EXHIBIT 99.2
ADMINISTRATION AGREEMENT
among
PEOPLE'S CHOICE HOME LOAN SECURITIES TRUST SERIES 2005-1,
as Issuer
XXXXX FARGO BANK, N.a.,
as Administrator
WILMINGTON TRUST COMPANY,
as Owner Trustee
and
PEOPLE'S CHOICE HOME LOAN SECURITIES CORP.,
as Depositor
Dated as of January 28, 2005
This Administration Agreement (the "Agreement") is entered into as of
January 28, 2005, among PEOPLE'S CHOICE HOME LOAN SECURITIES TRUST SERIES
2005-1, a Delaware statutory trust (the "Issuer"), XXXXX FARGO BANK, N.A., as
Administrator (the "Administrator"), WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee (the "Owner Trustee") and
PEOPLE'S CHOICE HOME LOAN SECURITIES CORP., as Depositor (the "Depositor").
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Indenture, the Trust Agreement or the Sale and
Servicing Agreement (each as defined herein).
W I T N E S S E T H:
WHEREAS, the Issuer is a statutory trust under the Delaware Statutory
Trust Act (12 Del.C. ss. 3801 et seq.) created by an Amended and Restated Trust
Agreement relating to the Trust, dated as of January 28, 2005 (the "Trust
Agreement"), among the Depositor, the Owner Trustee and Xxxxx Fargo Bank, N.A.,
as securities administrator (in such capacity, the "Securities Administrator"),
certificate registrar and certificate paying agent;
WHEREAS, the Issuer will issue under an indenture its People's Choice
Home Loan Securities Trust Series 2005-1 Mortgage-Backed Notes, Series 2005-1
(the "Notes") and, under the Trust Agreement, its Trust Certificates (the
"Certificates" and collectively with the Notes, the "Securities");
WHEREAS, the Notes will be secured by certain collateral, as more
particularly set forth in the Indenture, dated as of January 28, 2005 (the
"Indenture"), between the Issuer, HSBC Bank USA, National Association, as
indenture trustee (in such capacity, the "Indenture Trustee") and the Securities
Administrator;
WHEREAS, the Certificates will be created pursuant to the Trust
Agreement and will represent the undivided beneficial ownership interest in the
Trust;
WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Securities, including (i) a Sale and Servicing
Agreement, dated as of January 28, 2005 (the "Sale and Servicing Agreement"),
among the Issuer, the Depositor, People's Choice Funding, Inc., as seller and
company (the "Seller"), Xxxxx Fargo Bank, N.A., as master servicer (in such
capacity, the "Master Servicer") and Securities Administrator, and the Indenture
Trustee, (ii) the Letter of Representations, dated January 28, 2005 (the
"Depository Agreement"), among the Issuer, the Securities Administrator and The
Depository Trust Company relating to the Notes and (iii) the Indenture. The Sale
and Servicing Agreement, the Depository Agreement, the Indenture and the Trust
Agreement are collectively referred to herein as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer is required to
perform certain duties in connection with (a) the Notes and the collateral
therefor pledged pursuant to the Indenture (the "Collateral") and (b) the
beneficial ownership interests in the Issuer represented by the Certificates
(the registered holder of such interests being referred to herein as the
"Certificateholder");
WHEREAS, the Issuer desires to have the Administrator and the
Depositor, respectively, perform certain of the duties of the Issuer referred to
in the preceding clause, and to provide such additional services consistent with
the terms of this Agreement and the Related Agreements as the Issuer may from
time to time request; and
WHEREAS, the Administrator and the Depositor have the capacity to
provide the respective services required hereby and are willing to perform such
services for the Issuer on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
Section 1. Duties of the Administrator.
