Subordinated Percentage for a
Loan Group of the aggregate Stated Principal Balance of the Mortgage Loans in
such Loan Group, in each case as of the Cut-off Date or, if such date is after
the first Senior Termination Date, the aggregate of the Class Certificate
Balances of the Subordinated Certificates as of the Closing Date.
30
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero, which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Group: As defined in Section 4.05.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Pass-Through Margin: With respect to any Distribution Date and each
Class of LIBOR Certificates, the per annum rate indicated in the following
table:
Pass-Through Pass-Through
Class Margin (1) Margin (2)
----- ---------- ----------
Class I-A........ 0.25% 0.50%
Class II-A-1..... 0.25% 0.50%
Class II-A-2..... 0.32% 0.64%
Class B-1........ 0.50% 0.750%
Class B-2........ 0.68% 1.020%
Class B-3........ 1.45% 2.175%
Class B-4........ 1.75% 2.625%
Class B-5........ 1.75% 2.625%
Class B-6........ 1.75% 2.625%
Class B-7........ 1.75% 2.625%
------------------
(1) For the Interest Accrual Period related to any Distribution
Date occurring on or prior to the first possible Optional
Termination Date.
(2) For each other Interest Accrual Period.
Pass-Through Rate: For any interest-bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
Payment Adjustment Date: For each Mortgage Loan, the date specified in
the related Mortgage Note as the annual date on which the Mortgage Rate on the
related Scheduled Payment will be adjusted.
31
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Rate Cap: With respect to each Mortgage Loan and any Adjustment
Date therefor, the fixed percentage set forth in the related Mortgage Note, if
any, 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.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the
highest long term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each
Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal or
state banking authorities, provided that the commercial paper or
long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long term unsecured debt obligations of such holding
company, but only if Xxxxx'x is not a Rating Agency) are then
rated one of the two highest long term and the highest short term
ratings of each Rating Agency for such securities, or such lower
ratings as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by either Rating Agency;
(v) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (iv) above;
(vi) units of a taxable money market portfolio having the highest
rating assigned by each Rating Agency (except if Fitch is a Rating
Agency and has not rated the portfolio, the highest rating
assigned by Moody's) and restricted to
32
obligations issued or guaranteed by the United States or entities
whose obligations are backed by the full faith and credit of the
United States and repurchase agreements collateralized by such
obligations; and
(vii) such other relatively risk free investments bearing interest
or sold at a discount acceptable to each Rating Agency as will not
result in the downgrading or withdrawal of the rating then
assigned to the Certificates by either Rating Agency, as evidenced
by a signed writing delivered by each Rating Agency
provided, that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in Section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in Section 775 of the Code, (vi) a
Person that is not 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, or an estate or
trust whose income from sources without the United States is includible in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or
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
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form W-8ECI or any applicable successor
form, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause any REMIC created under this Agreement to
fail to qualify as a REMIC at any time that the Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or
of any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the FHLMC, a majority
of its board of directors is not selected by such governmental unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificate: As specified in the Preliminary Statement.
Planned Principal Classes: As specified in the Preliminary Statement.
33
Planned Principal Components: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans that were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date and, as to any other date of determination, the
aggregate of the Stated Principal Balances of the Outstanding Mortgage Loans
as of such date.
Prepayment Interest Shortfall: As to any Distribution Date, any Mortgage
Loan and any Principal Prepayment received during the related Prepayment
Period, the amount, if any, by which one month's interest at the related
Mortgage Rate, net of the related Master Servicing Fee Rate, on such Principal
Prepayment exceeds the amount of interest paid in connection with such
Principal Prepayment.
Prepayment Period: As to any Distribution Date, the calendar month
immediately preceding the month in which that Distribution Date occurs.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Prime Rate: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall
be adjusted automatically, without notice, on the effective date of any change
in such prime commercial lending rate. The Prime Rate is not necessarily The
Bank of New York's lowest rate of interest.
Principal Amount: As to any Distribution Date and any Loan Group, the
sum of (i) the principal portion of each Scheduled Payment (without giving
effect to any reductions thereof caused by any Debt Service Reductions or
Deficient Valuations) due on each Mortgage Loan (other than a Liquidated
Mortgage Loan) in such Loan Group on the related Due Date, (ii) the principal
portion of the Purchase Price of each Mortgage Loan in such Loan Group that
was purchased as of such Distribution Date, (iii) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loan in such Loan Group
received with respect to such Distribution Date, (iv) any Insurance Proceeds
or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans
in such Loan Group that are not yet Liquidated Mortgage Loans received during
the calendar month preceding the month of such Distribution Date, (v) with
respect to each Mortgage Loan in such Loan Group that became a Liquidated
Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of the Liquidation Proceeds allocable to
principal received during the calendar month preceding the month of such
Distribution Date with respect to such Mortgage Loan, (vi) with respect to
Loan Group II only, all Net Prepayments for Loan Group II received during the
related Prepayment Period, (vii) with respect to Loan Group I, the Principal
Prepayment Amount for such Loan Group received during the related Prepayment
Period and (viii) the principal portion of any Transfer Payments Received for
such Loan Group, minus the principal portion of any Transfer Payments Made for
such Loan Group and Distribution Date in accordance with Section 4.05 and (ix)
any Subsequent Recoveries on the Mortgage Loans in the related Loan Group
received during the calendar month preceding the month of such Distribution
Date.
34
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance
with the terms of the related Mortgage Note.
Principal Prepayment Amount: As to any Distribution Date, an amount
equal to the sum of all Principal Prepayments received on the Mortgage Loans
during the related Prepayment Period.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Relocation Payment: A payment from any Loan Group to a
Subsidiary REMIC Regular Interest other than a Regular Interest corresponding
to that Loan Group as provided in the Preliminary Statement. Principal
Relocation Payments from a Loan Group shall be made of the amounts in respect
of principal from the Mortgage Loans of the Loan Group and shall include a
proportionate allocation of the Realized Losses from the Mortgage Loans of the
Loan Group.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated Principal
Distribution Amount and any Class of Subordinated Certificates, the portion of
the Subordinated Principal Distribution Amount allocable to such Class, equal
to the product of the Subordinated Principal Distribution Amount on such
Distribution Date and a fraction, the numerator of which is the related Class
Certificate Balance thereof and the denominator of which is the aggregate of
the Class Certificate Balances of the Subordinated Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
Prospectus: The Prospectus, dated May 25, 2005, attached to the
Prospectus Supplement.
Prospectus Supplement: The Prospectus Supplement dated May 25, 2005,
relating to the Offered Certificates.
PUD: Planned unit development.
Purchase Agreement: With respect to the Commercial Capital Mortgage
Loans, the Commercial Capital Sale Agreement and with respect to the
Countrywide Mortgage Loans, each applicable Countrywide Purchase Agreement.
Purchase Price: With respect to any Mortgage Loan required to be
purchased (i) pursuant to Section 2.02 or 2.03, (ii) at the option of the
Master Servicer pursuant to Section 3.11 or (iii) by the related Transferor
pursuant to the related Purchase Agreement, an amount equal to the sum of (a)
100% of the unpaid principal balance of the Mortgage Loan on the date of such
purchase, (b) accrued interest thereon at the applicable Mortgage Rate (or at
the applicable
35
Adjusted Mortgage Rate if (x) the purchaser is the Master Servicer or (y) if
the purchaser is Countrywide and Countrywide is an affiliate of the Master
Servicer) from the date through which interest was last paid by the Mortgagor
to the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders and (c) costs and damages incurred by the Trust Fund in
connection with a repurchase pursuant to Section 2.03 that arises out of a
violation of any predatory or abusive lending law with respect to the related
Mortgage Loan.
Qualified Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and
each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and
to write the insurance provided by the insurance policy issued by it, approved
as a FNMA approved mortgage insurer and having a claims paying ability rating
of at least "AA" or equivalent rating by a nationally recognized statistical
rating organization. Any replacement insurer with respect to a Mortgage Loan
must have at least as high a claims paying ability rating as the insurer it
replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References in this
Agreement to a given rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as of the date of such liquidation,
plus (ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Adjusted Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan. With respect
to each Mortgage Loan that has become the subject of a Deficient Valuation, if
the principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan that has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
To the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of Realized Losses with respect to
that Mortgage Loan will be reduced by the amount of those Subsequent
Recoveries.
36
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the
Cooperative Property.
Record Date: With respect to any Distribution Date, in the case of LIBOR
Certificates represented by (i) Book-Entry Certificates, the Business Day
immediately preceding such Distribution Date and (ii) Definitive Certificates
and in the case of all other Certificates, the close of business on the last
Business Day of the month preceding the month in which such Distribution Date
occurs.
Reference Bank: As defined in Section 4.07(b).
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Interest: A "regular interest" in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act, or any comparable
state legislation.
Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which interest (i)
collectible on such Mortgage Loan for the most recently ended calendar month
is less than (ii) accrued thereon for such month pursuant to the Mortgage
Note.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed in lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary or any other officer of the
37
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
Restricted Classes: As defined in Section 4.02(d).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal or interest on such Mortgage Loan
which, unless otherwise specified in this Agreement, shall give effect to any
related Debt Service Reduction and any Deficient Valuation that affects the
amount of the monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933.
Security Agreement: With respect to a Cooperative Loan, the agreement or
mortgage creating a security interest in favor of the originator of the
Cooperative Loan in the related Cooperative Shares.
Seller: Belvedere Trust Finance Corporation, a Delaware corporation,
in its capacity as seller of the Mortgage Loans to the Depositor, and its
successors in such capacity.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
Senior Credit Support Depletion Date: The date on which the aggregate
Class Certificate Balance of the Subordinated Certificates has been reduced
to zero.
Senior Percentage: As to any Distribution Date and any Senior
Certificate Group, the percentage equivalent of a fraction the numerator of
which is the aggregate of the Class Certificate Balances of each Class of
Senior Certificates of such Senior Certificate Group (other than the Notional
Amount Certificates) immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Stated Principal Balance of each
Mortgage Loan in the related Loan Group as of the Due Date in the month
preceding the month of such Distribution Date; provided, however, that on any
Distribution Date after the first Senior Termination Date, the Senior
Percentage for the Senior Certificates of the remaining Senior Certificate
Group is the percentage equivalent of a fraction, the numerator of which is
the aggregate of the Class Certificate Balances of each such Class of Senior
Certificates (other than the Notional Amount Certificates) immediately prior
to such Distribution Date and the denominator of which is the aggregate of the
Class Certificate Balances of all Classes of Certificates (other than the
Notional Amount Certificates) immediately prior to such Distribution Date. In
no event will any Senior Percentage be greater than 100%.
Senior Prepayment Percentage: As to any Senior Certificate Group and any
Distribution Date during the ten years beginning on the first Distribution
Date, 100%. The related Senior Prepayment Percentage for any Senior
Certificate Group for any Distribution Date occurring on or after the tenth
anniversary of the first Distribution Date will, except as provided in this
Agreement, be as follows: for any Distribution Date in the first year
thereafter, the related Senior Percentage plus 70% of the related Subordinated
Percentage for such Distribution Date; for any
38
Distribution Date in the second year thereafter, the related Senior Percentage
plus 60% of the related Subordinated Percentage for such Distribution Date;
for any Distribution Date in the third year thereafter, the related Senior
Percentage plus 40% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the fourth year thereafter,
the related Senior Percentage plus 20% of the related Subordinated Percentage
for such Distribution Date; and for any Distribution Date thereafter, the
related Senior Percentage for such Distribution Date (unless on any
Distribution Date the related Senior Percentage exceeds the Senior Percentage
of such Senior Certificate Group as of the Closing Date, in which case the
related Senior Prepayment Percentage for such Distribution Date will once
again equal 100%). Notwithstanding the foregoing, no decrease in the related
Senior Prepayment Percentage will occur unless the Senior Step Down Conditions
are satisfied. Notwithstanding the foregoing, if the Two Times Test is
satisfied on a Distribution Date, the Senior Prepayment Percentage for such
Senior Certificate Group will equal, if such Distribution Date is (x) on or
prior to the Distribution Date in May 2008, the related Senior Percentage for
such Distribution Date plus 50% of the related Subordinated Percentage for
that Distribution Date and (y) after the Distribution Date in May 2008, the
related Senior Percentage.
Senior Principal Distribution Amount: As to any Distribution Date and
any Senior Certificate Group, the sum of (i) the related Senior Percentage of
all amounts described in clauses (i) through (iv) of the definition of
"Principal Amount" with respect to the related Loan Group for such
Distribution Date, (ii) with respect to any Mortgage Loan in the related Loan
Group that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the lesser of the related (a)
Senior Percentage of the Stated Principal Balance of such Mortgage Loan as of
the Due Date in the month preceding the month of that Distribution Date and
(b) Senior Prepayment Percentage of the amount of the net Liquidation Proceeds
allocable to principal received on the Mortgage Loan and (iii) (a) with
respect to the Group II Senior Certificates, the Senior Prepayment Percentage
of the amount described in clause (vi) of the definition of "Principal Amount"
for such Distribution Date and (b) with respect to the Group I Senior
Certificates, the related Senior Prepayment Percentage of the amount described
in clause (vii) of the definition of "Principal Amount" for the related Loan
Group for such Distribution Date; provided, however, on any Distribution Date
after the first Senior Termination Date, the Senior Principal Distribution
Amount for the remaining Senior Certificate Group will be calculated pursuant
to the above formula based on all the Mortgage Loans, as opposed to the
Mortgage Loans in the related Loan Group.
Senior Step Down Conditions: As of the first Distribution Date as to
which any decrease in the Senior Prepayment Percentage applies and with
respect to all of the Mortgage Loans, (i) the aggregate Stated Principal
Balance of all Mortgage Loans delinquent 60 days or more (including Mortgage
Loans in foreclosure, REO Property and Mortgage Loans the Mortgagors of which
are in bankruptcy) (averaged over the preceding six month period), as a
percentage of the aggregate Class Certificate Balance of the Subordinated
Certificates for such Distribution Date, does not equal or exceed 50% and (ii)
cumulative Realized Losses on all Mortgage Loans do not exceed: (a) commencing
with the Distribution Date on the tenth anniversary of the first Distribution
Date, 30% of the Original Subordinate Principal Balance, (b) commencing with
the Distribution Date on the eleventh anniversary of the first Distribution
Date, 35% of the Original Subordinate Principal Balance, (c) commencing with
the Distribution Date on the twelfth anniversary of the first Distribution
Date, 40% of the Original Subordinate Principal Balance, (d)
39
commencing with the Distribution Date on the thirteenth anniversary of the
first Distribution Date, 45% of the Original Subordinate Principal Balance and
(e) commencing with the Distribution Date on the fourteenth anniversary of the
first Distribution Date, 50% of the Original Subordinate Principal Balance.
Senior Termination Date: For each Senior Certificate Group, the
Distribution Date on which the aggregate Class Certificate Balance of the
related Classes of Senior Certificates has been reduced to zero.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer
of its servicing obligations, including the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any expenses
reimbursable to the Master Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
S&P or Standard & Poor's: Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc. If S&P is designated as a Rating Agency in
the Preliminary Statement, for purposes of Section 10.05(b) the address for
notices to S&P shall be Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Monitoring, or such
other address as S&P may hereafter furnish to the Depositor and the Master
Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any (i) previous
partial Principal Prepayments and Liquidation Proceeds received and allocable
to principal (other than with respect to any Liquidated Mortgage Loan) and to
the payment of principal due on such Due Date and irrespective of any
delinquency in payment by the related Mortgagor and (ii) with respect to Loan
Group II only, Deferred Interest added to the principal balance of that
Mortgage Loan in Loan Group II pursuant to the terms of the related Mortgage
Note on or prior to that Due Date.
Streamlined Documentation Mortgage Loan: Any Mortgage Loan originated
pursuant to Countrywide Home Loan Inc.'s Streamlined Loan Documentation
Program then in effect.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: For any Distribution Date and any Loan Group,
(i) on and prior to the first Senior Termination Date, 100% minus the Senior
Percentage for the Senior
40
Certificate Group relating to such Loan Group for such Distribution Date and
(ii) after the first Senior Termination Date, 100% minus the Senior Percentage
for such Distribution Date.
Subordinated Portion: For any Distribution Date and any Loan Group, an
amount equal to the excess, if any, of the aggregate Stated Principal Balance
of the Mortgage Loans in that Loan Group as of the Due Date in the month prior
to the month of such Distribution Date, over the aggregate Class Certificate
Balance of the related Classes of Senior Certificates immediately prior to
such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and
any Loan Group, 100% minus the related Senior Prepayment Percentage for such
Distribution Date.
Subordinated Principal Distribution Amount: With respect to any
Distribution Date and any Loan Group, the sum of the following amounts for
each Loan Group: an amount equal to the excess of (i) the sum, not less than
zero, of (a) the Subordinated Percentage of all amounts described in clauses
(i) through (iv) of the definition of "Principal Amount" for that Loan Group
and that Distribution Date, (b) with respect to each Mortgage Loan in that
Loan Group that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the Liquidation Proceeds
allocated to principal received with respect thereto remaining after
application thereof pursuant to clause (ii) of the definition of "Senior
Principal Distribution Amount," up to the Subordinated Percentage for such
Loan Group of the Stated Principal Balance of that Mortgage Loan and (c) (1)
with respect to Loan Group II only, the Subordinated Prepayment Percentage of
the amount described in clause (vi) of the definition of "Principal Amount"
for such Distribution Date and (2) with respect to each Loan Group I, the
related Subordinated Prepayment Percentage of the amount described in clause
(vii) of the definition of "Principal Amount" for the related Loan Group for
such Distribution Date less (ii) the principal portion of any Transfer
Payments Made for such Loan Group; provided, however, that on any Distribution
Date after the first Senior Termination Date, the Subordinated Principal
Distribution Amount will not be calculated by Loan Group but will equal the
amount calculated pursuant to the above formula based on the applicable
Subordinated Percentage and Subordinated Prepayment Percentage for the
Subordinated Certificates for such Distribution Date with respect to all of
the Mortgage Loans, as opposed to the Mortgage Loans in the related Loan
Group.
Subordinate Tax Adjusted Cap Rate: The Weighted Average Adjusted Net
Mortgage Rate of the Group I and Group II Mortgage Loans minus the product of
(x) 12 and (y) the Net Deferred Interest for such Distribution Date from the
Group I and Group II Mortgage Loans that is allocated to the Class B-PO
Certificate, divided by the aggregate Stated Principal Balance of the Group I
and Group II Mortgage Loans. For federal income tax purposes, the Weighted
Average Adjusted Net Mortgage Rate for Loan Group I and Loan Group II will
equal two times the weighted average of the Class LT-X-B-PO and Class
LT-Y-B-PO Interests, treating the Class LT-Y-II-PO as subject to a cap equal
to zero.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, unexpected amounts received by the Master Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 3.08) specifically
related to such Liquidated Mortgage Loan.
41
Subservicer: Any person to whom the Master Servicer has contracted for
the servicing of all or a portion of the Mortgage Loans pursuant to Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit M,
(i) have a Stated Principal Balance, after deduction of the principal portion
of the Scheduled Payment due in the month of substitution, not in excess of,
and not more than 10% less than the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) be accruing interest at a rate no lower than and not more
than 1% per annum higher than that of the Deleted Mortgage Loan; (iii) have a
Loan to Value Ratio no higher than that of the Deleted Mortgage Loan; (iv)
have a remaining term to maturity no greater than (and not more than six
months less than that of) the Deleted Mortgage Loan; (v) have a Maximum
Mortgage Rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (vi) have a Minimum Mortgage Rate specified in its
related mortgage note not more than 1% per annum higher or lower than the
Minimum Mortgage Rate of the Deleted Mortgage Loan; (vii) have the same
Mortgage Index, Mortgage Index reset period, Maximum Negative Amortization (if
applicable), Periodic Rate Cap, payment cap and reset provisions as the
Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher or
lower than that of the Deleted Mortgage Loan; (viii) not be a Cooperative Loan
unless the Deleted Mortgage Loan was a Cooperative Loan; and (ix) comply on
the date of substitution with each representation and warranty set forth in
Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(b).
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury Regulation ss. 1.860F-4(d) and temporary
Treasury Regulation ss. 301.6231(a)(7)-1T. The Holder of the largest
percentage interest in the Class A-R Certificates shall be the Tax Matters
Person for each REMIC formed hereunder, as more particularly set forth in
Section 8.11. The Trustee, or any successor thereto or assignee thereof shall
serve as tax administrator hereunder and as agent for the related Tax Matters
Person.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Payment Made: As defined in Section 4.05.
Transfer Payment Received: As defined in Section 4.05.
Transferor: With respect to the Commercial Capital Mortgage Loans,
Commercial Capital and with respect to the Countrywide Mortgage Loans,
Countrywide Home Loans, Inc.
Treasury Regulations: Regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary
42
Treasury Regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
Trust Fund: The corpus of the trust created under this Agreement
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto after the Cut-off Date to the extent not applied in
computing the Cut-off Date Principal Balance of the Mortgage Loans; (ii) the
Certificate Account, the Distribution Account and the Carryover Reserve Fund
and all amounts deposited therein pursuant to the applicable provisions of
this Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv) all
the right, title and interest of the Depositor (but none of its obligations)
in, to and under the Commercial Capital Sale Agreement pursuant to the
Commercial Capital Acknowledgement in respect of the Commercial Capital
Mortgage Loans; (v) all the right, title and interest of the Depositor (but
none of its obligations) in, to and under the Countrywide Purchase Agreements
pursuant to the Countrywide Acknowledgement in respect of the Countrywide
Mortgage Loans; (vi) all the right, title and interest of the Depositor (but
none of its obligations) in, to and under the Mortgage Loan Purchase
Agreement; (vii) all the right, title and interest of the Trustee (but none of
its obligations) in, to and under the Yield Maintenance Agreements; and (viii)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trustee: The Bank of New York, as trustee hereunder, and its successors
in such capacity.
Trustee Advance Rate: With respect to any Advance made by the Trustee
pursuant to Section 4.01(b), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus
5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth
of the Trustee Fee Rate multiplied by the Pool Stated Principal Balance with
respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum rate
agreed upon in writing on or prior to the Closing Date by the Trustee and the
Depositor.
Two Times Test: As to any Distribution Date and the Subordinated
Certificates, if the (i) Aggregate Subordinated Percentage for the
Subordinated Certificates is at least 200% of the Aggregate Subordinated
Percentage as of the Closing Date, (ii) outstanding aggregate Stated Principal
Balance of all Mortgage Loans delinquent 60 days or more (including Mortgage
Loans in foreclosure, REO Property and Mortgage Loans the Mortgagors of which
are in bankruptcy) (averaged over the preceding six month period), as a
percentage of the aggregate Class Certificate Balance of the Subordinated
Certificates as of the last day of the Interest Accrual Period related to such
Distribution Date, does not equal or exceed 50% and (iii) cumulative Realized
Losses on all the Mortgage Loans do not exceed, with respect to any
Distribution Date (x) on or before May 2008, 20% of the aggregate Class
Certificate Balance of the Subordinated Certificates as of the Closing Date or
(y) after May 2008, 30% of the aggregate Class Certificate Balance of the
Subordinated Certificates as of the Closing Date.
