EXHIBIT 4.1
EXECUTION COPY
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
Depositor
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
WILSHIRE CREDIT CORPORATION,
Servicer
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2005
--------------------------------------
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-WMC1
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................................... 1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES....................... 46
Section 2.01. Conveyance of Mortgage Loans............................................... 46
Section 2.02. Acceptance by the Trustee of the Mortgage Loans............................ 48
Section 2.03. Representations, Warranties and Covenants of the Depositor................. 50
Section 2.04. Representations and Warranties of the Master Servicer;
Representations and Warranties of the Servicer; Representations and
Warranties of the Securities Administrator................................. 54
Section 2.05. Substitutions and Repurchases of Mortgage Loans which are not
"Qualified Mortgages"...................................................... 57
Section 2.06. Authentication and Delivery of Certificates................................ 57
Section 2.07. REMIC Elections............................................................ 57
Section 2.08. [RESERVED]................................................................. 60
Section 2.09. Covenants of the Servicer.................................................. 60
Section 2.10. [RESERVED]................................................................. 61
Section 2.11. Permitted Activities of the Trust.......................................... 61
Section 2.12. Qualifying Special Purpose Entity.......................................... 61
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................................... 61
Section 3.01. Servicer to Service Mortgage Loans......................................... 61
Section 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer................................................................... 63
Section 3.03. Rights of the Depositor, the Securities Administrator and the Trustee
in Respect of the Servicer................................................. 63
Section 3.04. Master Servicer to Act as Servicer......................................... 63
Section 3.05. Collection of Mortgage Loan Payments; Collection Account; Certificate
Account.................................................................... 64
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts........ 67
Section 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans............................................................. 68
Section 3.08. Permitted Withdrawals from the Collection Account and Certificate
Account.................................................................... 68
Section 3.09. [RESERVED]................................................................. 70
Section 3.10. Maintenance of Hazard Insurance............................................ 70
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.................. 71
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds; Special Loss Mitigation.......................................... 72
Section 3.13. Trustee to Cooperate; Release of Mortgage Files............................ 75
Section 3.14. Documents, Records and Funds in Possession of Servicer to be Held for
the Trustee................................................................ 76
Section 3.15. Servicing Compensation..................................................... 76
Section 3.16. Access to Certain Documentation............................................ 77
Section 3.17. Annual Statement as to Compliance.......................................... 77
Section 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements................................................................. 77
Section 3.19. Rights of the NIMs Insurer................................................. 77
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TABLE OF CONTENTS
(continued)
PAGE
Section 3.20. [RESERVED]................................................................. 77
Section 3.21. Annual Certificate by Securities Administrator............................. 78
Section 3.22. Annual Certificate by Servicer............................................. 78
Section 3.23. Prepayment Charge Reporting Requirements................................... 79
Section 3.24. Information to the Securities Administrator................................ 79
Section 3.25. Indemnification............................................................ 79
Section 3.26. Nonsolicitation............................................................ 81
Section 3.27. High Cost Mortgage Loans................................................... 81
ARTICLE IV DISTRIBUTIONS...................................................................... 81
Section 4.01. Advances................................................................... 81
Section 4.02. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls........................................................ 82
Section 4.03. Distributions on the REMIC Interests....................................... 83
Section 4.04. Distributions.............................................................. 83
Section 4.05. Monthly Statements to Certificateholders................................... 89
ARTICLE V THE CERTIFICATES.................................................................... 92
Section 5.01. The Certificates........................................................... 92
Section 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates............................................................... 93
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.......................... 97
Section 5.04. Persons Deemed Owners...................................................... 98
Section 5.05. Access to List of Certificateholders' Names and Addresses.................. 98
Section 5.06. Book-Entry Certificates.................................................... 98
Section 5.07. Notices to Depository...................................................... 99
Section 5.08. Definitive Certificates.................................................... 99
Section 5.09. Maintenance of Office or Agency............................................ 100
Section 5.10. Authenticating Agents...................................................... 100
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE
SECURITIES ADMINISTRATOR.................................................................... 101
Section 6.01. Respective Liabilities of the Depositor, the Master Servicer, the
Servicer and the Securities Administrator.................................. 101
Section 6.02. Merger or Consolidation of the Depositor, the Master Servicer, the
Servicer or the Securities Administrator................................... 101
Section 6.03. Limitation on Liability of the Depositor, the Securities
Administrator, the Master Servicer, the Servicer and Others................ 101
Section 6.04. Limitation on Resignation of Servicer...................................... 102
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds............................. 102
Section 6.06. Limitation on Resignation of the Master Servicer........................... 103
Section 6.07. Assignment of Master Servicing............................................. 103
ARTICLE VII DEFAULT; TERMINATION OF SERVICER.................................................. 103
Section 7.01. Events of Default.......................................................... 104
Section 7.02. Master Servicer to Act; Appointment of Successor........................... 105
Section 7.03. Notification to Certificateholders......................................... 106
ARTICLE VIII CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.......................... 106
Section 8.01. Duties of the Trustee and the Securities Administrator..................... 106
Section 8.02. Certain Matters Affecting the Trustee and the Securities
Administrator.............................................................. 107
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TABLE OF CONTENTS
(continued)
PAGE
Section 8.03. Trustee and Securities Administrator Not Liable for Certificates or
Mortgage Loans............................................................. 109
Section 8.04. Trustee and Securities Administrator May Own Certificates.................. 109
Section 8.05. Trustee's Fees and Expenses................................................ 109
Section 8.06. Indemnification and Expenses of Trustee.................................... 109
Section 8.07. Eligibility Requirements for Trustee....................................... 110
Section 8.08. Resignation and Removal of Trustee......................................... 111
Section 8.09. Successor Trustee.......................................................... 111
Section 8.10. Merger or Consolidation of Trustee......................................... 112
Section 8.11. Appointment of Co-Trustee or Separate Trustee.............................. 112
Section 8.12. Tax Matters................................................................ 113
ARTICLE IX TERMINATION........................................................................ 115
Section 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans........... 115
Section 9.02. Final Distribution on the Certificates..................................... 116
Section 9.03. Additional Termination Requirements........................................ 117
ARTICLE X MISCELLANEOUS PROVISIONS............................................................ 118
Section 10.01. Amendment.................................................................. 118
Section 10.02. Counterparts............................................................... 120
Section 10.03. Governing Law.............................................................. 120
Section 10.04. Intention of Parties....................................................... 120
Section 10.05. Notices.................................................................... 121
Section 10.06. Severability of Provisions................................................. 122
Section 10.07. Assignment................................................................. 122
Section 10.08. Limitation on Rights of Certificateholders................................. 123
Section 10.09. Inspection and Audit Rights................................................ 124
Section 10.10. Certificates Nonassessable and Fully Paid.................................. 124
Section 10.11. Third Party Rights......................................................... 124
Section 10.12. Additional Rights of the NIMs Insurer...................................... 124
ARTICLE XI ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS.......................... 125
Section 11.01. Master Servicer............................................................ 125
Section 11.02. Monitoring of Servicer..................................................... 126
Section 11.03. Fidelity Bond.............................................................. 126
Section 11.04. Power to Act; Procedures................................................... 127
Section 11.05. Documents, Records and Funds in Possession of Master Servicer To Be
Held for Trustee........................................................... 127
Section 11.06. Trustee to Retain Possession of Certain Insurance Policies and
Documents.................................................................. 128
Section 11.07. Compensation for the Master Servicer and the Securities Administrator...... 128
Section 11.08. Annual Statement as to Compliance.......................................... 128
Section 11.09. Periodic Filings........................................................... 129
Section 11.10. Obligation of the Master Servicer in Respect of Prepayment Interest
Shortfalls................................................................. 130
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EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B-1 MORTGAGE LOAN SCHEDULE -MORTGAGE POOL
EXHIBIT B-2 MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE 144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF DELINQUENCY REPORT
EXHIBIT M-2 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT M-3 FORM OF REALIZED LOSS REPORT
EXHIBIT N FORM OF CAP CONTRACT
EXHIBIT O ONE-MONTH LIBOR CAP TABLE
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of January 1,
2005, among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), XXXXX FARGO BANK, N.A, a national banking
association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"),WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as servicer (the "Servicer") and HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of two (i) two real estate mortgage investment
conduits, (ii) the right to receive payments distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof, (iii) the Cap Contract and
the Cap Contract Account and (iv) the grantor trusts described in Section 2.07
hereof. The Lower Tier REMIC will consist of all of the assets constituting the
Trust Fund (other than the assets described in clauses (ii), (iii) and (iv)
above and the Lower Tier REMIC Regular Interests) and will be evidenced by the
Lower Tier REMIC Regular Interests (which will be uncertificated and will
represent the "regular interests" in the Lower Tier REMIC) and the Class LTR
Interest as the single "residual interest" in the Lower Tier REMIC. The Trustee
will hold the Lower Tier REMIC Regular Interests. The Upper Tier REMIC will
consist of the Lower Tier REMIC Regular Interests and will be evidenced by the
REMIC Regular Interests (which will represent the "regular interests" in the
Upper Tier REMIC) and the Residual Interest as the single "residual interest" in
the Upper Tier REMIC. The Class R Certificate will represent beneficial
ownership of the Class LTR Interest and the Residual Interest. The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the Latest Possible Maturity Date.
All covenants and agreements made by the Transferor in the Transfer
Agreement, by the Seller in the Sale Agreement and by the Depositor and the
Trustee herein with respect to the Mortgage Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates and, to the extent provided herein, the NIMs Insurer.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, the Servicer and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent master servicing institutions that master service mortgage loans of the
same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in Section 11.01 hereof, but in no event below the standard set forth
in clause (x) of this definition.
Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions which service for their own account mortgage loans of the
same type as the Mortgages Loans in the jurisdictions in which the related
Mortgaged Properties are located.
Accrual Period: With respect to each Class of Certificates and the Lower
Tier REMIC Interests and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate of payments of
principal and interest (net of the Servicing Fee Rate) on the Mortgage Loans
that were due during the applicable Due Period and not received as of the close
of business on the related Determination Date, less the aggregate amount of any
such Delinquent payments that the Servicer has determined would constitute a
Non-Recoverable Advance were an advance to be made with respect thereto;
provided, however, that with respect to any Mortgage Loan that is 150 days
delinquent or more (whether or not the Mortgage Loan has been converted to an
REO Property), there will be no obligation to make advances and, provided
further, however, that with respect to any Mortgage Loan that has been converted
to an REO Property which is less than 150 days delinquent, the obligation to
make Advances shall only be to payments of interest.
Advance Facility: A financing or other facility as described in Section
10.07(a).
Advancing Person: The Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of determination,
the sum of the Class A-1A Certificate Principal Balance, the Class A-1B
Certificate Principal Balance, the Class A-2A Certificate Principal Balance, the
Class A-2B Certificate Principal Balance, the Class A-2C Certificate Principal
Balance, the Class R Certificate Principal Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate Principal Balance, the Class M-4 Certificate Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate Principal
Balance, the Class B-3 Certificate Principal Balance, the Class B-4 Certificate
Principal Balance, the Class B-5 Certificate Principal Balance and the Class B-6
Certificate Principal Balance, in each case as of such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal
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Balance after distributions of principal on such Distribution Date exceeds the
aggregate Stated Principal Balance of the Mortgage Loans as of such Distribution
Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for the Seller by an independent fee appraiser at the time of the
origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Mortgage Loan to the Trustee, which
assignment, notice of transfer or equivalent instrument may, if permitted by
law, be in the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county.
Auction: The one-time auction conducted by the Trustee, as described in
Section 9.01(b) hereof.
Authenticating Agent: As defined in Section 5.10
Auction Date: The date on which the Auction occurs.
Available Funds Cap: As of any Distribution Date with respect to the
Certificates, a per annum rate equal to 12 times the quotient of (i) the total
scheduled interest on the Mortgage Loans based on the Net Mortgage Rates in
effect on the related Due Date, divided by (ii) the Aggregate Certificate
Principal Balance for such Distribution Date with such rate being multiplied by
30 and divided by the actual number of days in the related Accrual Period.
Balloon Loan: A Mortgage Loan having an original term to stated maturity
of approximately 10 years which provides for level monthly payments of principal
and interest based on a 30-year amortization schedule, with a balloon payment of
the remaining outstanding principal balance due on such Mortgage Loan at its
stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A (other than the Class R Certificate), Class M and Class B
Certificates constitutes a Class of Book-Entry Certificates.
Book-Entry Regulation S Global Securities: As defined in Section 5.01.
Bring Down Letter: That certain letter agreement, dated as of January 27,
2005 among WMC and the Seller.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Maryland,
State of Minnesota, State of Oregon and in the City of New York, New York are
authorized or obligated by law or executive order to be closed.
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Cap Contract: The amended confirmation and agreement and any related
confirmation thereto, between the Trustee and Credit Suisse First Boston
International (in the form of Exhibit N hereto).
Cap Contract Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 4.04(k) in the name of the
Trustee for the benefit of the Trust Fund and designated "Xxxxx Fargo Bank,
N.A., as securities administrator for HSBC Bank USA, National Association, as
trustee, in trust for registered holders of Xxxxxxx Xxxxx Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-WMC1." Funds in the
Cap Contract Account shall be held in trust for the Trust Fund for the uses and
purposes set forth in this Agreement.
Cap Contract Notional Balance: With respect to any Distribution Date, the
Cap Contract Notional Balance set forth for such Distribution Date in the
One-Month LIBOR Cap Table attached hereto as Exhibit O.
Cap Contract Termination Date: The Distribution Date following the
Distribution Date in August 2011.
Certificate: Any one of the certificates of any Class executed by the
Securities Administrator and authenticated by the Authenticating Agent in
substantially the forms attached hereto as Exhibits A.
Certificate Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 3.05(f) in the name of the
Trustee for the benefit of the Certificateholders and designated "Xxxxx Fargo
Bank, N.A., as securities administrator for HSBC Bank USA, National Association,
as trustee, in trust for registered holders of Xxxxxxx Xxxxx Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-WMC1." Funds in the
Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced by the
amount of the increase in the Certificate Principal Balance of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
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Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Securities Administrator and the Trustee are entitled to rely
conclusively on a certification of the Depositor or any 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
Section 5.01 hereof.
Class A Certificate Principal Balance: For any date of determination, the
sum of the Class A-1A Certificate Principal Balance, the Class A-1B Certificate
Principal Balance, the Class R Certificate Principal Balance, the Class A-2A
Certificate Principal Balance, the Class A-2B Certificate Principal Balance and
the Class A-2C Certificate Principal Balance.
Class A Certificates: Any of the Class A-1A Certificates, the Class A-1B
Certificates, the Class A-2A Certificates, the Class A-2B Certificates, the
Class A-2C Certificates and the Class R Certificates
Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal Distribution Amount for such
Distribution Date and (2) on or after the Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the Class A Certificate Principal
Balance immediately prior to such Distribution Date over (B) the lesser of (i)
61.40% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (ii) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount provided, however,
that in no event will the Class A Principal Distribution Amount with respect to
any Distribution Date exceed the aggregate Certificate Principal Balance of the
Class A Certificates.
Class A-1 Certificates: Each of the Class A-1A Certificates and the Class
A-1B Certificates.
Class A-1 Trigger Event: The situation that exists with respect to any
Distribution Date if, before February 2008, the aggregate amount of Realized
Losses incurred from the Cut-off Date through the last day of the related Due
Period (after giving effect to scheduled payments received or advanced on or
before the related Determination Date and Principal Prepayments received during
the related Prepayment Period) divided by the sum of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds 2.50%, or
if, on any Distribution Date on or after February 2008, a Stepdown Trigger Event
is in effect.
Class A-1A Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1A Certificates.
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Class A-1A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-1A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1A Pass-Through Rate for the related Accrual Period.
Class A-1A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.370% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.740% per annum.
Class A-1A Pass-Through Rate: For the first Distribution Date, 2.920% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1A Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class A-1B Certificate: Any Certificate designated as a "Class A-1B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-1B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1B Certificates.
Class A-1B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1B Pass-Through Rate on
the Class A-1B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class X-0X Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1B Pass-Through Rate for the related Accrual Period.
Class A-1B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.300% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.600% per annum.
Class A-1B Pass-Through Rate: For the first Distribution Date, 2.850% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1B Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
- 6 -
Class A-2 Certificates: Each of the Class A-2A Certificates, the Class
A-2B Certificates and the Class A-2C Certificates.
Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2A Certificates.
Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.100% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.200% per annum.
Class A-2A Pass-Through Rate: For the first Distribution Date, 2.650% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.
Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class X-0X Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.
- 7 -
Class A-2B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.220% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.440% per annum.
Class A-2B Pass-Through Rate: For the first Distribution Date, 2.770% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2C Certificates.
Class A-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2C Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2C Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2C Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2C Pass-Through Rate for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.340% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.680% per annum.
Class A-2C Pass-Through Rate: For the first Distribution Date, 2.890% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B Certificates: Any of the Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 or Class B-6 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of
- 8 -
such Distribution Date plus the portion of any previous distributions on such
Class in respect of Current Interest or a Class B-1 Interest Carry Forward
Amount that is recovered as a voidable preference by a trustee in bankruptcy,
less any Non-Supported Interest Shortfall allocated on such Distribution Date to
the Class B-1 Certificates. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.
Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.280% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.920% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 3.830% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance and the Class M-4
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Class M-4 Certificate
Principal Balance (after taking into account distribution of the Class M-4
Principal Distribution Amount on such Distribution Date) and (F) the Class B-1
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 89.10% of the Stated Principal Balance of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates and Class M Certificates has been reduced to zero, the Class B-1
Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class B-1 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A
and Class M Certificates and (II) in no event will the Class B-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class B-1
Certificate Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
- 9 -
Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.
Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.350% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.025% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 3.900% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (F) the Class B-1 Certificate Principal Balance
(after taking into account distributions of the Class B-1 Principal Distribution
Amount on such Distribution Date) and (G) the Class B-2 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
90.90% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
- 10 -
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A, Class M and Class
B-1 Certificates has been reduced to zero, the Class B-2 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-2 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M and Class B-1
Certificates and (II) in no event will the Class B-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-2 Certificate
Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.
Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.250% per annum and, as of any
Distribution Date after the Optional Termination Date, 3.375% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 4.800% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal
- 11 -
Balance, the Class B-1 Certificate Principal Balance and the Class B-2
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Class M-4 Certificate
Principal Balance (after taking into account distributions of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class B-1
Certificate Principal Balance (after taking into account distributions of the
Class B-1 Principal Distribution Amount on such Distribution Date), (G) the
Class B-2 Certificate Principal Balance (after taking into account distributions
of the Class B-2 Principal Distribution Amount on such Distribution Date) and
(H) the Class B-3 Certificate Principal Balance (after taking into account
distributions of the Class B-3 Principal Distribution Amount on such
Distribution Date) over (2) the lesser of (A) 92.40% of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balance of the Mortgage Loans
as of the end of the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M, Class B-1 and Class B-2 Certificates
has been reduced to zero, the Class B-3 Principal Distribution Amount will equal
the lesser of (x) the outstanding Certificate Principal Balance of the Class B-3
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M, Class B-1 and Class B-2 Certificates
and (II) in no event will the Class B-3 Principal Distribution Amount with
respect to any Distribution Date exceed the Class B-3 Certificate Principal
Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-4 Certificates.
Class B-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-4 Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-4 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
- 12 -
Class B-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.
Class B-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.750% per annum, and, as of any
Distribution Date after the Optional Termination Date, 5.625% per annum.
Class B-4 Pass-Through Rate: For the first Distribution Date, 6.300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-4 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal Balance and the Class B-3 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date), (G) the Class B-2 Certificate
Principal Balance (after taking into account distributions of the Class B-2
Principal Distribution Amount on such Distribution Date), (H) the Class B-3
Certificate Principal Balance (after taking into account distributions of the
Class B-3 Principal Distribution Amount on such Distribution Date) and (I) the
Class B-4 Certificate Principal Balance (after taking into account distributions
of the Class B-4 Principal Distribution Amount on such Distribution Date)over
(2) the lesser of (A) 93.40% of the Stated Principal Balance of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class M, Class B-1, Class B-2 and Class B-3 Certificates has been reduced to
zero, the Class B-4 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class B-4 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M, Class B-1, Class B-2 and Class B-3 Certificates and
(II) in no event will the Class B-4 Principal Distribution Amount with respect
to any Distribution Date exceed the Class B-4 Certificate Principal Balance.
Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
- 13 -
Class B-5 Certificate: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-5 Certificates.
Class B-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-5 Pass-Through Rate on
the Class B-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-5 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-5 Pass-Through Rate for the related Accrual Period.
Class B-5 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.750% per annum, and, as of any
Distribution Date after the Optional Termination Date, 5.625% per annum.
Class B-5 Pass-Through Rate: For the first Distribution Date, 6.300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-5 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal Balance, the Class B-3 Certificate Principal Balance and
the Class B-4 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distributions of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class B-1 Certificate Principal Balance (after
taking into account distributions of the Class B-1 Principal Distribution Amount
on such Distribution Date), (G) the Class B-2 Certificate Principal Balance
(after taking into account distributions of the Class B-2 Principal Distribution
Amount on such Distribution Date), (H) the Class B-3 Certificate Principal
Balance (after taking into account distributions of the Class B-3 Principal
Distribution Amount on such Distribution Date) (I) the Class B-4 Certificate
Principal Balance (after taking into account distributions of the Class B-4
Principal Distribution Amount on such Distribution Date) and (J) the Class B-5
Certificate Principal Balance (after taking into account distributions of the
Class B-5 Principal Distribution Amount on such Distribution
- 14 -
Date)over (2) the lesser of (A) 95.40% of the Stated Principal Balance of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M, Class B-1, Class B-2, Class B-3 and
Class B-4 Certificates has been reduced to zero, the Class B-5 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class B-5 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class M,
Class B-1, Class B-2, Class B-3 and Class B-4 Certificates and (II) in no event
will the Class B-5 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-5 Certificate Principal Balance.
Class B-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-6 Certificate: Any Certificate designated as a "Class B-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class B-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-6 Certificates.
Class B-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-6 Pass-Through Rate on
the Class B-6 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-6 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-6 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class B-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-6 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-6 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-6 Pass-Through Rate for the related Accrual Period.
Class B-6 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.750% per annum, and, as of any
Distribution Date after the Optional Termination Date, 5.625% per annum.
Class B-6 Pass-Through Rate: For the first Distribution Date, 6.300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-6 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
- 15 -
Class B-6 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal Balance, the Class B-3 Certificate Principal Balance, the
Class B-4 Certificate Principal Balance and the Class B-5 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date), (F) the Class B-1 Certificate
Principal Balance (after taking into account distributions of the Class B-1
Principal Distribution Amount on such Distribution Date), (G) the Class B-2
Certificate Principal Balance (after taking into account distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date), (H) the
Class B-3 Certificate Principal Balance (after taking into account distributions
of the Class B-3 Principal Distribution Amount on such Distribution Date) (I)
the Class B-4 Certificate Principal Balance (after taking into account
distributions of the Class B-4 Principal Distribution Amount on such
Distribution Date), (J) the Class B-5 Certificate Principal Balance (after
taking into account distributions of the Class B-5 Principal Distribution Amount
on such Distribution Date) and (K) the Class B-6 Certificate Principal Balance
(after taking into account distributions of the Class B-6 Principal Distribution
Amount on such Distribution Date)over (2) the lesser of (A) 97.10% of the Stated
Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period and (B) the excess of the Stated Principal Balance of the
Mortgage Loans as of the end of the immediately preceding Due Period over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Class A, Class M, Class B-1, Class B-2, Class
B-3, Class B-4 and Class B-5 Certificates has been reduced to zero, the Class
B-6 Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class B-6 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A,
Class M, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates
and (II) in no event will the Class B-6 Principal Distribution Amount with
respect to any Distribution Date exceed the Class B-6 Certificate Principal
Balance.
Class B-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class B-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
- 16 -
Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class C Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to the aggregate principal balance of the Lower
Tier REMIC Regular Interests immediately prior to such Distribution Date, plus
the interest portion of any previous distributions on such Class that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class C Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC Regular Interests (treating for purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker Classes as being capped at the
interest rate of its Related Certificates and treating the Class LTX Interest as
being capped at zero). The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the Lower Tier
REMIC Regular Interests immediately prior to any date of determination.
Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
Class LTA-1A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificates and an interest rate equal to the
Net Rate.
Class LTA-1B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTA-2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTA-2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
- 17 -
Class LTA-2C Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.
Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTB-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTM-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower
Tier REMIC.
Class LTX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes and an interest
rate equal to the Net Rate.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3 and Class
M-4 Certificates.
- 18 -
Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.500% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.750% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 3.050% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 74.00% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A Certificates and (II) in no event will the Class M-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-1
Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the
- 19 -
Class M-1 Unpaid Realized Loss Amounts on all previous Distribution Dates and
(y) all increases in the Certificate Principal Balance of such Class M-1
Certificates pursuant to the last sentence of the definition of "Certificate
Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.530% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.795% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 3.080% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M-1 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class M-2 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
77.50% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates and the
Class M-1 Certificates has been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class
- 20 -
M-2 Certificates and (y) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A and Class M-1 Certificates and (II) in
no event will the Class M-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.
Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class M-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.125% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 3.300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
- 21 -
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 83.90% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates and the Class M-2 Certificates has been reduced to zero,
the Class M-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-3 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M-1 and Class M-2 Certificates and (II) in no event will the
Class M-3 Principal Distribution Amount with respect to any Distribution Date
exceed the Class M-3 Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4 Certificates.
Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-4 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class M-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.780% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.170% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 3.330% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
- 22 -
Class M-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
and the Class M-3 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-3 Principal Distribution Amount on such Distribution Date and (E)
the Class M-4 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 86.70% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances for the Mortgage
Loans as of the end of the immediately preceding Due Period over the Minimum
Required Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates, the Class M-1 Certificates, the
Class M-2 Certificates, and the Class M-3 Certificates have been reduced to
zero, the Class M-4 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class M-4 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M-1, Class M-2, and Class M-3 Certificates and (II) in no
event will the Class M-4 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P Certificate
on the face thereof, executed by the Securities Administrator and authenticated
by the Securities Administrator in substantially the form set forth in Exhibit
A, representing the right to distributions as set forth herein.
Class R Certificate: The Class R Certificate executed by the Securities
Administrator and authenticated by the Securities Administrator in substantially
the form set forth in Exhibit A.
Class R Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class R Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class R Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R Certificate. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.
Class R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and
- 23 -
(2) interest on such excess (to the extent permitted by applicable law) at the
Class R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.370% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.740% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 2.920% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Closing Date: January 27, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Wilshire
Credit Corporation, as servicer for HSBC Bank USA, National Association, as
Trustee, in trust for registered holders of Xxxxxxx Xxxxx Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-WMC1". Funds in the
Collection Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
positions, the fraction, expressed as a percentage, the numerator of which is
the sum of (1) the original principal balance of the related Mortgage Loan and
(2) any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property and
(B) the sales price of the related Mortgaged Property at time of origination.
Compensating Interest: For any Distribution Date and any Principal
Prepayment in full in respect of a Mortgage Loan that is received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by the
Servicer in an amount not to exceed the product of (a) one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, equal to the amount of interest at the Net Mortgage Rate for
that Mortgage Loan from the date of prepayment through the 30th day of such
preceding calendar month.
Current Interest: Any of the Class A Current Interest, the Class R Current
Interest, the Class M-1 Current Interest, the Class M-2 Current Interest, the
Class M-3 Current Interest, the Class M-4 Current Interest, the Class B-1
Current Interest, the Class B-2 Current Interest, the Class B-3 Current
Interest, the Class B-4 Current Interest, the Class B-5 Current Interest, the
Class B-6 Current Interest and the Class C Current Interest.
Cut-off Date: January 1, 2005.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates on and
after the Cut-off Date.
- 24 -
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
immediately succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Securities Administrator and the initial Depository.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.
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Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in February 2005.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Eligible Account: An account that is (1) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (2) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Xxxxx'x and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Securities
Administrator, the Trustee and each Rating Agency, the Certificateholders have a
claim with respect to the funds in such account and a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (v) maintained at an eligible institution whose commercial paper,
short-term debt or other short-term deposits are rated at least A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state chartered depository
institution the deposits in which are insured by the FDIC to the applicable
limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1 by
S&P or Prime-1 by Xxxxx'x at the time any deposits are held on deposit therein,
or (vii) otherwise acceptable to each Rating Agency, as evidenced by a letter
from each Rating Agency to the Securities Administrator and the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
ERISA Restricted Certificates: The Class B-5, Class B-6 Certificates,
Class C Certificates, Class P Certificates, and Class R Certificate and any
other Certificate, unless the acquisition and holding of such other Certificate
is covered by and exempt under the Underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
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Excess Interest: On any Distribution Date, for the Class A Certificates,
Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3
Certificates, Class B-4 Certificates, Class B-5 Certificates and Class B-6
Certificates, the excess, if any, of (1) the amount of interest such Class of
Certificates is entitled to receive on such Distribution Date at its
Pass-Through Rate over (2) the amount of interest such Class of Certificates
would have been entitled to receive on such Distribution Date had the
Pass-Through Rate for such Class been the REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) $26,865,710 and over (B) the Pool Stated Principal Balance of the Mortgage
Loans as of such Distribution Date and (2) on and after the Stepdown Date, (A)
the sum of (x) the Aggregate Certificate Principal Balance immediately preceding
such Distribution Date, reduced by the Principal Funds with respect to such
Distribution Date and (y) the greater of (a) the sum of 2.90% of the Pool Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the Pool Stated Principal Balance of the
Mortgage Loans as of such Distribution Date; provided, however, that if on any
Distribution Date a Stepdown Trigger Event is in effect, the Extra Principal
Distribution Amount will not be reduced to the applicable percentage of the
then-current Pool Stated Principal Balance of the Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.
Xxxxxx Mae: A federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a Class of the Class A, Class M or
Class B Certificates is based upon the Available Funds Cap, the excess of (x)
the amount of interest that such Class would have been entitled to receive on
such Distribution Date had the Pass-Through Rate for that Class not been
calculated based on the Available Funds Cap, up to but not exceeding the greater
of (a) the Maximum Rate Cap or (b) the lesser of (i) One-Month LIBOR and (ii)
the Upper Collar over (y) the amount of interest payable on such Class on such
Distribution Date based on the Available Funds Cap, together with (i) the unpaid
portion of any such excess from prior Distribution Dates (and interest accrued
thereon at the then applicable Pass-Through Rate for such Class, without giving
effect to the Available Funds Cap) and (ii) any amount
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previously distributed with respect to Floating Rate Certificate Carryover for
such Class that is recovered as a voidable preference by a trustee in
bankruptcy.
Xxxxxxx Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Group One Mortgage Loan: Any Mortgage Loan identified in the Group One
Mortgage Loan Schedule attached hereto as Exhibit B-2.
Group One Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum of the respective Certificate
Principal Balances of the Class A-1 and Class R Certificates and (2) the product
of (x) the Group One Principal Distribution Percentage and (y) the Class A
Principal Distribution Amount; provided, however, that (A) with respect to the
Distribution Date on which the Certificate Principal Balance of each Class of
the Class A-2 Certificates is initially reduced to zero (so long as the Class
A-1 and Class R Certificates are outstanding), the excess of (i) the Group Two
Principal Distribution Percentage of the Class A Principal Distribution Amount
over (ii) the amount necessary to reduce the Certificate Principal Balance of
each of the Class A-2 Certificates to zero will be added to the Group One
Principal Distribution Amount and (B) with respect to any Distribution Date
thereafter, the Group One Principal Distribution Amount shall equal the Class A
Principal Distribution Amount.
Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds with respect to such Distribution Date received
with respect to Group One Mortgage Loans, and the denominator of which is the
amount of all Principal Funds with respect to such Distribution Date received on
all the Mortgage Loans.
Group Two Mortgage Loan: Any Mortgage Loan identified in the Group Two
Mortgage Loan Schedule attached hereto as Exhibit B-3.
Group Two Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum of the Certificate Principal Balance
of the Class A-2 Certificates and (2) the product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A Principal Distribution Amount;
provided, however, that (A) with respect to the Distribution Date on which the
Certificate Principal Balance of the Class A-1 and Class R Certificates is
initially reduced to zero (so long as any of the Class A-2 Certificates is
outstanding), the excess of (i) the Group One Principal Distribution Percentage
of the Class A Principal Distribution Amount over (ii) the amount necessary to
reduce the Certificate Principal Balances of the Class A-1 Certificates to zero
will be added to the Group Two Principal Distribution Amount and (B) with
respect to any Distribution Date thereafter, the Group Two Principal
Distribution Amount shall equal the Class A Principal Distribution Amount.
Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds with respect to such Distribution Date received
with respect to Group Two Mortgage Loans, and the denominator of which is
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the amount of all Principal Funds with respect to such Distribution Date
received on all the Mortgage Loans.
Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Class A, Class
M, Class B or Class C or Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing Date as set forth in
Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Initial Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the Trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: Any of the Class A-1A Interest Carry
Forward Amount, the Class A-1B Interest Carry Forward Amount, the Class A-2A
Interest Carry Forward Amount, the Class A-2B Interest Carry Forward Amount, the
Class A-2C Interest Carry Forward Amount, the Class R Interest Carry Forward
Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class M-4
Interest Carry Forward Amount, the Class B-1 Interest Carry Forward Amount, the
Class B-2 Interest Carry Forward Amount, the Class B-3 Interest Carry Forward
Amount, the Class B-4 Interest Carry Forward Amount, the Class B-5 Interest
Carry Forward Amount, the Class B-6 Interest Carry Forward Amount or the Class C
Interest Carry Forward Amount, as the case may be.
Interest Determination Date: With respect to the Certificates, (i) for any
Accrual Period other than the first Accrual Period, the second LIBOR Business
Day preceding the commencement of such Accrual Period and (ii) for the first
Accrual Period, January 25, 2004.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee, (2) all Advances
relating to interest with respect to the Mortgage Loans, (3) all Compensating
Interest with respect to the Mortgage Loans, (4) Liquidation Proceeds with
respect to the Mortgage Loans (to the
- 29 -
extent such Liquidation Proceeds relate to interest) collected during the
related Prepayment Period, (5) all proceeds of any purchase pursuant to Section
2.02 or 2.03 during the related Prepayment Period or pursuant to Section 9.01
not later than the related Determination Date (to the extent that such proceeds
relate to interest) less the Servicing Fee and (6) all Prepayment Charges
received with respect to the Mortgage Loans during the related Prepayment
Period, less (A) all Non-Recoverable Advances relating to interest and (B) other
amounts reimbursable to the Servicer, the Master Servicer, the Securities
Administrator and the Trustee pursuant to this Agreement.
Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and conducting transactions in foreign
currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Servicer has certified (in
accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation
or (b) is not a first lien Mortgage Loan and is delinquent 180 days or longer,
the Servicer has certified in a certificate of an officer of the Servicer
delivered to the Depositor and the Trustee that it does not believe that there
is a reasonable likelihood that any further net proceeds will be received or
recovered with respect to such Mortgage Loan.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of Mortgage Loans, whether
through trustee's sale, foreclosure sale, sale by the Servicer pursuant to this
Agreement or otherwise or amounts received in connection with any condemnation
or partial release of a Mortgaged Property and any other proceeds received in
connection with an REO Property, less the sum of related unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses related to such
Mortgage Loan.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the Class
LTA-1B Interest, the Class LTA-2A Interest, the Class LTA-2B Interest, the Class
LTA-2C Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTB-1 Interest, the Class
LTB-2 Interest, the Class LTB-3 Interest, the Class LTB-4 Interest, the Class
LTB-5 Interest, the Class LTB-6 Interest, the Class LTX Interest and the Class
LTR Interest.
Lower Tier REMIC Marker Classes: Each of the classes of Lower Tier REMIC
Regular Interests other than the Class LTX Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Master Servicer: Xxxxx Fargo Bank, N.A., a national banking association,
or any successor in interest.
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Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum Rate Cap: With respect to any Distribution Date, 12 times the
quotient of (x) the aggregate scheduled interest that would have been due on the
Mortgage Loans during the related Due Period had the Adjustable Rate Mortgage
Loans provided for interest at their maximum lifetime Net Mortgage Rates and the
Fixed Rate Mortgage Loans provided for interest at their Net Mortgage Rates,
divided by (y) the aggregate Stated Principal Balance of the Mortgage Loans as
of the preceding Distribution Date. With respect to the Class A, Class M and
Class B Certificates, such rate is multiplied by 30 and divided by the actual
number of days in the related Accrual Period.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loan
as of the Cut-off Date.
MIN: The loan number for any MERS Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a second lien or a second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
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 Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO 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. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.
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Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement 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 hereto as Exhibits X-0, X-0 and B-3,
setting forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a first
lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
respect to a second lien Mortgage Loan;
(x) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of each Adjustment Date;
(B) the next Adjustment Date;
(C) the Maximum Mortgage Rate;
(D) the Minimum Mortgage Rate;
(E) the Mortgage Rate as of the Cut-off Date;
(F) the related Periodic Rate Cap;
(G) the Gross Margin;
(xiii) location of the related Mortgaged Property;
(xiv) a code indicating whether a Prepayment Charge is applicable
and, if so,
(A) the period during which such Prepayment Charge is in
effect;
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(B) the amount of such Prepayment Charge;
(C) any limitations or other conditions on the
enforceability of such Prepayment Charge; and
(D) any other information pertaining to the Prepayment
Charge specified in the related Mortgage Note; and
(xv) the Credit Score and date obtained.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule set out on Exhibit B-1.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate.
Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Mortgage Loans calculated based on
the respective Net Mortgage Rates and the Stated Principal Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
NIM Notes: The notes to be issued pursuant to the Indenture.
NIMs Insurer: Any of the one or more insurers, if any, that is
guaranteeing certain payments under any NIM Notes; provided, that upon the
payment in full of the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.
NIMs Insurer Default: As defined in Section 10.12.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise related to the Mortgage Loans.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise related to the Mortgage
Loans.
Non-Supported Interest Shortfall: As defined in Section 4.02.
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Offered Certificates: The Class A-1A, Class X-0X, Xxxxx X-0X, Xxxxx X-0X,
Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class B-1, Class B-2,
Class B-3, Class B-4 and Class R Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Master Servicer, the Servicer or the Securities Administrator (or any other
officer customarily performing functions similar to those performed by any of
the above designated officers and also to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with a particular subject) or (2), if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor, the Master Servicer, the Servicer, the Securities Administrator
or the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Securities Administrator on the related Interest Determination Date on
the basis of (a) the offered rates for one-month United States dollar deposits,
as such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on
such Interest Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as of 11:00 a.m. (London time), the offered rates of the Reference
Banks for one-month United States dollar deposits, as such rates appear on the
Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each Interest Determination Date, One-Month LIBOR for the related
Accrual Period will be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the higher of
(i) One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, the Master Servicer, the Servicer or the Securities
Administrator, reasonably acceptable to each addressee of such opinion;
provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor, the Master Servicer, the Servicer or the
Securities Administrator, (2) not have any direct financial interest in the
Depositor, the Master Servicer, the Servicer or the Securities Administrator or
in any affiliate of any such party and (3) not be connected with the Depositor,
the Master Servicer, the Servicer or the Securities Administrator as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Optional Termination: The termination of the Trust Fund hereunder pursuant
to clause (a) of Section 9.01 hereof.
Optional Termination Amount: The repurchase price received by the Trustee
in connection with any repurchase of all of the Mortgage Loans pursuant to
Section 9.01.
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Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee (including any
amounts incurred by the Trustee in connection with conducting the Auction), the
Master Servicer, the Securities Administrator or the Servicer and any unpaid or
unreimbursed Servicing Fees, Securities Administrator Fees, Advances and
Servicing Advances, (C) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to any of
the Mortgage Loans of any predatory or abusive lending law and (D) in the event
an Auction has been conducted, all reasonable fees and expenses incurred by the
Trustee to conduct the Auction.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(2) Certificates in exchange for which or in lieu of which other Certificates
have been executed by the Securities Administrator and delivered by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be
equal to the Certificate Principal Balance of such Class
divided by the aggregate Certificate Principal Balance of all
Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of
the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the aggregate
of the Denominations of all Certificates of such Class; except
that in the case of any Class P Certificates, the Percentage
Interest with respect to such Certificate shown on the face of
such Certificate.