(a) The Administrator agrees to perform all of the duties
of the Issuer under the Depository Agreement. In addition to its duties
performed under the Depository Agreement, the Administrator shall take
all appropriate action that is the duty of the Issuer to take with
respect to the following matters under the Trust Agreement, Sale and
Servicing Agreement and the Indenture (references are to sections of
the Indenture):
(i) The Administrator shall notify the Owner
Trustee if the Administrator obtains actual knowledge or
written notice that any withholding tax is imposed on the
Trust's payments (or allocations of income) to a
Certificateholder;
(ii) the duty to cause the Note Register to be
kept if the Issuer assumes the duties of Note Registrar, and
to give the Securities Administrator and the Indenture Trustee
notice of any appointment of a new Note Registrar and the
location, or change in location, of the Note Register (Section
4.02);
(iii) causing the preparation of the Notes for
execution by the Owner Trustee upon the registration of any
transfer or exchange of the Notes (Sections 4.02 and 4.03);
(iv) if requested (and with sufficient
instruction from the Depositor), causing the preparation of an
Issuer Order and related documents for authentication of the
Notes, executing such Issuer Order on behalf of the Issuer and
causing delivery of the same to the Securities Administrator
(Sections 4.02 and 4.08);
(v) causing the preparation of Definitive Notes
in accordance with the instructions of any Clearing Agency
(including the preparation of any temporary notes), (Section
4.14);
(vi) the maintenance of an office for
registration of transfer or exchange of Notes (Section 3.02);
(vii) the preparation of an Issuer Order required
to appoint a Paying Agent, the preparation of written notice
to the Securities Administrator and the Indenture Trustee and
the duty to cause newly appointed Paying Agents, if any, to
execute and deliver to the Securities Administrator the
instrument specified in the Indenture regarding funds held in
trust (Section 3.03);
(viii) notifying the Paying Agent to pay to the
Securities Administrator all sums held in trust by the Paying
Agent (Section 3.03);
(ix) the notification to the Owner Trustee of the
Issuer's non-compliance with its negative covenants or
restricted payment covenants upon actual knowledge by the
Administrator of such non-compliance (Sections 3.09 and
Section 3.23); and
(x) if necessary, the mailing to the Noteholders
of notices with respect to their consent to any supplemental
indentures (Section 9.02);
(b) The Administrator agrees to notify the Depositor not
later than thirty (30) days prior to the date on which the Depositor is
required to deliver the annual Opinion of Counsel and Officer's
Certificate on behalf of the Issuer in accordance with Section 2(a)(vi)
below.
(c) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter
into transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Administrator's opinion, no less favorable to the
Issuer than would be available from unaffiliated parties. In carrying
out the foregoing duties, the Administrator shall be subject to the
same standard of care and have the same rights, indemnifications and
immunities as the Indenture Trustee under the Indenture, including,
without limitation, the right to compensation, reimbursement and
indemnification.
Section 2. Duties of the Depositor With Respect to the Indenture.
(a) The Depositor shall take all appropriate action that
is the duty of the Issuer to take with respect to the following matters
under the Indenture (references are to sections of the Indenture):
(i) causing the preparation of the Notes (for
execution by the Owner Trustee) upon their initial issuance
and causing the preparation of an Issuer Request (for
execution by the Owner Trustee) for delivery to the Securities
Administrator regarding the authentication of the Notes
(Sections 2.02);
(ii) causing the preparation of an Issuer Request
and Officer's Certificate (and executing the same on behalf of
the Issuer) and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the
Collateral, as defined in the Indenture (Section 8.05);
(iii) causing the preparation of Issuer Requests
(and executing the same on behalf of the Issuer) and the
obtaining of Opinions of Counsel with respect to the execution
of supplemental indentures;
(iv) causing the preparation, obtaining or filing
of the instruments, opinions and certificates and other
documents required for the release of collateral (Sections
8.01 and 10.01);
(v) the delivery of notice to the Indenture
Trustee, the Securities Administrator and each of the Rating
Agencies of each Event of Default under the Indenture (Section
3.24 and 5.01);
(vi) the annual delivery of Opinions of Counsel,
in accordance with Section 3.07 of the Indenture, as to the
Trust Estate, and the annual delivery and execution of the
Officer's Certificate (Section 3.10);
(vii) causing the preparation and execution of an
Officer's Certificate and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto with
respect to any request by the Issuer to the Indenture Trustee
or the Securities Administrator to take any action under the
Indenture (Sections 4.10 and 10.01); and
(viii) obtaining and preserving the Issuer's
qualification to do business in each jurisdiction in which
such qualification is or shall be necessary to protect the
validity and enforceability of the Indenture, the Notes, the
Collateral and each other instrument and agreement included in
the Trust Estate (Section 3.04).
(b) In addition to the duties of the Depositor set forth
above, the Depositor shall prepare for execution by the Issuer or shall cause
the preparation by other appropriate persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Related Agreements, and at
the request of the Owner Trustee shall take all appropriate action that it is
the duty of the Issuer to take pursuant to the Related Agreements. Subject to
Section 5 of this Agreement, and in accordance with the directions of the Owner
Trustee, the Depositor shall administer, perform or supervise the performance of
such other activities in connection with the Collateral (including the Related
Agreements) as are not covered by any of the foregoing provisions and as are
expressly requested by the Owner Trustee and are reasonably within the
capability of the Depositor.
Section 3. Records. The Administrator shall maintain appropriate books
of account, if any, and records relating to services performed hereunder, which
books of account and records shall be accessible for inspection by the Issuer
and the Depositor at any time during normal business hours.
Section 4. Compensation. The Administrator will perform the duties and
provide the services called for under Section 1 above for such compensation as
shall be agreed upon between the Administrator and the Depositor.