43
UCC: means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction.
Undercollateralized Group: As defined in Section 4.05.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002) or any substantially similar administrative exemption
granted by the Xxxxxx Xxxxxx Xxxxxxxxxx xx Xxxxx.
Xxxxxx Xxxxxx: means the United States of America.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to each Class of
Class X Certificates, if any (such Voting Rights to be allocated among the
holders of Certificates of each such Class in accordance with their respective
Percentage Interests), and (b) the remaining Voting Rights (or 100% of the
Voting Rights if there is no Class X Certificate) shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
Weighted Average Adjusted Net Mortgage Rate: As to any Distribution Date
and any Loan Group, the average of the Adjusted Net Mortgage Rate of each
Mortgage Loan in such Loan Group, weighted on the basis of its Stated
Principal Balance as of the end of the Prepayment Period related to the
immediately preceding Distribution Date.
Yield Maintenance Agreements: The transactions evidenced by (i) the
Confirmation, dated as of May 27, 2005 related to the Class II-A-1
Certificates and (ii) the Confirmation, dated as of May 27, 2005 related to
the Class II-A-2 Certificates, and any other documents related to such
Confirmations, which shall be assets of the Trust Fund.
Yield Maintenance Available Payment Amount: For the Class II-A-1 and
Class II-A-2 Certificates and any Distribution Date from and including July
2005 to and including November 2015, the lesser of (i) the amounts received by
the Trustee pursuant to the related Yield Maintenance Agreement for such
Distribution Date and deposited by the Trustee into the Carryover Reserve
Account in accordance with Section 3.05(c) and (ii) (A) in the case of the
Class II-A-1 Certificates, the product of (a) a fraction, the numerator of
which is the actual number of days in the Interest Accrual Period and the
denominator of which is 360, (b) the excess, if any, of (x) LIBOR, subject to
a maximum of 11.00%, over (y) the related Cap Strike Rate and (c) the lesser
of (1) the Class Certificate Balance of the Class II-A-1 Certificates
immediately prior to such Distribution Date and (2) the related Yield
Maintenance Notional Balance for such Distribution Date and (B) in the case of
the Class II-A-2 Certificates, the product of (a) a fraction, the numerator of
which is the actual number of days in the Interest Accrual Period and the
denominator of which is 360, (b) the excess, if any, of (x) LIBOR, subject to
a maximum of 10.50%, over (y) the related Cap Strike Rate and (c) the lesser
of (1) the Class Certificate Balance of the Class II-A-2 Certificates
immediately prior to such Distribution Date and (2) the related Yield
Maintenance Notional Balance for such Distribution Date.
44
Yield Maintenance Notional Balance: For the Yield Maintenance Agreements
related to the Class II-A-1 and Class II-A-2 Certificates and any Distribution
Date from and including July 2005 to and including November 2015, the
corresponding amount listed for such Distribution Date in Annex III of the
Prospectus Supplement. After the Distribution Date in November 2015, the
related Yield Maintenance Notional Balances will be equal to zero and the
Yield Maintenance Agreements shall terminate.
Yield Maintenance Payment: For any Class of Class II-A-1 or Class II-A-2
Certificates and for any Distribution Date from and including July 2005 to and
including November 2015, the lesser of (i) the Carryover Shortfall Amount for
such Class for such Distribution Date and (ii) such Class' related Yield
Maintenance Available Payment Amount for such Distribution Date.
For the Class II-A-X Certificates for any Distribution Date from and
including July 2005 to and including November 2015, the sum of the excess, if
any, of the (a) aggregate Yield Maintenance Available Payment Amount for such
Distribution Date for the Yield Maintenance Agreement over (b) aggregate of
the related Yield Maintenance Payments for the Class II-A-1 and Class II-A-2
Certificates for such Distribution Date.
SECTION 1.02. Interpretive Provisions.
With respect to all terms in this Agreement, unless the context
otherwise requires: (i) a term has the meaning assigned to it; (ii) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from
time to time in the United States; (iii) "or" is not exclusive; (iv)
"including" means including without limitation; (v) words in the singular
include the plural, and words in the plural include the singular; (vi) any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
(vii) references to a Person are also to its successors and permitted assigns;
(viii) the words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; (ix) references
contained in this Agreement to Section, Schedule and Exhibit, as applicable,
are references to Sections, Schedules and Exhibits in or to this Agreement
unless otherwise specified; (x) references to "writing" include printing,
typing, lithography and other means of reproducing words in a visible form;
and (xi) the term "proceeds" has the meaning set forth in the UCC.
45
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery of this
Agreement, hereby sells, transfers, assigns, sets over and otherwise conveys
to the Trustee, without recourse, the following property (collectively, the
"Conveyed Assets") all the right, title and interest of the Depositor (i) in
and to the Mortgage Loans (including the related Mortgage Notes and
Mortgages), including all interest and principal received or receivable by the
Depositor on or with respect to the Mortgage Loans after the Cut-off Date and
all interest and principal payments on the Mortgage Loans received prior to
the Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and
payable on the Mortgage Loans on or before the Cut-off Date, and including any
REO Property with respect to any such Mortgage Loan, (ii) (but none of its
obligations) in, to and under the Mortgage Loan Purchase Agreement and (iii)
(but none of its obligations) in, to and under each Purchase Agreement
pursuant to the related Acknowledgement in respect of the related Mortgage
Loans. On or prior to the Closing Date, the Depositor shall deliver to the
Trustee, the Mortgage File for each Mortgage Loan listed in the Mortgage Loan
Schedule (except that, in the case of the Delay Delivery Mortgage Loans, such
delivery may take place within 30 days following the Closing Date). Such
delivery of the Mortgage Files shall be made against delivery by the Trustee
of the Certificates to the Depositor or its designee. With respect to any
Mortgage Loan that does not have a first payment date on or before the Due
Date in the month of the first Distribution Date, the Depositor shall cause to
be deposited into the Distribution Account on or before the Distribution
Account Deposit Date relating to the applicable Distribution Date, an amount
equal to one month's interest at the related Adjusted Mortgage Rate on the
Cut-off Date Principal Balance of such Mortgage Loan.
(b) The Depositor further sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for the benefit of the Certificateholders,
without recourse, all the right, title and interest of the Depositor in and to
the Trust Fund together with the Depositor's right to require the Seller to
cure any breach of a representation or warranty made in the Mortgage Loan
Purchase Agreement by the Seller or to repurchase or substitute for any
affected Mortgage Loan in accordance therewith.
(c) In connection with the transfer and assignment set forth in clause
(a) and (b) above, the Depositor has delivered or caused to be delivered to
the Trustee (or, in the case of the Delay Delivery Mortgage Loans, the
Depositor will cause the Seller or the Transferor to deliver or cause to be
delivered to the Trustee within 30 days following the Closing Date) for the
benefit of the Certificateholders the following documents or instruments with
respect to each Mortgage Loan so assigned:
(i) (A) the original Mortgage Note endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
____________ without recourse," with all intervening endorsements
showing a complete chain of endorsement from the originator to the
Person endorsing the Mortgage Note (each such endorsement
46
being sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note); or
(B) with respect to any Lost Mortgage Note, a lost note
affidavit from the Seller stating that the original Mortgage Note
was lost or destroyed, together with a copy of such Mortgage Note;
(ii) except as provided below and for each Mortgage Loan that is
not a MERS Mortgage Loan, the original recorded Mortgage or a copy of
such Mortgage certified by the Seller as being a true and complete copy
of the Mortgage (or, in the case of a Mortgage for which the related
Mortgaged Property is located in the Commonwealth of Puerto Rico, a true
copy of the Mortgage certified as such by the applicable notary) and in
the case of each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loans and either language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan
or if the Mortgage Loan was not a MOM Loan at origination, the original
Mortgage and the assignment thereof to MERS, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with, except
as provided below, all interim recorded assignments of such mortgage
(each such assignment, when duly and validly completed, to be in
recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, the Mortgage to which the assignment relates);
provided that, if the related Mortgage has not been returned from the
applicable public recording office, such assignment of the Mortgage may
exclude the information to be provided by the recording office;
provided, further, that such assignment of Mortgage need not be
delivered in the case of a Mortgage for which the related Mortgaged
Property is located in the Commonwealth of Puerto Rico;
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) except as provided below, the original or duplicate original
lender's title policy or a printout of the electronic equivalent and all
riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
(A) The Coop Shares, together with a stock power in blank;
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
(D) The executed Recognition Agreement;
47
(E) The UCC financing statement with evidence of filing
thereon which has been filed in all places required to perfect the
Seller's interest in the Coop Shares and the Proprietary Lease;
and
(F) The UCC financing statements evidencing a complete and
unbroken line of assignments of the financing statement described
in clause (E) above from the mortgagee to the Trustee with
evidence of filing thereon (or in a form suitable for filing).
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Depositor agrees that it will use its best reasonable efforts to
cause, at the Trustee's expense, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by the applicable Transferor to the Seller
in accordance with the related Purchase Agreement, by the Seller to the
Depositor in accordance with the Mortgage Loan Purchase Agreement and by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage
Loans which are repurchased in accordance with this Agreement) in such
computer files the information required by the MERS(R) System to identify the
series of the Certificates issued in connection with such Mortgage Loans. The
Depositor further agrees that it will not and the Master Servicer agrees that
it will not, alter the information referenced in this paragraph with respect
to any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Depositor cannot deliver (a) the original recorded
Mortgage, (b) all interim recorded assignments or (c) the lender's title
policy (together with all riders thereto) satisfying the requirements of
clause (ii), (iii) or (v) above, respectively, concurrently with the execution
and delivery of this Agreement because such document or documents have not
been returned from the applicable public recording office in the case of
clause (ii) or (iii) above, or because the title policy has not been delivered
to the relevant Transferor, the Seller, the Master Servicer or the Depositor
by the applicable title insurer in the case of clause (v) above, the Depositor
shall promptly deliver to the Trustee, in the case of clause (ii) or (iii)
above, such original Mortgage or such interim assignment, as the case may be,
with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery of the
original Mortgage and each such interim assignment or a copy thereof,
certified, if appropriate, by the relevant recording office, be made later
than one year following the Closing Date, or, in the case of clause (v) above,
no later than 120 days following the Closing Date; provided, however, in the
event the Depositor is unable to deliver by such date each Mortgage and each
such interim assignment by reason of the fact that any such documents have not
been returned by the appropriate recording office, or, in the case of each
such interim assignment, because the related Mortgage has not been returned by
the appropriate recording office, the Depositor shall deliver such documents
to the Trustee as promptly as possible upon receipt thereof and, in any event,
within 720 days following the Closing Date. If the Depositor receives
additional original documents evidencing an assumption or modification of a
Mortgage Loan or any other documents required to be delivered by the Depositor
to the Trustee, the Depositor shall forward or cause to be forwarded all such
documents to the Trustee. In the event that the original Mortgage is not
delivered and in
48
connection with the payment in full of the related Mortgage Loan and the
public recording office requires the presentation of a "lost instruments
affidavit and indemnity" or any equivalent document, because only a copy of
the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Master Servicer shall execute and deliver or cause to be
executed and delivered such a document to the public recording office. In the
case where a public recording office retains the original recorded Mortgage or
in the case where a Mortgage is lost after recordation in a public recording
office, the Depositor shall deliver to the Trustee a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the original recorded Mortgage.
As promptly as practicable subsequent to such transfer and assignment,
and in any event, within 30 days after such transfer and assignment, the
Trustee shall at the expense of the Depositor (i) as the assignee thereof,
affix the following language to each assignment of Mortgage: "BellaVista
Series 0000-0, Xxx Xxxx xx Xxx Xxxx as trustee", (ii) cause such assignment to
be in proper form for recording in the appropriate public office for real
property records and (iii) cause to be delivered for recording in the
appropriate public office for real property records the assignments of the
Mortgages to the Trustee, except that, with respect to any assignments of
Mortgage as to which the Trustee has not received the information required to
prepare such assignment in recordable form, the Trustee's obligation to do so
and to deliver the same for such recording shall be as soon as practicable
after receipt of such information and in any event within 30 days after
receipt thereof and that the Trustee need not cause to be recorded any
assignment which relates to a Mortgage Loan (a) the Mortgaged Property and
Mortgage File relating to which are located in California or (b) in any other
jurisdiction (including Puerto Rico) under the laws of which in the opinion of
counsel provided by the Depositor to the Trustee, the recordation of such
assignment is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering or causing to be delivered
the above documents to the Trustee, will deposit in the Certificate Account
the portion of such payment that is required to be deposited in the
Certificate Account pursuant to Section 3.05.
Notwithstanding anything to the contrary in this Agreement, within 30
days after the Closing Date with respect to the Mortgage Loans, the Depositor
shall deliver, or cause to be delivered, to the Trustee the Mortgage File as
required pursuant to this Section 2.01 for each Delay Delivery Mortgage Loan.
If the Depositor fails to deliver, or cause to be delivered, a Mortgage File
for any Delay Delivery Mortgage Loan within the 30-day period provided for in
the prior sentence, the Depositor shall cause the Seller or the relevant
Transferor to (i) substitute a Substitute Mortgage Loan for the Delay Delivery
Mortgage Loan or (ii) repurchase the Delay Delivery Mortgage Loan, which
substitution or repurchase shall be accomplished in the manner and subject to
the conditions set forth in Section 2.03 (treating each Delay Delivery
Mortgage Loan as a Deleted Mortgage Loan for purposes of such Section 2.03);
provided, however, that the cure period provided for in Section 2.02 or
Section 2.03 shall not apply to the initial delivery of the Mortgage File for
such Delay Delivery Mortgage Loan, but rather the Depositor shall have five
Business Days to cure such failure to deliver. At the end of such 30-day
period the Trustee shall send a Delay Delivery Certification for the Delay
Delivery Mortgage Loans delivered during such 30-day period in accordance with
the provisions of Section 2.02.
49
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit F (an "Initial
Certification") and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Mortgage Files, and that
it holds or will hold such other assets as are included in the Trust Fund, in
trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it will maintain possession
of the Mortgage Notes in the State of California, unless otherwise permitted
by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor and the Master Servicer an Initial Certification. Based on its
review and examination, and only as to the documents identified in such
Initial Certification, the Trustee acknowledges that such documents appear
regular on their face and relate to the Mortgage Loans. The Trustee shall be
under no duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
On or about the 30th day after the Closing Date, the Trustee shall
deliver to the Depositor and the Master Servicer a Delay Delivery
Certification with respect to the Mortgage Loans in the form annexed hereto as
Exhibit G (a "Delay Delivery Certification"), with any applicable exceptions
noted thereon.
Not later than 90 days after the Closing Date, the Trustee shall deliver
to the Depositor and the Master Servicer a Final Certification with respect to
the Mortgage Loans in the form annexed hereto as Exhibit H (a "Final
Certification"), with any applicable exceptions noted thereon.
If, in the course of such review, the Trustee finds any document
constituting a part of a Mortgage File that does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification; provided, however, that the Trustee shall not make any
determination as to whether any (i) endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) assignment is in recordable form
or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Depositor
shall cause the Seller or the relevant Transferor to promptly correct or cure
such defect within 90 days from the date it was so notified of such defect
and, if the Seller or the relevant Transferor does not correct or cure such
defect within such period, the Depositor shall cause the Seller or the
relevant Transferor to either (a) substitute for the related Mortgage Loan a
Substitute Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, or (b)
purchase such Mortgage Loan from the Trustee within 90 days from the date the
Seller or the relevant Transferor was notified of such defect in writing at
the Purchase Price of such Mortgage Loan; provided, however, that in no event
shall such substitution or purchase occur more than 540 days from the Closing
Date, except that if the substitution or purchase of a Mortgage Loan pursuant
to this provision is required by reason of a delay in delivery of any
documents by the appropriate recording office, and there is a dispute between
either the Master
50
Servicer, the Depositor, the relevant Transferor or the Seller and the Trustee
over the location or status of the recorded document, then such substitution
or purchase shall occur within 720 days from the Closing Date. The Trustee
shall deliver written notice to each Rating Agency within 270 days from the
Closing Date indicating each Mortgage Loan (x) that has not been returned by
the appropriate recording office or (y) as to which there is a dispute as to
location or status of such Mortgage Loan. Such notice shall be delivered every
90 days thereafter until the related Mortgage Loan is returned to the Trustee.
Any such substitution pursuant to (a) above or purchase pursuant to (b) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.05, if any, and any substitution pursuant to (a)
above shall not be effected prior to the additional delivery to the Trustee of
a Request for Release substantially in the form of Exhibit N. No substitution
is permitted to be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage Loan shall be deposited
by the Depositor in the Certificate Account on or prior to the Distribution
Account Deposit Date for the Distribution Date in the month following the
month of repurchase and, upon receipt of such deposit and certification with
respect thereto in the form of Exhibit N, the Trustee shall release the
related Mortgage File to the Depositor or its designee and shall execute and
deliver at the Depositor's request such instruments of transfer or assignment
prepared by the Depositor, in each case without recourse, as shall be
necessary to vest in the Depositor or its designee, the Trustee's interest in
any Mortgage Loan released pursuant hereto. If pursuant to the foregoing
provisions the Depositor repurchases, or causes to be repurchased, a Mortgage
Loan that is a MERS Mortgage Loan, the Master Servicer shall either cause MERS
to (i) execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Depositor, or its designee, and shall
cause such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations or (ii) designate on the MERS(R)
System the Depositor, or its designee, as applicable, as the beneficial holder
of such Mortgage Loan.
(b) The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth in
this Agreement. The Master Servicer shall promptly deliver to the Trustee,
upon the execution or receipt thereof, the originals of such other documents
or instruments constituting the Mortgage File as come into the possession of
the Master Servicer from time to time.
(c) It is understood and agreed that the obligation of the Depositor to
cause the Seller or the relevant Transferor to substitute for or to purchase
any Mortgage Loan that does not meet the requirements of Section 2.01 above
shall constitute the sole remedy respecting such defect available to the
Trustee and any Certificateholder against the Depositor.
SECTION 2.03. Representations, Warranties and Covenants of the Master
Servicer and Breach of Representations under Mortgage Loan Purchase Agreement
or Purchase Agreements.
(a) The Master Servicer hereby makes the representations and warranties
set forth in Schedule II, and by this reference incorporated in this
Agreement, to the Depositor and the Trustee, as of the Closing Date.
51
(b) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Seller pursuant to the Mortgage Loan
Purchase Agreement or a breach of a representation or warranty made by a
Transferor in the applicable Purchase Agreement that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the
party discovering such breach shall give prompt notice thereof to the other
parties, the Seller and the relevant Transferor. Within 90 days of the earlier
of the Depositor's discovery or the Depositor's receipt of written notice from
any party of a breach of any representation or warranty referred to in the
preceding sentence that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Depositor shall cause the Seller
or the relevant Transferor to cure such breach in all material respects, and
if such breach is not so cured, the Depositor shall cause the Seller or the
relevant Transferor to (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and substitute in its place a Substitute
Mortgage Loan, in the manner and subject to the conditions set forth in this
Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from
the Trustee at the Purchase Price in the manner set forth below; provided,
however, that any such substitution pursuant to (i) above shall not be
effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05, if any, and any such substitution pursuant to (i)
above shall not be effected prior to the additional delivery to the Trustee of
a Request for Release substantially in the form of Exhibit N and the Mortgage
File for any such Substitute Mortgage Loan.
If the Depositor fails to take any action in accordance with the
preceding paragraph after the Depositor has been notified of a breach of a
representation or warranty that any of the Depositor, the Seller or a
Transferor has made that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Trustee shall pursue any remedies
available to it against the Depositor, the Seller or the relevant Transferor,
as applicable. The Depositor shall promptly reimburse the Trustee and the
Master Servicer for any expenses reasonably incurred by the Trustee or the
Master Servicer in respect of enforcing the remedies for such breach.
With respect to any Substitute Mortgage Loan or Loans, the Depositor
shall cause the Seller or the relevant Transferor to deliver to the Trustee
for the benefit of the Certificateholders the Mortgage Note, the Mortgage, the
related assignment of the Mortgage, and such other documents and agreements as
are required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution is permitted to be made
in any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Substitute Mortgage Loans in the month of
substitution shall not be part of the Trust Fund and will be retained by the
Depositor on the next succeeding Distribution Date. For the month of
substitution, distributions to Certificateholders will include the monthly
payment due on any Deleted Mortgage Loan for such month and thereafter the
Depositor shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan. The Master Servicer shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Substitute Mortgage
Loan and the Master Servicer shall deliver the amended Mortgage Loan Schedule
to the Trustee. Upon such substitution, the Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
Depositor shall be deemed to have made with respect to such Substitute
Mortgage Loan, as of the date of substitution, the representations and
warranties
52
made pursuant to Section 2.04 with respect to such Mortgage Loan. Upon any
such substitution and the deposit to the Certificate Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph, the Trustee shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Depositor and shall execute and deliver at the
Depositor's direction such instruments of transfer or assignment prepared by
the Depositor, in each case without recourse, as shall be necessary to vest
title in the Depositor or, at the direction of the Depositor, the Seller, the
relevant Transferor, or its designee, the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Depositor, the Seller or a Transferor
substitutes or causes the substitution of one or more Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate Stated Principal Balances
of all such Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans
(after application of the scheduled principal portion of the monthly payments
due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Mortgage Loans shall be
deposited in the Certificate Account by the Depositor, or the Seller or the
relevant Transferor at the direction of the Depositor, on or before the
Distribution Account Deposit Date for the Distribution Date in the month
succeeding the calendar month during which the related Mortgage Loan became
required to be purchased or replaced hereunder.
In the event that the Seller or a Transferor shall have repurchased a
Mortgage Loan, the Depositor shall cause the Purchase Price therefor to be
deposited in the Certificate Account pursuant to Section 3.05 on or before the
Distribution Account Deposit Date for the Distribution Date in the month
following the month during which the Seller or the relevant Transferor, as
applicable, became obligated under the Mortgage Loan Purchase Agreement or
under the related Purchase Agreement, as applicable, to repurchase or replace
(or cause the repurchase or replacement of) such Mortgage Loan and upon such
deposit of the Purchase Price, the delivery of the Opinion of Counsel required
by Section 2.05 and receipt of a Request for Release in the form of Exhibit N,
the Trustee shall release the related Mortgage File held for the benefit of
the Certificateholders to such Person, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be necessary
to transfer title from the Trustee. It is understood and agreed that the
obligation under this Agreement of the Depositor to cure, repurchase or
replace any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedy against the Depositor respecting such breach
available to Certificateholders or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
Notwithstanding anything to the contrary in this Agreement, with respect
to any action which this Agreement provides shall be taken by the Seller or a
Transferor and which the Seller or relevant Transferor is obligated to take
under the Mortgage Loan Purchase Agreement or the related Purchase Agreement,
as applicable, (i) if the relevant Transferor is an affiliate of the
53
Master Servicer, the Master Servicer shall use its best reasonable efforts to
cause such Transferor to take such action and the Depositor shall have no
obligation or responsibility whatsoever either to take such action or to use
any efforts to cause such Transferor to take such action, (ii) if the relevant
Transferor is not an affiliate of the Master Servicer, then upon the request
of the Master Servicer the Depositor shall cause the Seller to use its best
reasonable efforts to enforce such Transferor's obligation to take such action
but shall have no further obligation if such Transferor fails to take such
action after the Depositor has caused the Seller to use its best reasonable
efforts to cause such Transferor to take such action and (iii) in no event
shall the Depositor be obligated to take any action that is an obligation of a
Transferor under the related Purchase Agreement. All action taken by the
Master Servicer or the Depositor pursuant to the preceding sentence shall be
at their own expense.