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Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the trust created pursuant
to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor and
other assets of the Trust Fund, including the Cap Contract and
any credit enhancement and passive derivative financial
instruments that pertain to beneficial interests issued or
sold to parties other than the Depositor, its Affiliates, or
its agents;
(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) receiving collections on the Mortgage Loans and making
payments on such Certificates and interests in accordance with
the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental
to accomplish these limited purposes, which activities cannot
be contrary to the status of the Trust Fund as a qualified
special purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial or
finance company paper issued by the Depositor, the Securities
Administrator or any of its Affiliates, which is then
receiving the highest commercial or finance company paper
rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances (other than banker's acceptances issued by the
Securities Administrator or any of its Affiliates) issued by
any depository institution or trust company incorporated under
the laws of the United States or of any state thereof and
subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or
long term unsecured debt obligations of such depository
institution or trust company are then rated one of the two
highest long-term and the highest short-term ratings of each
such Rating Agency for such securities;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent
that such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two
highest long-term or the highest short-term
- 36 -
ratings of each Rating Agency containing, at the time of the
issuance of such agreements, such terms and conditions as will
not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any such Rating Agency as
evidenced by a letter from each Rating Agency;
(vii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as
principal) described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Securities
Administrator or any of its Affiliates, incorporated under the
laws of the United States or any state thereof which, at the
time of such investment, have one of the two highest long term
ratings of each Rating Agency;
(ix) interests in any money market fund (including those managed or
advised by the Securities Administrator, the Trustee or their
respective affiliates) which at the date of acquisition of the
interests in such fund and throughout the time such interests
are held in such fund has the highest applicable long term
rating by each Rating Agency rating such fund; and
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of
the United States or any state thereof, other than the
Securities Administrator or any of its Affiliates, which on
the date of acquisition has been rated by each such Rating
Agency in their respective highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of the any REMIC provided
for herein as a REMIC under the Code or result in imposition of a tax on the
Trust Fund or any REMIC provided for herein and (II) each such investment must
be a "permitted investment" within the meaning of Section 860G(a)(5) of the
Code. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on
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unrelated business taxable income) on any excess inclusions (as defined in
Section 860E(c)(1) of the Code) with respect to a Certificate, (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, and (v) a Person that is not a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in or under the laws of the United States or any State thereof or the District
of Columbia or an estate whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trust, unless, in the case of this clause (v), such Person has furnished
the transferor and the Securities Administrator with a duly completed Internal
Revenue Service Form W-8ECI or applicable successor form. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Section 7701 of the Code. A corporation will not be treated as an
instrumentality of the United States or of any State thereof for these purposes
if all of its activities are subject to tax and, with the exception of the
Federal Home Loan Mortgage Corporation, a majority of its board of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Offered Certificates.
Prepayment Charges: Any prepayment premium or charge payable by a
Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note or Mortgage, as applicable.
Prepayment Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the calendar month in which such Servicer Remittance Date occurs and the
last day of the related Prepayment Period, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Servicer Remittance Date occurs and ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a Principal
Prepayment in full on a Mortgage Loan received during the period from and
including the first day to and including the 14th day of the month of such
Distribution Date), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period beginning with
the opening of business on the 15th day of the calendar month preceding the
month in which such Distribution Date
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occurs (or in the case of the first Distribution Date, beginning with the
opening of business on the Cut-off Date) and ending on the close of business on
the 14th day of the month in which such Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) the scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) prepayments
collected in the related Prepayment Period, (3) the Stated Principal Balance of
each Mortgage Loan that was purchased by the Depositor or the Servicer during
the related Prepayment Period or, in the case of a purchase pursuant to Section
9.01, on the Business Day prior to such Distribution Date, (4) the amount, if
any, by which the aggregate unpaid principal balance of any Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related Deleted Mortgage
Loans delivered by the Seller in connection with a substitution of a Mortgage
Loan pursuant to Section 2.03(c), (5) all Liquidation Proceeds collected during
the related Prepayment Period (to the extent such Liquidation Proceeds related
to principal), (6) all Subsequent Recoveries received during the related Due
Period and (7) all other collections and recoveries in respect of principal
during the related Prepayment Period less (A) all Non-Recoverable Advances
relating to principal with respect to the Mortgage Loans and (B) other amounts
reimbursable to the Servicer, the Master Servicer, the Securities Administrator
and the Trustee pursuant to this Agreement allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated January 25, 2005
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the applicable Transferor pursuant to Section 2.02
or 2.03 hereof or purchased by the Servicer pursuant to Section 3.12(c) hereof,
an amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan as of the date of such purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest thereon at the applicable Mortgage
Rate from (a) the date through which interest was last paid by the Mortgagor to
(b) the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders and (iii) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to such
Mortgage Loan of any predatory or abusive lending law.
Rating Agency: Either of S&P or Xxxxx'x. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
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Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) with respect to a Mortgage
Loan which is not a Liquidated Loan, any amount of principal that the Mortgagor
is no longer legally required to pay (except for the extinguishment of debt that
results from the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Xxxxx Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Securities Administrator which are engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, England, (ii) whose quotations appear
on the Reuters Screen LIBO Page on the relevant Interest Determination Date and
(iii) which have been designated as such by the Securities Administrator.
Regular Certificate: Any one of the Class A, Class M, and Class B
Certificates.
Regulation S: Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.
Regulation S Global Securities: The Book-Entry Regulation S Global
Securities and the Definitive Regulation S Global Securities.
Related Certificates: With respect to the Class LTA-1A Interest, the Class
A-1A and Class R Certificates. With respect to the Class LTA-1B Interest, the
Class A-1B Certificates . With respect to the Class LTA-2A Interest, the Class
A-2A Certificates. With respect to the Class LTA-2B Interest, the Class A-2B
Certificates. With respect to the Class LTA-2C Interest, the Class A-2C
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates. With respect to the Class LTB-4 Interest, the Class B-4
Certificates. With respect to the Class LTB-5 Interest, the Class B-5
Certificates. With respect to the Class LTB-6 Interest, the Class B-6
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
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REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires, all of) the Lower Tier REMIC and the
Upper Tier REMIC.
REMIC Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing "Available Funds Cap" in such definition
with "Net Rate."
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 2.07 and (ii) the Uncertificated Class C Interest.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; and (9) comply
with each representation and warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee (or its custodian), substantially in the form of Exhibit
I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
- 41 -
Required Percentage: As of any Distribution Date, the quotient of (1) the
excess of (A) the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date, over (B) the Certificate Principal Balance of the most senior
Class of Certificates outstanding, prior to giving effect to distributions to be
made on such Distribution Date and (2) the Stated Principal Balance of the
Mortgage Loans as of such Distribution Date.
Reserve Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Securities Administrator determines to be (1) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the one-month United States dollar lending rates which New York
City banks selected by the Securities Administrator are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (2) in the event that the Securities
Administrator can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Securities
Administrator are quoting on such Interest Determination Date to leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions to the
extent attributable to an interest rate in excess of the Net Rate.
Responsible Officer: When used with respect to the Securities
Administrator or the Servicer, any officer of the Securities Administrator or
the Servicer with direct responsibility for the administration of this Agreement
and also means any other officer to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject. When used with respect to the Trustee, any Managing
Director, any Director, Vice President, any Assistant Vice President, any
Associate, any Assistant Secretary, any trust officer, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers who at such time shall be officers to whom,
with respect to a particular matter, the matter is referred because of the
officer's knowledge of and familiarity with the particular subject and who has
direct responsibility for the administration of this Agreement.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of January 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated pursuant to
the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., a national banking
association, or any successor in interest.
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Securities Administrator Fee: All of the investment income earned on funds
in the Certificate Account.
Seller: Xxxxxxx Xxxxx Mortgage Capital, Inc., a Delaware corporation, or
its successors in interest.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer's Assignee: As defined in Section 10.14(a).
Servicer Remittance Date: With respect to any Distribution Date, the later
of two Business Days after the 15th day of the month in which such Distribution
Date occurs and the 18th day (or if such day is not a Business Day, the next
preceding Business Day) of the month in which such Distribution Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, inspection, restoration and protection of a Mortgaged
Property, including without limitation advances in respect of real estate taxes
and assessments, (2) any collection, enforcement or judicial proceedings,
including without limitation foreclosures, collections and liquidations, (3) the
conservation, management, sale and liquidation of any REO Property, (4)
executing and recording instruments of satisfaction, deeds of reconveyance or
Assignments of Mortgage to the extent not otherwise recovered from the related
Mortgages or payable under this Agreement, (5) correcting errors of prior
servicers; costs and expenses charged to the Servicer by the Trustee; tax
tracking; title research; flood certifications; lender paid mortgage insurance,
(6) obtaining or correcting any legal documentation required to be included in
the Mortgage Files and reasonably necessary for the Servicer to perform its
obligations under this Agreement and (7) compliance with the obligations under
Sections 3.01 and 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
facsimile signature appear on a list of servicing officers furnished to the
Master Servicer, the Securities Administrator and the Trustee by the Servicer on
the Closing Date pursuant to this Agreement, as such lists may from time to time
be amended.
Servicing Transfer Costs: : In the event that the Servicer does not
reimburse the Master Servicer under this Agreement, all costs associated with
the transfer of servicing from the predecessor Servicer, including, without
limitation, any costs or expenses associated with the termination of the
predecessor Servicer, the appointment of a successor servicer, the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Master Servicer
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or any successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Master Servicer or successor servicer
to service the Mortgage Loans properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x) due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the Servicer as of the close of
business on the Determination Date related to such Distribution Date or with
respect to which Advances were made on the Servicer Advance Date prior to such
Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
Stepdown Date: The later to occur of (1) the Distribution Date in February
2008 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance (reduced by the Principal Funds with respect to such
Distribution Date) is less than or equal to (B) 61.40% of the Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
PERCENTAGE
February 2008 - January 2009 2.50% with respect to February
2008, plus an additional 1/12th of
1.50% for each month thereafter
February 2009 - January 2010 4.00% with respect to February
2009, plus an additional 1/12th of
1.00% for each month thereafter
February 2010 - January 2011 5.00% with respect to February
2009, plus an additional 1/12th of
0.75% for each month thereafter
February 2011 and thereafter 5.75%
Stepdown Trigger Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties)
and (B) the Stated Principal Balance of the Mortgage Loans as of the last day of
the preceding calendar month, equals or exceeds the product of (i) 41.00% and
(ii) the Required Percentage or (2) the quotient (expressed as a percentage) of
(A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of
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the calendar month preceding such Distribution Date and (B) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date exceeds the
Required Loss Percentage.
Subordinated Certificates: The Class M and Class B Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts reimbursed to the Servicer related to Liquidated Mortgage Loans)
subsequent to such Mortgage Loan being determined to be a Liquidated Mortgage
Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Agreement: The Master Mortgage Loan Purchase and Interim
Servicing Agreement dated as of January 1, 2004, as amended, between Xxxxxxx
Xxxxx Mortgage Capital Inc., as purchaser and WMC Mortgage Corp., as seller and
interim servicer, as supplemented by the Bring Down Letter.
Transferor: WMC.
Trust Fund: The corpus of the trust (the "Xxxxxxx Xxxxx Mortgage Investors
Trust, Series 2005-WMC1") created hereunder consisting of (i) the Mortgage Loans
and all interest and principal received on or with respect thereto on and after
the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof, exclusive of interest not required to be deposited in
the Collection Account; (ii) the Collection Account and the Certificate Account
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (v) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property; and (vi) the Cap Contract and Cap Contract
Account.
Trustee: HSBC Bank USA, National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Uncertificated Class C Interest: An uncertificated interest having (i) the
same rights to payments as the Class C Certificates, other than the rights to
payments of amounts with respect to the Cap Contract, and (ii) the rights to the
payments treated as distributed to the Class C Certificates under Section
2.07(d), provided, however, that such interest shall have no obligation to make
any payments treated as paid by the Class C Certificates pursuant to interest
rate cap agreements under Section 2.07(d).
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in
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gross income for United States tax purposes regardless of its source or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be United States Persons.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized Loss Amount,
Class B-4 Realized Loss Amount, Class B-5 Unpaid Realized Loss Amount, Class B-6
Unpaid Realized Loss Amount and Class C Unpaid Realized Loss Amount,
collectively.
Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and Class B
Certificates, with the allocation among such Certificates to be in proportion to
the Class Certificate Principal Balance of each Class relative to the Class
Certificate Principal Balance of all other Classes and (2) each Class of the
Class C and Class P will be allocated 1% of the Voting Rights Certificates.
Voting Rights will be allocated among the Certificates of each such Class in
accordance with their respective Percentage Interests.
WMC: WMC Mortgage Corp., a California corporation, or its successor in
interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
Without limitation, it is agreed and understood by the Depositor, the
Servicer and the Trustee that it is not intended that any Mortgage Loan be
included in the Trust that is either (i) a "High-Cost Home Loan" as defined in
the New Jersey Home Ownership Act effective November 27, 2003; or (ii) a
"High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004.
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with, the Trustee, the following documents or instruments with
respect to each Mortgage Loan:
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(A) The Original Mortgage Note endorsed in blank or, "Pay to the order
of HSBC Bank USA, National Association, as trustee, without recourse" together
with all riders thereto. The Mortgage Note shall include all intervening
endorsements showing a complete chain of the title from the originator to
[____________________].
(B) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage together with all riders thereto, with
evidence of recording thereon, or, if the original Mortgage has not yet been
returned from the recording office, a copy of the original Mortgage together
with all riders thereto certified to be true copy of the original of the
Mortgage that has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located and in the
case of each MERS Loan, the original Mortgage together with all riders thereto,
noting the presence of the MIN of the Loan and either language indicating that
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at
origination, the original Mortgage and the assignment thereof to MERS, with
evidence of recording indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage in blank or, to "HSBC Bank USA, National
Association, as trustee."
(D) The original policy of title insurance (or a preliminary title
report, commitment or binder if the original title insurance policy has not been
received from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment has not
yet been returned from the recording office, a copy of such assignment certified
to be a true copy of the original of the assignment which has been sent for
recording in the appropriate jurisdiction in which the Mortgaged Property is
located.
(F) Originals of all assumption and modification agreements, if any.
(G) If in connection with any Mortgage Loan, the Depositor cannot
deliver the Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording thereon, if
applicable, concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage or assumption, consolidation or modification,
as the case may be, has been delivered for recordation, the Depositor shall
deliver or cause to be delivered to the Trustee written notice stating that such
Mortgage or assumption, consolidation or modification, as the case may be, has
been delivered to the appropriate public recording office for recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to the Trustee
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording indicated thereon,
if applicable, upon receipt thereof from the public recording office. To the
extent any required endorsement is not contained on a Mortgage Note or an
Assignment of Mortgage, the Depositor shall make or cause such endorsement to be
made.
(H) With respect to any Mortgage Loan, none of the Depositor, the Master
Servicer, the Servicer, the Securities Administrator or the Trustee shall be
obligated to cause to be recorded the Assignment of Mortgage referred to in this
Section 2.01. In the event an Assignment of
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Mortgage is not recorded, the Master Servicer or the Servicer, as
applicable, shall have no liability for its failure to receive and act on
notices related to such Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor, the Master Servicer, the Servicer nor
the Securities Administrator shall take any action inconsistent with such
ownership and shall not claim any ownership interest therein. The Depositor, the
Master Servicer, the Servicer and Securities Administrator shall respond to any
third party inquiries with respect to ownership of the Mortgage Loans by stating
that such ownership is held by the Trustee on behalf of the Certificateholders.
Mortgage documents relating to the Mortgage Loans not delivered to the Trustee
are and shall be held in trust by the Servicer, for the benefit of the Trustee
as the owner thereof, and the Servicer's possession of the contents of each
Mortgage File so retained is for the sole purpose of servicing the related
Mortgage Loan, and such retention and possession by the Servicer is in a
custodial capacity only. The Depositor agrees to take no action inconsistent
with the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement and the benefit
of the repurchase obligations and the obligation of the Seller contained in the
Sale Agreement to take, at the request of the Depositor or the Trustee, all
action on its part which is reasonably necessary to ensure the enforceability of
a Mortgage Loan. The Trustee hereby accepts such assignment, and shall be
entitled to exercise all rights of the Depositor under the Sale Agreement as if,
for such purpose, it were the Depositor. The foregoing sale, transfer,
assignment, set-over, deposit and conveyance does not and is not intended to
result in creation or assumption by the Trustee of any obligation of the
Depositor, the Seller, or any other Person in connection with the Mortgage Loans
or any other agreement or instrument relating thereto.
Section 2.02. Acceptance by the Trustee of the Mortgage Loans.
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Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it in trust for the use and benefit of all present
and future Certificateholders. The Depositor will cause the Seller to repurchase
any Mortgage Loan to which a material exception was taken in the Exception
Report unless such exception is cured to the satisfaction of the Trustee within
45 Business Days of the Closing Date.
The Trustee acknowledges receipt of the Cap Contract (a form of which is
attached hereto), the Transfer Agreement, the Bring Down Letter and the Sale
Agreement.
The Trustee agrees, for the benefit of Certificateholders and the NIMs
Insurer, to review each Mortgage File delivered to it within 60 days after the
Closing Date to ascertain and to certify, within 70 days of the Closing Date, to
the NIMs Insurer, the Depositor, the Master Servicer and the Servicer that all
documents required by Section 2.01 have been executed and received, and that
such documents relate to the Mortgage Loans identified in Exhibit B-1 that have
been conveyed to it. If the Trustee finds any document or documents constituting
a part of a Mortgage File to be missing or defective (that is, mutilated,
damaged, defaced or unexecuted) in any material respect, the Trustee shall
promptly (and in any event within no more than five Business Days) after such
finding so notify the NIMs Insurer, the Servicer, the Master Servicer, the
Seller and the Depositor. In addition, the Trustee shall also notify the NIMs
Insurer, the Master Servicer, the Servicer, the Seller and the Depositor if the
original Mortgage with evidence of recording thereon with respect to a Mortgage
Loan is not received within 70 days of the Closing Date; if it has not been
received because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation, the Depositor shall deliver or
cause to be delivered to the Trustee written notice stating that such Mortgage
has been delivered to the appropriate public recording office for recordation
and thereafter the Depositor shall deliver or cause to be delivered such
Mortgage with evidence of recording thereon upon receipt thereof from the public
recording office. The Trustee shall request that the Seller correct or cure such
omission, defect or other irregularity, or substitute a Mortgage Loan pursuant
to the provisions of Section 2.03, within 90 days from the date the Seller was
notified of such omission or defect and, if the Seller does not correct or cure
such omission or defect within such period, that the Seller purchase such
Mortgage Loan from the Trust Fund within 90 days from the date the Trustee
notified the Seller of such omission, defect or other irregularity at the
Purchase Price of such Mortgage Loan. The Purchase Price for any Mortgage Loan
purchased pursuant to this Section 2.02 shall be paid to the Servicer and
deposited by the Servicer in the Certificate Account or Collection Account, as
appropriate, promptly upon receipt, and, upon receipt by the Trustee of written
notification of such deposit signed by a Servicing Officer, the Trustee, upon
receipt of a Request for Release, shall promptly release to the Seller the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, without recourse, as shall be requested by the Seller
and necessary to vest in the Seller or its designee, as the case may be, any
Mortgage Loan released pursuant hereto, and the Trustee shall have no further
responsibility with regard to such Mortgage Loan. It is understood and agreed
that the obligation of the Seller to purchase, cure or substitute any Mortgage
Loan as to which a material defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission
available to the Trustee on behalf of Certificateholders and the NIMs Insurer.
The preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the NIMs Insurer, the Depositor or the Trustee pursuant to
the Sale Agreement, the Transfer Agreement and the Bring-Down Letter. The
Trustee shall be under no duty or obligation to inspect, review and examine such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable, recordable or appropriate to the represented purpose, or
that they have actually been recorded, or that they are other than what they
purport to be on their face. The Servicer, the
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Master Servicer, the Securities Administrator and the Trustee shall keep
confidential the name of each Mortgagor except as required by this Agreement and
the Servicer, the Master Servicer, the Securities Administrator and the Trustee
shall not solicit any such Mortgagor for the purpose of refinancing the related
Mortgage Loan; notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, or information obtained by the Trustee from
sources other than the other parties hereto, (ii) disclosure of any and all
information (A) if required to do so by any applicable law, rule or regulation,
(B) to any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Trustee's business or that of its
affiliates, (C) pursuant to any subpoena, civil investigation demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which Trustee or any affiliate or an officer, director, employer or
shareholder thereof is a party or (D) to any affiliate, independent or internal
auditor, agent, employee or attorney of the Trustee having a need to know the
same, provided that the Trustee advises such recipient of the confidential
nature of the information being disclosed, or (iii) any other disclosure
authorized by the Depositor.
Within 70 days of the Closing Date, the Trustee (or its custodian) shall
deliver to the NIMs Insurer, the Depositor, the Master Servicer and the Servicer
the Trustee's Certification, substantially in the form of Exhibit D attached
hereto, evidencing the completeness of the Mortgage Files, with any exceptions
noted thereto.
Section 2.03. Representations, Warranties and Covenants of the Depositor.
(a) The Depositor hereby represents and warrants to the Servicer,
the Master Servicer, the Securities Administrator, the NIMs Insurer and the
Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or
hold its properties and to conduct its business as now conducted by it and
to enter into and perform its obligations under this Agreement and the
Sale Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and the Sale Agreement and
has duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the Sale
Agreement; and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject,
as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general principles of equity, regardless of whether enforcement
is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and the Sale Agreement, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Depositor and will not (A) result in a material breach of
any term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it
may be bound or (C) constitute a material violation of any statute, order
or regulation applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Depositor; and the Depositor is not in breach or violation of any material
indenture or other
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material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair the Depositor's ability to perform or meet any of
its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and the Sale Agreement or the ability of the Depositor to
perform its obligations under this Agreement and the Sale Agreement in
accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement and the Sale Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage Loan as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets, claims,
liens, mortgage, pledge, charge, security interest, defenses or
counterclaims.
(b) The representations and warranties of the Transferor with
respect to the Mortgage Loans contained in the Transfer Agreement were made as
of the date of the Transfer Agreement and brought forward to the Closing Date
pursuant to the Bring Down Letter. The representations and warranties of the
Transferor with respect to the Mortgage Loans contained in the Bring Down Letter
were made as of the Closing Date. The representations and warranties of the
Seller with respect to the Mortgage Loans contained in the Sale Agreement were
made as of the Closing Date. To the extent that any fact, condition or event
with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of the Transferor under the Transfer Agreement and
(ii) a representation or warranty of the Seller under the Sale Agreement, the
only right or remedy of the Trustee, the NIMs Insurer or of any
Certificateholder shall be the Trustee's right to enforce the obligations of the
Transferor under any applicable representation or warranty made by it. The
Trustee acknowledges that the Seller shall have no obligation or liability with
respect to any breach of a representation or warranty made by it with respect to
the Mortgage Loans if the fact, condition or event constituting such breach also
constitutes a breach of a representation or warranty made by the Transferor in
the Transfer Agreement, without regard to whether the Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee also acknowledges that the Seller shall have no obligation or liability
with respect to any breach of a representation or warranty made solely by the
Transferor with respect to the Mortgage Loans, without regard to whether the
Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee further acknowledges that the Depositor
shall have no obligation or liability with respect to any breach of any
representation or warranty with respect to the Mortgage Loans (except as set
forth in Section 2.03(a)(v)) under any circumstances.
In addition to the representations and warranties of the Transferor in the
Transfer Agreement that were brought forward to the Closing Date pursuant to the
Bring Down Letter, with respect to each Mortgage Loan, the Transferor made
certain additional covenants regarding such Mortgage Loan, as set forth in the
Transfer Agreement. With respect to any breach of such additional covenants that
materially and adversely affects the interests of the Certificateholders in such
Mortgage Loan, the Seller shall (1) use reasonable efforts to enforce such
covenant against the Transferor and (2) if the Seller successfully enforces any
obligation of the Transferor to repurchase such Mortgage Loan, the Seller shall
repurchase
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such Mortgage Loan in accordance with this Section 2.03. If the Seller does not
successfully enforce the obligation, if any, of the Transferor to repurchase a
Mortgage Loan with respect to any breach of any such additional covenants, the
Seller shall have no obligation or right to repurchase or cure such Mortgage
Loan.
(c) Upon discovery by any of the Depositor, the Master Servicer,
the Securities Administrator, the Servicer, the NIMs Insurer or the Trustee of a
breach of any of such representations and warranties that adversely and
materially affects the value of the related Mortgage Loan, Prepayment Charges or
the interests of the Certificateholders, the party discovering such breach shall
give prompt written notice to the other parties. Within 90 days of the discovery
of such breach of any representation or warranty, the Transferor or the Seller,
as applicable, shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Trustee at the Purchase Price or (c) within the two year period following
the Closing Date, substitute a Replacement Mortgage Loan for the affected
Mortgage Loan. In the event of discovery of a breach of any representation and
warranty of the Transferor or the Seller, the Trustee's rights shall be enforced
under the Transfer Agreement or the Sale Agreement for the benefit of
Certificateholders and the NIMs Insurer. If a breach of the representations and
warranties set forth in the Transfer Agreement exists solely due to the
unenforceability of a Prepayment Charge, the Trustee or the other party having
notice thereof shall notify the NIMs Insurer thereof and not seek to enforce the
repurchase remedy provided for herein unless directed in writing to do so by the
NIMs Insurer. In the event of a breach of the representations and warranties
with respect to the Mortgage Loans set forth in the Transfer Agreement, the
Trustee shall, at the request of the NIMs Insurer, enforce the right of the
Trust Fund and the NIMs Insurer to be indemnified for such breach of
representation and warranty. In the event that such breach relates solely to the
unenforceability of a Prepayment Charge, amounts received in respect of such
indemnity up to the amount of such Prepayment Charge shall be distributed
pursuant to Section 4.04(b)(i). As provided in the Sale Agreement, if the Seller
substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the Sale Agreement which adversely and
materially affects the value of such Mortgage Loan and such substitute mortgage
loan is not a Replacement Mortgage Loan, under the terms of the Sale Agreement,
the Seller will, in exchange for such substitute Mortgage Loan, (i) provide the
applicable Purchase Price for the affected Mortgage Loan or (ii) within two
years of the Closing Date, substitute such affected Mortgage Loan with a
Replacement Mortgage Loan. Any such substitution shall not be effected prior to
the additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit I and shall not be effected unless it is within two years of
the Startup Day. The Seller indemnifies and holds the Trust Fund, the Trustee,
the Depositor, the NIMs Insurer, the Master Servicer, the Securities
Administrator, the Servicer and each Certificateholder harmless against any and
all taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Trust Fund, the Trustee, the Depositor, the NIMs Insurer, the Master Servicer,
the Securities Administrator, the Servicer and any Certificateholder may sustain
in connection with any actions of the Seller relating to a repurchase of a
Mortgage Loan other than in compliance with the terms of this Section 2.03 and
the Sale Agreement, to the extent that any such action causes (i) any federal or
state tax to be imposed on the Trust Fund or any REMIC provided for herein,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup day" under Section 860(d)(1) of the Code, or (ii) any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificate is
outstanding. In furtherance of the foregoing, if the Seller is not a member of
MERS and repurchases a Mortgage Loan which is registered on the MERS System, the
Seller, at its own expense and without any right of reimbursement, shall cause
MERS to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to
be removed from registration on the MERS System in accordance with MERS' rules
and regulations.
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With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Agreement, by the Seller pursuant to the Sale Agreement or by the
Transferor pursuant to the Transfer Agreement, the principal portion of the
funds received by the Securities Administrator in respect of such repurchase of
a Mortgage Loan will be considered a Principal Prepayment and shall be deposited
in the Certificate Account pursuant to Section 3.05. The Trustee, upon receipt
of notice from the Securities Administrator of its receipt of the full amount of
the Purchase Price for a Deleted Mortgage Loan, or upon receipt of the Mortgage
File for a Replacement Mortgage Loan substituted for a Deleted Mortgage Loan,
shall release or cause to be released and reassign to the Depositor, the Seller
or the Transferor, as applicable, the related Mortgage File for the Deleted
Mortgage Loan and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as shall
be necessary to vest in such party or its designee or assignee title to any
Deleted Mortgage Loan released pursuant hereto, free and clear of all security
interests, liens and other encumbrances created by this Agreement, which
instruments shall be prepared by the Trustee (or its custodian), and neither the
Trustee nor the Securities Administrator shall not have any further
responsibility with respect to the Mortgage File relating to such Deleted
Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Trustee (or its custodian) pursuant to the terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the Seller must deliver to the Trustee (or its
custodian) the Mortgage File for the Replacement Mortgage Loan containing the
documents set forth in Section 2.01 along with a written certification
certifying as to the Mortgage Loan satisfying all requirements under the
definition of Replacement Mortgage Loan and the delivery of such Mortgage File
and containing the granting language set forth in Section 2.01; and (ii) the
Depositor will be deemed to have made, with respect to such Replacement Mortgage
Loan, each of the representations and warranties made by it with respect to the
related Deleted Mortgage Loan. The Trustee (or its custodian) shall review the
Mortgage File with respect to each Replacement Mortgage Loan and certify to the
NIMs Insurer and the Depositor that all documents required by Section 2.01 have
been executed and received.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Seller to the Securities Administrator for
deposit into the Certificate Account by the Seller on the Determination Date for
the Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee, the NIMs Insurer and the
Securities Administrator shall have received an Opinion of Counsel (at the
expense of the party seeking to make the substitution) that, under current law,
such substitution will not (A) affect adversely the status of any REMIC
established hereunder as a REMIC, or of the related "regular interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC to engage in
a "prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions.
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The Trustee shall amend the Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
Upon such substitution by the Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the Sale
Agreement, including all applicable representations and warranties thereof
included in the Sale Agreement as of the date of substitution.
(d) It is understood and agreed that the representations,
warranties and indemnification (i) set forth in this Section 2.03, (ii) of the
Seller and the Depositor set forth in the Sale Agreement and assigned to the
Trustee by the Depositor hereunder and (iii) of the Transferor, assigned by the
Seller to the Depositor pursuant to the Sale Agreement and assigned to the
Trustee by the Depositor hereunder shall each survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule to the Servicer on the Closing Date.
Section 2.04. Representations and Warranties of the Master Servicer;
Representations and Warranties of the Servicer; Representations and Warranties
of the Securities Administrator.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Servicer and the Trustee as follows, as of the date hereof:
(i) The Master Servicer is duly organized and is validly
existing as a national banking association and is duly authorized and qualified
to transact any and all business contemplated by this Agreement to be conducted
by the Master Servicer.
(ii) The Master Servicer has the power and authority to
master service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate, the transactions contemplated by this Agreement and
has duly authorized by all necessary action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its terms,
except that (A) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Master Servicer, the master servicing of the Mortgage Loans under this
Agreement, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Master Servicer and will not (A)
result in a material breach of any term or provision of the charter or by-laws
of the Master Servicer or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Master Servicer
is a party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not in breach
or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or
- 54 -
violation may materially impair the Master Servicer's ability to perform or meet
any of its obligations under this Agreement.
(iv) The Master Servicer, or an affiliate thereof, is an
approved servicer of mortgage loans for Xxxxxx Xxx and for Xxxxxxx Mac.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or its performance of any of its other obligations under this
Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is required,
the Master Servicer has obtained the same.
(b) The Servicer hereby represents and warrants to the Depositor,
the Master Servicer, the Securities Administrator and the Trustee as follows, as
of the date hereof:
(i) The Servicer is duly organized and is validly existing
as a corporation in good standing under the laws of the State of Nevada and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by the Servicer in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to ensure its ability to enforce
each Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Servicer has the corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Servicer and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Servicer or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or
- 55 -
governmental body having jurisdiction over it which breach or violation may
materially impair the Servicer's ability to perform or meet any of its
obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans
for Xxxxxx Xxx and is an approved servicer of mortgage loans for Xxxxxxx Mac.
(v) Except as previously disclosed to the Depositor in the
Prospectus Supplement, no litigation is pending or, to the best of the
Servicer's knowledge, threatened, against the Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement or
the ability of the Servicer to service the Mortgage Loans or to perform any of
its other obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for the period it serviced the Mortgage Loans), in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
(c) The Securities Administrator hereby represents and warrants to
the Depositor, the Master Servicer, the Servicer and the Trustee as of the date
hereof:
(i) The Securities Administrator is duly organized and is
validly existing as a national banking association and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to be
conducted by the Securities Administrator.
(ii) The Securities Administrator has the full corporate
power and authority to execute, deliver and perform, and to enter into and
consummate, the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Securities
Administrator the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery hereof by
the other parties hereto, constitutes a legal, valid and binding obligation of
the Securities Administrator, enforceable against the Securities Administrator
in accordance with its terms, except that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Securities Administrator, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Securities
Administrator and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Securities Administrator or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Securities Administrator is a party or by
which it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Securities Administrator of any court,
regulatory body, administrative agency or governmental body having
- 56 -
jurisdiction over the Securities Administrator; and the Securities Administrator
is not in breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Securities Administrator's ability to perform or meet any of its obligations
under this Agreement.
(iv) No litigation is pending or, to the best of the
Securities Administrator's knowledge, threatened, against the Securities
Administrator that would materially and adversely affect the execution, delivery
or enforceability of this Agreement or the ability of the Securities
Administrator to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Securities Administrator of, or compliance by the Securities
Administrator with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or order is
required, the Securities Administrator has obtained the same.
Section 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages".
Upon discovery by the Depositor, the Master Servicer, the Servicer, the
Securities Administrator or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of section 860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in any event
within 5 Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Depositor shall, at the Depositor's
option, either (i) substitute, if the conditions in Section 2.03(c) with respect
to substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 2.03. The Trustee, upon the
written direction of the Depositor, shall reconvey to the Depositor the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Securities
Administrator has caused to be authenticated and delivered to or upon the order
of the Depositor, in exchange for the Mortgage Loans, Certificates duly
authenticated by the Authenticating Agent in authorized denominations evidencing
ownership of the entire Trust Fund. The Trustee agrees to hold the Trust Fund
and exercise the rights referred to above for the benefit of all present and
future Holders of the Certificates and to perform its duties set forth in this
Agreement in accordance with the provisions hereof.
Section 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to
make an appropriate election to treat each of the Upper Tier REMIC and the Lower
Tier REMIC as a REMIC. The Trustee, upon written direction of the Securities
Administrator, shall sign the returns providing for such elections and such
other tax or information returns which are required to be signed by the Trustee
under applicable law. This Agreement shall be construed so as to carry out the
intention of the parties that each of the Upper Tier REMIC and the Lower Tier
REMIC be treated as a REMIC at all times prior to the date on which the Trust
Fund is terminated.
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(b) The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. Each REMIC's fiscal year shall be the calendar year.
The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund (other than (i) amounts distributable to the Class P Certificates pursuant
to Section 4.04(b)(i) hereof, (ii) the interests issued by the Lower Tier REMIC,
(iii) the grantor trusts described in Section 2.07 hereof and (iv) the Cap
Contract and Cap Contract Account). The Lower Tier REMIC shall issue the Class
LTA-1A Interest, Class LTA-1B Interest, Class LTA-2A Interest, Class LTA-2B
Interest, Class LTA-2C Interest, Class LTB-1 Interest, Class LTB-2 Interest,
Class LTB-3 Interest, Class LTB-4 Interest, Class LTB-5 Interest, Class LTB-6
Interest, Class LTM-1 Interest, Class LTM-2 Interest, Class LTM-3 Interest,
Class LTM-4 Interest and Class LTX Interest which shall be designated as regular
interests of such REMIC and shall issue the Class LTR Interest that shall be
designated as the sole class of residual interest in the Lower Tier REMIC. Each
of the Lower Tier REMIC Regular Interests shall have the characteristics set
forth in its definition.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC. For
federal income tax purposes, the pass-through rate on each REMIC Regular
Interest (other than the Uncertificated Class C Interest) and on the sole class
of residual interest in the Upper Tier REMIC shall be subject to a cap equal to
the Net Rate.
The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class LTR Interest
shall not have a principal balance or bear interest.
(c) The "tax matters person" with respect to each REMIC for
purposes of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of a Class R Certificate, by its
acceptance thereof, irrevocably appoints the Securities Administrator as its
agent and attorney-in-fact to act as "tax matters person" with respect to each
REMIC for purposes of the REMIC Provisions. If there is more than one beneficial
owner of the Class R Certificate, the "tax matters person" shall be the Person
with the greatest percentage interest in the Class R Certificate and, if there
is more than one such Person, shall be determined under Treasury regulation
Section 1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the Class A,
Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A (other than the Class R Certificate),
Class M and Class B Certificates and the residual interest in the Upper Tier
REMIC held by the holder of the Class R Certificate. For information reporting
requirements, the rights of the Class A, Class M and Class B Certificates to
receive payments in respect of Excess Interest shall be assumed to have zero
value or a de minimis value. This provision is intended to satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with REMIC interests to be separately respected and
shall be interpreted consistently with such regulation. On each Distribution
Date, to the extent that any of the Class A, Class M and Class B Certificates
receive payments of Excess Interest, such amounts, to the extent not derived
from payments on the Cap Contract, will be treated as distributed by the
Upper-Tier REMIC to the Class C Certificates pro rata in payment of the amounts
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specified in Section 4.04(g) and then paid to the relevant Class of Certificates
pursuant to the related interest rate cap agreement.
(e) The parties intend that the portion of the Trust Fund
consisting of the Uncertificated Class C Interest, the Cap Contract, the Cap
Contract Account and the obligation of the holders of the Class C Certificates
to pay amounts of Excess Interest to the holders of the Class A, Class M and
Class B Certificates shall be treated as a "grantor trust" under the Code, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A, Class M, Class B and
Class C Certificates as may be applicable under the Code.
(f) The parties intend that the portion of the Trust Fund
consisting of the right to receive payments distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof shall be treated as a
"grantor trust" under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the Trustee
shall (i) furnish or cause to be furnished to the holders of the Class P
Certificates information regarding their allocable share of the income with
respect to such grantor trust and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) and
such other forms as may be applicable.
(g) [RESERVED]
(h) All payments of principal and interest at the Net Mortgage
Rate on each of the Mortgage Loans (other than payments distributable to the
Class P Certificates pursuant to Section 4.04(b)(i) hereof) received from the
Mortgage Loans shall be paid to the Lower Tier REMIC Regular Interests until the
principal balance of all such interests have been reduced to zero and any losses
allocated to such interests have been reimbursed. Any excess amounts shall be
distributed to the Class LTR Interest. On each Distribution Date, an amount
equal to 50% of the increase in the Overcollateralization Amount shall be
payable as a reduction of the principal amounts of the Lower Tier REMIC Marker
Classes (with such amount allocated among the Lower Tier REMIC Marker Classes so
that each Lower Tier REMIC Marker Class will have its principal reduced by an
amount equal to 50% of any increase in the Overcollateralization Amount that
results in a reduction in the principal balance of its Related Certificates) and
will be accrued and added to the principal balance of the Class LTX Interest.
All payments of scheduled principal and prepayments of principal on the Mortgage
Loans shall be allocated 50% to the Class LTX Interest and 50% to the Lower Tier
REMIC Marker Classes (with principal payments allocated to each of the Lower
Tier REMIC Marker Classes in an amount equal to 50% of the principal amounts
distributed to the Related Certificates in reduction of their principal
amounts). Notwithstanding the preceding sentence, an amount equal to the
principal payments that result in a reduction in the Overcollateralization
Amount shall be treated as payable entirely to the Class LTX Interest. Realized
Losses that are allocated to the Certificates shall be applied to the Lower Tier
REMIC Marker Classes and the Class LTX Interest so that after all distributions
have been made on each Distribution Date (i) the principal balance of each of
the Lower Tier REMIC Marker Classes is equal to 50% of the principal balance of
the Related Certificates and (ii) the principal balance of the Class LTX
Interest is equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.
Each Lower Tier REMIC Marker Class shall be entitled to receive an amount equal
to 50% of all amounts distributed to the Related Certificates in respect of
unreimbursed amounts of Realized Losses. The Class LTX Interest shall be
entitled to receive all other amounts distributed to the Certificates in respect
of unreimbursed amounts of Realized Losses.