Section 5. Additional Information to be Furnished to the Issuer. The
Depositor shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
Section 6. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
Section 7. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Administrator or the Depositor, respectively, and either of
the Issuer or the Owner Trustee, as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii) shall
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
Section 8. Other Activities of Administrator and the Depositor. Nothing
herein shall prevent the Administrator, the Depositor or their respective
Affiliates from engaging in other businesses or, in its sole discretion, from
acting in a similar capacity as an administrator for any other person or entity
even though such person or entity may engage in business activities similar to
those of the Issuer or the Owner Trustee.
Section 9. Term of Agreement; Resignation and Removal of Administrator.
(a) This Agreement shall continue in force until the
termination of the Trust Agreement in accordance with its terms, upon
which event this Agreement shall automatically terminate.
(b) Subject to Section 9(e) hereof, the Administrator may
resign its duties hereunder by providing the Issuer with at least 60
days' prior written notice.
(c) Subject to Section 9(e) hereof, the Issuer may remove
the Administrator without cause by providing the Administrator with at
least 60 days' prior written notice.
(d) Subject to Section 9(e) hereof, the Issuer may remove
the Administrator immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall
occur:
(i) the Administrator shall default in the
performance of any of its duties under this Agreement and,
after notice of such default, shall not cure such default
within ten days (or, if such default cannot be cured in such
time, shall not give within ten days such assurance of cure as
shall be reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises
shall (x) enter a decree or order for relief, which decree or
order shall not have been vacated within 60
days, in respect of the Administrator in any involuntary case
under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or (y) appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Administrator or any substantial part
of its property, or (z) order the winding-up or liquidation of
the Administrator's affairs; or
(iii) the Administrator shall commence a voluntary
case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the
entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or
similar official for the Administrator or any substantial part
of its property, shall consent to the taking of possession by
any such official of any substantial part of its property,
shall make any general assignment for the benefit of creditors
or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in clauses
(ii) or (iii) of this Section 9(d) shall occur, it shall give written notice
thereof to the Issuer, the Depositor and the Indenture Trustee within seven days
after the occurrence of such event.
(e) No resignation or removal of the Administrator
pursuant to this Section shall be effective until (i) a successor
Administrator shall have been appointed by the Issuer (or the Depositor
on its behalf) and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same
manner as the Administrator is bound hereunder.
If a successor Administrator does not take office within 60 days after
the retiring Administrator resigns or is removed, the resigning or removed
Administrator or the Issuer may petition any court of competent jurisdiction for
the appointment of a successor Administrator.
(f) The appointment of any successor Administrator shall
be effective only if such successor Administrator will not cause a
downgrading of any class of Notes by either of the Rating Agencies.
(g) Subject to Sections 9(e) and 9(f), the Administrator
acknowledges that upon the appointment of a successor Indenture Trustee
pursuant to Section 6.08 of the Indenture, the Administrator shall
immediately resign and such successor Indenture Trustee shall
automatically become the Administrator under this Agreement. Any such
successor Indenture Trustee shall be required to agree to assume the
duties of the Administrator under the terms and conditions of this
Agreement in its acceptance of appointment as successor Indenture
Trustee.
Section 10. Action upon Termination, Resignation or Removal of the
Administrator. Promptly upon the effective date of termination of this Agreement
pursuant to Section 9(a) hereof or the resignation or removal of the
Administrator pursuant to Section 9(b), (c) or (g) hereof, respectively, the
Administrator shall be entitled to be paid all fees and reimbursable expenses
accruing to it to the date of such termination, resignation or removal. The
Administrator shall forthwith upon such termination pursuant to Section 9(a)
deliver to the successor Administrator all property and documents of or relating
to the Collateral then in the custody of the Administrator, or if this Agreement
has been terminated, to the Depositor. In the event of the resignation or
removal of the Administrator pursuant to Section 9(b), (c) or (d), respectively,
the Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.
Section 11. Notices. Any notice, report or other communication given
hereunder shall be in writing, delivered by mail, overnight courier or facsimile
and addressed as follows:
(a) if to the Issuer, to:
People's Choice Home Loan Securities Trust Series 2005-1
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
fax: (000) 000-0000
(b) if to the Administrator, to:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager - People's Choice Home Loan
Securities Trust Series 2005-1
fax: (000) 000-0000
(c) if to the Owner Trustee, to:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
fax: (000) 000-0000
(d) if to the Depositor, to:
People's Choice Home Loan Securities Corp.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel- People's Choice Home Loan Trust
Series 2005-1
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by
certified mail, postage prepaid, hand delivered or faxed to the address of such
party as provided above.
Section 12. Amendments.
(a) This Agreement may be amended from time to time by
the parties hereto as specified in this Section, provided that any
amendment be accompanied by the written consent of the Indenture
Trustee and an Opinion of Counsel shall be furnished to the Indenture
Trustee (which Opinion of Counsel shall not be at the expense of the
Indenture Trustee) stating that such amendment complies with the
provisions of this Section.