If the Depositor, the Seller or the Master Servicer, as applicable,
fails to enforce any obligation of a Transferor under the related Purchase
Agreement, the Trustee shall pursue any remedies available to it against such
Transferor, and the Depositor shall cause the Seller to (in the case of a
Transferor that is not an affiliate of the Master Servicer) or the Master
Servicer shall (in the case of a Transferor that is an affiliate of the Master
Servicer) promptly reimburse the Trustee for any expenses reasonably incurred
by the Trustee in respect of taking such action.
SECTION 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee (i) with
respect to each Mortgage Loan that immediately prior to the transfer and
assignment of the Mortgage Loans to the Trustee pursuant to this Agreement,
the Depositor had good title to the Mortgage Loans and the Mortgage Notes were
subject to no offsets, defenses or counterclaims and (ii) that the Seller made
the representations and warranties set forth on Schedule III.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee. Upon discovery by the Depositor or the Trustee of a breach of any of
the foregoing representations and warranties set forth in this Section 2.04
(referred to herein as a "breach"), which breach materially and adversely
affects the interest of the Certificateholders, the party discovering such
breach shall give prompt written notice to the others and to each Rating
Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection With
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or Section 2.03 shall be made more than
90 days after the Closing Date unless the Depositor delivers, or causes to be
delivered, to the Trustee an Opinion of Counsel, which Opinion of Counsel
shall not be at the expense of either the Trustee or the Trust Fund, addressed
to the Trustee, to the effect that such substitution will not (i) result in
the imposition of the tax on "prohibited transactions" on the Trust Fund or
contributions after the Startup Day, as defined in Sections 860F(a)(2) and
860G(d) of the Code, respectively, or (ii) cause any REMIC created under this
Agreement to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
54
(b) Upon discovery by the Depositor, 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 promptly (and in any event within five Business Days of discovery) give
written notice thereof to the other parties. In connection therewith, the
Trustee shall require the Depositor, or the Seller or the relevant Transferor
at the direction of the Depositor, to either (i) substitute if the conditions
in Section 2.03(b) with respect to substitutions are satisfied, a Substitute
Mortgage Loan for the affected Mortgage Loan or (ii) repurchase the affected
Mortgage Loan within 90 days of such discovery in the same manner as it would
a Mortgage Loan for a breach of representation or warranty made pursuant to
Section 2.03. The Trustee shall reconvey to the Depositor, or the Seller or
the relevant Transferor, at the direction of the Depositor, the Mortgage Loan
to be released pursuant to this Section in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
If the Depositor, the Seller or the relevant Transferor fails to take
any action after it has received notice in accordance with the preceding
paragraph, the Trustee shall pursue any remedies available to it against the
Depositor, the Seller or the relevant Transferor, as applicable. The Depositor
shall promptly reimburse the Trustee for any expenses reasonably incurred by
the Trustee in respect of enforcing the remedies for such breach.
SECTION 2.06. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and
future Holders of the Certificates and to perform the duties set forth in this
Agreement to the best of its ability, to the end that the interests of the
Holders of the Certificates may be adequately and effectively protected.
SECTION 2.07. Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement or
report furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by the Master Servicer
pursuant to this Agreement will contain any untrue statement of a material
fact or omit to state a material fact necessary to make such information,
certificate, statement or report not misleading.
SECTION 2.08. Additional Representations of Depositor.
The Depositor hereby represents and warrants to the Trustee that as of
the Closing Date:
55
(a) this Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Mortgage Loans in favor of the Trustee,
which security interest is prior to all other liens, and is enforceable as
such against creditors of and purchasers from the Depositor;
(b) the Mortgage Notes constitute "promissory notes" within the meaning
of the applicable UCC;
(c) the Depositor owns and has good and marketable title to the Mortgage
Loans free and clear of any lien of any Person;
(d) the Depositor will cause to be filed all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest in the Mortgage Loans
hereunder;
(e) other than the conveyance to the Trustee pursuant to this Agreement,
the Depositor has not pledged, assigned, sold, granted a security interest in,
or otherwise conveyed any of the Mortgage Loans; the Depositor has not
authorized the filing of and is not aware of any financing statements against
the Depositor that include a description of collateral covering the Mortgage
Loans other than any financing statement relating to the security interest
granted to the Trustee hereunder or any security interest that has been
terminated; and the Depositor is not aware of any judgment or tax lien filings
against the Depositor;
(f) none of the Mortgage Notes have any marks or notations indicating
that they have been pledged, assigned or otherwise conveyed to any Person
other than the Trustee, except for any (i) endorsements that are part of a
complete chain of endorsements from the originator of the Mortgage Notes to
the Trustee and (ii) marks or notations pertaining to liens that have been
terminated or released; and
(g) none of the provisions of this Section 2.08 shall be waived without
the prior written confirmation from Standard & Poor's that such waiver shall
not result in a reduction or withdrawal of the then-current rating of the
Certificates.
56
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage
loan servicers. In connection with such servicing and administration, the
Master Servicer shall have full power and authority, acting alone or through
Subservicers as provided in Section 3.02, subject to the terms of this
Agreement to (i) execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and
documents, (ii) consent to transfers of any Mortgaged Property and assumptions
of the Mortgage Notes and related Mortgages (but only in the manner provided
in this Agreement), (iii) collect any Insurance Proceeds and other Liquidation
Proceeds (which for the purpose of this Section 3.01 includes any Subsequent
Recoveries) and (iv) effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan; provided that
the Master Servicer shall not take any action that is inconsistent with or
prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan or the rights and interests of the Depositor, the Trustee and
the Certificateholders under this Agreement. The Master Servicer shall
represent and protect the interests of the Trust Fund in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any
claim, proceeding or litigation regarding a Mortgage Loan, and shall not make
or permit any modification, waiver or amendment of any Mortgage Loan which
would cause any REMIC created under this Agreement to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860F(a) or Section
860G(d) of the Code. Without limiting the generality of the foregoing, the
Master Servicer, in its own name or in the name of the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor and the Trustee,
when the Master Servicer believes it appropriate in its reasonable judgment,
to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to the Mortgaged Properties held for the benefit of the Certificateholders.
The Master Servicer shall prepare and deliver to the Depositor or the Trustee
such documents requiring execution and delivery by either or both of them as
are necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans to the extent that the Master Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor or the Trustee shall
execute such documents and deliver them to the Master Servicer. The Master
Servicer further is authorized and empowered by the Trustee, on behalf of the
Certificateholders and the Trustee, in its own name or in the name of the
Subservicer, when the Master Servicer or the Subservicer, as the case may be,
believes it appropriate in its best judgment to register any Mortgage Loan on
the MERS(R) System, or cause the removal from the registration of any Mortgage
Loan on the MERS(R) System, to execute and deliver, on behalf of the Trustee
and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns.
57
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further
as provided in Section 3.08. The costs incurred by the Master Servicer, if
any, in effecting the timely payments of taxes and assessments on the
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added to
the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Master Servicer may arrange for the subservicing of any Mortgage
Loan by a Subservicer pursuant to a subservicing agreement; provided, however,
that such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated under this Agreement.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Notwithstanding the provisions of any subservicing agreement, any of
the provisions of this Agreement relating to agreements or arrangements
between the Master Servicer and a Subservicer or reference to actions taken
through a Subservicer or otherwise, the Master Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and
under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. All actions of each
Subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Master Servicer with the same force and effect as
if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Master Servicer.
(c) Upon the direction of the Master Servicer, the Trustee shall
cooperate with any Subservicer in the manner so directed by the Master
Servicer; provided, however, that the Trustee shall be under no obligation to
take any action or cooperate in any manner with a Subservicer if the Trustee
does not have an obligation to take such action or cooperate in such manner
with respect to the Master Servicer pursuant to the express terms of this
Agreement.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Master Servicer.
The Depositor may, but is not obligated to, enforce the obligations of
the Master Servicer hereunder and may, but is not obligated to, perform, or
cause a designee to perform, any
58
defaulted obligation of the Master Servicer hereunder and in connection with
any such defaulted obligation to exercise the related rights of the Master
Servicer hereunder; provided that the Master Servicer shall not be relieved of
any of its obligations hereunder by virtue of such performance by the
Depositor or its designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by the Master
Servicer nor shall the Trustee or the Depositor be obligated to supervise the
performance of the Master Servicer under this Agreement or otherwise.
SECTION 3.04. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee shall then assume all of the rights and obligations of the Master
Servicer hereunder arising thereafter (except that the Trustee shall not be
(i) liable for losses of the Master Servicer pursuant to Section 3.09 or any
acts or omissions of the predecessor Master Servicer under this Agreement),
(ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder including repurchases or substitutions of Mortgage
Loans pursuant to Section 2.02 or Section 2.03, (iv) responsible for expenses
of the Master Servicer pursuant to Section 2.03 or (v) deemed to have made any
representations and warranties of the Master Servicer under this Agreement).
Any such assumption shall be subject to Section 7.02. If the Master Servicer
shall for any reason no longer be the Master Servicer (including by reason of
any Event of Default), the Trustee shall succeed to any rights and obligations
of the Master Servicer under each subservicing agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement or substitute subservicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the substitute
subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate Account;
Carryover Reserve Fund; Distribution Account.
(a) The Master Servicer shall make reasonable efforts in accordance with
the customary and usual standards of practice of prudent mortgage servicers to
collect all payments called for under the terms and provisions of the Mortgage
Loans to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due
dates for payments due on a Mortgage Note for a period not greater than 180
days; provided, however, that the Master Servicer shall not extend the
maturity of any such Mortgage Loan past the date on which the final payment is
due on the latest maturing Mortgage Loan as of the Cut-off Date. In the event
of any such arrangement, the Master Servicer shall make Advances on the
related Mortgage Loan in accordance with the provisions of Section 4.01 during
the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof
59
by reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) On or prior to the Closing Date, the Master Servicer shall establish
and maintain a Certificate Account into which the Master Servicer shall
deposit or cause to be deposited no later than two Business Days after receipt
(or, if the current long-term credit rating of Countrywide Home Loans, Inc. is
reduced below "A-" by S&P or "A3" by Xxxxx'x, the Master Servicer shall
deposit or cause to be deposited on a daily basis within one Business Day of
receipt), except as otherwise specifically provided in this Agreement, the
following payments and collections remitted by Subservicers or received by it
in respect of Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on the Mortgage Loans on or before the
Cut-off Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the related Master Servicing Fee and any lender paid mortgage
insurance premiums;
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation Proceeds, other than proceeds to be applied to the
restoration or repair of a Mortgaged Property or released to the
Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.09(c) and in respect of net monthly rental income
from REO Property pursuant to Section 3.11;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to Section
4.01; and
(viii) any other amounts required to be deposited under this
Agreement.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Master Servicer shall cause
funds to be deposited into the Certificate Account in an amount required to
cause an amount of interest to be paid with respect to such Mortgage Loan
equal to the amount of interest that has accrued on such Mortgage Loan from
the preceding Due Date at the Mortgage Rate net of the related Master
Servicing Fee.
60
The foregoing requirements for remittance by the Master Servicer shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted by
the Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted, it may at any time withdraw or direct the
institution maintaining the Certificate Account to withdraw such amount from
the Certificate Account, any provision in this Agreement to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the Trustee or such other institution
maintaining the Certificate Account which describes the amounts deposited in
error in the Certificate Account. The Master Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this Section. All
funds deposited in the Certificate Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08.
(c) On or prior to the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the LIBOR
Certificates, the Carryover Reserve Fund and shall deposit $1,000 therein upon
receipt from or on behalf of the Depositor of such amount. All funds on
deposit in the Carryover Reserve Fund shall (i) be held separate and apart
from, and shall not be commingled with, any other monies, including other
monies held by the Trustee pursuant to this Agreement and (ii) remain
uninvested.
The Trustee shall deposit into the Carryover Reserve Fund (i) all
amounts received under the Yield Maintenance Agreements and (ii) on each
Distribution Date, amounts otherwise distributable to the Class I-A-X, Class
II-A-X and Class B-X Certificates. The Trustee shall make withdrawals from the
Carryover Reserve Fund to make distributions pursuant to Section 4.02(a)(5)
exclusively (other than as expressly provided for in Section 3.08).
(d) [Reserved].
(e) On or prior to the Closing Date, the Trustee shall establish and
maintain, on behalf of the Certificateholders, the Distribution Account. The
Trustee shall, promptly upon receipt, deposit in the Distribution Account and
retain in the Distribution Account the following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer pursuant to
Section 3.05(f) in connection with any losses on Permitted Investments;
and
(iii) any other amounts deposited hereunder which are required to
be deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Distribution Account, any provision in this Agreement to
the contrary notwithstanding. Such direction may be accomplished by delivering
an Officer's Certificate to the Trustee which describes the amounts deposited
in error in the Distribution Account. All funds deposited in the Distribution
Account shall be held by the Trustee in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Trustee
61
incur liability for withdrawals from the Distribution Account at the
direction of the Master Servicer.
(f) Each institution at which the Certificate Account or the
Distribution Account is maintained shall invest the funds in such account as
directed in writing by the Master Servicer in Permitted Investments, which
shall mature not later than, in the case of the (i) Certificate Account, the
second Business Day next preceding the related Distribution Account Deposit
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such account, then such Permitted Investment shall
mature not later than the Business Day next preceding such Distribution
Account Deposit Date) and (ii) Distribution Account, the Business Day next
preceding the Distribution Date (except that if such Permitted Investment is
an obligation of the institution that maintains such fund or account, then
such Permitted Investment shall mature not later than such Distribution Date)
and, in each case, shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from any such investment of funds on deposit in the Certificate
Account or the Distribution Account shall be for the benefit of the Master
Servicer as servicing compensation and shall be remitted to it monthly as
provided in this Agreement. The amount of any realized losses in the
Certificate Account or the Distribution Account incurred in any such account
in respect of any such investments shall promptly be deposited by the Master
Servicer in the Certificate Account or paid to the Trustee for deposit into
the Distribution Account, as applicable. The Trustee in its fiduciary capacity
shall not be liable for the amount of any loss incurred in respect of any
investment or lack of investment of funds held in the Certificate Account or
the Distribution Account and made in accordance with this Section 3.05.
(g) The Master Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Certificate Account prior to any change thereof. The Trustee shall give notice
to the Master Servicer, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account or the Carryover Reserve
Fund prior to any change thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Master Servicer shall establish and maintain one
or more accounts (each, an "Escrow Account") and deposit and retain in such
accounts all collections from the Mortgagors (or advances by the Master
Servicer) for the payment of taxes, assessments, hazard insurance premiums or
comparable items for the account of the Mortgagors. Nothing in this Agreement
shall require the Master Servicer to compel a Mortgagor to establish an Escrow
Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 (with respect to taxes and assessments and insurance
premiums) and 3.09 (with respect to hazard insurance), to refund to
62
any Mortgagors any sums determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01. The Escrow Accounts shall not be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to in
Section 3.06(a) that are not timely paid by the Mortgagors on the date when
the tax, premium or other cost for which such payment is intended is due, but
the Master Servicer shall be required so to advance only to the extent that
such advances, in the good faith judgment of the Master Servicer will be
recoverable by the Master Servicer out of Insurance Proceeds, Liquidation
Proceeds or otherwise.
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage
Loans and all accounts, insurance information and other matters relating to
this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the office designated
by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer will
provide to each Certificateholder or Certificate Owner which is a savings and
loan association, bank or insurance company certain reports and reasonable
access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder or Certificate Owner to comply
with applicable regulations of the OTS or other regulatory authorities with
respect to investment in the Certificates; provided that the Master Servicer
shall be entitled to be reimbursed by each such Certificateholder or
Certificate Owner for actual expenses incurred by the Master Servicer in
providing such reports and access.
SECTION 3.08. Permitted Withdrawals From the Certificate Account, the
Distribution Account and the Carryover Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously
retained by the Master Servicer), the servicing compensation to which it
is entitled pursuant to Section 3.14 and to pay to the Master Servicer,
as additional servicing compensation, earnings on or investment income
with respect to funds in or credited to the Certificate Account;
(ii) to reimburse each of the Master Servicer and the Trustee for
unreimbursed Advances made by it, such right of reimbursement pursuant
to this subclause (ii) being limited to amounts received on the Mortgage
Loan(s) in respect of which any such Advance was made;
63
(iii) to reimburse each of the Master Servicer and the Trustee for
any Nonrecoverable Advance previously made by it;
(iv) to reimburse the Master Servicer for Insured Expenses from
the related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing Advances, the Master Servicer's right to reimbursement
pursuant to this clause (a) with respect to any Mortgage Loan being
limited to amounts received on such Mortgage Loan(s) that represent late
recoveries of the payments for which such advances were made pursuant to
Section 3.01 or Section 3.06 and (b) for unpaid Master Servicing Fees as
provided in Section 3.11;
(vi) to pay to the purchaser, with respect to each Mortgage Loan
or property acquired in respect thereof that has been purchased pursuant
to Section 2.02, Section 2.03 or Section 3.11, all amounts received on
such Mortgage Loan after the date of such purchase;
(vii) to reimburse the Master Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section
6.03;
(viii) to withdraw any amount deposited in the Certificate Account
and not required to be deposited in the Certificate Account;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Available Funds and the Trustee
Fee for such Distribution Date and remit such amount to the Trustee for
deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01.
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 Certificate Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi). Prior to making any withdrawal from the Certificate
Account pursuant to subclause (iii), the Master Servicer shall deliver to the
Trustee an Officer's Certificate of a Servicing Officer indicating the amount
of any previous Advance determined by the Master Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loans(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distributions to Certificateholders, in the manner specified in this Agreement
(and may withhold from the amounts so withdrawn, the amount of any taxes that
it is authorized to withhold pursuant to Section 8.11(g)). In addition, the
Trustee may from time to time make withdrawals from the Distribution Account
for the following purposes:
(i) to pay to itself the Trustee Fee for the related Distribution
Date;
64
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds in
the Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein;
(iv) to reimburse the Trustee for any unreimbursed Advances made
by it pursuant to Section 4.01(b), such right of reimbursement pursuant
to this subclause (iv) being limited to amounts (a) received on the
related Mortgage Loan(s) in respect of which any such Advance was made
and (b) not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(ii);
(v) to reimburse the Trustee for any Nonrecoverable Advance
previously made by the Trustee pursuant to Section 4.01(b), such right
of reimbursement pursuant to this subclause (v) being limited to amounts
not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(iii); and
(vi) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund for
distribution to the LIBOR Certificates in the manner specified in Section
4.02(a)(5) (and may withhold from the amounts so withdrawn the amount of any
taxes that it is authorized to retain pursuant to Section 8.11(g)). In
addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(i) to withdraw any amount deposited in the Carryover Reserve Fund
and not required to be deposited therein; and
(ii) to clear and terminate the Carryover Reserve Fund upon the
retirement of the LIBOR Certificates pursuant to Section 9.01 and the
termination of the Yield Maintenance Agreements.
(d) [Reserved].
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of the (i) maximum insurable value of the improvements
securing such Mortgage Loan or (ii) greater of (a) the outstanding principal
balance of the Mortgage Loan, including any Deferred Interest (if applicable),
and (b) an amount such that the proceeds of such policy shall be sufficient to
prevent the Mortgagor or the mortgagee from becoming a co insurer. Each such
policy of standard hazard insurance shall contain, or have an accompanying
endorsement that contains, a standard mortgagee clause. Any amounts collected
by the Master Servicer under any such policies (other than the amounts to be
applied to the restoration or repair of the related Mortgaged Property or
amounts released to the Mortgagor in accordance with the Master Servicer's
normal servicing
65
procedures) shall be deposited in the Certificate Account. Any cost incurred
by the Master Servicer in maintaining any such insurance shall not, for the
purpose of calculating monthly distributions to the Certificateholders or
remittances to the Trustee for their benefit, be added to the principal
balance of the Mortgage Loan, notwithstanding that the terms of the Mortgage
Loan so permit. Such costs shall be recoverable by the Master Servicer out of
late payments by the related Mortgagor or out of liquidation proceeds or
Subsequent Recoveries to the extent permitted by Section 3.08. It is
understood and agreed that no earthquake or other additional insurance is to
be required of any Mortgagor or maintained on property acquired in respect of
a Mortgage other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
If the Mortgaged Property is located at the time of origination of the
Mortgage Loan in a federally designated special flood hazard area and such
area is participating in the national flood insurance program, the Master
Servicer shall cause flood insurance to be maintained with respect to such
Mortgage Loan. Such flood insurance shall be in an amount equal to the least
of the (i) outstanding principal balance of the related Mortgage Loan, (ii)
replacement value of the improvements which are part of such Mortgaged
Property and (iii) maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program.
(b) The Master Servicer shall not take any action which would result in
non coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Master Servicer, would have been covered
thereunder. The Master Servicer shall not cancel or refuse to renew any such
Primary Insurance Policy that is in effect at the date of the initial issuance
of the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non renewed policy
is maintained with a Qualified Insurer.
Except with respect to any Lender PMI Mortgage Loans, the Master
Servicer shall not be required to maintain any Primary Insurance Policy (i)
with respect to any Mortgage Loan with a Loan to Value Ratio less than or
equal to 80% as of any date of determination or, based on a new appraisal, the
principal balance of such Mortgage Loan represents 80% or less of the new
appraised value or (ii) if maintaining such Primary Insurance Policy is
prohibited by applicable law. With respect to the Lender PMI Mortgage Loans,
the Master Servicer shall maintain the Primary Insurance Policy for the life
of such Mortgage Loans, unless otherwise provided for in the related Mortgage
Note or prohibited by law.
The Master Servicer agrees to effect the timely payment of the premiums
on each Primary Insurance Policy, and such costs not otherwise recoverable
shall be recoverable by the Master Servicer from the related liquidation
proceeds and Subsequent Recoveries.
(c) In connection with its activities as Master Servicer of the Mortgage
Loans, the Master Servicer agrees to present on behalf of itself, the Trustee
and Certificateholders, claims to the insurer under any Primary Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Any amounts collected by the Master Servicer under
any Primary Insurance Policies shall be deposited in the Certificate Account.
66
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Master Servicer
shall to the extent that it has knowledge of such conveyance, enforce any due
on sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Master
Servicer is not required to exercise such rights with respect to a Mortgage
Loan if the Person to whom the related Mortgaged Property has been conveyed or
is proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that
the Master Servicer is prohibited by law from enforcing any such due on sale
clause, or if coverage under any Required Insurance Policy would be adversely
affected, or if nonenforcement is otherwise permitted hereunder, the Master
Servicer is authorized, subject to Section 3.10(b), to take or enter into an
assumption and modification agreement from or with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, unless prohibited by applicable
state law, the Mortgagor remains liable thereon, provided that the Mortgage
Loan shall continue to be covered (if so covered before the Master Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Master Servicer, subject to Section 3.10(b), is also authorized with the prior
approval of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted
as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Master Servicer shall not be deemed to be in default under this
Section by reason of any transfer or assumption which the Master Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever.