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If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier REMIC Regular Interests on such
Distribution Date) among the Lower Tier REMIC Regular Interests so that (i) each
of the Lower Tier Marker Classes has a principal balance equal to 50% of the
principal balance of the Related Certificates, (ii) the Class LTX Interest has a
principal balance equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.
(i) In the event that any REMIC provided for herein fails to
qualify as a REMIC, loses its status as a REMIC or incurs federal, state or
local taxes as a result of a prohibited transaction or prohibited contribution
under the REMIC Provisions due to the negligent performance by the Servicer of
its duties and obligations set forth herein, the Servicer shall indemnify the
NIMs Insurer, the Trustee, the Securities Administrator, the Master Servicer and
the Trust Fund against any and all Losses resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Securities
Administrator, the Master Servicer, the Depositor or the Holder of a Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R Certificate on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Servicer of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).
(j) In the event that any REMIC provided for herein fails to
qualify as a REMIC, loses its status as a REMIC, or incurs federal, state or
local taxes as a result of a prohibited transaction or prohibited contribution
under the REMIC Provisions due to the negligent performance by the Securities
Administrator of its duties and obligations set forth herein, the Securities
Administrator shall indemnify the NIMs Insurer and the Trust Fund against any
and all Losses resulting from such negligence; provided, however, that the
Securities Administrator shall not be liable for any such Losses attributable to
the action or inaction of the Servicer, the Master Servicer, the Depositor, the
Trustee or the Holder of a Class R Certificate, as applicable, nor for any such
Losses resulting from misinformation provided by the Holder of such Class R
Certificate on which the Securities Administrator has relied. The foregoing
shall not be deemed to limit or restrict the rights and remedies of the Holder
of such Class R Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Securities
Administrator have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Securities Administrator of
its duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).
Section 2.08. [RESERVED]
Section 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
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(a) the Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy;
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, the Master
Servicer, the Securities Administrator, the NIMs Insurer or the Trustee, any
affiliate of the Depositor, the Master Servicer, the Securities Administrator,
the NIMs Insurer or the Trustee and prepared by the Servicer pursuant to this
Agreement will be inaccurate in any material respect, provided, however, that
the Servicer shall not be responsible for inaccurate information provided to it
by third parties.
Section 2.10. [RESERVED]
Section 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and to perform the duties and obligations of the
Trustee under, the Cap Contract, an insurance and indemnity agreement with a
NIMs Insurer and any other agreement or instrument related thereto, in each case
in such form as the Depositor shall direct or shall approve, the execution and
delivery of any such agreement by the Depositor to be conclusive evidence of its
approval thereof
Section 2.12. Qualifying Special Purpose Entity. For purposes of SFAS 140,
the parties hereto intend that the Trust Fund shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 or SFAS 140.
ARTICLE II
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that, subject to Section 6.03, the
Servicer shall not take any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the rights and interests of the other
parties to this Agreement except as otherwise required by this Agreement or by
law. Notwithstanding anything in this Agreement to the contrary, the Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would cause any of the REMICs provided for herein to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and
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protect the interest of the Trust Fund in the same manner as it currently
protects its own interest in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Mortgage Loan, but in any case not in any
manner that is a lesser standard than that provided in the first sentence of
this Section 3.01. Without limiting the generality of the foregoing, the
Servicer, in its own name or in the name of the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, subordinations and all other comparable
instruments, with respect to the Mortgage Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor, the Securities
Administrator and/or the Trustee such documents requiring execution and delivery
by any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, to the extent that the Servicer is
not permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor, the Securities
Administrator and/or the Trustee shall execute such documents and deliver them
to the Servicer. For purposes of this Section 3.01, the Trustee hereby grants to
the Servicer a limited power of attorney to execute and file any and all
documents necessary to fulfill the obligations of the Servicer under this
Section 3.01.
The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall deliver a list of Servicing Officers to the Master
Servicer and the Trustee by the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 97-02 and that for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment 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. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS System,
shall be subject to withdrawal by the Servicer from the Collection Account.
With respect to any second lien Mortgage Loan, the Servicer may consent to
the refinancing of the prior senior lien relating to such Mortgage Loan,
provided that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage
Loan is no higher than the Combined Loan-to-Value Ratio prior to such
refinancing; and
(b) the interest rate for the loan evidencing the refinanced
senior lien is no more than 2.0% higher than the interest rate on the loan
evidencing the existing senior lien immediately prior to the date of such
refinancing; and
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(c) the loan evidencing the refinanced senior lien is not subject
to negative amortization.
Section 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer, which may be an affiliate (each, a "subservicer")
pursuant to a subservicing agreement (each, a "Subservicing Agreement")
including, at the Servicer's option, if requested to do so by the Holder of the
Class C Certificate; provided, however, that (i) such subservicing arrangement
and the terms of the related subservicing agreement must provide for the
servicing of such Mortgage Loans in a manner consistent with the servicing
arrangements contemplated hereunder, (ii) that such agreement would not result
in a withdrawal or downgrading by any Rating Agency of the ratings of any
Certificates or any of the NIM Notes evidenced by a letter to that effect
delivered by each Rating Agency to the Depositor and the NIMs Insurer and (iii)
the NIMs Insurer shall have consented to such subservicing agreement.
Notwithstanding the provisions of any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a subservicer or reference to actions taken through a subservicer
or otherwise, the Servicer shall remain obligated and liable to the Depositor,
the Master Servicer, the Trustee and the Certificateholders for the servicing
and administration of the Mortgage Loans in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue of
such subservicing agreements or arrangements or by virtue of indemnification
from the subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Mortgage Loans. Every subservicing agreement entered into by the Servicer shall
contain a provision giving any successor servicer the option to terminate such
agreement, with the consent of the NIMs Insurer, in the event a successor
servicer is appointed. All actions of the each subservicer performed pursuant to
the related subservicing agreement shall be performed as an agent of the
Servicer with the same force and effect as if performed directly by the
Servicer. The Servicer shall deliver to the NIMs Insurer and the Master Servicer
copies of all subservicing agreements. The Trustee shall have no obligations,
duties or liabilities with respect to a subservicer, including without
limitation, any obligation, duty or liability to monitor such subservicer or to
pay a subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
Section 3.03. Rights of the Depositor, the Securities Administrator and
the Trustee in Respect of the Servicer.
None of the Securities Administrator, the Trustee nor the Depositor shall
have any responsibility or liability for any action or failure to act by the
Servicer, and none of them is obligated to supervise the performance of the
Servicer hereunder or otherwise.
Section 3.04. Master Servicer to Act as Servicer.
Subject to Sections 6.04, 7.02 and 11.02, in the event that the Servicer
shall for any reason no longer be the Servicer hereunder (including by reason of
an Event of Default), the Master Servicer or its designee shall, within a period
of time not to exceed ninety (90) days from the date of notice of termination or
resignation, thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter (except that the Master Servicer shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances or Servicing Advances if it is prohibited from doing so by applicable
law, (iii) obligated
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to effectuate repurchases or substitutions of Mortgage Loans hereunder,
including pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for any
expenses of the Servicer pursuant to Section 2.03 or (v) deemed to have made any
representations and warranties hereunder, including pursuant to Section 2.04 or
the first paragraph of Section 6.02 hereof; provided, however that the Master
Servicer (subject to clause (ii) above) or its designee, in its capacity as the
successor servicer, shall immediately assume the terminated or resigning
Servicer's obligation to make Advances and Servicing Advances). No such
termination or resignation shall affect any obligation of the Servicer to pay
amounts owed under this Agreement and to perform its duties under this Agreement
until its successor assumes all of its rights and obligations hereunder. If the
Servicer shall for any reason no longer be the Servicer (including by reason of
any Event of Default), the Master Servicer (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the Servicer under
any subservicing agreement in accordance with the terms thereof; provided,
however, that the Master Servicer (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as servicer under a
subservicing agreement arising prior to the date of such succession unless it
expressly elects to succeed to the rights and obligations of the Servicer
thereunder; and the Servicer shall not thereby be relieved of any liability or
obligations under the subservicing agreement arising prior to the date of such
succession. To the extent any costs or expenses, including without limitation
Servicing Transfer Costs incurred by the Master Servicer in connection with this
Section 3.04 or Section 11.02, are not paid by the Servicer pursuant to this
Agreement within 30 days of the date of the Master Servicer's invoice thereof,
such amounts shall be payable out of the Certificate Account; provided that if
the Servicer has been terminated by reason of an Event of Default, the
terminated Servicer shall reimburse the Trust Fund for any such expense incurred
by the Trust Fund upon receipt of a reasonably detailed invoice evidencing such
expenses. If the Master Servicer is unwilling or unable to act as servicer, the
Master Servicer shall seek to appoint a successor servicer that is eligible in
accordance with the criteria specified this Agreement.
The Servicer shall, upon request of the Master Servicer, but at the
expense of the Servicer if the Servicer has been terminated by reason of an
Event of Default, deliver to the assuming party all documents and records
relating to each subservicing agreement and the Mortgage Loans then being
serviced and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
Section 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any default
interest charge, or (ii) subject to Section 3.01, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provided, further, that the
NIMs Insurer's prior written consent shall be required for any modification,
waiver or amendment after the Cut-off Date if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans as of the Cut-Off Date. In the event of any
such arrangement pursuant to clause (ii) above, subject to Section 4.01, the
Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan
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(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as "forbearance"), provided, however, that in
determining which course of action permitted by this sentence it shall pursue,
the Servicer shall adhere to the standards of Section 3.01. The Servicer's
analysis supporting any forbearance and the conclusion that any forbearance
meets the standards of Section 3.01 shall be reflected in writing in the
Mortgage File.
(b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the Servicer has not
been provided with information sufficient to enable it to collect the Prepayment
Charge, or (iv) in the Servicer's reasonable judgment as described in Section
3.01 hereof, (x) such waiver relates to a default or a reasonably foreseeable
default, (y) such waiver would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and related Mortgage Loan and (z)
doing so is standard and customary in servicing similar Mortgage Loans
(including any waiver of a Prepayment Charge in connection with a refinancing of
a Mortgage Loan that is related to a default or a reasonably foreseeable
default). Except as provided in the preceding sentence, in no event will the
Servicer waive a Prepayment Charge in connection with a refinancing of a
Mortgage Loan that is not related to a default or a reasonably foreseeable
default. If the Servicer waives or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Servicer, other than as provided above, the
Servicer shall deposit the amount of such Prepayment Charge (or such portion
thereof as had been waived for deposit) into the Collection Account for
distribution in accordance with the terms of this Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(d) The Servicer shall establish and initially maintain, on behalf
of the Certificateholders, the Collection Account. The Servicer shall deposit
into the Collection Account daily, within two Business Days of receipt thereof,
in immediately available funds, the following payments and collections received
or made by it on and after the Cut-Off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans, other than principal due on the
Mortgage Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage
Loans net of the related Servicing Fee permitted under Section 3.15, other than
(x) interest due on the Mortgage Loans on or prior to the Cut-off Date and (y)
Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or released to
the Mortgagor in accordance with the Servicer's normal servicing procedures;
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(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer
pursuant to Section 3.05(g) in connection with any losses on Permitted
Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Advances made by the Servicer pursuant to Section
4.01;
(ix) all Prepayment Charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property and other similar ancillary fees (other than
Prepayment Charges)) if collected, and any Prepayment Interest Excess need not
be remitted by the Servicer. Rather, such fees and charges may be retained by
the Servicer as additional servicing compensation. In the event that the
Servicer shall remit any amount not required to be remitted and not otherwise
subject to withdrawal pursuant to Section 3.08 hereof, it may at any time
withdraw or direct the Trustee, or such other institution maintaining the
Collection Account, to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Collection Account at
the direction of the Servicer.
The Servicer shall give notice to the NIMs Insurer, the Securities
Administrator and the Trustee of the location of the Collection Account
maintained by it when established and prior to any change thereof. Not later
than twenty days after each Distribution Date, the Servicer shall forward to the
NIMs Insurer, the Securities Administrator, the Trustee and the Depositor the
most current available bank statement for the Collection Account. Copies of such
statement shall be provided by the Securities Administrator to any
Certificateholder and to any Person identified to the Securities Administrator
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Servicer to the
Securities Administrator.
(e) The Securities Administrator shall establish and maintain, on
behalf of the Certificateholders, the Certificate Account. The Securities
Administrator shall, promptly upon receipt, deposit or cause to be deposited in
the Certificate Account and retain therein the following:
(i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate Account;
(ii) the Purchase Price and any Substitution Adjustment
Amount;
(iii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
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(iv) the Optional Termination Amount paid by the winning
bidder at the Auction or by the Servicer pursuant to Section 9.01.
Any amounts received by the Securities Administrator prior to 1:00 p.m.
New York City time (or such earlier deadline for investment in the Permitted
Investments designated by the Securities Administrator) which are required to be
deposited in the Certificate Account by the Servicer or Master Servicer shall be
invested in Permitted Investments on the Business Day on which they were
received. The foregoing requirements for remittance by the Servicer and Master
Servicer and deposit by the Servicer and Master Servicer into the Certificate
Account shall be exclusive. If the Servicer fails to remit any funds due by the
time designated herein, the Servicer shall pay to the Securities Administrator,
for its own account, interest accrued on such funds at the prime rate as set
forth in The Wall Street Journal from and including the applicable due date, to
but excluding the day such funds are paid to the Securities Administrator. In
the event that the Servicer or the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw such amount from the
Certificate Account, any provision herein to the contrary notwithstanding. All
funds deposited in the Certificate Account shall be held by the Securities
Administrator in trust for the Certificateholders until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 3.08. In no event
shall the Securities Administrator incur liability for withdrawals from the
Certificate Account at the direction of the Servicer or the Master Servicer. The
Securities Administrator shall give notice to the NIMs Insurer, the Master
Servicer and the Servicer of the location of the Certificate Account maintained
by it when established and prior to any change thereof.
(f) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account as directed by
the Servicer or the Securities Administrator, as applicable, in writing, in
Permitted Investments, which shall mature not later than (i) in the case of the
Collection Account the Business Day preceding the related Servicer Remittance
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Servicer Remittance Date) and (ii) in the case of the Certificate Account, the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains such Certificate Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Trustee, for the benefit of the Certificateholders. All
income and gain net of any losses realized from amounts on deposit in the
Collection Account shall be for the benefit of the Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any losses incurred in the Collection Account in respect of any such
investments shall be deposited by the Servicer in the Collection Account out of
the Servicer's own funds immediately as realized. All income and gain net of any
losses realized from amounts on deposit in the Certificate Account shall be for
the benefit of the Securities Administrator and shall be remitted to or
withdrawn by it monthly as provided herein. The amount of any losses incurred in
the Certificate Account in respect of any such investments shall be deposited by
the Securities Administrator in the Certificate Account out of the Securities
Administrator's own funds immediately as realized.
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
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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
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes and assessments and insurance premiums) and
3.10 hereof (with respect to hazard insurance), to refund to any Mortgagors any
sums as may be determined to be overages, to pay interest, if required by law or
the terms of the related Mortgage or Mortgage Note, to Mortgagors on balances in
the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 9.01 hereof. The Escrow
Accounts shall not be a part of the Trust Fund.
Section 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
Section 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.
(a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously
paid to or withheld by the Servicer), as servicing compensation in accordance
with Section 3.15, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest payment was
made, and, as additional servicing compensation, those other amounts set forth
in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it) with respect to
the Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in respect of
which any such Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable
Advance previously made and any Non-Recoverable Servicing Advances previously
made to the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income
with respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(vi) reserved;
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(vii) to pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing Advances would constitute an "unanticipated expense"
within the meaning of Treasury Regulation Section 1.860-1(b)(3)(ii)), the
Servicer's right to reimbursement of Servicing Advances pursuant to this
subclause (vi) with respect to any Mortgage Loan being limited to amounts
received on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late recoveries of
the payments for which such advances were made pursuant to Section 3.01 or
Section 3.06;
(viii) to pay to the Depositor or the Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(ix) to reimburse the Servicer, the Master Servicer, the
Securities Administrator or the Depositor for expenses incurred by any of them
in connection with the Mortgage Loans or Certificates and reimbursable pursuant
to Section 3.04, Section 3.25, Section 6.03 or Section 11.02(c) hereof provided
that reimbursement therefor would constitute "unanticipated" expenses within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(x) to reimburse the Trustee for enforcement expenses
reasonably incurred in respect of a breach or defect giving rise to the purchase
obligation in Section 2.03 that were incurred in the purchase price of the
Mortgage Loans including any expenses arising out of the enforcement of the
purchase obligation; provided that any such expenses will be reimbursable under
this subclause (x) only to the that such expenses would constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for herein;
(xi) [RESERVED]
(xii) to withdraw pursuant to Section 3.05 any amount
deposited in the Collection Account and not required to be deposited therein;
and
(xiii) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 4:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds (other that amounts payable
to the Securities Administrator and the Trustee), to the extent on deposit, and
such amount shall be deposited in the Certificate Account; provided, however, if
the Securities Administrator does not receive such Interest Funds and Principal
Funds by 5:00 p.m. Eastern Time, such Interest Funds and Principal Funds shall
be deposited in the Certificate Account by 1:00 p.m. Eastern Time on the next
Business Day. In the event such funds are not deposited by 1:00 p.m. Eastern
Time, the Servicer shall pay, out of its own funds, interest on such amount at a
rate equal to the "prime rate" as published by Xxxxx Fargo Bank, N.A. at such
time for each date or part thereof.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.
The Servicer shall provide written notification to the Securities
Administrator on or prior to the next succeeding Servicer Remittance Date upon
making any withdrawals from the Collection Account pursuant to subclauses (iii)
and (vii) above.
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Unless otherwise specified, any amounts reimbursable to the Servicer or
the Trustee from amounts on deposit in the Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.
(b) The Securities Administrator shall withdraw funds from the
Certificate Account for distribution to the Certificateholders in the manner
specified in this Agreement (and shall withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to retain pursuant to this
Agreement). In addition, the Securities Administrator may from time to time make
withdrawals from the Certificate Account for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be deposited therein;
(ii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof (after paying all
amounts necessary to the Trustee, the Securities Administrator, the Master
Servicer or the Servicer in connection with any such termination);
(iii) to pay the Securities Administrator any unpaid
Securities Administrator Fee and to reimburse the Securities Administrator, the
Master Servicer or the Trustee for any fees, expenses and indemnification
reimbursable pursuant to this Agreement, including without limitation Sections
3.04, 6.03, 8.05, 8.06 and 11.02 hereof; and
(iv) to pay to the Securities Administrator earnings on or
investment income with respect to funds in or credited to the Certificate
Account.
Section 3.09. [RESERVED]
Section 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each Mortgage Loan secured
by a first lien (other than a Co-op Loan), fire and hazard insurance with
extended coverage in an amount that is at least equal to the lesser of (i) the
replacement value of the improvements that are part of such Mortgaged Property
and (ii) the greater of (a) the outstanding principal balance of the Mortgage
Loan and (b) an amount such that the proceeds of such policy shall be sufficient
to prevent the related Mortgagor and/or mortgagee from becoming a co-insurer.
Each such policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause. The
Servicer shall also cause flood insurance to be maintained on property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan, to the
extent described below. Pursuant to Section 3.05 hereof, any amounts collected
by the Servicer under any such policies (other than the amounts to be applied to
the restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Servicer's
normal servicing procedures) shall be deposited in the Collection Account. Any
cost incurred by the Servicer in maintaining any such insurance shall not, for
the purpose of calculating monthly distributions to the Certificateholders or
remittances to the 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 Servicer as a Servicing Advance
to the extent provided in Section 3.08(a)(vii) hereof. It is understood and
agreed that no earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a Mortgage other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
with respect to a Mortgage Loan secured by a first lien 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
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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 lesser of
(i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements that are part of such Mortgaged Property,
or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which the expense shall constitute a Servicing
Advance) delivered to the Master Servicer , the Trustee and the Depositor shall
conclusively establish the reasonableness of the Servicer's belief that any
"due-on-sale" clause is not enforceable under applicable law. In such event, the
Servicer shall make reasonable efforts to enter into an assumption and
modification agreement 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 law or the Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted under
applicable law, the Servicer is authorized to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Note. In addition to the foregoing, the Servicer shall
not be required to enforce any "due-on-sale" clause if in the reasonable
judgment of the Servicer, entering into an assumption and modification agreement
with a Person to whom such property shall be conveyed and releasing the original
Mortgagor from liability would be in the best interests of the
Certificateholders. The Mortgage Loan, as assumed, shall conform in all respects
to the requirements, representations and warranties of this Agreement. The
Servicer shall notify the Trustee and the NIMs Insurer that any such assumption
or substitution agreement has been completed by forwarding to the Trustee (with
a copy to the NIMs Insurer) the original copy of such assumption or substitution
agreement (indicating the Mortgage File to which it relates) which copy shall be
added by the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The Servicer shall
be responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the Monthly
Payment on the related Mortgage Loan shall not be changed but shall remain as in
effect immediately prior to the assumption or substitution, the stated maturity
or outstanding principal amount of such Mortgage Loan shall not be changed nor
shall any
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required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Special Loss Mitigation.