(b) If the purpose of the amendment is to prevent the
imposition of any federal or state taxes at any time that any Notes are
outstanding (i.e. technical in nature), it shall not be necessary to
obtain the consent of any Noteholder, but the Indenture Trustee shall
be furnished with an Opinion of Counsel (which opinion shall not be at
the expense of the Indenture Trustee) that such amendment is necessary
or helpful to prevent the imposition of such taxes and is not
materially adverse to any Noteholder.
(c) If the purpose of the amendment is to add or
eliminate or change any provision of this Agreement, it shall not be
necessary to obtain the consent of any Noteholder, but the Indenture
Trustee shall be furnished, other than as contemplated in clause (b)
above, with either (i) a letter from each of the Rating Agencies
confirming that such amendment will not cause such Rating Agency to
qualify, downgrade or withdraw their then-current rating of the Notes
or (ii) an Opinion of Counsel, from the party requesting such
amendment, stating that such amendment will not materially and
adversely affect any of the Noteholders.
(d) Promptly after the execution of any such amendment,
the Administrator shall furnish a copy of such amendment to each
Holder, the Depositor and to the Rating Agencies. Successors and
Assigns. This Agreement may not be assigned by the Administrator unless
such assignment is previously consented to in writing by the Owner
Trustee and the Depositor (which consent shall not be unreasonably
withheld or delayed). An assignment with such consent and satisfaction,
if accepted by the assignee, shall bind the assignee hereunder in the
same manner as the Administrator is bound hereunder. Notwithstanding
the foregoing, this Agreement may be assigned by the Administrator
without the consent of the Owner Trustee or the Depositor to a
corporation or other organization that is a successor (by merger,
consolidation or purchase of assets) to the Administrator, provided
that such successor organization executes and delivers to the Issuer,
the Owner Trustee and the Depositor an agreement in which such
corporation or other organization agrees to be bound hereunder by the
terms of said assignment in the same manner as the Administrator is
bound hereunder. Subject to the foregoing, this Agreement shall bind
any successors or assigns of the parties hereto.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND,
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 14. Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
Section 15. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute one and
the same agreement.
Section 16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 17. Not Applicable to Xxxxx Fargo Bank, N.A. in Other
Capacities. Nothing in this Agreement shall affect any obligation Xxxxx Fargo
Bank, National Association may have in any other capacity.
Section 18. Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been countersigned
by Wilmington Trust Company not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall Wilmington Trust
Company in its individual capacity or any beneficial owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
Section 19. Limitation of Liability of the Administrator;
Indemnification. Notwithstanding anything herein to the contrary, this Agreement
has been signed by Xxxxx Fargo Bank, N.A., not in its individual capacity but
solely in its capacity as Administrator and in no event shall Xxxxx Fargo Bank,
N.A. in its individual capacity have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer. The
Administrator shall not have any duties or obligations other than those
expressly set forth in this Agreement, and no implied duties on its part shall
be read into this Agreement. In acting as Administrator, Xxxxx Fargo Bank, N.A.
shall be entitled to the same benefits, rights, immunities, protections and
rights to indemnification as are afforded to the Securities Administrator under
Article VI (including without limitation Section 6.07) of the Indenture.
Section 20. Benefit of Agreement. It is expressly agreed that in
performing its duties under this Agreement, the Administrator will act for the
benefit of holders of the Securities as well as for the benefit of the Issuer,
and that such obligations on the part of the Administrator shall be enforceable
at the instance of the Indenture Trustee and the Issuer.
Section 21. Bankruptcy Matters. No party to this Agreement, other than
Xxxxx Fargo Bank, N.A., solely in its capacity as Administrator and not in its
individual or corporate capacity, shall take any action to cause the Depositor
or the Issuer to dissolve in whole or in part or file a voluntary petition or
otherwise initiate proceedings to have the Depositor or the Issuer adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Depositor or the Issuer, or file a petition seeking or
consenting to reorganization or relief of the Depositor or the Issuer as debtor
under any applicable federal or state law relating to bankruptcy, insolvency, or
other relief for debtors with respect to the Depositor or the Issuer; or seek or
consent to the appointment of any trustee, receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) of the Depositor
or the Issuer or of all or any substantial part of the properties and assets of
the Depositor or the Issuer, or cause the Issuer to make any general assignment
for the benefit of creditors of the Depositor or the Issuer, or take any action
in furtherance of any of the above actions.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
PEOPLE'S CHOICE HOME LOAN
SECURITIES TRUST SERIES 2005-1,
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Financial Services Officer
XXXXX FARGO BANK, N.A., as Administrator
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY,
as Owner Trustee
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Financial Services Officer
PEOPLE'S CHOICE HOME LOAN
SECURITIES CORP.,
as Depositor
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: CFO