(b) Subject to the Master Servicer's duty to enforce any due on sale
clause to the extent set forth in Section 3.10(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master
Servicer shall prepare and deliver or cause to be prepared and delivered to
the Trustee for signature and shall direct, in writing, the Trustee to execute
the assumption agreement with the Person to whom the Mortgaged Property is to
be conveyed and such modification agreement or supplement to the Mortgage Note
or Mortgage or other instruments as are reasonable or necessary to carry out
the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note may be changed. In addition, the substitute
Mortgagor and the Mortgaged Property must be acceptable to the Master Servicer
in accordance with its underwriting standards as then in effect. Together with
each such substitution, assumption or other agreement or instrument delivered
to the Trustee for execution by it, the Master Servicer shall deliver an
Officer's Certificate signed by a Servicing Officer stating that the
requirements of this subsection have been met in connection therewith. The
67
Master Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of
the original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.
(a) The Master Servicer shall exercise its discretion, consistent with
customary servicing procedures and the terms of this Agreement, with respect
to the enforcement and servicing of defaulted Mortgage Loans in such a manner
as will maximize the receipt of principal and interest with respect thereto,
including the sale of such Mortgage Loan to a third party, the modification of
such Mortgage Loan, or foreclosure upon the related Mortgaged Property and
disposition thereof. In connection with any foreclosure or other conversion,
the Master Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities and meet the requirements of the insurer under
any Required Insurance Policy; provided, however, that the Master Servicer
shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall
determine that such (i) restoration or foreclosure will increase the proceeds
of liquidation of the Mortgage Loan after reimbursement to itself of such
expenses and (ii) expenses will be recoverable to it through Liquidation
Proceeds and Subsequent Recoveries (respecting which it shall have priority
for purposes of withdrawals from the Certificate Account). The Master Servicer
shall be responsible for all other costs and expenses incurred by it in any
such proceedings; provided, however, that it shall be entitled to
reimbursement of such costs and expenses from the liquidation proceeds and
Subsequent Recoveries with respect to the related Mortgaged Property, as
provided in the definition of Liquidation Proceeds. If the Master Servicer has
knowledge that a Mortgaged Property which the Master Servicer is contemplating
acquiring in foreclosure or by deed in lieu of foreclosure is located within a
one mile radius of any site listed in the Expenditure Plan for the Hazardous
Substance Clean Up Bond Act of 1984 or other site with environmental or
hazardous waste risks known to the Master Servicer, the Master Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name shall
be placed on the title to such REO Property solely as the Trustee hereunder
and not in its individual capacity. The Master Servicer shall ensure that the
title to such REO Property references this Agreement and the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall either itself or through an agent selected by the Master
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the
68
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the maintenance
of such REO Property at such times as is necessary to enable the Trustee to
comply with the reporting requirements of the REMIC Provisions. The net
monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding required by Section 1445 and Section 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by
Section 6050H of the Code with respect to the receipt of mortgage interest
from individuals and any tax reporting required by Section 6050P of the Code
with respect to the cancellation of indebtedness by certain financial
entities, by preparing such tax and information returns as may be required, in
the form required, and delivering the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds
thereof, but in no event later than three years after its acquisition by the
Trust Fund. In that event, the Trustee shall have been supplied with an
Opinion of Counsel to the effect that the holding by the Trust Fund of such
Mortgaged Property subsequent to a three year period, if applicable, will not
result in the imposition of taxes on "prohibited transactions" of any REMIC
hereunder as defined in Section 860F of the Code or cause any REMIC hereunder
to fail to qualify as a REMIC at any time that any Certificates are
outstanding, and that the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel)
after the expiration of such three-year period. Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Trust Fund
shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or (ii) subject any REMIC hereunder to the imposition of any federal,
state or local income taxes on the income earned from such Mortgaged Property
under Section 860G(c) of the Code or otherwise, unless the Master Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose
obligors is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of
a deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Master Servicer will cause compliance with the provisions
of Treasury Regulation Section 1.1445 2(d)(3) necessary to assure that no
withholding tax obligation arises with respect to the proceeds of such
foreclosure except to the extent, if any, that proceeds of such foreclosure
are required to be remitted to the obligors on such Mortgage Loan.
The decision of the Master Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Master Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO
Properties, net of reimbursement to the Master Servicer for expenses
69
incurred (including any property or other taxes) in connection with such
management and net of unreimbursed Master Servicing Fees, Advances and
Servicing Advances, shall be applied to the payment of principal of and
interest on the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate Account. To the extent the net income received during any
calendar month is in excess of the amount attributable to amortizing principal
and accrued interest at the related Mortgage Rate on the related Mortgage Loan
for such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer for any related unreimbursed
Servicing Advances and Master Servicing Fees; second, to reimburse the Master
Servicer or the Trustee for any unreimbursed Advances; third, to reimburse the
Certificate Account for any Nonrecoverable Advances (or portions thereof) that
were previously withdrawn by the Master Servicer or the Trustee pursuant to
Section 3.08(a)(iii) that related to such Mortgage Loan; fourth, to accrued
and unpaid interest (to the extent no Advance has been made for such amount or
any such Advance has been reimbursed) on the Mortgage Loan or related REO
Property, at the Adjusted Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fifth, as a
recovery of principal of the Mortgage Loan. Excess Proceeds, if any, from the
liquidation of a Liquidated Mortgage Loan will be retained by the Master
Servicer as additional servicing compensation pursuant to Section 3.14.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust Fund any Mortgage Loan which is
151 days or more delinquent at a price equal to the Purchase Price; provided,
however, that the Master Servicer may only exercise this right on or before
the next to the last day of the calendar month in which such Mortgage Loan
became 151 days delinquent (such month, the "Eligible Repurchase Month");
provided further, that any such Mortgage Loan which becomes current but
thereafter becomes delinquent may be purchased by the Master Servicer pursuant
to this Section in any ensuing Eligible Repurchase Month. The Purchase Price
for any Mortgage Loan purchased under this Section 3.11 shall be deposited in
the Certificate Account and the Trustee, upon receipt of a certificate from
the Master Servicer in the form of Exhibit N, shall release or cause to be
released to the purchaser of such Mortgage Loan the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared
by the purchaser of such Mortgage Loan, in each case without recourse, as
shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage
Loan released pursuant hereto and the purchaser of such Mortgage Loan shall
succeed to all the Trustee's right, title and interest in and to such Mortgage
Loan and all security and documents related thereto. Such assignment shall be
an assignment outright and not for security. The purchaser of such Mortgage
Loan shall thereupon own such Mortgage Loan, and all security and documents,
free of any further obligation to the Trustee or the Certificateholders with
respect thereto.
(b) The Master Servicer may agree to a modification of any Mortgage Loan
(the "Modified Mortgage Loan") if the (i) modification is in lieu of a
refinancing, (ii) Mortgage Rate
70
on the Modified Mortgage Loan is approximately a prevailing market rate for
newly originated mortgage loans having similar terms and (iii) Master Servicer
purchases the Modified Mortgage Loan from the Trust Fund as described below.
Effective immediately after the modification, and, in any event, on the same
Business Day on which the modification occurs, all interest of the Trustee in
the Modified Mortgage Loan shall automatically be deemed transferred and
assigned to the Master Servicer and all benefits and burdens of ownership
thereof, including the right to accrued interest thereon from the date of
modification and the risk of default thereon, shall pass to the Master
Servicer. The Master Servicer shall promptly deliver to the Trustee a
certification of a Servicing Officer to the effect that all requirements of
this paragraph have been satisfied with respect to the Modified Mortgage Loan.
For federal income tax purposes, the Trustee shall account for such purchase
as a prepayment in full of the Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any Modified
Mortgage Loan in the Certificate Account pursuant to Section 3.05 within one
Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by
the Trustee of written notification of any such deposit signed by a Servicing
Officer, the Trustee shall release to the Master Servicer the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be necessary to vest in the Master
Servicer any Modified Mortgage Loan previously transferred and assigned
pursuant to this Agreement. The Master Servicer covenants and agrees to
indemnify the Trust Fund against any liability for any "prohibited
transaction" taxes and any related interest, additions, and penalties imposed
on the Trust Fund established hereunder as a result of any modification of a
Mortgage Loan effected pursuant to this subsection (b), any holding of a
Modified Mortgage Loan by the Trust Fund or any purchase of a Modified
Mortgage Loan by the Master Servicer (but such obligation shall not prevent
the Master Servicer or any other appropriate Person from in good faith
contesting any such tax in appropriate proceedings and shall not prevent the
Master Servicer from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings). The Master Servicer shall have no
right of reimbursement for any amount paid pursuant to the foregoing
indemnification, except to the extent that the amount of any tax, interest,
and penalties, together with interest thereon, is refunded to the Trust Fund
or the Master Servicer.
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering, or causing to be delivered a "Request for
Release" substantially in the form of Exhibit N. Upon receipt of such request,
the Trustee shall promptly release the related Mortgage File to the Master
Servicer, and the Trustee shall at the Master Servicer's direction execute and
deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Master
Servicer, together with the Mortgage Note with written evidence of
cancellation on the Mortgage Note. The Master Servicer is authorized to cause
the removal from the registration on the MERS(R) System of such Mortgage and
to execute and deliver, on behalf of the Trustee and the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation or of
partial or full release. Expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the related
Mortgagor. From time to time and as shall be appropriate for
71
the servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance, any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee shall, upon delivery to the Trustee
of a Request for Release in the form of Exhibit M signed by a Servicing
Officer, release the Mortgage File to the Master Servicer. Subject to the
further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan is liquidated and the proceeds thereof are deposited in the Certificate
Account, in which case the Master Servicer shall deliver to the Trustee a
Request for Release in the form of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity.
SECTION 3.13. Documents, Records and Funds in Possession of Master
Servicer to Be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or which otherwise
are collected by the Master Servicer as Liquidation Proceeds, Insurance
Proceeds or Subsequent Recoveries in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds and any
Subsequent Recoveries, including any funds on deposit in the Certificate
Account, shall be held by the Master Servicer for and on behalf of the Trustee
and shall be and remain the sole and exclusive property of the Trustee,
subject to the applicable provisions of this Agreement. The Master Servicer
also agrees that it shall not create, incur or subject any Mortgage File or
any funds that are deposited in the Certificate Account, Carryover Reserve
Fund, Distribution Account or any Escrow Account, or any funds that otherwise
are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of setoff against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that
the Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
72
SECTION 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account an amount equal
to the Master Servicing Fee; provided, that the aggregate Master Servicing Fee
with respect to any Distribution Date shall be reduced (i) by an amount equal
to the aggregate of the Prepayment Interest Shortfalls on all of the Mortgage
Loans, if any, with respect to such Distribution Date, but not to exceed the
Compensating Interest for such Distribution Date and (ii) with respect to the
initial Distribution Date, an amount equal to the amount to be deposited into
the Distribution Account pursuant to Section 2.01(a) and not so deposited.
Additional servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, prepayment penalties, assumption fees, late
payment charges and all income and gain net of any losses realized from
Permitted Investments shall be retained by the Master Servicer to the extent
not required to be deposited in the Certificate Account pursuant to Section
3.05. The Master Servicer shall be required to pay all expenses incurred by it
in connection with its master servicing activities hereunder (including
payment of any premiums for hazard insurance and any Primary Insurance Policy
and maintenance of the other forms of insurance coverage required by this
Agreement) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.
SECTION 3.15. Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Certificateholders or
Certificate Owners and the examiners and supervisory agents of the OTS, the
FDIC and such other authorities, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the OTS and the FDIC.
Such access shall be afforded without charge, but only upon reasonable and
prior written request and during normal business hours at the offices
designated by the Master Servicer. Nothing in this Section shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Master Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
SECTION 3.16. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee on or
before 80 days after the end of the Master Servicer's fiscal year, commencing
with its 2005 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of the Master Servicer during the
preceding calendar year and of the performance of the Master Servicer under
this Agreement has been made under such officer's supervision and (ii) to the
best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each
Rating Agency.
73
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before 80 days after the end of the Master Servicer's fiscal year,
commencing with its 2005 fiscal year, the Master Servicer at its expense shall
cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, the
Depositor or any affiliate thereof) which is a member of the American
Institute of Certified Public Accountants to furnish a statement to the
Trustee and the Depositor to the effect that such firm has examined certain
documents and records relating to the servicing of the Mortgage Loans under
this Agreement or of mortgage loans under pooling and servicing agreements
substantially similar to this Agreement (such statement to have attached
thereto a schedule setting forth the pooling and servicing agreements covered
thereby) and that, on the basis of such examination, conducted substantially
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or the Audit Program for Mortgages serviced for FNMA and FHLMC, such servicing
has been conducted in compliance with such pooling and servicing agreements
except for such significant exceptions or errors in records that, in the
opinion of such firm, the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages serviced for FNMA and FHLMC
requires it to report. In rendering such statement, such firm may rely, as to
matters relating to direct servicing of mortgage loans by Subservicers, upon
comparable statements for examinations conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC (rendered within one year of
such statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee.
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall for so long as it acts as master servicer
under this Agreement, obtain and maintain in force a (i) policy or policies of
insurance covering errors and omissions in the performance of its obligations
as Master Servicer hereunder and (b) fidelity bond in respect of its officers,
employees and agents. Each such policy and bond shall, together, comply with
the requirements from time to time of FNMA or FHLMC for persons performing
servicing for mortgage loans purchased by FNMA or FHLMC. In the event that any
such policy or bond ceases to be in effect, the Master Servicer shall obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.
SECTION 3.19. Notification of Adjustments.
On each Adjustment Date, the Master Servicer shall make interest rate or
monthly payment adjustments for each Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note and applicable
regulations. The Master Servicer shall execute and deliver the notices
required by each Mortgage and Mortgage Note and applicable regulations
regarding interest rate or monthly payment adjustments. The Master Servicer
also shall provide timely notification to the Trustee of all applicable data
and information regarding such interest
74
rate or monthly payment adjustments and the Master Servicer's methods of
implementing such interest rate or monthly payment adjustments. Upon the
discovery by the Master Servicer or the Trustee that the Master Servicer has
failed to adjust or has incorrectly adjusted a Mortgage Rate or a monthly
payment pursuant to the terms of the related Mortgage Note and Mortgage, the
Master Servicer shall immediately deposit in the Certificate Account from its
own funds the amount of any interest or principal loss caused thereby without
reimbursement therefor; provided, however, the Master Servicer shall be held
harmless with respect to any interest rate or monthly payment adjustments made
by any servicer prior to the Master Servicer.
75
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.
(a) The Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance pursuant to
the definition thereof. If the Master Servicer determines it is required to
make an Advance, it shall, on or before the Master Servicer Advance Date,
either (i) deposit into the Certificate Account an amount equal to the Advance
or (ii) make an appropriate entry in its records relating to the Certificate
Account that any Amount Held for Future Distribution has been used by the
Master Servicer in discharge of its obligation to make any such Advance. Any
funds so applied shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the next Master
Servicer Advance Date. The Master Servicer shall be entitled to be reimbursed
from the Certificate Account for all Advances of its own funds made pursuant
to this Section as provided in Section 3.08. The obligation to make Advances
with respect to any Mortgage Loan shall continue if such Mortgage Loan has
been foreclosed or otherwise terminated and the related Mortgaged Property has
not been liquidated.
(b) If the Master Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in the second
sentence of Section 4.01(a), the Master Servicer shall use its best efforts to
give written notice thereof to the Trustee (each such notice, a "Trustee
Advance Notice"; and such notice may be given by telecopy), not later than
3:00 P.M., New York time, on the Business Day immediately preceding the
related Master Servicer Advance Date, specifying the amount that will not be
deposited by the Master Servicer (each such amount, an "Advance Deficiency")
and certifying that such Advance Deficiency constitutes an Advance hereunder
and is not a Nonrecoverable Advance. If the Trustee receives a Trustee Advance
Notice on or before 3:30 P.M., New York time on a Master Servicer Advance
Date, the Trustee shall, not later than 3:00 P.M., New York time, on the
related Distribution Date, deposit in the Distribution Account an amount equal
to the Advance Deficiency identified in such Trustee Advance Notice unless it
is prohibited from so doing by applicable law. Notwithstanding the foregoing,
the Trustee shall not be required to make such deposit if the Trustee shall
have received written notification from the Master Servicer that the Master
Servicer has deposited or caused to be deposited in the Certificate Account an
amount equal to such Advance Deficiency. All Advances made by the Trustee
pursuant to this Section 4.01(b) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(b) together with accrued interest, not later
than the fifth day following the related Master Servicer Advance Date. In the
event that the Master Servicer does not reimburse the Trustee in accordance
with the requirements of the preceding sentence, the Trustee shall immediately
(i) terminate all of the rights and obligations of the Master Servicer under
this Agreement in accordance with Section 7.01 and (ii) subject to the
limitations set forth in Section 3.04, assume all of the rights and
obligations of the Master Servicer hereunder.
76
(c) The Master Servicer shall, not later than the close of business on
the second Business Day immediately preceding each Distribution Date, deliver
to the Trustee a report (in form and substance reasonably satisfactory to the
Trustee) that indicates the (i) Mortgage Loans with respect to which the
Master Servicer has determined that the related Scheduled Payments should be
advanced and (ii) amount of the related Scheduled Payments. The Master
Servicer shall deliver to the Trustee on the related Master Servicer Advance
Date an Officer's Certificate of a Servicing Officer indicating the amount of
any proposed Advance determined by the Master Servicer to be a Nonrecoverable
Advance.
SECTION 4.02. Priorities of Distribution.
(a) (1) With respect to the Available Funds for Loan Group I, on each
Distribution Date, the Trustee shall withdraw such Available Funds from the
Distribution Account and apply such funds to distributions on the specified
Classes of Group I Senior Certificates in the following order and priority
and, in each case, to the extent of Available Funds remaining:
(i) concurrently, to each interest-bearing Class of Group I Senior
Certificates and the Class B-X Certificates (based on the related Class
B-X Portion), an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount for such Distribution Date, any
shortfall being allocated among such Classes in proportion to the amount
of the Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided, however, that
the amount of interest otherwise distributable in respect of the Class
I-A-X and Class B-X Certificates shall be deposited into the Carryover
Reserve Fund and shall be distributed in accordance with Section
4.02(a)(5); and
(ii) to each Class of Group I Senior Certificates, as follows:
(x) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group I for such
Distribution Date, will be distributed sequentially, as follows:
(1) first, to the Class A-R Certificates, until its Class
Certificate Balance is reduced to zero; and
(2) second, to the Class I-A Certificates, until its Class
Certificate Balance is reduced to zero.
(2) With respect to the Available Funds for Loan Group II, on each
Distribution Date, the Trustee shall withdraw such Available Funds from the
Distribution Account and apply such funds to distributions on the specified
Classes of Group II Senior Certificates in the following order and priority
and, in each case, to the extent of Available Funds remaining:
(i) concurrently, to each interest-bearing Class of Group II
Senior Certificates and the Class B-X Certificates (based on the related
Class B-X Portion), an amount allocable to interest equal to the related
Class Optimal Interest Distribution Amount for such Distribution Date,
any shortfall being allocated among such Classes in proportion to
77
the amount of the Class Optimal Interest Distribution Amount that would
have been distributed in the absence of such shortfall; provided,
however, that the amount of interest otherwise distributable in respect
of the Class II-A-X and Class B-X Certificates shall be deposited into
the Carryover Reserve Fund and shall be distributed in accordance with
Section 4.02(a)(5); and
(ii) to each Class of Group II Senior Certificates, as follows:
(x) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group II for such
Distribution Date, will be distributed sequentially, as follows:
(1) first, concurrently, to the Class II-A-1 and Class
II-A-2 Certificates, pro rata, until their respective Class
Certificate Balances are reduced to zero; and
(2) second, concurrently, to the Class II-PO and Class B-PO
Certificates, pro rata, until their respective Class
Certificate Balances are reduced to zero.
(3) On each Distribution Date, Available Funds from all Loan Groups
remaining after making the distributions described in Section 4.02(a)(1)
through Section 4.02(a)(2), shall be distributed to the Senior Certificates to
the extent provided in Section 4.05.
(4) On each Distribution Date, Available Funds remaining after making
the distributions described in Section 4.02(a)(1) through Section 4.02(a)(3)
above, shall be distributed to the Subordinated Certificates and the Class A-R
Certificates in the following order and priority and, in each case, to the
extent of such funds remaining:
(i) to the Class B-1 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
(ii) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero;
(iii) to the Class B-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(iv) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero;
(v) to the Class B-3 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for such Class
for such Distribution Date;
78
(vi) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero;
(vii) to the Class B-4 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(viii) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero;
(ix) to the Class B-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(x) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero;
(xi) to the Class B-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(xii) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero;
(xiii) to the Class B-7 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(xiv) to the Class B-7 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date until
the Class Certificate Balance thereof is reduced to zero; and
(xv) to the Class A-R Certificates, any remaining funds.
(5) On each Distribution Date, any amounts on deposit in the Carryover
Reserve Fund shall be distributed as follows:
(i) The Yield Maintenance Payment in respect of the Class II-A-1
Certificates shall be distributed, sequentially, first, to the Class II-A-1
Certificates, up to the amount of any Carryover Shortfall Amount with respect
to the Class II-A-1 Certificates for such Distribution Date and second, any
remaining amount to the Class II-A-X Certificates.
(ii) The Yield Maintenance Payment in respect of the Class II-A-2
Certificates shall be distributed, sequentially, first, to the Class II-A-2
Certificates, up to the amount of any Carryover Shortfall Amount with respect
to the Class II-A-2 Certificates for such Distribution Date and second, any
remaining amount to the Class II-A-X Certificates.
79
(iii) All amounts deposited in the Carryover Reserve Fund pursuant
to Section 4.02(a)(1)(i), 4.02(a)(2)(i) and Section 4.02(a)(4)(i) shall
be distributed in the following order of priority:
(A) first, concurrently, to the Class II-A-1, Class II-A-2
Certificates and the Subordinated Certificates, pro rata based on each
such Class' entitlement to receive Carryover Shortfall Amounts on such
Distribution Date and remaining after the application of clauses (i) and
(ii) above, in an amount up to such Class' respective Carryover
Shortfall Amount remaining unpaid on such Distribution Date, and
(B) second, concurrently, any remaining amounts to the Class
I-A-X, Class II-A-X and Class B-X Certificates, pro rata, based upon
their respective Class Optimal Interest Distribution Amounts for such
Distribution Date (prior to reduction for any Net Deferred Interest and
Net Interest Shortfalls and prior to the deposit of such amounts in the
Carryover Shortfall Reserve Fund).
(b) [Reserved.]