(a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Collection Account pursuant to Section 3.08
hereof). The Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. Any Mortgage
Loan that is charged off may be sold to the majority Certificateholder of the
Class C Certificates, at its option, at its fair market value after the time
period specified in (e) below. If the Servicer has knowledge that a Mortgaged
Property that the Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer or an affiliate may
receive usual and customary real estate referral fees for real estate brokers in
connection with the listing and disposition of REO Property. The Servicer shall
prepare a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Servicer to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
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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 Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Trust Fund or, at the expense of the Trust Fund, obtain, in accordance with
applicable procedures for obtaining an automatic extension of the grace period,
more than 60 days prior to the day on which such three-year period would
otherwise expire, an extension of the three-year grace period, in which case
such property must be disposed of prior to the end of such extension, unless the
Trustee, the NIMs Insurer and the Securities Administrator shall have been
supplied with an Opinion of Counsel (such Opinion of Counsel not to be an
expense of the Trustee, the NIMs Insurer or the Securities Administrator), to
the effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such three-year period or extension will not result in the
imposition of taxes on "prohibited transactions" of the Trust Fund or any of the
REMICs provided for herein as defined in section 860F of the Code or cause any
of the REMICs provided for herein to fail to qualify as a REMIC at any time that
any Certificates are outstanding, in which case the Trust Fund may continue to
hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be held, rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust
Fund or any REMIC provided for herein to the imposition of any federal, state or
local income taxes on the income earned from such Mortgaged under section
860G(c) of the Code or otherwise, unless the Servicer or the Depositor has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, 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 Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to any Prepayment Charges and then to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate
to the Due Date
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occurring in the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) The Servicer, in its sole discretion, shall have the right to
elect (by written notice sent to the Trustee, the Master Servicer and the
Securities Administrator) to purchase for its own account from the Trust Fund
any Mortgage Loan that is 91 days or more Delinquent at a price equal to the
Purchase Price. The Purchase Price for any Mortgage Loan purchased hereunder
shall be delivered to the Securities Administrator for deposit to the
Certificate Account and the Trustee (or its custodian), upon receipt of such
confirmation of deposit and a Request for Release from the Servicer in the form
of Exhibit I hereto, shall release or cause to be released to the Servicer the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment prepared by the Servicer, in each case without recourse, as shall
be necessary to vest in the Servicer any Mortgage Loan released pursuant hereto
and the Servicer shall succeed to all the Trustee's right, title and interest in
and to such Mortgage Loan and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The Servicer
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Securities Administrator or the Certificateholders
with respect thereto.
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (provided that the Servicer has
determined that no net recovery is possible through foreclosure proceedings or
other liquidation of the related Mortgaged Property), (iii) take a deed in lieu
of foreclosure, (iv) accept a short sale or short refinance; (v) arrange for a
repayment plan, or (vi) agree to a modification of such Mortgage Loan. As to any
Mortgage Loan that becomes 120 days delinquent, the Servicer will be required to
obtain a broker's price opinion, the cost of which will be reimbursable as a
Servicing Advance. After obtaining the broker's price opinion, the Servicer will
determine, in its reasonable business judgment, whether a net recovery is
possible through foreclosure proceedings or other liquidation of the related
Mortgage Property. If the Servicer determines that no such recovery is possible,
it must charge off the related Mortgage Loan at the time it becomes 180 days
delinquent. Once a Mortgage Loan has been charged off, the Servicer will
discontinue making Advances, the Servicer will not be entitled to Servicing Fees
(except as provided below) with respect to such Mortgage Loan, and the Mortgage
Loan will be treated as a Liquidated Mortgage Loan. If the Servicer determines
that such net recovery is possible through foreclosure proceedings or other
liquidation of the related Mortgaged Property on a Mortgage Loan that becomes
180 days delinquent, the Servicer may continue making Advances, and the Servicer
will be required to notify the Trustee and the Securities Administrator of such
decision.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above,
may continue to be serviced by the Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, only to the
extent of funds available from any recoveries on any such Mortgage Loans. Any
such Mortgage Loans serviced in accordance with the specialized collection
procedures shall be serviced for approximately six months. Any net recoveries
received on such Mortgage Loans during such six month period will be treated as
Subsequent Recoveries. On the date which is six months after the date on which
the Servicer begins servicing such Mortgage Loans using the specialized
collection procedures, unless specific net recoveries are anticipated by the
Servicer on a particular Mortgage Loan, such charged off loan will be released
to the majority holder of the Class C Certificates and thereafter, (i) the
majority holder of the Class C
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Certificates will be entitled to any amounts subsequently received in respect of
any such released loans, (ii) the majority holder of the Class C Certificates
may designate any servicer to service any such released loan and (iii) the
majority holder of the Class C Certificates may sell any such released loan to a
third party.
Section 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of a copy of such request, the Trustee or its designee
shall promptly release the related Mortgage File to the Servicer, and the
Servicer is authorized to cause the removal from the registration on the MERS
System of any such Mortgage if applicable, and the Servicer, on behalf of the
Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Mortgagor to the
extent permitted by law, and otherwise to the Trust Fund to the extent such
expenses constitute "unanticipated expenses" within the meaning of Treasury
Regulations Section 1.860G-(1)(b)(3)(ii). From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its designee shall, upon
delivery to the Trustee or its designee of a Request for Release in the form of
Exhibit I signed by a Servicing Officer, release the Mortgage File to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
or its designee when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account.
Each Request for Release may be delivered to the Trustee or its designee
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or its designee shall mutually agree. The Trustee or
its designee shall promptly release the related Mortgage File(s) within five (5)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above. Receipt of a properly completed Request for
Release shall be authorization to the Trustee or its designee to release such
Mortgage Files, provided the Trustee or its designee has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages respectively caused by
it.
On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total number
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii).
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If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Servicer
may deliver or cause to be delivered to the Trustee or its designee, for
signature, as appropriate or on behalf of the Trustee, execute any court
pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, the Servicer shall cause possession of any
Mortgage File or of the documents therein that shall have been released by the
Trustee or its designee to be returned to the Trustee promptly after possession
thereof shall have been released by the Trustee or its designee unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account, and the Servicer
shall have delivered to the Trustee or its designee a Request for Release in the
form of Exhibit I or (ii) the Mortgage File or document shall have been
delivered to an attorney or to a public trustee or other public official as
required by law for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property and the Servicer shall
have delivered to the Trustee or its designee an Officer's Certificate of a
Servicing Officer certifying as to the name and address of the Person to which
the Mortgage File or the documents therein were delivered and the purpose or
purposes of such delivery.
Section 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or in any Escrow Account, or any funds that otherwise are or may become
due or payable to the Trustee or the Securities Administrator for the benefit of
the Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or otherwise
any claim or right of set off against any Mortgage File or any funds collected
on, or in connection with, a Mortgage Loan, except, however, that the Servicer
shall be entitled to set off against and deduct from any such funds any amounts
that are properly due and payable to the Servicer under this Agreement.
Section 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property) and similar fees
payable by the Mortgagor, Prepayment Interest Excess, and all income and gain
net of any losses realized from Permitted Investments in the Collection Account
shall be retained by the Servicer to the extent not required to be deposited in
the Collection Account pursuant to Sections 3.05, or 3.12(a) hereof. The
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement. In no event shall
the Trustee be liable for any
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Servicing Fee or for any differential between the Servicing Fee and the amount
necessary to induce a successor servicer to act as successor servicer under this
Agreement.
Section 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it provided, that
the Servicer shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
Section 3.17. Annual Statement as to Compliance.
Pursuant to this Agreement, the Servicer shall deliver to the Depositor,
the Securities Administrator, the Master Servicer and the Trustee on or before
March 15 of each year beginning in 2006, (or such other date as to which the
Depositor gives the Servicer at least 30 days prior notice) in order to remain
in compliance with the Section 302 Requirements, an Officer's Certificate
stating, as to each signatory thereof, that (i) a review of the activities of
the Servicer during the preceding calendar year and of performance under this
Agreement or a similar agreement has been made under such officer's supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. The Master Servicer shall forward a copy of each such
statement received by it to each Rating Agency. Copies of such statement shall
be provided by the Securities Administrator to any Certificateholder upon
written request at the Certificateholder's expense, provided such statement has
been delivered by the Servicer to the Securities Administrator.
Section 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before March 15 of each year, beginning in 2006 or such other date
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Securities Administrator , the
Trustee, the Master Servicer and the Depositor. Copies of the USAP Report shall
be provided by the Securities Administrator to any Certificateholder upon
request at the Certificateholder's expense, provided such report has been
delivered by the Servicer to the Securities Administrator.
Section 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this agreement shall
exist so long as the NIM Notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such NIM Notes.
Section 3.20. [RESERVED]
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Section 3.21. Annual Certificate by Securities Administrator.
For so long as the Master Servicer and the Securities Administrator are
the same Person, the Securities Administrator shall not be required to satisfy
or perform the terms of Section 3.21(a) and (b).
(a) On or before March 15 of each year (commencing in 2006), an
officer of the Securities Administrator shall execute and deliver an Officer's
Certificate, signed by a Responsible Officer of the Securities Administrator or
any officer to whom that officer reports, to the Depositor and the Master
Servicer for the benefit of the Depositor and the Master Servicer and their
respective officers, directors and affiliates, certifying as to the matters
described in the Officer's Certificate attached hereto as Exhibit K.
(b) The Securities Administrator shall indemnify and hold harmless
the Depositor, the Master Servicer (unless the Master Servicer is the same
person as the Securities Administrator), the Trustee and their respective
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Securities Administrator or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.21, any material misstatement
or omission in the Officer's Certificate required under this Section or the
negligence, bad faith or willful misconduct of the Securities Administrator in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Depositor and the Master Servicer, then the
Securities Administrator agrees that it shall contribute to the amount paid or
payable by the Depositor or the Master Servicer as a result of the losses,
claims, damages or liabilities of the Depositor or the Master Servicer in such
proportion as is appropriate to reflect the relative fault of the Securities
Administrator on the one hand and of the Depositor and the Master Servicer on
the other in connection with a breach of the Securities Administrator's
obligations under this Section 3.21, any material misstatement or omission in
the Officer's Certificate required under this Section or the Securities
Administrator's negligence, bad faith or willful misconduct in connection
therewith.
Section 3.22. Annual Certificate by Servicer.
(a) Within 15 days prior to the date on which a Form 10-K is
required to be filed with a Certification by the Master Servicer, the Servicer
shall execute and deliver an Officer's Certificate in the form of Exhibit L
attached hereto, signed by the senior officer in charge of servicing of the
Servicer or any officer to whom that officer reports, to the Master Servicer and
Depositor for the benefit of the Master Servicer and Depositor and their
respective officers, directors and affiliates.
(b) The Servicer shall indemnify and hold harmless the Securities
Administrator, the Trustee, the Master Servicer and the Depositor and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under Section 3.17, Section 3.18 and this Section
3.22, any material misstatement or omission in the Officer's Certificate
required under this Section or the negligence, bad faith or willful misconduct
of the Servicer in connection therewith. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Securities
Administrator, the Master Servicer and the Depositor, then the Servicer agrees
that it shall contribute to the amount paid or payable by the Securities
Administrator, the Master Servicer and the Depositor as a result of the losses,
claims, damages or liabilities of the Depositor and the Master Servicer in such
proportion as is appropriate to reflect the relative fault of the Depositor and
the Master Servicer on the one hand and the Servicer on the other in connection
with a breach of the Servicer's obligations under
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this Section 3.22, any material misstatement or omission in the Officer's
Certificate required under this Section or the Servicer's negligence, bad faith
or willful misconduct in connection therewith.
Section 3.23. Prepayment Charge Reporting Requirements.
Promptly after each Distribution Date, the Servicer shall provide to the
Depositor and the Master Servicer the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) original principal balance;
(v) Prepayment Charge amount due; and
(vi) Prepayment Charge amount collected.
Section 3.24. Information to the Securities Administrator.
Two Business Days after the 15th day of each month, but not later than the
18th day of each month, the Servicer shall furnish to the Master Servicer a
delinquency report in the form set forth in Exhibit M-1, a monthly remittance
advice in the form set forth in Exhibit M-2 and a realized loss report in the
form set forth in Exhibit M-3 (or such other form or forms as the Master
Servicer and the Servicer may from time to time agree) for the period ending on
the last Business Day of the preceding month; provided, however, that in the
event the 18th day is not a Business Day, the aforementioned reports shall be
furnished by the Servicer to the Master Sevicer on the next Business Day; and
provided, further, that in the event there are three non-Business Days preceding
the 18th day, the Servicer will (a) furnish to the Master Servicer, on or before
the 18th day of the month, the aforementioned reports, which will not include
information arising from the related Prepayment Period, and (b) furnish to the
Master Servicer, by 3:00 P.M., EST on the next succeeding Business Day after the
18th day, a cumulative version of the aforementioned reports which includes such
information arising from the related Prepayment Period.
Section 3.25. Indemnification.
(a) The Servicer shall indemnify the Seller, the Trust Fund, the
Trustee, the Depositor, the Securities Administrator, the Master Servicer, the
NIMs Insurer and their officers, directors, employees and agents and hold each
of them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Servicer
immediately shall notify the Seller, the Trustee, the Securities Administrator,
the Master Servicer, the NIMs Insurer and the Depositor or any other relevant
party if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the indemnified party,
which consent shall not be unreasonably withheld or delayed) the defense of any
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or any of such parties in respect of such claim. The Servicer
shall follow any reasonable written instructions
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received from the NIMs Insurer and the Master Servicer in connection with such
claim, it being understood that the Master Servicer shall have no duty to
monitor or give instructions with respect to such claims. The Servicer shall
provide the Depositor, the Securities Administrator, the Trustee, the NIMs
Insurer and the Master Servicer with a written report of all expenses and
advances incurred by the Servicer pursuant to this Section 3.25(a), and the
Servicer shall promptly reimburse itself from the assets of the Trust Fund in
the Collection Account for all amounts advanced by it pursuant to the preceding
sentence except when and to the extent a determination has been made that the
claim in any way relates to the failure of the Servicer to service and
administer the Mortgage Loans in material compliance with the terms of this
Agreement or the gross negligence, bad faith or willful misconduct of the
Servicer. The provisions of this paragraph shall survive the termination of this
Agreement and the payment of the outstanding Certificates.
(b) The Master Servicer shall indemnify the Seller, the Trust
Fund, the Trustee, the Securities Administrator, the Servicer and the Depositor
and their officers, directors, employees and agents and hold each of them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the failure of the Master Servicer to perform its duties and
master service the Mortgage Loans in compliance with the terms of this
Agreement. The Master Servicer immediately shall notify the Seller, the Trustee,
the Servicer, the Securities Administrator and the Depositor or any other
relevant party if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld or delayed)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or any of such parties in respect of such
claim. The Master Servicer shall follow any written instructions received from
the Trustee in connection with such claim it being understood that the Trustee
shall have no duty to monitor or give instructions with respect to such claims.
The Master Servicer shall provide the Servicer, the Securities Administrator,
the Trustee and the Depositor with a written report of all expenses and advances
incurred by the Master Servicer pursuant to this Section 3.25(b), and the Master
Servicer shall promptly reimburse itself from the assets of the Trust Fund in
the Collection Account for all amounts advanced by it pursuant to the preceding
sentence except when the claim in any way relates to the failure of the Master
Servicer to service and administer the Mortgage Loans in material compliance
with the terms of this Agreement or the negligence, bad faith or willful
misconduct of the Master Servicer. The provisions of this paragraph shall
survive the termination of this Agreement and the payment of the outstanding
Certificates.
(c) The Securities Administrator shall indemnify the Seller, the
Trust Fund, the Trustee, the Servicer, the Master Servicer and the Depositor and
their officers, directors, employees and agents and hold each of them harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of such parties may sustain in any way related
to the failure of the Securities Administrator to perform its duties in
compliance with the terms of this Agreement. The Securities Administrator
immediately shall notify the Seller, the Trustee, the Servicer, the Master
Servicer and the Depositor or any other relevant party if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans, assume (with
the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any of such parties in respect of such claim. The Securities Administrator shall
follow any written instructions received from the Trustee in connection with
such claim it being understood that the Trustee shall have no duty to monitor or
give instructions with respect to such claims. The Securities Administrator
shall provide the Trustee, the Servicer, the Master Servicer and the Depositor
with a written report of all expenses and advances incurred by the Securities
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Administrator pursuant to this Section 3.25(c), and the Securities Administrator
shall promptly reimburse itself from the assets of the Trust Fund in the
Certificate Account for all amounts advanced by it pursuant to the preceding
sentence except when the claim in any way relates to the failure of the
Securities Administrator to perform its duties in material compliance with the
terms of this Agreement or the negligence, bad faith or willful misconduct of
the Securities Administrator. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
Section 3.26. Nonsolicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.
Section 3.27. High Cost Mortgage Loans.
In the event that the Servicer reasonably determines that a Mortgage Loan
may be a "high cost mortgage loan", "high cost home", "covered", "high cost",
"high risk home", "predatory" or similarly classified loan under any applicable
state, federal or local law, the Servicer may notify the Depositor, the Master
Servicer and Trustee thereof; the Servicer may terminate its servicing thereof;
and such determination shall be deemed to materially and adversely affect the
interests of the Certificateholders in such Mortgage Loan and the Seller will
repurchase the Mortgage Loan within a 30 day period from the date of the notice
in the manner described in Section 2.05.
ARTICLE IV
DISTRIBUTIONS
Section 4.01. Advances.
(a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 4:00 p.m. Eastern time on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Securities
Administrator for the benefit of the Certificateholders, funds constituting the
remaining portion of such Advance, if applicable, and (ii) to the Depositor, the
NIMs Insurer, each Rating Agency and the Master Servicer an Officer's
Certificate setting forth the basis for such determination. The Servicer may, in
its sole discretion, make an Advance with respect to the principal portion of
the final Scheduled Payment on a Balloon Loan, but the Servicer is under no
obligation to do so; provided, however, that nothing in this sentence shall
affect the Servicer's obligation under this Section 4.01 to Advance the interest
portion of the final Scheduled Payment with respect to a Balloon Loan as if such
Balloon Loan were a fully amortizing Mortgage Loan. If a Mortgagor does not pay
its final Scheduled Payment on a Balloon Loan when due, the Servicer shall
Advance (unless it determines in its good faith judgment that such amounts would
constitute a Non-Recoverable Advance) a full month of interest (net of the
Servicing
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Fee) on the Stated Principal Balance thereof each month until its Stated
Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
In addition, the Servicer shall have the right to reimburse itself for any such
Advance from amounts held from time to time in the Collection Account to the
extent such amounts are not then required to be distributed. Any funds so
applied and transferred pursuant to the previous two sentences shall be replaced
by the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled to be
reimbursed from the Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until the earlier of
(i) such Mortgage Loan is paid in full, (ii) the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01, (iii) the Servicer determines in its good faith judgment that such
amounts would constitute a Non-Recoverable Advance as provided in the preceding
paragraph or (iv) the date on which such Mortgage Loan becomes 150 days
delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor and the Master Servicer. In addition, the
Servicer shall not be required to advance any Relief Act Shortfalls.