(c) On each Distribution Date, the amount referred to in clause (i) of
the definition of Class Optimal Interest Distribution Amount for each Class of
Certificates or Components thereof for such Distribution Date shall be reduced
for each Class or Component of Senior Certificates of a Senior Certificate
Group and each Class of Subordinated Certificates by (i) the related Class's
pro rata share of Net Prepayment Interest Shortfalls for such Loan Group
based, with respect to a Class of (x) Senior Certificates or Component
thereof, on the related Class Optimal Interest Distribution Amount for such
Distribution Date and (y) Subordinated Certificates on and prior to the first
Senior Termination Date, on the Assumed Interest Amount or after such Senior
Termination Date, the related Class Optimal Interest Distribution Amount for
such Distribution Date, without taking into account such Net Prepayment
Interest Shortfalls, and (ii) the related Class' Allocable Share of (a) with
respect to each Mortgage Loan in the related Loan Group (or after the Senior
Credit Support Depletion Date, any Mortgage Loan) that became subject to a
Debt Service Reduction during the calendar month preceding the month of such
Distribution Date, the interest portion of the related Debt Service Reduction
and (b) each Relief Act Reduction for the Mortgage Loans in the related Loan
Group (or after the Senior Credit Support Depletion Date, any Mortgage Loan)
incurred during the calendar month preceding the month of such Distribution
Date.
(d) Notwithstanding the priority and allocation contained in Section
4.02(a)(4), if with respect to any Class of Subordinated Certificates on any
Distribution Date (other than the Class of Subordinated Certificates then
outstanding with the highest priority of distribution) the sum of the related
Class Subordination Percentages of such Class and of all Classes of
Subordinated Certificates which have a higher numerical Class designation than
such Class (the "Applicable Credit Support Percentage") is less than the
Original Applicable Credit Support Percentage for such Class, no distribution
of (i) Net Prepayments with respect to the Mortgage Loans in Loan Group II or
(ii) Principal Prepayments with respect to the Mortgage Loans in Loan Group I
will be made to any such Classes of Subordinated Certificates (the "Restricted
Classes") and the amount of such (i) Net Prepayments with respect to the
Mortgage Loans in Loan Group II or (ii) Principal Prepayments with respect to
the Mortgage Loans in Loan Group I
80
otherwise distributable to the Restricted Classes shall be distributed to any
Classes of Subordinated Certificates having lower numerical Class designations
than such Class, pro rata, based on their respective Class Certificate
Balances immediately prior to such Distribution Date and shall be distributed
in the sequential order provided in Section 4.02(a)(4).
(e) If Subsequent Recoveries have been received with respect to a
Liquidated Mortgage Loan in a Loan Group, the amount of such Subsequent
Recoveries will be applied sequentially, in the order of payment priority, to
increase the Class Certificate Balance or Component Principal Balance of each
related Class of Certificates or Component to which the related Realized
Losses have been allocated, but in each case by not more than the amount of
Realized Losses previously allocated to that Class of Certificates or
Component pursuant to Section 4.04. Holders of such Certificates will not be
entitled to any payment in respect of the Class Optimal Interest Distribution
Amount on the amount of such increases for any Interest Accrual Period
preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied pro rata to the Certificate Balance or Component
Balance of each Certificate of such Class or Component thereof.
SECTION 4.03. Allocation of Net Deferred Interest.
For any Distribution Date, Net Deferred Interest on the Mortgage Loans
in Loan Group II will be allocated to each Class of the Class II-A-1, Class
II-A-2, Class II-A-X, Class B-X and Subordinated Certificates in an amount
equal to the excess, if any, of (i) the amount of interest that accrued on
such Class of Certificates at its respective Pass-Through Rate during the
Interest Accrual Period related to that Distribution Date over (ii) the amount
of interest that accrued on such Class of Certificates at the related Adjusted
Cap Rate during the Interest Accrual Period related to that Distribution Date.
SECTION 4.04. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Trustee shall determine
the total amount of Realized Losses with respect to each Loan Group with
respect to the related Distribution Date. For purposes of allocating losses to
the Subordinated Certificates, the Class B-1 Certificates will be deemed to
have a lower numerical Class designation, and to be of a higher relative
payment priority, than each other Class of Subordinated Certificates.
Realized Losses with respect to any Distribution Date shall be allocated
as follows: any Realized Losses on the Mortgage Loans in a Loan Group shall be
allocated first to the Subordinated Certificates in reverse order of their
respective numerical Class designations (beginning with the Class of
Subordinated Certificates then outstanding with the highest numerical Class
designation) until the respective Class Certificate Balance of each such Class
is reduced to zero, and second, to the Senior Certificates of the related
Senior Certificate Group (other than the Class X Certificates), if applicable,
pro rata, on the basis of their respective Class Certificate Balances, in each
case immediately prior to the related Distribution Date, until the respective
Class Certificate Balance of each such Class is reduced to zero; provided,
however, that any Realized Loss that would otherwise be allocated to the Class
II-A-1 Certificates shall instead be allocated to the Class II-A-2
Certificates until the Class Certificate Balance of the Class II-A-2
Certificates has been reduced to zero.
81
(b) The Class Certificate Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class designation
shall be reduced on each Distribution Date by the amount, if any, by which the
aggregate of the Class Certificate Balances of all outstanding Classes of
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses on such Distribution Date), exceeds the Pool
Stated Principal Balance as of the Due Date in the month of such Distribution
Date.
(c) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Certificate Balance of a Class of Certificates pursuant
to Section 4.04(b) above shall be allocated among the Certificates of such
Class in proportion to their respective Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 4.04(b) above shall be accomplished by reducing the
Certificate Balance, Component Balance or Subordinated Portion thereof, as
applicable, immediately following the distributions made on the related
Distribution Date in accordance with the definition of "Certificate Balance",
"Component Balance" or "Subordinated Portion", as the case may be.
SECTION 4.05. Cross-Collateralization; Adjustments to Available
Funds.
If on any Distribution Date the Class Certificate Balance of any Senior
Certificates in a Senior Certificate Group immediately prior to each
Distribution Date is greater than the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group(s) (the "Undercollateralized
Group"), then the Trustee shall apply the Available Funds of the other Loan
Group(s) that are not undercollateralized (the "Overcollateralized Group"), as
follows:
(1) to add to the Available Funds of each Undercollateralized Group an
amount equal to the lesser of (a) one month's interest on the Transfer Payment
Received of each Undercollateralized Group at the Weighted Average Adjusted
Net Mortgage Rate applicable to the Undercollateralized Group(s) and (b)
Available Funds of the Overcollateralized Group(s) remaining after making
distributions to the Certificates of such Overcollateralized Group(s) on such
Distribution Date pursuant to Section 4.02; and
(2) to the related Senior Certificates of each Undercollateralized
Group, to the extent of the principal portion of Available Funds of the
Overcollateralized Group(s) remaining after making distributions to the Senior
Certificates of such Overcollateralized Group(s) on such Distribution Date
pursuant to Section 4.02, until the Class Certificate Balance of the Senior
Certificates of each such Undercollateralized Group equals the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group.
The payment received by the Undercollateralized Group is referred to as
a "Transfer Payment Received". The payment made by the Overcollateralized
Group is referred to as a "Transfer Payment Xxxx".
00
SECTION 4.06. Monthly Statements to Certificateholders.
(a) Concurrently with each distribution on a Distribution Date, the
Trustee will forward by mail to each Rating Agency and make available to
Certificateholders on the Trustee's website
(xxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx) a statement generally setting forth the
following information:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments,
Liquidation Proceeds and Subsequent Recoveries included therein;
(ii) the amount thereof allocable to interest, any Class Unpaid
Interest Amounts included in such distribution and any remaining Class
Unpaid Interest Amounts after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest;
(iv) the Class Certificate Balance, Component Principal Balance or
Component Notional Amount of each Class of Certificates and any
Component thereof after giving effect to the distribution of principal
on such Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) each Senior Percentage and Subordinated Percentage for the
following Distribution Date;
(vii) the amount of the Master Servicing Fees paid to or retained
by the Master Servicer with respect to such Distribution Date;
(viii) the Pass Through Rate for each Class of Certificates and
any Component thereof, with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances outstanding as of
the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage Loans
in each Loan Group and in the aggregate (A) delinquent (exclusive of
Mortgage Loans in foreclosure) (1) 1 to 30 days, (2) 31 to 60 days, (3)
61 to 90 days and (4) 91 or more days and (B) in foreclosure and
delinquent (1) 1 to 30 days, (2) 31 to 60 days, (3) 61 to 90 days and
(4) 91 or more days, as of the close of business on the last day of the
calendar month preceding such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated
Principal Balance of
83
such Mortgage Loan as of the close of business on the Determination Date
preceding such Distribution Date and the date of acquisition thereof;
(xii) the total number and principal balance of any REO Properties
in each Loan Group and in the aggregate (and market value, if available)
as of the close of business on the Determination Date preceding such
Distribution Date;
(xiii) each Senior Prepayment Percentage and Subordinated
Prepayment Percentage for the following Distribution Date;
(xiv) the aggregate amount of Realized Losses in each Loan Group
and in the aggregate incurred during the preceding calendar month and
the aggregate amount of Subsequent Recoveries, if any, reducing the
Realized Losses from the preceding calendar months;
(xv) with respect to the second Distribution Date, the number and
aggregate balance of any Delay Delivery Mortgage Loans not delivered
within 30 days after the Closing Date;
(xvi) the amount of Net Deferred Interest added to the Class
Certificate Balance or Component Principal Balance of any Class of
Certificates or any Component thereof, as applicable; and
(xvii) the Yield Maintenance Payments for the Class II-A-1 and
Class II-A-2 Certificates for such Distribution Date.
(b) The Trustee's responsibility for disbursing the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information provided by the Master Servicer.
(c) On or before the fifth Business Day following the end of each
Prepayment Period (but in no event later than the third Business Day prior to
the related Distribution Date), the Master Servicer shall deliver to the
Trustee (which delivery may be by electronic data transmission) a report in
substantially the form set forth as Schedule IV.
(d) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this Section
4.06 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
SECTION 4.07. Determination of Pass-Through Rates for LIBOR
Certificates.
(a) On each Interest Determination Date so long as any LIBOR
Certificates are outstanding, the Trustee will determine LIBOR on the basis of
the British Bankers' Association ("BBA") "Interest Settlement Rate" for
one-month deposits in United States dollars as found on
84
Telerate page 3750 as of 11:00 A.M. London time on each LIBOR Determination
Date. "Telerate Page 3750" means the display page currently so designated on
the Moneyline Telerate Service (formerly the Dow Xxxxx Markets) (or such other
page as may replace that page on that service for the purpose of displaying
comparable rates or prices).
(b) If on any Interest Determination Date, LIBOR cannot be determined as
provided in paragraph (a) of this Section 4.07, the Trustee shall either (i)
request each Reference Bank to inform the Trustee of the quotation offered by
its principal London office for making one-month United States dollar deposits
in leading banks in the London interbank market, as of 11:00 A.M. (London
time) on such Interest Determination Date, or (ii) in lieu of making any such
request, rely on such Reference Bank quotations that appear at such time on
the Reuters Screen LIBOR Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions for
Swaps, 1986 Edition), to the extent available. LIBOR for the next Interest
Accrual Period will be established by the Trustee on each interest
Determination Date as follows:
(i) If on any Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next applicable
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to the
nearest whole multiple of 1/32%).
(ii) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (a) LIBOR as
determined on the previous Interest Determination Date or (b) the
Reserve Interest Rate. The "Reserve Interest Rate" shall be the rate per
annum that the Trustee determines to be either (x) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/32%) of
the one-month United States dollar lending rates that New York City
banks selected by the Trustee (the "New York City banks") are quoting,
on the relevant Interest Determination Date, to the principal London
offices of at least two of the Reference Banks to which such quotations
are, in the opinion of the Trustee, being so made, or (y) in the event
that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate that New York City banks
selected by the Trustee are quoting on such Interest Determination Date
to leading European banks.
(iii) If on any Interest Determination Date the Trustee is
required but is unable to determine the Reserve Interest Rate in the
manner provided in paragraph (b)(ii) above, LIBOR for the related
Classes of Certificates shall be LIBOR as determined on the preceding
applicable Interest Determination Date.
Until all of the LIBOR Certificates are paid in full, the Trustee will at all
times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each Interest Determination Date. The Master Servicer
initially shall designate the Reference Banks. Each "Reference Bank" shall be
a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Trustee and shall have an established place of
business in London, England. If any such Reference Bank should be unwilling or
unable to act as such or if the Master Servicer
85
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank. The Trustee shall
have no liability or responsibility to any Person for (i) the selection of any
Reference Bank for purposes of determining LIBOR or (ii) any inability to
retain at least four Reference Banks that is caused by circumstances beyond
its reasonable control.
(c) The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each Interest
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in the footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
In determining LIBOR, any Pass-Through Rate for the LIBOR Certificates,
any Interest Settlement Rate or any Reserve Interest Rate, the Trustee may
conclusively rely and shall be protected in relying upon the offered
quotations (whether written, oral or on the Dow Xxxxx Markets) from the BBA
designated banks, the Reference Banks or the New York City banks as to LIBOR,
the Interest Settlement Rate or the Reserve Interest Rate, as appropriate, in
effect from time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee's selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from the BBA designated banks, the Reference Banks or the New York City banks
or to determine such arithmetic mean, all as provided for in this Section
4.07.
The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each holder of a Certificate and the Trustee.
86
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either by (i)
wire transfer in immediately available funds to the account of such holder at
a bank or other entity having appropriate facilities therefor, if such Holder
(i) has so notified the Trustee at least five Business Days prior to the
related Record Date and (ii) shall hold (1) a Notional Amount Certificate, (2)
100% of the Class Certificate Balance of any Class of Certificates or (3)
Certificates of any Class with aggregate principal Denominations of not less
than $1,000,000 or (ii) check mailed by first class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the countersignature and delivery of such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be
issued at the direction of the Depositor or any affiliate of the Depositor.
The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06, a Certificate Register for the Trust Fund
in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of
Certificates as provided in this Agreement. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the
name of the designated
87
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
the event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer in
substantially the forms set forth in Exhibit J-2 (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Securities Act. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor 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 an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and
88
in form and substance satisfactory to the Trustee (in the event such
Certificate is a Private Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit K or Exhibit L, or in the event such
Certificate is a Residual Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that (a) such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA or a plan or arrangement subject to Section 4975 of the Code, or
a Person acting on behalf of any such plan or arrangement, or using the assets
of any such plan or arrangement to effect such transfer or (b) in the case of
a Certificate that is an ERISA-Restricted Certificate that has been the
subject of an ERISA-Qualifying Underwriting, a representation that the
transferee is an insurance company that is purchasing such Certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificate satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60 or
(ii) in the case of any ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan or arrangement subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee or any other
Person acting on behalf of any such plan or arrangement or using such plan's
or arrangement's assets, an Opinion of Counsel satisfactory to the Trustee,
which Opinion of Counsel shall not be an expense of the Trustee, the Master
Servicer or the Trust Fund, addressed to the Trustee, to the effect that the
purchase and holding of such ERISA-Restricted Certificate will not result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code, and will not subject the Trustee to any obligation in addition to
those expressly undertaken in this Agreement or to any liability (such Opinion
of Counsel, a "Benefit Plan Opinion"). For purposes of the preceding sentence,
with respect to an ERISA-Restricted Certificate that is not a Residual
Certificate, in the event the representation letter or Benefit Plan Opinion
referred to in the preceding sentence is not so furnished, one of the
representations in clause (i), as appropriate, shall be deemed to have been
made to the Trustee by the transferee's (including an initial acquirer's)
acceptance of the ERISA-Restricted Certificates. Notwithstanding anything to
the contrary in this Agreement, any purported transfer of an ERISA-Restricted
Certificate to or on behalf of an employee benefit plan or arrangement subject
to ERISA or to Section 4975 of the Code without the delivery to the Trustee of
a Benefit Plan Opinion satisfactory to the Trustee as described above shall be
void and of no effect.
To the extent permitted under applicable law (including ERISA), the
Trustee shall be under no liability to any Person for any registration of
transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 5.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the transfer was registered by the
Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
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
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
89
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached to this Agreement
as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (a) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (b) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (c)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be null and void and shall vest no rights in the purported
Transferee. If any purported transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such
Holder under the provisions of this Agreement so long as the Transfer
was registered after receipt of the related Transfer Affidavit,
Transferor Certificate and either the Rule 144A Letter or the Investment
Letter. The Trustee shall be entitled but not obligated to recover from
any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as
it became other than a Permitted Transferee, all payments made on such
Residual Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code
as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of
90
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the Trustee or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC
at any time that the Certificates are outstanding or result in the imposition
of any tax on the Trust Fund, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
hereby consents to any amendment of this Agreement which, based on an Opinion
of Counsel furnished to the Trustee, is reasonably necessary to (i) ensure
that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is
not a Permitted Transferee and (ii) provide for a means to compel the Transfer
of a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants
with respect to indirect participating firms and persons shown on the books of
such indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of 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 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.
If (i) the (a) Depository or 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) Trustee or the Depositor is unable
to locate a qualified successor or (ii) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate
Balance of the Book-Entry Certificates together advise the Trustee and the
Depository through the Depository Participants 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
91
and of the availability of definitive, fully-registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Master Servicer, the Depositor nor the Trustee shall be liable for any delay
in delivery of such instruction and each may conclusively rely on, and shall
be protected in relying on, such instructions. The Master Servicer shall
provide the Trustee with an adequate inventory of certificates to facilitate
the issuance and transfer of Definitive Certificates. Upon the issuance of
Definitive Certificates all references in this Agreement to obligations
imposed upon or to be performed by the Depository shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder;
provided that the Trustee shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (ii) there is delivered to the Master Servicer
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master Servicer or
the Trustee may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Master Servicer, the Trustee nor any agent of the Master Servicer or the
Trustee shall be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders or Certificate Owners (i) request
such information in writing from the Trustee, (ii) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect to their rights under
this Agreement or under the Certificates and (iii) provide a copy of the
communication which such Certificateholders or Certificate Owners propose to
transmit, or if the Depositor or Master Servicer shall request such
information in writing from the Trustee, then the Trustee
92
shall, within ten Business Days after the receipt of such request, (a) provide
the Depositor, the Master Servicer or such Certificateholders or Certificate
Owners at such recipients' expense the most recent list of the
Certificateholders of such Trust Fund held by the Trustee, if any, and (b)
assist the Depositor, the Master Servicer or such Certificateholders or
Certificate Owners at such recipients' expense with obtaining from the
Depository a list of the related Depository Participants acting on behalf of
Certificate Owners of Book Entry Certificates. The Depositor and every
Certificateholder and Certificate Owner, by receiving and holding a
Certificate or beneficial interest therein, agree that the Trustee shall not
be held accountable by reason of the disclosure of any such information as to
the list of the Certificateholders or Depository Participants hereunder,
regardless of the source from which such information was derived.
SECTION 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office for such purposes. The Trustee
will give prompt written notice to the Certificateholders of any change in
such location of any such office or agency.
93
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the
Master Servicer.
The Depositor and the Master Servicer shall each be liable in accordance
with this Agreement only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them in this Agreement.
SECTION 6.02. Merger or Consolidation of the Depositor or the Master
Servicer.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the United States or under the laws of one of the states thereof and will
obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may be merged
or consolidated, or 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, notwithstanding anything in this
Agreement to the contrary; provided, however, that the successor or surviving
Person to the Master Servicer shall be qualified to service mortgage loans on
behalf of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Master
Servicer and Others.
None of the Depositor, 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, the Trustee, the Certificateholders or
any other Person for taking any action 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 Master Servicer or any such Person against any (i) breach of
representations or warranties made by it in this Agreement or (ii) liability
which would otherwise be imposed by reasons of willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement. The Depositor, the Master Servicer and any director,
officer, employee or
94
agent of the Depositor or the Master Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred
in connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement
or the Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither the
Depositor nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that either the Depositor or the Master Servicer
may in its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account.
SECTION 6.04. Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon (i) appointment of a successor servicer and
receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrade or withdrawal of
the rating of any of the Certificates or (ii) determination that its duties
hereunder are no longer permissible under applicable law. Any such
determination under clause (ii) of the preceding sentence permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor master servicer shall have assumed
the Master Servicer's responsibilities, duties, liabilities and obligations
under this Agreement.
95
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
The term "Event of Default", wherever used in this Agreement, means any
one of the following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or remit to the Trustee any payment required to be
made under the terms of this Agreement, which failure shall continue
unremedied for five days after the date upon which written notice of
such failure shall have been given to the Master Servicer by the Trustee
or the Depositor or to the Master Servicer and the Trustee by the
Holders of Certificates having not less than 25% of the Voting Rights
evidenced by the Certificates;
(ii) any failure by the Master Servicer to observe or perform in
any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement, which failure
materially affects the rights of Certificateholders, that failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to the Master
Servicer by the Trustee or the Depositor, or to the Master Servicer and
the Trustee by the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates; provided, however,
that the 60 day cure period shall not apply to the initial delivery of
the Mortgage File for Delay Delivery Mortgage Loans nor the failure to
substitute or repurchase in lieu of delivery;
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 consecutive days;
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer;
(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, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall fail to reimburse in full the
Trustee within five days of the Master Servicer Advance Date for any
Advance made by the Trustee pursuant to Section 4.01(b) together with
accrued and unpaid interest.
96
If an 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
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 51% of the
Voting Rights evidenced by the Certificates, the Trustee shall by notice in
writing to the Master Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, other than its
rights as a Certificateholder hereunder. On and after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. The Trustee shall thereupon make
any Advance which the Master Servicer failed to make subject to Section 4.01
whether or not the obligations of the Master Servicer have been terminated
pursuant to this Section. The Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as attorney in fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such
termination shall affect any obligation of the Master Servicer to pay amounts
owed pursuant to Article VIII. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including the transfer to the Trustee
of all cash amounts which shall at the time be credited to the Certificate
Account, or thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to
the notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to
which such Master Servicer would have been entitled pursuant to Sections
3.08(a)(i) through (viii), and any other amounts payable to such Master
Servicer hereunder the entitlement to which arose prior to the termination of
its activities under this Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee shall, subject to and to the
extent provided in Section 3.04, be the successor to the Master Servicer in
its capacity as master servicer under this Agreement and the transactions set
forth or provided for in this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions of this Agreement and applicable law
including the obligation to make Advances pursuant to Section 4.01. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans that the Master Servicer would have been entitled to charge
to the Certificate Account or Distribution Account if the Master Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Master Servicer in accordance with Section 7.01,
the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making Advances pursuant to Section 4.01 or
if it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
the appointment of which does not adversely
97
affect the then-current rating of the Certificates by each Rating Agency as
the successor to the Master Servicer hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Master Servicer
hereunder. Any successor to the Master Servicer shall be an institution which
is an FNMA and FHLMC approved seller/servicer in good standing, which has a
net worth of at least $15,000,000, and which is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, which contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than liabilities of
the Master Servicer under Section 6.03 incurred prior to termination of the
Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior
to such assignment and delegation will not be qualified or reduced as a result
of such assignment and delegation. Pending appointment of a successor to the
Master Servicer hereunder, the Trustee, unless the Trustee is prohibited by
law from so acting, shall, subject to Section 3.04, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Master Servicing
Fee permitted to be paid to the Master Servicer hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. Neither the Trustee nor
any other successor master servicer shall be deemed to be in default hereunder
by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the Master Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as master servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as master servicer maintain in force the insurance policies
that the Master Servicer is required to maintain pursuant to Section 3.09.
In connection with the termination or resignation of the Master Servicer
hereunder, either the (i) successor Master Servicer, including the Trustee if
the Trustee is acting as successor Master Servicer, shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS or (ii)
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to, either (a) execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer or (b) designate on the MERS(R) System the successor Master Servicer
as the servicer of such Mortgage Loan. The predecessor Master Servicer shall
file or cause to be filed any such assignment in the appropriate recording
office. The successor Master Servicer shall cause such assignment to be
delivered to the Trustee promptly upon receipt of the original with evidence
of recording thereon or a copy certified by the public recording office in
which such assignment was recorded.
98
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
99
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:
(i) unless an Event of Default known to the Trustee shall have
occurred and be continuing, the duties and obligations of the Trustee
shall be determined solely by the express provisions of this Agreement,
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be finally proven that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Holders of Certificates evidencing not less than
25% of the Voting Rights of Certificates relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee
under this Agreement; and
(iv) without limiting the provisions of this Section 8.01 or
Section 8.02, the Trustee shall be entitled to rely conclusively on the
information delivered to it by the Master Servicer in a Trustee Advance
Notice in determining whether it is required to
100
make an Advance under Section 4.01(b), shall have no responsibility to
ascertain or confirm any information contained in any Trustee Advance
Notice, and shall have no obligation to make any Advance under Section
4.01(b) in the absence of a Trustee Advance Notice or actual knowledge
of a Responsible Officer of the Trustee that (a) an Advance was not made
by the Master Servicer and (b) such Advance is not a Nonrecoverable
Advance.
SECTION 8.02. Certain Matters Affecting the Trustee.
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 believed by it to be genuine
and to have been signed or presented by the proper party or parties and
the Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates evidencing not less than 25% of the Voting
Rights allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers
hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement in its commercial
capacity (other than as issuer of the investment security);
101
(viii) the Trustee shall not have any obligation to make any
payments to any party to the Yield Maintenance Agreements, neither as
Trustee nor in its individual capacity (it being understood that the
foregoing shall in no way limit or relate to the requirements of this
Agreement that Trustee pay the related Certificateholders all amounts
due them under the related Yield Maintenance Agreement);
(ix) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(x) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred therein or thereby.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained in this Agreement and in the Certificates shall
be taken as the statements of the Depositor, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Agreement or of the Certificates or of
any Mortgage Loan or related document or of MERS or the MERS(R) System other
than with respect to the Trustee's execution and counter-signature of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were
not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Distribution Account on each Distribution Date
an amount equal to the Trustee Fee for such Distribution Date. The Trustee and
any director, officer, employee or agent of the Trustee shall be indemnified
by the Depositor and held harmless against any loss, liability or expense
(including reasonable attorney's fees and expenses) incurred in connection
with any claim or legal action relating to (i) this Agreement, (ii) the
Certificates or (iii) in connection with the performance of any of the
Trustee's duties hereunder (including performing its duties under the Yield
Maintenance Agreements) other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
any of the Trustee's duties hereunder or incurred by reason of any action of
the Trustee taken at the direction of the Certificateholders. Such indemnity
shall survive the termination of this Agreement or the
102
resignation or removal of the Trustee hereunder. Without limiting the
foregoing, the Depositor covenants and agrees, except as otherwise agreed upon
in writing by the Depositor and the Trustee, and except for any such expense,
disbursement or advance as may arise from the Trustee's negligence, bad faith
or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to: (i)
the reasonable compensation and the expenses and disbursements of its counsel
not associated with the closing of the issuance of the Certificates, (ii) the
reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage such persons to perform acts or services
hereunder and (iii) printing and engraving expenses in connection with
preparing any Definitive Certificates. Except as otherwise provided in this
Agreement, the Trustee shall not be entitled to payment or reimbursement for
any routine ongoing expenses incurred by the Trustee in the ordinary course of
its duties as Trustee, Registrar, Tax Matters Person or Paying Agent hereunder
or for any other expenses.
The Trustee and any director, officer, employee or agent of the Trustee
shall be indemnified by the Master Servicer and held harmless against any
loss, liability or expense (including reasonable attorney's fees and expenses)
incurred in connection with any claim or legal action resulting from (i) any
error in any tax or information return prepared by the Master Servicer or (ii)
willful misfeasance, bad faith or negligence by the Master Servicer in
connection with the performance of its duties hereunder; provided, however,
that the Master Servicer shall have no obligation to indemnify or hold
harmless the Trustee or any director, officer, employee or agent of the
Trustee against any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, subject to supervision
or examination by federal or state authority and with a credit rating which
would not cause either of the Rating Agencies to reduce or withdraw their
respective then-current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or the Master Servicer and its affiliates; provided, however,
that such entity cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.
103
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed
with respect to the Trust Fund by any state in which the Trustee or the Trust
Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and appoint a successor trustee by written instrument,
in triplicate, one copy of which instrument shall be delivered to the Trustee,
one copy of which shall be delivered to the Master Servicer and one copy to
the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor Trustee to the Master Servicer, one
complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each
Rating Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee in this Agreement. The Depositor, the Master
Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties, and obligations.
104
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 and its appointment
shall not adversely affect the then-current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 without the execution or filing
of any paper or further act on the part of any of the parties hereto, anything
in this Agreement to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provision of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the 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 to act as co trustee or co trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power
to make such appointment. No co trustee or separate trustee under this Section
shall be required to meet the terms of eligibility as a successor trustee
under Section 8.06 and no notice to Certificateholders of the appointment of
any co trustee or separate trustee shall be required under Section 8.08.
Every separate trustee and co trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) to the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee under
this Agreement to advance funds on behalf of the Master Servicer, shall
be conferred or imposed upon and exercised or performed by the
105
Trustee and such separate trustee or co trustee jointly (it being
understood that such separate trustee or co trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as
successor to the 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 the applicable Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such
separate trustee or co-trustee as agent of the Trustee;
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co trustee; and
(iv) the Depositor, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co trustee may, at any time, constitute the
Trustee its agent or attorney in fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Tax Matters.
(a) For federal income tax purposes, the taxable year of each REMIC
formed hereunder shall be a calendar year and the Trustee shall maintain or
cause the maintenance of the books of each such REMIC on the accrual method of
accounting. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date.
106
(b) The Trustee shall prepare and file or cause to be filed with the
Internal Revenue Service, and the Trustee shall sign, federal tax information
returns or elections required to be made hereunder with respect to each REMIC
formed hereunder, the Trust Fund, if applicable, and the Certificates
containing such information and at the times and in the manner as may be
required by the Code or applicable Treasury Regulations, and shall furnish to
each Holder of Certificates at any time during the calendar year for which
such returns or reports are made such statements or information at the times
and in the manner as may be required thereby, including reports relating to
mortgaged property that is abandoned or foreclosed, receipt of mortgage
interests in kind in a trade or business, a cancellation of indebtedness,
interest, original issue discount and market discount or premium (using a
constant prepayment assumption of 20% CPR). The Trustee will apply for an
Employee Identification Number from the Internal Revenue Service under Form
SS-4 or any other acceptable method for all tax entities. In connection with
the foregoing, the Trustee shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, which shall provide the name and address of the
Person who can be contacted to obtain information required to be reported to
the holders of regular interests in each REMIC formed hereunder. The Trustee
shall make elections to treat each REMIC formed hereunder as a REMIC (which
elections shall apply to the taxable period ending December 31, 2005 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
Regulations may prescribe, and as described by the Trustee. The Trustee shall
sign all tax information returns filed pursuant to this Section and any other
returns as may be required by the Code. The Holder of the largest percentage
interest in the Class A-R Certificates is hereby designated as the "Tax
Matters Person" (within the meaning of Treasury Regulation ss. 1.860F-4(d))
for each REMIC formed hereunder. The Trustee is hereby designated and
appointed as the agent of such Tax Matters Person. Any Holder of a Residual
Certificate will by acceptance thereof appoint the Trustee as agent and
attorney in fact for the purpose of acting as Tax Matters Person for each
REMIC formed hereunder during such time as the Trustee does not own any such
Residual Certificate. In the event that the Code or applicable Treasury
Regulations prohibit the Trustee from signing tax or information returns or
other statements, or the Trustee from acting as agent for the Tax Matters
Person, the Trustee shall take whatever action that in its sole good faith
judgment is necessary for the proper filing of such information returns or for
the provision of a tax matters person, including designation of the Holder of
the largest percentage interest in a Residual Certificate to sign such returns
or act as Tax Matters Person. Each Holder of a Residual Certificate shall be
bound by this Section.
(c) The Trustee shall provide upon request and receipt of reasonable
compensation, such information as required in Section 860D(a)(6)(B) of the
Code to the Internal Revenue Service, to any Person purporting to transfer a
Residual Certificate to a Person other than a transferee permitted by Section
5.02(c), and to any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate, organization described
in Section 1381 of the Code, or nominee holding an interest in a pass through
entity described in Section 860E(e)(6) of the Code, any record holder of which
is not a transferee permitted by Section 5.02(c) (or which is deemed by
statute to be an entity with a disqualified member).
(d) The Trustee shall prepare and file or cause to be filed, and the
Trustee shall sign, any state income tax returns required under applicable
state law with respect to each REMIC formed hereunder or the Trust Fund.
107
(e) 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 on the Mortgage
Loans that the Trustee reasonably believes are applicable under the Code. The
consent of Certificateholders shall not be required for such withholding. In
the event that the Trustee withholds any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant
to federal withholding requirements, the Trustee shall, together with its
monthly report to such Certificateholders, indicate such amount withheld.
(f) In order to enable the Trustee to perform its duties as set forth in
this Agreement, the Depositor shall provide, or cause to be provided, to the
Trustee within 10 days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including the price,
yield, prepayment assumption and projected cash flows of the Certificates and
the Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or
data that the Trustee may, from time to time, reasonably request in order to
enable the Trustee to perform its duties as set forth in this Agreement. The
Depositor hereby agrees to indemnify the Trustee for any losses, liabilities,
damages, claims or expenses of the Trustee arising from any errors, omissions
or miscalculations of the Trustee that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC 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 contribution to any REMIC hereunder after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including any minimum tax imposed upon any REMIC pursuant to Section 23153 and
Section 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for in this Agreement, such tax shall be paid by (i) the
Trustee, if any such other tax arises out of or results from a breach by the
Trustee of any of its obligations under this Agreement, (ii) the Master
Servicer, in the case of any such minimum tax, or if such tax arises out of or
results from a breach by the Master Servicer of any of its obligations under
this Agreement, (iii) the Depositor, if any such tax arises out of or results
from the Depositor's obligation to repurchase a Mortgage Loan pursuant to
Section 2.02 or Section 2.03, including any obligation of the Seller or a
Transferor to repurchase a Mortgage Loan, or (iv) in all other cases, or in
the event that the Trustee, the Master Servicer or the Depositor fails to
honor its obligations under the preceding clauses (i), (ii) or (iii), any such
tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 3.08(b).
(h) The Trustee shall treat the Carryover Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is
owned by the holders of the Class X Certificates, and that is not an asset of
any REMIC created hereunder. The Trustee shall treat the rights of the holders
of the Class X Certificates to receive payments as provided in the third to
last paragraph of the Preliminary Statement as rights in an interest rate cap
contract written by the Holders of the Class X. Thus, the Class X Certificates
shall be treated as representing ownership of not only a Master REMIC regular
interest, but also ownership of an interest in an interest rate cap contract,
and each of the Class X Certificates will be treated as having assumed
108
the obligation to make payments under an interest rate cap agreement. For
purposes of determining the issue price of the Master REMIC regular interests,
the Trustee shall assume that the cap contract obligations assumed by each of
the Class X Certificates each have a value of $1,000.
SECTION 8.12. Yield Maintenance Agreements.
The Depositor hereby authorizes and directs the Trustee to (i)
enter into and perform the obligations of the Trustee, not in its individual
capacity but solely as Trustee of the BellaVista Mortgage Trust 2005-2, under
the Yield Maintenance Agreements and (ii) exercise and enforce the rights of
the Trustee as specified therein.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Liquidation or Purchase of all
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Master Servicer and the Trustee created hereby with respect
to the Trust Fund shall terminate upon the earlier of the (i) purchase by the
Depositor of all Mortgage Loans (and REO Properties) remaining in the Trust
Fund at the price equal to the sum of (a) 100% of the Stated Principal Balance
of each Mortgage Loan plus one month's accrued interest thereon at the
applicable Adjusted Mortgage Rate, (b) the lesser of the (1) appraised value
of any REO Property as determined by the higher of two appraisals completed by
two independent appraisers selected by the Depositor at the expense of the
Depositor and (2) Stated Principal Balance of each Mortgage Loan related to
any REO Property and (c) any remaining unpaid costs and damages incurred by
the Trust Fund that arises out of a violation of any predatory or abusive
lending law that also constitutes an actual breach of a representation or
warranty of clause (7) on Schedule III, in all cases plus accrued and unpaid
interest thereon at the applicable Adjusted Mortgage Rate and (ii) later of
the (a) maturity or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (b) distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement. In no event
shall the trusts created hereby continue beyond the earlier of the (x)
expiration of 21 years from the death of the survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of
St. James's, living on the date of this Agreement and (y) Latest Possible
Maturity Date.
The Depositor shall have the right to purchase all Mortgage Loans and
REO Properties pursuant to clause (i) in the preceding paragraph of this
Section 9.01 only on or after the date on which the Pool Stated Principal
Balance, at the time of any such repurchase, is less than or equal to 10% of
the Cut-off Date Pool Principal Balance.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Master Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust
Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Depositor elects to terminate any portion of
109
the Trust Fund by optional repurchase pursuant to Section 9.01, at least 20
days prior to the date notice is to be mailed to the affected
Certificateholders, the Depositor shall notify the Master Servicer and the
Trustee of the date the Depositor intends to terminate the Trust Fund and of
the applicable repurchase price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not earlier than the 10th day
and no later than the 15th day of the month next preceding the month of such
final distribution. Any such notice shall specify (i) the Distribution Date
upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates at the office therein designated,
(ii) the amount of such final distribution, (iii) the location of the office
or agency at which such presentation and surrender must be made, and (iv) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
Certificates at the office therein specified. The Master Servicer will give
such notice to each Rating Agency at the time such notice is given to
Certificateholders.
In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on or before the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of
the Certificates. Upon such final deposit with respect to the Trust Fund and
the receipt by the Trustee of a Request for Release therefor, the Trustee
shall promptly release to the Master Servicer the Mortgage Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case
on the final Distribution Date and in the order set forth in Section 4.02, in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class
of Regular Certificates, the Certificate Balance thereof plus accrued interest
thereon (or on their Notional Amount, if applicable) in the case of an
interest-bearing Certificate and (ii) as to the Residual Certificates, the
amount, if any, which remains on deposit in the Distribution Account (other
than the amounts retained to meet claims) after application pursuant to clause
(i) above. Notwithstanding the reduction of the Class Certificate Balance of
any Class of Certificates to zero, such Class will be outstanding hereunder
(solely for the purpose of receiving distributions and not for any other
purpose) until the termination of the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee
hereunder in accordance with Article IX.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within six months after the second notice all the applicable Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust
110
Fund. If within one year after the second notice all Certificates shall not
have been surrendered for cancellation, the Class A-R Certificateholders shall
be entitled to all unclaimed funds and other assets of the Trust Fund which
remain subject to this Agreement.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Depositor exercises its purchase option as provided
in Section 9.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Master Servicer, to the effect
that the failure to comply with the requirements of this Section 9.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on any
REMIC as defined in Section 860F of the Code, or (ii) cause any REMIC to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(1) within 90 days prior to the final Distribution Date set
forth in the notice given by the Master Servicer under Section 9.02, the
Master Servicer shall prepare and the Trustee, at the expense of the Tax
Matters Person, shall adopt a plan of complete liquidation within the
meaning of Section 860F(a)(4) of the Code which, as evidenced by an
Opinion of Counsel (which opinion shall not be an expense of the Trustee
or the Tax Matters Person), meets the requirements of a qualified
liquidation; and
(2) within 90 days after the time of adoption of such a plan
of complete liquidation, the Trustee shall sell all of the assets of the
Trust Fund to the Depositor for cash in accordance with Section 9.01.
(b) The Trustee as agent for any REMIC created under this Agreement
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1) and to take such other action in connection
therewith as may be reasonably requested by the Master Servicer.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer to prepare and the Trustee to adopt and sign a
plan of complete liquidation.
111
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee without the consent of any of the
Certificateholders to (i) cure any ambiguity or mistake, (ii) correct any
defective provision in this Agreement or to supplement any provision in this
Agreement which may be inconsistent with any other provision in this
Agreement, (iii) conform this Agreement to the Prospectus Supplement and
Prospectus provided to investors in connection with the initial offering of
the Certificates, (iv) add to the duties of the Depositor or the Master
Servicer, (v) modify, alter, amend, add to or rescind any of the terms or
provisions contained in this Agreement to comply with any rules or regulations
promulgated by the Securities and Exchange Commission from time to time, (vi)
add any other provisions with respect to matters or questions arising
hereunder or (vii) modify, alter, amend, add to or rescind any of the terms or
provisions contained in this Agreement; provided that any action pursuant to
clauses (vi) or (vii) above shall not, as evidenced by an Opinion of Counsel
(which Opinion of Counsel shall not be an expense of the Trustee or the Trust
Fund), adversely affect in any material respect the interests of any
Certificateholder; provided, however, that the amendment shall be deemed not
to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of a Majority in Interest of each
Class of Certificates affected by such amendment. Each party to this Agreement
hereby agrees that it will cooperate with each other party in amending this
Agreement pursuant to clause (v) above. The Trustee, the Depositor and the
Master Servicer also may at any time and from time to time amend this
Agreement without the consent of the Certificateholders to modify, eliminate
or add to any of its provisions to such extent as shall be necessary or
helpful to (i) maintain the qualification of any REMIC as a REMIC under the
Code, (ii) avoid or minimize the risk of the imposition of any tax on any
REMIC pursuant to the Code that would be a claim at any time prior to the
final redemption of the Certificates or (iii) comply with any other
requirements of the Code, provided that the Trustee has been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust Fund, to the effect that such action is necessary or helpful to, as
applicable, (a) maintain such qualification, (b) avoid or minimize the risk of
the imposition of such a tax or (c) comply with any such requirements of the
Code.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of a
Majority in Interest of each Class of Certificates adversely affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments required to be
112
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of
the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating 66 2/3%, or
(iii) reduce the aforesaid percentages of Certificates the Holders of which
are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or
cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (a) the amendment does not adversely affect in any material
respect the interests of any Certificateholder or (b) the conclusion set forth
in the immediately preceding clause (a) is not required to be reached pursuant
to this Section 10.01.
SECTION 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Master Servicer at its
expense, but only upon direction by the Trustee accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as in
this Agreement provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
113
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the (i) Conveyed Assets by the Depositor to the Trustee and (ii) Trust Fund by
the Depositor to the Trustee each be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyances be deemed to be the grant of a security interest in such
property. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, or if for
any other reason this Agreement is held or deemed to create a security
interest in such assets, then (i) this Agreement shall constitute a security
agreement and (ii) the conveyance provided for in Section 2.01 shall be deemed
to be a grant by the Depositor to the Trustee of, and the Depositor hereby
grants to the Trustee to secure all of the Depositor's obligations hereunder,
a security interest in all of the Depositor's right, title and interest,
whether now owned or hereafter acquired, in and to the Trust Fund and the
Conveyed Assets.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Conveyed Assets and the Trust Fund, such security interest would be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any UCC financing statements or continuation statements in
connection with such security interest.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which it has
actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been
cured;
(iii) the resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
(iv) the repurchase or substitution of Mortgage Loans pursuant to
Section 2.03;
(v) the final payment to Certificateholders; and
114
(vi) any rating action involving the long-term credit rating of
the Master Servicer, which notice shall be made by first class mail
within two Business Days after the Trustee gains actual knowledge of
such a rating action.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(i) each report to Certificateholders described in Section 4.06;
(ii) each annual statement as to compliance described in Section
3.16;
(iii) each annual independent public accountants' servicing report
described in Section 3.17; and
(iv) any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, Section 2.03 or Section 3.11.
(b) All directions, demands and notices under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered by first
class mail, by courier or by facsimile transmission to, in the case of the (a)
Depositor, BellaVista Funding Corporation, 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx
Xxxxxx, XX 00000, Attention: Xxxxx Xxxx, (b) Master Servicer, Countrywide Home
Loans Servicing LP, 000 Xxxxxxxxxxx Xxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000
facsimile number (000) 000-0000, Attention: Xxxx Xxxx, or such other address
as may be hereafter furnished to the Depositor and the Trustee by the Master
Servicer in writing, (c) Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx,
0X, Xxx Xxxx, Xxx Xxxx 00000, facsimile number: (000) 000-0000, Attention:
Mortgage-Backed Securities Group, BellaVista Mortgage Trust 2005-2, or such
other address as the Trustee may hereafter furnish to the Depositor or Master
Servicer and (d) Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders of the
Certificates.
SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained in this Agreement,
except as provided in Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and
Depositor.
115
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created by this Agreement, or otherwise affect the
rights, obligations and liabilities of the parties to this Agreement or any of
them.
No Certificateholder shall have any right to vote (except as provided in
this Agreement) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything set forth in this Agreement or contained in the terms of the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision of
this Agreement.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
provided in this Agreement, and unless the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the Certificates shall
also have made written request to the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its
officers, employees and independent public accountants (and by this provision
the Master Servicer hereby authorizes said accountants to discuss with such
116
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under
this Section 10.09 shall be borne by the party requesting such inspection; all
other such expenses shall be borne by the Master Servicer or the related
Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
SECTION 10.11. Protection of Assets.
(a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this Agreement, the Trust Fund
created by this Agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell
assets; or
(iii) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
(c) The Trustee, by entering into this Agreement, and each Certificate
Owner, by its acceptance of a Certificate (or interest therein) issued
hereunder, hereby covenants and agrees that they shall not, prior to the date
that is one year and one day after the termination of this Agreement,
institute a bankruptcy, reorganization or other proceeding against the
Depositor or against any stockholder of the Depositor under any federal or
state bankruptcy law or similar law. The Trustee and each Certificate Owner,
by its acceptance of a Certificate (or interest therein) issued hereunder,
hereby further covenant and agree that they shall not cooperate with or
encourage others to file a bankruptcy petition against the Depositor during
the same period. Nothing in this paragraph shall preclude, or be deemed to
estop, such Certificate Owner from (i) taking or omitting to take any action
prior to such date in any (a) any case or proceeding voluntarily filed or
commenced by or on behalf of the Depositor under or pursuant to any such law
or (b) any involuntary case or proceeding pertaining to the Depositor that is
filed or commenced by or on behalf of a person other than such Certificate
Owner and is not joined in by such Certificate Owner (or any Person to which
such Holder shall have assigned, transferred or otherwise conveyed any part of
the obligations of the Depositor hereunder) under or pursuant to any such law,
or (ii) commencing or prosecuting any legal action that is not an involuntary
case or proceeding under or pursuant to any such law against the Depositor or
any of its properties.