(c) Notwithstanding the foregoing, the Servicer shall not be
required to make any Advances for any Mortgage Loan after such Mortgage Loan
becomes 150 days delinquent. The Servicer shall identify such delinquent
Mortgage Loans in the Servicer Statement referenced in Section 3.24. In
addition, the Servicer shall provide the Master Servicer with an Officer's
Certificate listing such delinquent Mortgage Loans and certifying that such
loans are 150 days or more delinquent.
Section 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall. In case of such deposit, the Servicer
shall not be entitled to any recovery or reimbursement from the Depositor, the
Master Servicer, the Securities Administrator, the Trustee, the Trust Fund or
the Certificateholders. With respect to any Distribution Date, to the extent
that the Prepayment Interest Shortfall exceeds Compensating Interest (such
excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Certificates, pro rata based upon the amount of interest each such Class would
otherwise be entitled to receive on such Distribution Date.
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Section 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in the Lower Tier REMIC in an amount sufficient to make the
distributions on the respective Certificates on such Distribution Date in
accordance with the provisions of Section 4.04.
Section 4.04. Distributions.
(a) Reserved.
(b) On each Distribution Date, the Securities Administrator shall
make the following distributions from the Certificate Account of an amount equal
to the Interest Funds in the following order of priority:
(i) to the Class P Certificates, an amount equal to any
Prepayment Charges collected on the Mortgage Loans during the related Prepayment
Period and all amounts paid by the Servicer or the Seller in respect of
Prepayment Charges pursuant to this Agreement or the Sale Agreement, as
applicable, and all amounts received in respect of any indemnification paid as a
result of a Prepayment Charge being unenforceable in breach of the
representations and warranties set forth in the Sale Agreement for the related
Prepayment Period;
(ii) to each class of the Class A Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such Class;
provided, however, if such amount is not sufficient to make a full distribution
of the Current Interest and any Interest Carry Forward Amount with respect to
the Class A Certificates, such amount will be distributed pro rata among each
Class of the Class A Certificates based on the ratio of (x) the Current Interest
and Interest Carry Forward Amount for each class of the Class A Certificates to
(y) the total amount of Current Interest and any Interest Carry Forward Amount
for the Class A Certificates;
(iii) to the Class M-1 Certificates, the Class M-1 Current
Interest and any Class M-1 Interest Carry Forward Amount;
(iv) to the Class M-2 Certificates, the Class M-2 Current
Interest and any Class M-2 Interest Carry Forward Amount;
(v) to the Class M-3 Certificates, the Class M-3 Current
Interest and any Class M-3 Interest Carry Forward Amount;
(vi) to the Class M-4 Certificates, the Class M-4 Current
Interest and any Class M-4 Interest Carry Forward Amount;
(vii) to the Class B-1 Certificates, the Class B-1 Current
Interest and any Class B-1 Interest Carry Forward Amount;
(viii) to the Class B-2 Certificates, the Class B-2 Current
Interest and any Class B-2 Interest Carry Forward Amount;
(ix) to the Class B-3 Certificates, the Class B-3 Current
Interest and any Class B-3 Interest Carry Forward Amount;
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(x) to the Class B-4 Certificates, the Class B-4 Current
Interest and any Class B-4 Interest Carry Forward Amount;
(xi) to the Class B-5 Certificates, the Class B-5 Current
Interest and any Class B-4 Interest Carry Forward Amount,
(xii) to the Class B-6 Certificates, the Class B-6 Current
Interest and any Class B-4 Interest Carry Forward Amount; and
(xiii) any remainder pursuant to Section 4.04(f) hereof.
On each Distribution Date, subject to the proviso in (ii) above, Interest
Funds received on the Group One Mortgage Loans will be deemed to be distributed
to the Class R, Class A-1A and Class A-1B Certificates and Interest Funds
received on the Group Two Mortgage Loans will be deemed to be distributed to the
Class A-2A, Class A-2B and Class A-2C Certificates, in each case, until the
related Current Interest and Interest Carry Forward Amount of each such class of
Certificates for such Distribution Date has been paid in full. Thereafter,
Interest Funds not required for such distributions are available to be applied
if necessary, to the class or classes of Certificates that are not related to
such group of Mortgage Loans
(c) [Reserved]
(d) On each Distribution Date, the Securities Administrator shall
make the following distributions from the Certificate Account of an amount equal
to the Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(b) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Class A Certificates, the Class A Principal
Distribution Amount will be distributed as follows:
(A) the Group One Principal Distribution Amount will be
distributed as follows: (1) if a Class A-1 Trigger Event has
occurred, the Group One Principal Distribution Amount will be
distributed sequentially to the Class R, Class A-1A and Class A-1B
Certificates, until the Certificate Principal Balance of each such
class has been reduced to zero and (2) if no Class A-1 Trigger Event
has occurred, the Group One Principal Distribution Amount will be
distributed as follows: first, to the Class R Certificate until its
Certificate Principal Balance has been reduced to zero, and second,
pro rata to the Class A-1A and Class A-1B Certificates, based on
their relative Certificate Principal Balances, until the Certificate
Principal Balance of each such class has been reduced to zero; and
(B) the Group Two Principal Distribution Amount will be
distributed sequentially to the Class A-2A, Class A-2B and Class
A-2C Certificates until the Certificate Principal Balance of each
such class has been reduced to zero; provided, however, that on and
after the Distribution Date on which the aggregate Certificate
Principal Balance of the Class M, Class B and Class C Certificates
have been reduced to zero, any principal distributions allocated to
the Class A-2A, Class A-2B and Class A-2C Certificates are required
to be allocated pro rata among such classes of Certificates, based
on their respective Certificate Principal Balances, until their
Certificate Principal Balances have been reduced to zero;
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(ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
(iv) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount;
(v) to the Class M-4 Certificates, the Class M-4 Principal
Distribution Amount;
(vi) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;
(vii) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;
(viii) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount;
(ix) to the Class B-4 Certificates, the Class B-4 Principal
Distribution Amount;
(x) to the Class B-5 Certificates, the Class B-5 Principal
Distribution Amount;
(xi) to the Class B-6 Certificates, the Class B-6 Principal
Distribution Amount; and
(xii) any remainder pursuant to Section 4.04(f) hereof.
(e) [Reserved].
(f) On each Distribution Date, the Securities Administrator shall
make the following distributions up to the following amounts from the
Certificate Account of the remainders pursuant to Section 4.04(b)(xiii) and
(d)(xii) hereof and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(b) and (d) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date:
(i) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;
(ii) to the Class M-1 Certificates, the Class M-1 Unpaid
Realized Loss Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Unpaid
Realized Loss Amount;
(iv) to the Class M-3 Certificates, the Class M-3 Unpaid
Realized Loss Amount;
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(v) to the Class M-4 Certificates, the Class M-4 Unpaid
Realized Loss Amount
(vi) to the Class B-1 Certificates, the Class B-1 Unpaid
Realized Loss Amount;
(vii) to the Class B-2 Certificates, the Class B-2 Unpaid
Realized Loss Amount;
(viii) to the Class B-3 Certificates, the Class B-3 Unpaid
Realized Loss Amount;
(ix) to the Class B-4 Certificates, the Class B-4 Unpaid
Realized Loss Amount;
(x) to the Class B-5 Certificates, the Class B-5 Unpaid
Realized Loss Amount;
(xi) to the Class B-6 Certificates, the Class B-6 Unpaid
Realized Loss Amount;
(xii) to the Class A, Class M and Class B Certificates, on a
pro rata basis, based upon outstanding Floating Rate Certificate Carryover for
each such Class, the Floating Rate Certificate Carryover for each Class; and
(xiii) the remainder pursuant to Section 4.04(g) hereof.
(g) on each Distribution Date, the Securities Administrator shall
allocate the remainders pursuant to Section 4.04(f)(xiii) as follows:
(i) to the Class C Certificates in the following order of
priority, (I) the Class C Current Interest, (II) the Class C Interest Carry
Forward Amount, (III) as principal on the Class C Certificate until the
Certificate Principal Balance of the Class C Certificates has been reduced to
zero and (IV) the Class C Unpaid Realized Loss Amount; and
(ii) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Securities Administrator shall
allocate the remainder pursuant to Section 4.04(g)(ii) hereof (i) to the
Securities Administrator and the Trustee to reimburse amounts or pay
indemnification amounts owing to the Trustee from the Trust Fund pursuant to
Section 8.06 and any indemnification amounts owing to the Master Servicer and
the Securities Administrator pursuant to Section 6.03 and (ii) to the Class R
Certificate and such distributions shall be made only after all preceding
distributions shall have been made until such remainder shall have been fully
distributed.
(i) On each Distribution Date, after giving effect to
distributions on such Distribution Date, the Securities Administrator shall
allocate the Applied Realized Loss Amount for the Certificates to reduce the
Certificate Principal Balances of the Class C Certificates and the Subordinated
Certificates in the following order of priority:
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(i) to the Class C Certificates, until the Class C
Certificate Principal Balance is reduced to zero;
(ii) to the Class B-6 Certificates until the Class B-6
Certificate Principal Balance is reduced to zero;
(iii) to the Class B-5 Certificates until the Class B-5
Certificate Principal Balance is reduced to zero;
(iv) to the Class B-4 Certificates until the Class B-4
Certificate Principal Balance is reduced to zero;
(v) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;
(vi) to the Class B-2 Certificate until the Class B-2
Principal Balance is reduced to zero;
(vii) to the Class B-1 Certificate until the Class B-1
Principal Balance is reduced to zero;
(viii) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;
(ix) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;
(x) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and
(xi) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either by wire transfer in immediately available funds to the account of such
holder at a bank or other entity having appropriate facilities therefor, if such
Holder has so notified the Securities Administrator at least five (5) Business
Days prior to the related Record Date or, if not, by check mailed by first class
mail to such Certificateholder at the address of such holder appearing in the
Certificate Register. Notwithstanding the foregoing, but subject to Section 9.02
hereof respecting the final distribution, distributions with respect to
Certificates registered in the name of a Depository shall be made to such
Depository in immediately available funds.
In accordance with this Agreement, the Servicer shall prepare and deliver
a report (the "Remittance Report") to the Securities Administrator in the form
of a computer readable magnetic tape (or by such other means as the Servicer and
the Securities Administrator may agree from time to time) containing such data
and information as to permit the Securities Administrator to prepare the Monthly
Statement to Certificateholders and make the required distributions for the
related Distribution Date. The Securities Administrator will prepare the Monthly
Report based solely upon the information received from the Servicer.
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The Trustee shall promptly notify the NIMs Insurer of any proceeding or
the institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or the
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates and the Trustee hereby agree
that the NIMs Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to such Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMs Insurer shall be subrogated to the rights
of the Trustee and each Holder of the Class C Certificates and the Class P
Certificates in the conduct of any such Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim;
provided, however, that the NIMs Insurer will not have any rights with respect
to any Preference Claim set forth in this paragraph unless the indenture trustee
with respect to the NIM Notes or the holder of any NIMs Notes has been required
to relinquish a distribution made on the Class C Certificates, the Class P
Certificates or the NIM Notes, as applicable, and the NIMs Insurer made a
payment in respect of such relinquished amount.
(k) The Trustee is hereby directed by the Depositor to execute the
Cap Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents, adequacy or
sufficiency of such Cap Contract, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Trustee under the Cap Contract at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in the Cap
Contract, the Trustee shall not be required to make any payments to the
counterparty under the Cap Contract. Any payments received under the terms of
the Cap Contract will be available to pay the holders of the Offered
Certificates up to the amount of any Floating Rate Certificate Carryover
remaining after the application of Section 4.04(f)(xii) on such Distribution
Date; provided, however, that payments received on the Cap Contract will not be
used to pay any Floating Rate Certificate Carryover that results from a failure
to allocate Applied Realized Loss Amounts to the Class A Certificates. Any
amounts in the Cap Contract Account on any Distribution Date in excess of
amounts required, subject to the restrictions set forth in the preceding
sentence, to pay outstanding Floating Rate Certificate Carryovers on such
Distribution Date will be distributed to the holders of the Class C
Certificates. Payments from the Cap Contract Account in respect of the Floating
Rate Certificate Carryovers shall, subject to the limitations set forth in the
second preceding sentence of this Section 4.04(k), be paid to the Class A, Class
M and Class B Certificates in accordance with the provisions of Section
4.04(f)(xii) hereof.
For any Distribution Date on which there is a payment under the Cap
Contract based on a notional balance in excess of the aggregate Certificate
Principal Balance of the Offered Certificates, the amount representing such
excess payment, to the extent not otherwise used to pay Floating Rate
Certificate Carryovers, shall not be an asset of the Trust Fund and, instead,
shall be paid into and distributed out of a separate trust created by this
Agreement for the benefit of the Class C Certificates and shall be distributed
to the Class C Certificates.
(i) On or prior to the Cap Contract Termination Date,
amounts, if any, received by the Securities Administrator for the benefit of the
Trust Fund in respect of the Cap Contract shall be deposited by the Securities
Administrator into the Cap Contract Account. With respect to any Distribution
Date on or prior to the Cap Contract Termination Date, the amount, if any,
payable by the Cap Contract Counterparty under the Cap Contract will equal the
product of (i) the excess of (x) One-Month LIBOR (as determined by the Cap
Contract Counterparty and subject to a cap equal to the rate with respect to
such Distribution Date as shown under the heading "Upper Collar" in the Cap
Table), over
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(y) the rate with respect to such Distribution Date as shown under the heading
"Lower Collar" in the Cap Table, (ii) an amount equal to the Cap Contract
Notional Balance and (iii) the number of days in such Accrual Period, divided by
360.
(ii) Amounts on deposit in the Cap Contract Account will
remain uninvested pending distribution to Certificateholders.
(iii) The Cap Contract is scheduled to remain in effect until
the Cap Contract Termination Date and will be subject to early termination only
in limited circumstances. Such circumstances include certain insolvency or
bankruptcy events in relation to the Cap Contract Counterparty (after a grace
period of three Local Business Days, as defined in the Cap Contract, after
notice of such failure is received by the Cap Contract Counterparty) to make a
payment due under the Cap Contract, the failure by the Cap Contract Counterparty
or the Trustee (after a cure period of 20 days after notice of such failure is
received) to perform any other agreement made by it under the Cap Contract, the
termination of the Trust Fund and the Cap Contract becoming illegal or subject
to certain kinds of taxation.
Section 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date based solely on
information provided by the Servicer, the Securities Administrator shall prepare
and make available on its website located at xxx.xxxxxxx.xxx to each Holder of a
Class of Certificates of the Trust Fund, the Servicer, the Master Servicer, the
Trustee, the NIMs Insurer, the Rating Agencies and the Depositor a statement
setting forth for the Certificates:
(i) the amount of the related distribution to Holders of
each Class allocable to principal, separately identifying (A) the aggregate
amount of any Principal Prepayments included therein, (B) the aggregate of all
scheduled payments of principal included therein, (C) the Extra Principal
Distribution Amount, if any, and (D) the aggregate amount of Prepayment Charges,
if any;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;
(iii) any Interest Carryforward Amount for each Class of the
Offered Certificates;
(iv) the Class Certificate Principal Balance of each Class
after giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;
(v) the Pool Stated Principal Balance for such Distribution
Date;
(vi) the amount of the Servicing Fee paid to or retained by
the Servicer, and any amounts constituting reimbursement or indemnification of
the Servicer, Master Servicer, Securities Administrator or Trustee;
(vii) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(viii) the amount of Advances included in the distribution on
such Distribution Date;
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(ix) the cumulative amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts to date, in the aggregate and with respect to
Group One Mortgage Loans and Group Two Mortgage Loans;
(x) the amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts with respect to such Distribution Date, in the aggregate
and with respect to Group One Mortgage Loans and Group Two Mortgage Loans;
(xi) the number and aggregate principal amounts of Mortgage
Loans (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60
days, (2) 61 to 90 days and (3) 91 or more days, and (B) in foreclosure and
Delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each
case as of the close of business on the last day of the calendar month preceding
such Distribution Date, in the aggregate and with respect to Group One Mortgage
Loans and Group Two Mortgage Loans;
(xii) the total number and principal balance of any REO
Properties as of the close of business on the last day of the calendar month
preceding such Distribution Date, in the aggregate and with respect to Group One
Mortgage Loans and Group Two Mortgage Loans;
(xiii) the aggregate Stated Principal Balance of all
Liquidated Loans as of the preceding Distribution Date, in the aggregate and
with respect to Group One Mortgage Loans and Group Two Mortgage Loans;
(xiv) whether a Stepdown Trigger Event or Class A-1 Trigger
Event has occurred and is in effect;
(xv) with respect to each Class of Certificates, any Interest
Carry Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;
(xvi) with respect to each Class of Certificates, any Floating
Rate Certificate Carryover with respect to such Distribution Date for each such
Class, any Floating Rate Certificate Carryover paid for each such Class and any
remaining Floating Rate Certificate Carryover for each such Class;
(xvii) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;
(xviii) the number of Mortgage Loans for which Prepayment
Charges were received during the related Prepayment Period and, for each such
Mortgage Loan, the amount of Prepayment Charges received during the related
Prepayment Period and in the aggregate of such amounts for all such Mortgage
Loans since the Cut-off Date;
(xix) as of each Distribution Date, the amount, if any, to be
deposited in the Certificate Account pursuant to the Cap Contract as described
in Section 4.04(k) and the amount thereof to be paid to the Class A, Class M and
Class B Certificates described in Section 4.04(k) hereof;
(xx) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(v); and
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(xxi) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC Regular Interest or
REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
Regular Interest or REMIC "residual interest".
(b) The Securities Administrator will make the Monthly Statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders, other parties to
this Agreement and any other interested parties via the Securities
Administrator's Internet website. The Securities Administrator's Internet
website shall initially be located at "xxx.xxxxxxx.xxx". Assistance in using the
website can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the website are entitled to have a
paper copy mailed to them via first class mail by calling the customer service
desk and indicating such. The Securities Administrator shall have the right to
change the way the monthly statements to Certificateholders are distributed in
order to make such distribution more convenient and/or more accessible to the
above parties and the Trustee shall provide timely and adequate notification to
all above parties regarding any such changes.
The Securities Administrator shall also be entitled to rely on but shall
not be responsible for the content or accuracy of any information provided by
third parties for purposes of preparing the monthly statement and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
As a condition to access the Securities Administrator's internet website,
the Securities Administrator may require registration and the acceptance of a
disclaimer. The Securities Administrator will not be liable for the
dissemination of information in accordance with this Agreement.
(c) The Servicer shall deliver to the NIMs Insurer a copy of any
report delivered by the Servicer to the Securities Administrator.
(d) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Securities Administrator shall make
available on its website or cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder of record, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 4.05 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as are from time to time
in effect.
(e) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Class R Certificate and the
NIMs Insurer the Form 1066 and each Form 1066Q and shall respond promptly to
written requests made not more frequently than quarterly by any Holder of Class
R Certificate with respect to the following matters: The original projected
principal and interest cash flows on the Closing Date on each Class of regular
and residual interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(i) The projected remaining principal and interest cash
flows as of the end of any calendar quarter with respect to each Class of
regular and residual interests created hereunder and the Mortgage Loans, based
on the Prepayment Assumption;
(ii) The Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash flows
described above;
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(iii) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through the end
of such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(iv) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the REMICs with respect
to such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;
(v) The amount and timing of any non-interest expenses of
the REMICs; and
(vi) Any taxes (including penalties and interest) imposed on
the REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
A-1A $25,000.00 $1.00 $837,359,000
A-1B $25,000.00 $1.00 $ 93,040,000
A-2A $25,000.00 $1.00 $336,604,000
A-2B $25,000.00 $1.00 $165,216,000
A-2C $25,000.00 $1.00 $ 62,996,000
M-1 $25,000.00 $1.00 $116,726,000
M-2 $25,000.00 $1.00 $ 32,424,000
M-3 $25,000.00 $1.00 $ 59,289,000
M-4 $25,000.00 $1.00 $ 25,939,000
B-1 $25,000.00 $1.00 $ 22,233,000
B-2 $25,000.00 $1.00 $ 16,675,000
B-3 $25,000.00 $1.00 $ 13,896,000
B-4 $25,000.00 $1.00 $ 9,264,000
B-5 $25,000.00 $1.00 $ 18,528,000
B-6 $25,000.00 $1.00 $ 15,748,000
C (1) (1) 100%
R $ 100.00 N/A $ 100
P (2) (2) (2)
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---------------------
(1) The Class C Certificates shall not have minimum dollar denominations or
certificate notional amounts and shall be issued in a minimum percentage
interest of 25%. The initial Overcollateralization Amount is
$26,870,486.11.