117
(d) Any amounts due hereunder with respect to the Certificates shall be
paid solely from the Trust Fund. In the event the Trust Fund has been
exhausted and the Certificates have not been paid in full, then any and all
amounts remaining due on the Certificates shall be extinguished and the
Certificates cancelled. To the extent that under any applicable law the holder
of a Certificate is deemed to have an interest in assets of the Depositor
("Depositor Assets"), such holder is deemed to have agreed that its interest
in such Depositor Assets is fully subordinate to any claims against such
Depositor Assets of the transferees, pledgees or grantees to which such
Depositor Assets are transferred, pledged or granted and is further deemed to
have agreed that this Agreement shall constitute a subordination agreement for
purpose of Section 510(a) of the Bankruptcy Code.
* * * * * *
118
IN WITNESS WHEREOF, the Depositor, the Trustee and the Master Servicer
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
BELLAVISTA FUNDING CORPORATION,
as Depositor
By:
----------------------------
Name: Xxxxx Xxxx
Title: President
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------
Name: Xxx Xxxxx Xxxxxxx
Title: Assistant Treasurer
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:
----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
[Signature page to Pooling and Servicing Agreement for BellaVista Series
2005-2]
Acknowledged solely with respect to its
obligations under Section 4.01(b)
THE BANK OF NEW YORK, in its individual
capacity
By:
----------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
[Signature page to Pooling and Servicing Agreement for BellaVista Series
2005-2]
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-1
SCHEDULE II
BellaVista Mortgage Trust 2005-2
Mortgage Pass-Through Certificates,
Series 2005-2
Representations and Warranties of the Master Servicer
-----------------------------------------------------
Countrywide Home Loans Servicing LP ("Countrywide Servicing") hereby
makes the representations and warranties set forth in this Schedule II to the
Depositor and the Trustee as of the Closing Date. Capitalized terms used but
not otherwise defined in this Schedule II shall have the meanings ascribed
thereto in the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") relating to the above-referenced Series, among Belvedere Trust
Finance Corporation, as seller, Countrywide Home Loans Servicing LP, as master
servicer, BellaVista Funding Corporation, as depositor, and The Bank of New
York, as trustee.
(1) Countrywide Servicing is duly organized as a limited
partnership and is validly existing and in good standing under the laws
of the State of Texas and is duly authorized and qualified to transact
any and all business contemplated by the Pooling and Servicing Agreement
to be conducted by Countrywide Servicing 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, to
service the Mortgage Loans in accordance with the terms of the Pooling
and Servicing Agreement and to perform any of its obligations under the
Pooling and Servicing Agreement in accordance with the terms thereof.
(2) Countrywide Servicing has the full partnership power and
authority to service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by the Pooling and Servicing Agreement and has duly authorized by all
necessary partnership action on the part of Countrywide Servicing the
execution, delivery and performance of the Pooling and Servicing
Agreement; and the Pooling and Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of
Countrywide Servicing, enforceable against Countrywide Servicing in
accordance with its terms, except that the (i) enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (ii)
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Countrywide Servicing, the servicing of the Mortgage Loans
by Countrywide Servicing under the Pooling and Servicing Agreement, the
consummation of any other of the transactions contemplated by the
Pooling and Servicing Agreement, and the fulfillment of or compliance
with the terms thereof are in the ordinary course of business of
Countrywide Servicing and will not (i) result in a material breach of
any term or provision of the certificate of limited partnership,
partnership agreement or other
S-II-1
organizational documents of Countrywide Servicing, (ii) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which Countrywide Servicing is a
party or by which it may be bound or (iii) constitute a material
violation of any statute, order or regulation applicable to Countrywide
Servicing of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Countrywide Servicing; and
Countrywide Servicing is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair the ability of
Countrywide Servicing to perform or meet any of its obligations under
the Pooling and Servicing Agreement.
(4) Countrywide Servicing is an approved servicer of
conventional mortgage loans for FNMA or FHLMC and is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act.
(5) No litigation is pending or, to the best of Countrywide
Servicing's knowledge, threatened, against Countrywide Servicing that
would materially and adversely affect the execution, delivery or
enforceability of the Pooling and Servicing Agreement or the ability of
Countrywide Servicing to service the Mortgage Loans or to perform any of
its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Countrywide Servicing of, or compliance by
Countrywide Servicing with, the Pooling and Servicing Agreement or the
consummation of the transactions contemplated thereby, or if any such
consent, approval, authorization or order is required, Countrywide
Servicing has obtained the same.
(7) Countrywide Servicing is a member of MERS in good
standing, and will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the MERS Mortgage
Loans for as long as such Mortgage Loans are registered with MERS.
S-II-2
SCHEDULE III
BellaVista Mortgage Trust 2005-2
Mortgage Pass-Through Certificates,
Series 2005-2
Representations and Warranties as to the Mortgage Loans
-------------------------------------------------------
BellaVista Funding Corporation (the "Depositor") hereby confirms that
the representations and warranties set forth in this Schedule III have been
made by the Seller under the Mortgage Loan Purchase Agreement.
1) With respect to the Countrywide Mortgage Loans in
Countrywide Purchase Group I, the representations and warranties of
Countrywide Home Loans, Inc. contained in Schedule I of the Countrywide
Acknowledgement, to the extent true and correct as of the date such
representations and warranties were made by Countrywide Home Loans,
Inc., have remained true and correct at all times (i) in the case of
those representations and warranties given as of the "Closing Date" (as
defined in Schedule I of the Countrywide Acknowledgement) or as to which
no time qualification is specified, from such date until May 27, 2005
and (ii) in the case of those representations and warranties given as of
the "Cut-off Date" (as defined in Schedule I of the Countrywide
Acknowledgement), from such specified date until May 1, 2005.
2) With respect to the Countrywide Mortgage Loans in
Countrywide Purchase Group II and Countrywide Purchase Group III, the
representations and warranties of Countrywide Home Loans, Inc. contained
in Section 7.02 of the Countrywide Underlying Purchase Agreement, to the
extent true and correct as of the date such representations and
warranties were made by Countrywide Home Loans, Inc., have remained true
and correct at all times (i) in the case of those representations and
warranties given as of the related "Closing Date" (as defined in the
Countrywide Underlying Purchase Agreement) or as to which no time
qualification is specified, from such date until May 27, 2005 and (ii)
in the case of those representations and warranties given as of the
related "Cut-off Date" (as defined in the Countrywide Underlying
Purchase Agreement), from such specified date until May 1, 2005.
3) With respect to the Commercial Capital Mortgage Loans,
the representations and warranties of Commercial Capital Bank contained
in Section 2.05 of the Commercial Capital Sale Agreement, to the extent
true and correct as of the date such representations and warranties were
made by Commercial Capital, have remained true and correct at all times
(i) in the case of those representations and warranties given as of the
"Closing Date" (as defined in the Commercial Capital Sale Agreement) or
as to which no time qualification is specified, from such date until May
27, 2005 and (ii) in the case of those representations and warranties
given as of the "Cut-off Date" (as defined in the Commercial Capital
Sale Agreement), from such specified date until May 1, 2005.
4) The information set forth on the Mortgage Loan Schedule
attached to the Mortgage Loan Purchase Agreement with respect to each
Mortgage Loan is true and correct in all material respects as of the
Closing Date.
S-III-1
5) Immediately prior to the assignment of each Mortgage Loan
to the Depositor, the Seller had good title to, and was the sole owner
of, such Mortgage Loan free and clear of any pledge, lien, encumbrance
or security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to
sell and assign the same pursuant to the Mortgage Loan Purchase
Agreement.
6) Other than the sale of the Mortgage Loans to the
Depositor pursuant to the Mortgage Loan Purchase Agreement, the Seller
has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Mortgage Loans. The Seller has not
authorized the filing of and is not aware of any financing statements
against the Seller that include a description of collateral covering the
Mortgage Loans other than any financing statement relating to the sale
of the Mortgage Loans to the Depositor pursuant to the Mortgage Loan
Purchase Agreement or that has been terminated. The Seller is not aware
of any judgment or tax lien filings against the Seller.
7) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company or mortgage banking company that is supervised and examined by a
federal or state authority, or by a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act.
8) Each Mortgage Loan was originated (within the meaning of
Section 3(a)(41) of the Exchange Act) by an entity that satisfied at the
time of origination the requirements of Section 3(a)(41) of the Exchange
Act.
9) Each Mortgage Loan at the time it was made complied in
all material respects with applicable local, state and federal laws,
including all applicable predatory and abusive lending laws.
10) The Mortgage Loans were selected from among the
outstanding mortgage loans in the Seller's portfolio at the Closing Date
as to which the representations and warranties made as to the Mortgage
Loans set forth in this Schedule III can be made. Such selection was not
made in a manner intended to adversely affect the interest of the
Depositor.
11) None of the Mortgage Loans are High Cost as defined by
the applicable predatory and abusive lending laws. None of the Mortgage
Loans is a "high cost home loan" as defined in the Georgia Fair Lending
Act prior to its amendment on March 7, 2003 (the "Georgia Act"), and all
of the Mortgage Loans that are subject to the Georgia Act comply with
the requirements of such act. None of the Mortgage Loans is a "High-Cost
Home Loan" as defined in the New Jersey predatory and abusive lending
law.
12) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the then
current Standard & Poor's LEVELS(R) Version 5.6b Glossary Revised,
Appendix E which is attached hereto as
S-III-2
Exhibit O (the "Glossary") where (x) a "High Cost Loan" is each loan
identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Cost Loan
Categorization" in the Glossary as each such loan is defined in the
applicable anti-predatory lending law of the State or jurisdiction
specified in such table and (y) a "Covered Loan" is each loan identified
in the column "Category under applicable anti-predatory lending law" of
the table entitled "Standard & Poor's High Covered Loan Categorization"
in the Glossary as each such loan is defined in the applicable
anti-predatory lending law of the State or jurisdiction specified in
such table.
S-III-3
SCHEDULE IV
Form of Monthly Master Servicer Report
===============================================================================
LOAN LEVEL REPORTING SYSTEM
-------------------------------------------------------------------------------
DATABASE STRUCTURE
-------------------------------------------------------------------------------
[MONTH, YEAR]
-------------------------------------------------------------------------------
Field Number Field Name Field Type Field Width Dec
-------------------------------------------------------------------------------
1 INVNUM Numeric 4
-------------------------------------------------------------------------------
2 INVBLK Numeric 4
-------------------------------------------------------------------------------
3 INACNU Character 8
-------------------------------------------------------------------------------
4 BEGSCH Numeric 15 2
-------------------------------------------------------------------------------
5 SCHPRN Numeric 13 2
-------------------------------------------------------------------------------
6 TADPRN Numeric 11 2
-------------------------------------------------------------------------------
7 LIQEPB Numeric 11 2
-------------------------------------------------------------------------------
8 ACTCOD Numeric 11
-------------------------------------------------------------------------------
9 ACTDAT Numeric 4
-------------------------------------------------------------------------------
10 INTPMT Numeric 8
-------------------------------------------------------------------------------
11 PRNPMT Numeric 13 2
-------------------------------------------------------------------------------
12 ENDSCH Numeric 13 2
-------------------------------------------------------------------------------
13 SCHNOT Numeric 13 2
-------------------------------------------------------------------------------
14 SCHPAS Numeric 7 3
-------------------------------------------------------------------------------
15 PRINPT Numeric 7 3
-------------------------------------------------------------------------------
16 PRIBAL Numeric 11 2
-------------------------------------------------------------------------------
17 LPIDTE Numeric 13 2
-------------------------------------------------------------------------------
18 DELPRN Numeric 7
-------------------------------------------------------------------------------
19 PPDPRN Numeric 11 2
-------------------------------------------------------------------------------
20 DELPRN Numeric 11 2
-------------------------------------------------------------------------------
21 NXTCHG Numeric 8
-------------------------------------------------------------------------------
22 ARMNOT Numeric 7 3
-------------------------------------------------------------------------------
23 ARMPAS Numeric 7 3
-------------------------------------------------------------------------------
24 ARMPMT Numeric 11 2
-------------------------------------------------------------------------------
25 ZZTYPE Character 2
-------------------------------------------------------------------------------
26 ISSUID Character 1
-------------------------------------------------------------------------------
27 KEYNAME Character 8
-------------------------------------------------------------------------------
TOTAL 240
-------------------------------------------------------------------------------
Suggested DBASE file
Format: Modem
transmission
===============================================================================
S-IV-1
EXHIBIT A
[FORM OF SENIOR CERTIFICATE
(OTHER THAN THE CLASS A-R, NOTIONAL AMOUNT OR CLASS X CERTIFICATES)]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF 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") [, TOGETHER WITH
CERTAIN RIGHTS SPECIFIED IN THE AGREEMENT (AS DEFINED BELOW)].
[UNTIL THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA QUALIFYING
UNDERWRITING, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN
MADE TO THE TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF A CERTIFICATE OF THIS
CLASS AND BY A BENEFICIAL OWNER'S ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE
OF THIS CLASS. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, UNTIL
THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA QUALIFYING UNDERWRITING, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.]
A-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balance
of all Certificates of
this Class : $
CUSIP :
Interest Rate :
Maturity Date :
BELLAVISTA FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 2005-1
Class [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of mortgage loans (the "Mortgage Loans")
secured by first liens on one- to four-family residential properties
BellaVista Funding Corporation, as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by any of
the Depositor, the Seller, the Master Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate Initial Certificate Balance
of all Certificates of the Class to which this Certificate belongs) in certain
(i) monthly distributions with respect to a Trust Fund consisting primarily of
the Mortgage Loans deposited by BellaVista Funding Corporation (the
"Depositor") and (ii) rights specified in the Pooling and Servicing Agreement,
dated as of the Cut-off Date specified above (the "Agreement"), among the
Depositor, Countrywide Home Loans Servicing LP, as master servicer (the
"Master Servicer"), and The Bank of New York, as trustee (the "Trustee").
A-2
The Trust Fund was created pursuant to the Agreement. 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.
[Until this certificate has been the subject of an ERISA-Qualifying
Underwriting, no transfer of a Certificate of this Class shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, nor a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense
of the Trustee or the Master Servicer, or (ii) in the case of any such
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Trustee and the Master Servicer to the effect that the purchase or holding of
such Certificate will not result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, and will not subject the
Trustee or the Master Servicer to any obligation in addition to those
undertaken in the Agreement, which Opinion of Counsel shall not be an expense
of the Trustee or the Master Servicer. Such representation shall be deemed to
have been made to the Trustee by the Transferee's acceptance of a Certificate
of this Class and by a beneficial owner's acceptance of its interest in a
Certificate of this Class. Notwithstanding anything else to the contrary
herein, until such certificate has been the subject of an ERISA-Qualifying
Underwriting, any purported transfer of a Certificate of this Class to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
opinion of counsel satisfactory to the Trustee as described above shall be
void and of no effect.]
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 0000
XXX XXXX XX XXX XXXX,
as Trustee
By ______________________
Countersigned:
By _____________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
A-4
EXHIBIT B
[FORM OF SUBORDINATED CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF 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") [, TOGETHER WITH
CERTAIN RIGHTS SPECIFIED IN THE AGREEMENT (AS DEFINED BELOW)].
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
[NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR IF SUCH CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, OR THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY
WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY
GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION V(e) OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THE PURCHASE AND HOLDING
OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND III OF PTCE 95-60 OR AN
OPINION OF COUNSEL IN
B-1
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER
OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO
ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.]
B-2
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balance
of all Certificates of
this Class : $
CUSIP :
Interest Rate :
Maturity Date :
BELLAVISTA FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 2005-1
Class [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of mortgage loans (the "Mortgage Loans")
secured by first liens on one- to four-family residential properties
BellaVista Funding Corporation, as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by any of
the Depositor, the Seller, the Master Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate Initial Certificate Balance
of all Certificates of the Class to which this Certificate belongs) in certain
(i) monthly distributions with respect to a Trust Fund consisting primarily of
the Mortgage Loans deposited by BellaVista Funding Corporation (the
"Depositor") and (ii) rights specified in the Pooling and Servicing Agreement,
dated as of the Cut-off Date specified above (the "Agreement"), among the
Depositor, Countrywide Home Loans Servicing LP, as master servicer (the
"Master Servicer"), and The Bank of New York, as trustee (the "Trustee").
B-3
The Trust Fund was created pursuant to the Agreement. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
[No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee shall each certify to the Trustee
in writing the facts surrounding the transfer. In the event that such a
transfer is to be made within three years from the date of the initial
issuance of Certificates pursuant hereto, there shall also be delivered
(except in the case of a transfer pursuant to Rule 144A of the Securities Act)
to the Trustee an Opinion of Counsel that such transfer may be made pursuant
to an exemption from the Securities Act and such state securities laws, which
Opinion of Counsel shall not be obtained at the expense of the Trustee, the
Sellers, the Master Servicer or the Depositor. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee
and the Depositor 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 a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense
of the Trustee or the Master Servicer, (ii) if such certificate has been the
subject of an ERISA Qualifying Underwriting, a representation that the
transferee is an insurance company which is purchasing such Certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificate satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60, or
(iii) in the case of any such Certificate presented for registration in the
name of an employee benefit plan subject to ERISA or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Trustee to the effect that the purchase and
holding of such Certificate will not result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will
not subject the Trustee or the Master Servicer to any obligation in addition
to those undertaken in the Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Master Servicer or the Trust Fund. Notwithstanding
anything else to the contrary herein, any purported transfer of a Certificate
of this Class to or on behalf of an employee benefit plan subject to ERISA or
to Section 4975 of the Code without the opinion of counsel satisfactory to the
Trustee as described above shall be void and of no effect.]
B-4
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
B-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 0000
XXX XXXX XX XXX XXXX,
as Trustee
By ______________________
Countersigned:
By _________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
B-6
EXHIBIT C
[FORM OF CLASS A-R CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT EITHER SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR IF SUCH
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PERSON INVESTING ON BEHALF OF OR
WITH PLAN ASSETS OF SUCH A PLAN AND THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER SECTION I AND III OF PTCE 95-60, OR AN OPINION
OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN
SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
[THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST" ISSUED
UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO BELOW AND MAY NOT BE
TRANSFERRED TO ANY PERSON EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE
TRANSFEREE OF THE DUTIES OF THE SERVICER UNDER SUCH AGREEMENT.]
C-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balance
of all Certificates of
this Class : $
CUSIP :
Interest Rate :
Maturity Date :
BELLAVISTA FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 2005-1
Class A-R
evidencing the distributions allocable to the Class A-R Certificates
with respect to a Trust Fund consisting primarily of a pool of mortgage
loans (the "Mortgage Loans") secured by first liens on one- to
four-family residential properties
BellaVista Funding Corporation, as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by any of
the Depositor, the Seller, the Master Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate Initial Certificate Balance
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by BellaVista Funding Corporation (the "Depositor")
pursuant to a Pooling and Servicing Agreement, dated as of the Cut-off Date
specified above (the "Agreement"), among the Depositor, Countrywide Home Loans
Servicing LP, as master servicer (the "Master Servicer"), and The Bank of New
York, as trustee (the "Trustee"). The Trust Fund was created pursuant to the
Agreement. To the extent not defined herein, the capitalized terms
C-2
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class A-R
Certificate at the Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
No transfer of a Class A-R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code,
or a person acting on behalf of or investing plan assets of any such plan,
which representation letter shall not be an expense of the Trustee or the
Master Servicer or (ii) if such certificate has been the subject of an ERISA
Qualifying Underwriting and the transferee is an insurance company, a
representation that the transferee is an insurance company which is purchasing
such Certificate with funds contained in an "insurance company general
account" (as such term is defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of
such Certificate satisfy the requirements for exemptive relief under Sections
I and III of PTCE 95-60, or (iii) an Opinion of Counsel satisfactory to the
Trustee to the effect that the purchase and holding of such Class A-R
Certificate will not result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code and will not subject the
Trustee or the Master Servicer to any obligation in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Master Servicer or the Trust Fund. Notwithstanding
anything else to the contrary herein, any purported transfer of a Class A-R
Certificate to or on behalf of an employee benefit plan subject to ERISA or to
the Code without the opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect.
Each Holder of this Class A-R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class A-R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class A-R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class A-R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class A-R Certificate must agree not to transfer an
Ownership Interest in this Class A-R Certificate if it has actual knowledge
that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class A-R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
C-3
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
C-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 0000
XXX XXXX XX XXX XXXX,
as Trustee
By ______________________
Countersigned:
By ____________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
C-5
EXHIBIT D
[FORM OF [NOTIONAL AMOUNT] [CLASS X] CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTION IN RESPECT OF PRINCIPAL.]
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")[, TOGETHER WITH CERTAIN RIGHTS AND CERTAIN
OBLIGATIONS SPECIFIED IN THE AGREEMENT (AS DEFINED BELOW)].
[UNTIL THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA QUALIFYING
UNDERWRITING, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN
MADE TO THE TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF A CERTIFICATE OF THIS
CLASS AND BY A BENEFICIAL OWNER'S ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE
OF THIS CLASS. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, UNTIL
THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA QUALIFYING UNDERWRITING, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.]
D-1
Certificate No. :
Cut-off Date :
First Distribution Date :
[Notional Amount] [Certificate Principal Balance]
as of the Cut-off Date: $
[Notional Amount] [Certificate Principal Balance]
as of the Cut-off Date: $
[Notional Amount] [Certificate Principal Balance] of all
Certificates of this Class as of the Cut-off Date: $
CUSIP :
Interest Rate : [Interest Only]
Maturity Date :
BELLAVISTA FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 2005-1
Class [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of mortgage loans (the "Mortgage Loans")
secured by first liens on one- to four-family residential properties
BellaVista Funding Corporation, as Depositor
[The Notional Amount of this certificate at any time, may be less than
the Notional Amount as set forth herein.] [The Component Notional Amount of
this certificate at any time, may be less than the Component Notional Amount
as set forth herein.] [The Certificate Principal Balance of this certificate
at any time, may be greater than the Certificate Principal Balance as set
forth herein.] This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by any of the Depositor, the Seller, the
Master Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate [Notional Amount, as of the
Cut-off Date,] [Component Notional Amount, as of the Cut-off Date,] of all
Certificates of the Class to which this Certificate belongs) in certain (i)
D-2
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by BellaVista Funding Corporation (the "Depositor"),
(ii) rights specified in the Pooling and Servicing Agreement, dated as of the
Cut-off Date specified above (the "Agreement"), among the Depositor,
Countrywide Home Loans Servicing LP, as master servicer (the "Master
Servicer"), and The Bank of New York, as trustee (the "Trustee"), and (iii)
obligations specified in the Agreement. The Trust Fund was created pursuant to
the Agreement. 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.
[Until this certificate has been the subject of an ERISA-Qualifying
Underwriting, no transfer of a Certificate of this Class shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, nor a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense
of the Trustee or the Master Servicer, or (ii) in the case of any such
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Trustee and the Master Servicer to the effect that the purchase or holding of
such Certificate will not result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, and will not subject the
Trustee or the Master Servicer to any obligation in addition to those
undertaken in the Agreement, which Opinion of Counsel shall not be an expense
of the Trustee or the Master Servicer. Such representation shall be deemed to
have been made to the Trustee by the Transferee's acceptance of a Certificate
of this Class and by a beneficial owner's acceptance of its interest in a
Certificate of this Class. Notwithstanding anything else to the contrary
herein, until such certificate has been the subject of an ERISA-Qualifying
Underwriting, any purported transfer of a Certificate of this Class to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
opinion of counsel satisfactory to the Trustee as described above shall be
void and of no effect.]
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ____________, 0000
XXX XXXX XX XXX XXXX,
as Trustee
By ______________________
Countersigned:
By _________________________
Authorized Signatory of
THE BANK OF NEW YORK,
as Trustee
D-4
EXHIBIT E
[FORM OF REVERSE OF CERTIFICATES]
BELLAVISTA FUNDING CORPORATION
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as BellaVista Funding Corporation Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest
in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 22nd day (or, if such 22nd day is not a Business Day, the Business Day
immediately succeeding such 22nd day) of each month (each, a "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future Holders of
E-1
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Seller and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the Pool Stated Principal Balance is
less than 10% of the Cut-off Date Pool Principal Balance, the Master Servicer
will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. In the
event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund or the disposition of all
property in respect thereof and the distribution to Certificateholders of all
amounts required to be distributed pursuant to the Agreement. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-2
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ________________________________________________________________________
_____________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to, ______________________________________________
______________________________________________________________________________
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ________________________, 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.
E-3
STATE OF )
) ss.:
COUNTY OF )
On the _____day of ___________________, 20__ before me, a notary
public in and for said State, personally appeared _____________________________,
known to me who, being by me duly sworn, did depose and say that he executed the
foregoing instrument.
_________________________________
Notary Public
[Notarial Seal]
E-4
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
_____________________
_____________________
Re: Pooling and Servicing Agreement among BellaVista Funding
Corporation, as Depositor, Countrywide Home Loans Servicing LP,
as Master Servicer, and The Bank of New York, as Trustee, Mortgage
Pass-Through Certificates, Series 2005-1
-------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Delay Delivery Mortgage Loan, any
Mortgage Loan paid in full or any Mortgage Loan listed on the attached
schedule) it has received:
(i) (a) the original Mortgage Note endorsed as provided in the following
form: "Pay to the order of __________, without recourse" or (b) with respect
to any Lost Mortgage Note, a lost note affidavit from the Depositor stating
that the original Mortgage Note was lost or destroyed; and
(ii) a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments); provided, however, that it has
received no assignment with respect to any Mortgage for which the related
Mortgaged Property is located in the Commonwealth of Puerto Rico.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
F-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By: _________________________________
Name:
Title:
F-2
EXHIBIT G
FORM OF DELAY DELIVERY CERTIFICATION
[date]
[Depositor]
[Master Servicer]
____________________
____________________
Re: Pooling and Servicing Agreement among BellaVista Funding
Corporation, as Depositor, Countrywide Home Loans Servicing LP,
as Master Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 2005-1
---------------------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto
(the "Schedule A"), delivered by the undersigned, as Trustee, on the Closing
Date in accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). The undersigned
hereby certifies that, as to each Delay Delivery Mortgage Loan listed on
Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) it has received:
(i) the original Mortgage Note, endorsed by the Depositor or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Depositor, or, if
the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Depositor,
stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, [and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage,
noting thereon the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "The Bank of
New York, as trustee under the Pooling and Servicing Agreement
dated as of [month] 1, 2005, without
G-1
recourse", or, in the case of each Mortgage Loan with respect to
property located in the State of California that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in blank
(each such assignment, when duly and validly completed, to be in
recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which such
assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage
[(noting the presence of a MIN in the case of each MERS Mortgage
Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under
applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or,
in the event such original title policy has not been received from
the insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a
copy thereof certified by the title company, with the original
policy of title insurance to be delivered within one year of the
Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Depositor cannot deliver the original recorded Mortgage
or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv), as applicable, the Trustee has
received, in lieu thereof, a true and complete copy of such Mortgage and/or
such assignment or assignments of the Mortgage, as applicable, each certified
by the Depositor, the applicable title company, escrow agent or attorney, or
the originator of such Mortgage Loan, as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule"
in Article I of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee 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 makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the [Mortgage Loan Schedule][Loan Number
and Borrower Identification Mortgage Loan Schedule] or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
G-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By: ______________________
Name:
Title:
G-3
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
______________________
________________________
Re: Pooling and Servicing Agreement among BellaVista Funding
Corporation, as Depositor, Countrywide Home Loans Servicing LP,
as Master Servicer, and The Bank of New York, as Trustee,
Mortgage Pass-Through Certificates, Series 2005-1
------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached Document Exception Report) it has received:
(i) the original Mortgage Note, endorsed by the Depositor or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Depositor, or, if
the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Depositor,
stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, [and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage,
noting thereon the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "The Bank of
New York, as trustee under the Pooling and Servicing Agreement
dated as of [month] 1, 20__, without recourse", or, in the case of
each Mortgage Loan with respect to property located in the State
of California that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage in blank (each such assignment, when
duly and validly completed, to be in recordable form and
sufficient to effect the assignment
H-1
of and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage
[(noting the presence of a MIN in the case of each Mortgage Loan
that is a MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under
applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or,
in the event such original title policy has not been received from
the insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a
copy thereof certified by the title company, with the original
policy of title insurance to be delivered within one year of the
Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Depositor cannot deliver the original recorded Mortgage
or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv), as applicable, the Trustee has
received, in lieu thereof, a true and complete copy of such Mortgage and/or
such assignment or assignments of the Mortgage, as applicable, each certified
by the Depositor, the applicable title company, escrow agent or attorney, or
the originator of such Mortgage Loan, as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule"
in Article I of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee 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 makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the [Mortgage Loan Schedule][Loan Number
and Borrower Identification Mortgage Loan Schedule] or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By: ______________________
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
BellaVista Funding Corporation
Mortgage Pass-Through Certificates
Series 2005-1
-------------
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, by and among BellaVista
Funding Corporation, as depositor (the "Depositor"), Countrywide Home Loans
Servicing LP, as master servicer and The Bank of New York, as Trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit.
The Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
I-1
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide
by the provisions of Section 5.02(c) of the Agreement and the restrictions
noted on the face of the Certificate. The Transferee understands and agrees
that any breach of any of the representations included herein shall render the
Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificates.
8. The Transferee's taxpayer identification number is __________________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificates may be "noneconomic
residual interests" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the
Transferee is not acting on behalf of or with plan assets of such a plan, or
the Transferee is an insurance company that is acquiring the Certificates with
assets contained in an "insurance company general account," (as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60) and its
purchase and holding of the Certificates satisfy the requirements for
exemptive relief under Sections I and III and PTCE 95-60.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of _______________, 20__.
_____________________________________
PRINT NAME OF TRANSFEREE
By: ________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_____________________________
[Assistant] Secretary
Personally appeared before me the above named ______________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ___________________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of _________, 20__.
___________________________________
NOTARY PUBLIC
My Commission expires the
___ day of _________, 20__
I-3
EXHIBIT 1
to EXHIBIT I
Certain Definitions
-------------------
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in Section 860E(c)(1) of the
Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in Section 775 of the Code, (vi) a
Person that is not 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, or an estate or
trust whose income from sources without the United States is includible in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or
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
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form W-8ECI or any applicable successor
form, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC created under the Agreement to
fail to qualify as a REMIC at any time that the Residual Certificates are
Outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality
of the United States or of any State or political subdivision thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the FHLMC, a majority of its board of directors is not selected
by such governmental unit.
"Person": Any individual, corporation, partnership, joint venture, bank,
joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-4
EXHIBIT 2
to EXHIBIT I
Section 5.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest in
a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
a Class A-R Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-R Certificate shall be a Permitted Transferee and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Class A-R Certificate unless, in addition to the
certificates required to be delivered to the Trustee under subparagraph (b)
above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a Class
A-R Certificate shall agree (A) to obtain a Transfer Affidavit from any other
Person to whom such Person attempts to Transfer its Ownership Interest in a
Class A-R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class A-R Certificate and (C) not to Transfer its Ownership
Interest in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest in a
Class A-R Certificate in violation of the provisions of this Section 5.02(c)
shall be null and void and shall vest no rights in the purported Transferee.
If any purported transferee shall become a Holder of a Class A-R Certificate
in violation of the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class A-R Certificate that is in fact not
permitted by Section 5.02(b) and this Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A Letter or the
Investment Letter. The Trustee shall be entitled but not obligated to recover
from any Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as it
became other than a Permitted Transferee, all payments made on such Class A-R
Certificate at and after either such time. Any such payments so recovered by
the Trustee shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate.
I-5
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of any Ownership Interest in a Class A-R Certificate to any Holder
who is not a Permitted Transferee.
I-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE
(RESIDUAL)
__________________________
Date
BellaVista Funding Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx - 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage-Backed Securities Group
Series 2005-1
Re: BellaVista Funding Corporation Mortgage Pass-Through Certificates,
Series 2005-1, Class
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that to the extent we are disposing of a Class A-R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
____________________________________
Print Name of Transferor
By: ________________________________
Authorized Officer
J-1-1
EXHIBIT J-2
FORM OF TRANSFEROR CERTIFICATE
(PRIVATE)
__________________________
Date
BellaVista Funding Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx - 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage-Backed Securities Group
Series 2005-1
Re: BellaVista Funding Corporation Mortgage Pass-Through Certificates,
Series 2005-1, Class
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under
the Securities Act of 1933, as amended (the "Act"), and are being disposed by
us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, in a manner that would be
deemed, or taken any other action which would result in, a violation of
Section 5 of the Act.
Very truly yours,
_____________________________________
Print Name of Transferor
By: _________________________________
Authorized Officer
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________________________
Date
BellaVista Funding Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx - 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage-Backed Securities Group
Series 2005-1
Re: BellaVista Funding Corporation Mortgage Pass-Through Certificates,
Series 2005-1, Class
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws and are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been
the subject of an ERISA-Qualifying Underwriting, we are an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase
and holding of such Certificates satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60, (e) we are acquiring the Certificates
for investment for our own account and not with a view to any distribution of
such Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (g) below),
(f) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or
K-1
otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt
from such registration requirements, and if requested, we will at our expense
provide an opinion of counsel satisfactory to the addressees of this
Certificate that such sale, transfer or other disposition may be made pursuant
to an exemption from the Act, (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially
the same effect as this certificate, and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling
and Servicing Agreement.
Very truly yours,
_____________________________________
Print Name of Transferor
By: _________________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
__________________________
Date
BellaVista Funding Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx - 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage-Backed Securities Group
Series 2005-1
Re: BellaVista Funding Corporation Mortgage Pass-Through Certificates,
Series 2005-1, Class
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws and are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been
the subject of an ERISA-Qualifying Underwriting, we are an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase
and holding of such Certificates satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60, (e) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from, or otherwise approached or negotiated with respect to
the Certificates, any interest
L-1
in the Certificates or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or in
any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2.
We are aware that the sale to us is being made in reliance on Rule 144A. We
are acquiring the Certificates for our own account or for resale pursuant to
Rule 144A and further, understand that such Certificates may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
Very truly yours,
_____________________________________
Print Name of Transferor
By: _________________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis either at least $100,000 in securities or,
if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official
or is a foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which
is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the
L-3
reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part
of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities Exchange Act
of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
L-4
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
_______________________________________
Print Name of Buyer
By: __________________________________
Name:
Title:
Date: _________________________________
L-5
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
___ The Buyer owned $_________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4 The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by the
U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates
of deposit, (iv) loan participations, (v) repurchase agreements,
L-6
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_______________________________________
Print Name of Buyer or Adviser
By: __________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date: _________________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
BellaVista Funding Corporation
Mortgage Pass-Through Certificates
Series 2005-1
Loan Information
----------------
Name of Mortgagor: ______________________________________
Servicer Loan No.: ______________________________________
Trustee
-------
Name: ______________________________________
Address: ______________________________________
______________________________________
______________________________________
Trustee
Mortgage File No.: ______________________________________
The undersigned Master Servicer hereby acknowledges that it has received
from The Bank of New York, as Trustee for the Holders of Mortgage Pass-Through
Certificates, of the above-referenced Series, the documents referred to below
(the "Documents"). All capitalized terms not otherwise defined in this Request
for Release shall have the meanings given them in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among the Trustee, Countrywide Home Loans Servicing
LP, as Master Servicer and BellaVista Funding Corporation, as Depositor.
( ) Mortgage Note dated _______________, 20__, in the original principal
sum of $___________, made by ____________________________, payable to,
or endorsed to the order of, the Trustee.
( ) Mortgage recorded on __________________ as instrument no.
______________________ in the County Recorder's Office of the County of
_________________________, State of _______________________ in
book/reel/docket _________________________ of official records at
page/image _______________________________.
( ) Deed of Trust recorded on ______________________ as instrument no.
___________ in the County Recorder's Office of the County of
__________________________, State of _____________________ in
book/reel/docket _________________________ of official records at
page/image ____________________________.
M-1
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_____________________ as instrument no. __________________ in the
County Recorder's Office of the County of _____________________, State
of ___________________ in book/reel/docket ________________ of official
records at page/image ______________________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( )___________________________________________________________________
( )___________________________________________________________________
( )___________________________________________________________________
( )___________________________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions nor
shall the Servicer assert or seek to assert any claims or rights of
setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds
of proceeds, coming into the possession or control of the Master
Servicer shall at all times be earmarked for the account of the Trustee,
and the Master Servicer shall keep the Documents and any proceeds
separate and distinct from all other property in the Master Servicer's
possession, custody or control.
M-2
COUNTRYWIDE HOME LOANS
SERVICING LP
By _________________________________
Its _________________________________
Date:_________________, 20__
M-3
EXHIBIT N
REQUEST FOR RELEASE OF DOCUMENTS
To: The Bank of New York Attn: Mortgage Custody
Services
Re: The Pooling & Servicing Agreement dated [month] 1, 2005,
among Countrywide Home Loans Servicing LP, as Master Servicer,
BellaVista Funding Corporation and The Bank of New York, as
Trustee
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee for BellaVista Funding Corporation, we request the release of the
Mortgage Loan File for the Mortgage Loan(s) described below, for the reason
indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1. Mortgage Loan paid in full (Countrywide Home Loans, Inc. hereby
certifies that all amounts have been received).
2. Mortgage Loan Liquidated (Countrywide Home Loans, Inc. hereby
certifies that all proceeds of foreclosure, insurance, or other
liquidation have been finally received).
3. Mortgage Loan in Foreclosure.
4. Other (explain):
If item 1 or 2 above is checked, and if all or part of the Mortgage File
was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Mortgage Loan. If item 3 or 4 is checked, upon return
of all of the above documents to you as Trustee, please acknowledge your
receipt by signing in the space indicated below, and returning this form.
N-1
COUNTRYWIDE HOME LOANS, INC.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
By: _______________________________
Name:______________________________
Title: ____________________________
Date:______________________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By: _______________________________
Name:______________________________
Title: ____________________________
Date:______________________________
N-2
EXHIBIT O
STANDARD & POOR'S LEVELS(R) VERSION 5.6 GLOSSARY REVISED, APPENDIX E
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the jurisdictions listed below into three categories based upon a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan category because they included
thresholds and tests that are typical of what is generally considered High
Cost by the industry.
------------------------------------------------------------------------------------
Standard & Poor's High-Cost Loan Categorization
------------------------------------------------------------------------------------
State/jurisdiction Name of Anti-Predatory Lending
Law/Effective Date
------------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection Act, Ark.
Code Xxx. xx.xx. 00-00-000 et seq. Effective
July 16, 2003
------------------------------------------------------------------------------------
Cleveland Heights, Ohio Ordinance No. 72-2003 (PSH), Mun. Code xx.xx.
757.01 et seq. Effective June 2, 2003
------------------------------------------------------------------------------------
Consumer Equity Protection, Colo. Stat.
Xxx. xx.xx. 5-3.5-101 et seq. Effective for
Colorado covered loans offered or entered into on
or after Jan. 1, 2003. Other provisions
of the Act took effect on June 7, 2002
------------------------------------------------------------------------------------
Connecticut Abusive Home Loan Lending
Connecticut Practices Act, Conn. Gen. Stat.
xx.xx. 36a-746 et seq. Effective Oct. 1, 2001
------------------------------------------------------------------------------------
Home Loan Protection Act, D.C. Code
District of Columbia xx.xx. 26-1151.01 et seq. Effective for
loans closed on or after Jan. 28, 2003
------------------------------------------------------------------------------------
Fair Lending Act, Fla. Stat. Xxx.
Florida xx.xx. 494.0078 et seq. Effective Oct. 2,
2002
------------------------------------------------------------------------------------
Georgia Fair Lending Act, Ga. Code Xxx.
Georgia (Oct. 1, 2002 - March 6, xx.xx. 7-6A-1 et seq. Effective Oct. 1,
2003) 2002-March 6, 2003
------------------------------------------------------------------------------------
Georgia Fair Lending Act, Ga. Code Xxx.
Georgia as amended xx.xx. 7-6A-1 et seq. Effective for loans
(March 7, 2003 - current) closed on or after March 7, 2003
------------------------------------------------------------------------------------
Home Ownership and Equity Protection Act
of 1994, 15 U.S.C. ss. 1639, 12 C.F.R.
HOEPA Section 32 xx.xx. 226.32 and 226.34. Effective Oct. 1,
1995, amendments Oct. 1, 2002
------------------------------------------------------------------------------------
High Risk Home Loan Act, Ill. Comp. Stat.
tit. 815, xx.xx. 137/5 et seq. Effective
Illinois Jan. 1, 2004 (prior to this date,
regulations under Residential Mortgage
License Act effective from May 14, 2001)
------------------------------------------------------------------------------------
Consumer Credit Code, Kan. Stat. Xxx.
xx.xx. 16a-1-101 et seq. Sections 16a-1-301
Kansas and 16a-3-207 became effective April 14,
1999; Section 16a-3-308a became effective
July 1, 1999
------------------------------------------------------------------------------------
2003 KY H.B. 287 - High Cost Home Loan
Kentucky Act, Ky. Rev. Stat. xx.xx. 360.100 et seq.
Effective June 24, 2003
------------------------------------------------------------------------------------
Truth in Lending, Me. Rev. Stat. tit.
9-A, xx.xx. 8-101 et seq. Effective
Maine Sept. 29, 1995, and as amended from time
to time
------------------------------------------------------------------------------------
Part 40 and Part 32, 209 C.M.R. xx.xx. 32.00
Massachusetts et seq. and 209
------------------------------------------------------------------------------------
O-1
------------------------------------------------------------------------------------
Standard & Poor's High-Cost Loan Categorization
------------------------------------------------------------------------------------
State/jurisdiction Name of Anti-Predatory Lending
Law/Effective Date
------------------------------------------------------------------------------------
C.M.R. xx.xx. 40.01 et seq.
Effective March 22, 2001, and amended
from time to time
------------------------------------------------------------------------------------
Assembly Xxxx No. 284, Nev. Rev. Stat.
Nevada xx.xx. 598D.010 et seq. Effective Oct. 1,
2003
------------------------------------------------------------------------------------
New Jersey Home Ownership Security Act of
2002, N.J. Rev. Stat. xx.xx. 46:10B-22 et
New Jersey seq. Effective for loans closed on or
after Nov. 27, 2003
------------------------------------------------------------------------------------
Home Loan Protection Act, N.M. Rev. Stat.
New Mexico xx.xx. 58-21A-1 et seq. Effective as of
Jan. 1, 2004; Revised as of Feb. 26, 2004
------------------------------------------------------------------------------------
N.Y. Banking Law Article 6-l. Effective
New York for applications made on or after
April 1, 2003
------------------------------------------------------------------------------------
Restrictions and Limitations on High Cost
Home Loans, N.C. Gen. Stat. xx.xx. 24-1.1E
North Carolina et seq. Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines of
credit)
------------------------------------------------------------------------------------
H.B. 386 (codified in various sections of
Ohio the Ohio Code), Ohio Rev. Code Xxx.
xx.xx. 1349.25 et seq. Effective May 24, 2002
------------------------------------------------------------------------------------
Consumer Credit Code (codified in various
sections of Title 14A). Effective
Oklahoma July 1, 2000; amended effective Jan. 1,
2004
------------------------------------------------------------------------------------
South Carolina High Cost and Consumer
Home Loans Act, S.C. Code Xxx.
South Carolina xx.xx. 37-23-10 et seq. Effective for loans
taken on or after Jan. 1, 2004
------------------------------------------------------------------------------------
West Virginia Residential Mortgage
Lender, Broker and Servicer Act, W. Va.
West Virginia Code Xxx. xx.xx. 31-17-1 et seq. Effective
June 5, 2002
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Standard & Poor's Covered Loan Categorization
------------------------------------------------------------------------------------
State/jurisdiction Name of Anti-Predatory Lending
Law/Effective Date
------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx.
2003) xx.xx. 7-6A-1 et seq. Effective Oct. 1,
2002-March 6, 2003
------------------------------------------------------------------------------------
New Jersey Home Ownership Security Act of
New Jersey 2002, N.J. Rev. Stat. xx.xx. 46:10B-22 et
seq. Effective Nov. 27, 2003-July 5, 2004
------------------------------------------------------------------------------------
O-2
------------------------------------------------------------------------------------
Standard & Poor's Home Loan Categorization
------------------------------------------------------------------------------------
State/jurisdiction Name of Anti-Predatory Category under applicable
Lending Law/Effective Date anti-predatory lending law
------------------------------------------------------------------------------------
Georgia (Oct. 1, 0000- Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Home Loan
March 6, 2003) Code Xxx. xx.xx. 7-6A-1 et seq.
Effective Oct. 1,
2002-March 6, 2003
------------------------------------------------------------------------------------
New Jersey Home Ownership Home Loan
Security Act of 2002, N.J.
Rev. Stat. xx.xx. 46:10B-22 et
New Jersey seq. Effective for loans
closed on or after Nov. 27,
2003
------------------------------------------------------------------------------------
Home Loan Protection Act, Home Loan
N.M. Rev. Stat. xx.xx. 00-00X-0
Xxx Xxxxxx et seq. Effective as of
Jan. 1, 2004; revised as of
Feb. 26, 2004
------------------------------------------------------------------------------------
Restrictions and Limitations Consumer Home Loan
on High Cost Home Loans, N.C.
Gen. Stat. xx.xx. 24-1.1E et seq.
North Carolina Effective July 1, 2000;
amended Oct. 1, 2003 (adding
open-end lines of credit)
------------------------------------------------------------------------------------
South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C.
South Carolina Code Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on
or after Jan. 1, 2004
------------------------------------------------------------------------------------
O-3
EXHIBIT P
[RESERVED]
P-1