(2) The Class P Certificates shall not have minimum dollar denominations or
Certificate Principal Balances and shall be issued in a minimum percentage
interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the
Securities Administrator shall bind the Trust Fund, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such authentication and delivery. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form set forth as attached hereto executed by the Authenticating Agent by manual
signature, and such certificate of authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. On the Closing Date, the Authenticating Agent shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any Affiliate thereof.
The Class B-5 and Class B-6 Certificates sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent global certificates in definitive, fully registered form without
interest coupons with the applicable legends set forth in Exhibit A hereto added
to the form of each such Certificate (each, a "Book-Entry Regulation S Global
Security"), which shall be deposited on behalf of the Holders of such
Certificates represented thereby with the Securities Administrator, as custodian
for DTC and registered in the name of a nominee of DTC, duly executed and
authenticated by the Securities Administrator and the Authenticating Agent as
hereinafter provided. The aggregate principal amounts of the Book-Entry
Regulation S Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Securities Administrator or DTC or its
nominee, as the case may be, as hereinafter provided.
Section 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of Transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of Transfer of any Certificate, the
Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute and the Authenticating Agent shall authenticate and deliver the
Certificates that the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of Transfer
or exchange shall be accompanied by a written instrument of Transfer in form
satisfactory to the Securities Administrator duly executed by the holder thereof
or his attorney duly authorized in writing.
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No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Securities Administrator in accordance
with such Securities Administrator's customary procedures.
No Transfer of a Class B-5, Class B-6, Class C or Class P Certificate
shall be made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective transferee
shall (except with respect to the initial transfer of a Class B-5, Class B-6,
Class C or Class P Certificate by Xxxxxxx Xxxxx & Co. or, in connection with any
transfers of a Class C or Class P Certificate to the indenture trustee under an
Indenture pursuant to which NIM Notes are issued, whether or not such notes are
guaranteed by the NIMs Insurer) each certify to the Securities Administrator in
writing the facts surrounding the Transfer in substantially the form set forth
in Exhibit F (the "Transferor Certificate") and (i) deliver a letter in
substantially the form of either Exhibit G (the "Investment Letter") or Exhibit
H (the "Rule 144A Letter") or (ii) there shall be delivered to the Securities
Administrator an Opinion of Counsel that such Transfer may be made pursuant to
an exemption from the Securities Act, which Opinion of Counsel shall not be an
expense of the Depositor, the Securities Administrator or the Trustee. The
Depositor shall provide to any Holder of a Class B-5, Class B-6, Class C or
Class P 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 Securities Administrator shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
in the possession of the Securities Administrator regarding the Certificates,
the Mortgage Loans and other matters regarding the Trust Fund as the Depositor
shall reasonably request to meet its obligation under the preceding sentence.
Each Holder of a Class B-5, Class B-6, Class C or Class P Certificate desiring
to effect such Transfer shall, and does hereby agree to, indemnify the
Depositor, the Securities Administrator and the Trustee against any liability
that may result if the Transfer is not so exempt or is not made in accordance
with such federal and state laws.
By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Depositor, the Securities Administrator and any
of their respective successors that: (i) such Person is not a "U.S. person"
within the meaning of Regulation S and was, at the time the buy order was
originated, outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" (a "QIB") as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in
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reliance on Rule 144A or (B) in an offshore transaction (as defined in
Regulation S) in compliance with the provisions of Regulation S, in each case in
compliance with the requirements of this Agreement; and it will notify such
transferee of the transfer restrictions specified in this Section.
No transfer of an ERISA Restricted Certificate that is a Class R
Certificate may be made to any Person that is an employee benefit plan subject
to Title I of ERISA, a plan subject to Section 4975 of the Code or a plan
subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or to
any Person directly or indirectly acquiring such Certificate by, on behalf of,
or with any assets of any such plan (collectively, "Plan"). Each Person to whom
a Class R Certificate is to be transferred shall be required or deemed to
represent that it is not a Plan.
No transfer of an ERISA-Restricted Certificate (other than the Class R
Certificate) shall be made to any Person unless the Securities Administrator has
received (A) a representation that such transferee is not a Plan, or (B) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation that such transferee is an insurance company that is acquiring
the Certificate with assets of an "insurance company general account," as
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60, and the acquisition and holding of the Certificate are covered and exempt
under Sections I and III of PTCE 95-60, or (C) solely in the case of any such
Certificate that is a Definitive Certificate, an Opinion of Counsel satisfactory
to the Securities Administrator, and upon which the Securities Administrator and
the NIMs Insurer shall be entitled to rely, to the effect that the acquisition
and holding of such Certificate will not constitute or result in a nonexempt
prohibited transaction under Title I of ERISA or Section 4975 of the Code, or a
violation of Similar Law, and will not subject the Trustee, the Master Servicer,
the Securities Administrator, the Servicer, the NIMs Insurer or the Depositor to
any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Trustee, the Master Servicer, the Servicer, the NIMs Insurer
or the Depositor.
For purposes of the two immediately preceding paragraphs of this
Subsection 5.02(a), other than clause (C) in the immediately preceding
paragraph, the representations as set forth therein shall be deemed to have been
made to the Securities Administrator by the transferee's acceptance of an ERISA
Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any Class of ERISA Restricted Certificates).
Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA Restricted Certificate to or on behalf of a Plan without
the delivery to the Securities Administrator of a representation or an Opinion
of Counsel satisfactory to the Securities Administrator as described above shall
be void and of no effect. The Securities Administrator shall not be under any
liability to any Person for any registration or transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 5.02(a), nor shall the
Securities Administrator be under any liability for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Securities Administrator in accordance with the foregoing
requirements. The Securities Administrator shall be entitled, but not obligated,
to recover from any Holder of any ERISA Restricted Certificate that was in fact
a Plan and that held such Certificate in violation of this Section 5.02(a) all
payments made on such ERISA Restricted Certificate at and after the time it
commenced such holding. Any such payments so recovered shall be paid and
delivered to the last preceding Holder of such Certificate that is not a Plan.
(b) Each Person who has or who acquires any Ownership Interest in
a Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
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(i) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Securities
Administrator shall not register the Transfer of any Class R Certificate unless,
in addition to the certificates required to be delivered to the Securities
Administrator under subparagraph (a) above, the Securities Administrator shall
have been furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit E-1 and
an affidavit of the proposed transferor in the form attached hereto as Exhibit
E-2. In the absence of a contrary instruction from the transferor of a Class R
Certificate, declaration (11) in Appendix A of the Transfer Affidavit may be
left blank. If the transferor requests by written notice to the Securities
Administrator prior to the date of the proposed transfer that one of the two
other forms of declaration (11) in Appendix A of the Transfer Affidavit be used,
then the requirements of this Section 5.02(b)(ii) shall not have been satisfied
unless the Transfer Affidavit includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership Interest
in a Class R Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee. Further, no transfer, sale or other
disposition of any Ownership Interest in a Class R Certificate may be made to a
person who is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Securities Administrator
with a duly completed and effective Internal Revenue Service Form W-8ECI (or any
successor thereto) and the Securities Administrator consents to such transfer,
sale or other disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(b), then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Securities Administrator shall be under no liability to any
Person for any registration of Transfer of a Class R Certificate that is in fact
not permitted by Section 5.02(a) and 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 after receipt of the related Transfer
Affidavit. The Securities Administrator shall be entitled but not obligated to
recover from any Holder of a Class R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such subsequent time
as it became other than a Permitted Transferee, all payments made on such Class
R Certificate at and after either such time. Any such payments so recovered by
the Securities Administrator shall be paid and delivered by the Securities
Administrator to the last preceding Permitted Transferee of such Certificate.
(v) At the option of the Holder of the Class R Certificate,
the Class LTR Interest and the residual interest in the Upper Tier REMIC may be
severed and represented by separate certificates (with the separate certificate
that represents the Residual Interest also representing all rights of the Class
R Certificate to distributions attributable to a Pass-Through Rate on the Class
R Certificate in
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excess of the Net Rate); provided, however, that such separate certification may
not occur until the Securities Administrator and the NIMs Insurer receive an
Opinion of Counsel to the effect that separate certification in the form and
manner proposed would not result in the imposition of federal tax upon the Trust
Fund or any of the REMICs provided for herein or cause any of the REMICs
provided for herein to fail to qualify as a REMIC; and provided further, that
the provisions of Sections 5.02(a) and (b) will apply to each such separate
certificate as if the separate certificate were a Class R Certificate. If, as
evidenced by an Opinion of Counsel, it is necessary to preserve the REMIC status
of any of the REMICs provided for herein, the Class LTR Interest and the
Residual Interest in the Upper Tier REMIC shall be severed and represented by
separate certificates (with the separate certificate that represents the
Residual Interest also representing all rights of the Class R Certificate to
distributions attributable to a Pass-Through Rate on the Class R Certificate in
excess of the Net Rate).
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(b) shall cease to apply (and the applicable portions of the legend
on a Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator and the NIMs Insurer of an
Opinion of Counsel, which Opinion of Counsel shall not be an expense of the
Securities Administrator, the NIMs Insurer or the Depositor, to the effect that
the elimination of such restrictions will not cause any of the REMICs provided
for herein to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the imposition of any tax on the Trust Fund, any REMIC
provided for herein, a Certificateholder or another Person. Each Person holding
or acquiring any Ownership Interest in a Class R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Securities Administrator, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(c) The transferor of the Class R Certificate shall notify the
Securities Administrator in writing upon the transfer of the Class R
Certificate.
(d) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor, the Securities Administrator or the Trustee.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Securities
Administrator or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof and (b) there is delivered to the Securities Administrator and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator and
the Trustee and their counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Securities Administrator under the terms of
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this Section 5.03 shall be canceled and destroyed by the Securities
Administrator in accordance with its standard procedures without liability on
its part.
Section 5.04. Persons Deemed Owners.
The NIMs Insurer, the Trustee, the Securities Administrator and any agent
of the NIMs Insurer, the Trustee or the Securities Administrator may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the NIMs Insurer,
the Trustee or the Securities Administrator, nor any agent of the NIMs Insurer,
the Trustee or the Securities Administrator shall be affected by any notice to
the contrary.
Section 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication that such Certificateholders propose to
transmit or if the NIMs Insurer or the Depositor shall request such information
in writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
NIMs Insurer or the Depositor or such Certificateholders at such recipients'
expense the most recent list of the Certificateholders of the Trust Fund held by
the Securities Administrator, if any. The Depositor and every Certificateholder,
by receiving and holding a Certificate, agree that the Securities Administrator
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Class C, Class P and Class R Certificates shall be Definitive
Certificates (as defined below). The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of a Book-Entry Certificate will receive a
definitive certificate representing such Certificate Owner's interest in such
Certificates, except as provided in Section 5.08. Unless and until definitive,
fully registered Certificates ("Definitive Certificates") have been issued to
the Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Securities Administrator, the NIMs Insurer
and the Trustee may deal with the Depository and the Depository Participants for
all purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of the Book-Entry
Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the
Book-Entry Certificates shall be exercised only through the Depository and the
Depository Participants and shall be limited to those established by law and
agreements between the Owners of the Book-Entry Certificates and the
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Depository and/or the Depository Participants. Pursuant to the Depository
Agreement, unless and until Definitive Certificates are issued pursuant to
Section 5.08, the Depository will make book-entry transfers among the Depository
Participants and receive and transmit distributions of principal and interest on
the related Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Securities Administrator and the Trustee may rely and
shall be fully protected in relying upon information furnished by the Depository
with respect to its Depository Participants; and
(g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Securities Administrator and the
Trustee shall give all such notices and communications to the Depository.
Section 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Securities
Administrator and the Trustee that the Depository is no longer willing,
qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Trustee and the Depository of its intent to terminate
the book entry system through the Depository and, upon receipt of notice of such
intent from the Depository, the Certificate Owners of the Book-Entry
Certificates agree to initiate such termination or (c) after the occurrence and
continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Securities Administrator, the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Securities
Administrator shall notify all Certificate Owners of such Book-Entry
Certificates and the NIMs Insurer, through the Depository, of the occurrence of
any such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Securities Administrator with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon surrender
to the Securities Administrator of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Authenticating Agent shall authenticate and the Securities Administrator
shall deliver such Definitive Certificates. Neither the Depositor nor the
Securities Administrator shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to
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obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates and the Securities
Administrator shall recognize the Holders of such Definitive Certificates as
Certificateholders hereunder.
Section 5.09. Maintenance of Office or Agency.
The Securities Administrator will maintain or cause to be maintained at
its expense an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange. The Securities
Administrator initially designates its offices at Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Client Services Manager -
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2005-WMC1 as offices for such
purposes. The Securities Administrator will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
Section 5.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents
(each, an "Authenticating Agent") each of which shall be authorized to act on
behalf of the Trustee in authenticating the Certificates. Wherever reference is
made in this Agreement to the authentication of Certificates by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or any state
thereof, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to operate a trust business and subject to
supervision or examination by federal or state authorities. If the
Authenticating Agent is a party other than the Trustee, the Trustee shall have
no liability in connection with the performance or failure of performance of the
Authenticating Agent. The Trustee hereby appoints Xxxxx Fargo Bank, N.A. as the
initial Authenticating Agent. The Trustee shall be the Authenticating Agent
during any such time as no other Authenticating Agent has been appointed and has
not resigned.
(b) Any Person into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent shall
be a party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. Except with respect to the initial Authenticating Agent, Xxxxx Fargo
Bank, N.A., which shall be the Authenticating Agent for so long as it is the
Securities Administrator, the Trustee may at any time terminate the agency of
any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance within the provisions of this Section
5.10, the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 5.10. No Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
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ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE SECURITIES
ADMINISTRATOR
Section 6.01. Respective Liabilities of the Depositor, the Master
Servicer, the Servicer and the Securities Administrator.
The Depositor, the Master Servicer, the Servicer and the Securities
Administrator shall each be liable in accordance herewith only to the extent of
the obligations specifically and respectively imposed upon and undertaken by
them herein.
Section 6.02. Merger or Consolidation of the Depositor, the Master
Servicer, the Servicer or the Securities Administrator.
Except as provided in the next paragraph, the Depositor, the Master
Servicer, the Servicer and the Securities Administrator will each keep in full
effect its existence, rights and franchises as a corporation or banking
association under the laws of the United States or under the laws of one of the
States thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor, the Master Servicer, the Servicer or
the Securities Administrator may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Depositor, the Master
Servicer, the Servicer or the Securities Administrator shall be a party, or any
Person succeeding to the business of the Depositor, the Master Servicer, the
Servicer or the Securities Administrator, shall be the successor of the
Depositor, the Master Servicer, the Securities Administrator or the Servicer, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding (except for the execution of an assumption agreement
where such succession is not effected by operation of law); provided, however,
that the successor or surviving Person to the Servicer shall be qualified to
sell mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Xxx
or Xxxxxxx Mac.
Section 6.03. Limitation on Liability of the Depositor, the Securities
Administrator, the Master Servicer, the Servicer and Others.
None of the Depositor, the Master Servicer, the Servicer, the Securities
Administrator nor any of the directors, officers, employees or agents of the
Depositor, the Master Servicer, the Servicer or the Securities Administrator
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer, the
Servicer, the Securities Administrator or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Master Servicer, the Servicer, the Securities Administrator or any such Person
from any liability that would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder. The Depositor, the
Master Servicer, the Servicer or the Securities Administrator and any director,
officer, employee or agent of the Depositor, the Master Servicer, the Servicer
or the Securities Administrator may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor, the Master Servicer, the Servicer, the
Securities Administrator and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Servicer or the Securities Administrator
shall
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be indemnified by the Trust Fund and held harmless against any loss, liability
or expense, incurred in connection with the performance of their duties under
this agreement or incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than (i) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or (ii) which does not constitute
an "unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). None of the Depositor, the Master Servicer, the Servicer nor
the Securities Administrator shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided, however, that any of the Depositor, the Master Servicer,
the Servicer or the Securities Administrator in its discretion may undertake any
such action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and the interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor, the Master Servicer,
the Servicer and the Securities Administrator shall be entitled to be reimbursed
therefor out of the Collection Account as provided by Section 3.08 hereof.
In addition, the Master Servicer and Securities Administrator shall be
entitled to be reimbursed out of the Certificate Account for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the
Master Servicer or Securities Administrator on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of each of the Master Servicer or
Securities Administrator acting in its capacity as Master Servicer or Securities
Administrator hereunder, respectively, and (B) to the extent that the Securities
Administrator must engage persons not regularly in its employ to perform acts or
services on behalf of the Trust Fund, which acts or services are not in the
ordinary course of the duties of a securities administrator, in the absence of a
breach or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons), except any such compensation, expense,
disbursement or advance that either (i) arises from its negligence, bad faith or
willful misconduct or (ii) does not constitute an "unanticipated expense" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
On each Distribution Date, the Securities Administrator shall be entitled
to the Securities Administrator Fee as compensation for its services hereunder.
Section 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee, the NIMs Insurer and the Master Servicer. No
such resignation shall become effective until the Master Servicer or a successor
servicer reasonably acceptable to the NIMs Insurer and the Master Servicer is
appointed and has assumed the Servicer's responsibilities, duties, liabilities
and obligations hereunder. Any such resignation shall not relieve the Servicer
of any of the obligations specified in Section 7.01 and 7.02 as obligations that
survive the resignation or termination of the Servicer.
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its
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obligations as servicer hereunder, and (b) a fidelity bond in respect of its
officers, employees and agents. Each such policy or policies and bond shall,
together, comply with the requirements from time to time of Xxxxxx Xxx or
Xxxxxxx Mac for Persons performing servicing for mortgage loans purchased by
Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee, the NIMs
Insurer and the Master Servicer, upon request, with copies of such policies and
fidelity bond or a certification from the insurance provider evidencing such
policies and fidelity bond. In the event that any such policy or bond ceases to
be in effect, the Servicer shall use its reasonable best efforts to obtain a
comparable replacement policy or bond from an insurer or issuer meeting the
requirements set forth above as of the date of such replacement. Any such policy
or fidelity bond shall by its terms not be cancelable without thirty days' prior
written notice to the Trustee and the Master Servicer.
Section 6.06. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or
another successor Master Servicer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement. If the Securities Administrator and the Master Servicer are the same
Person, then at any time the Securities Administrator resigns or is removed
hereunder, the Master Servicer shall likewise be terminated as master servicer
hereunder.
Section 6.07. Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in their entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accept in writing such
assignment and delegation and assume the obligations of the Master Servicer
hereunder and (a) shall be a Person which shall be qualified to service mortgage
loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee and the
Depositor; and (d) shall execute and deliver to the Trustee an agreement, in
form and substance reasonably satisfactory to the Trustee and which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by it as master servicer
under this Agreement, any custodial agreement from and after the effective date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver to the
Trustee an Officer's Certificate and an independent Opinion of Counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
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Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to make any Advance, to
deposit in the Collection Account or the Certificate Account or remit to the
Securities Administrator any payment (excluding a payment required to be made
under Section 4.01 hereof) required to be made under the terms of this
Agreement, which failure shall continue unremedied for three Business Days and,
with respect to a payment required to be made under Section 4.01 hereof, for one
Business Day, after the date on which written notice of such failure shall have
been given to the Servicer by the Securities Administrator or the Depositor, or
to the Securities Administrator and the Servicer by the NIMs Insurer or the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue, which failure or breach shall continue unremedied for a
period of 60 days after the date on which written notice of such failure shall
have been given to the Servicer by the Master Servicer, the Securities
Administrator, the Trustee or the Depositor, or to the Master Servicer, the
Securities Administrator, the Trustee and the Depositor by the NIMs Insurer or
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) consent by the Servicer to the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or
(v) admission by a Servicer in writing of its inability to
pay its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vi) any failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
Agreement, which failure continues unremedied for a period of ten (10) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Master Servicer or any
other party to this Agreement.
If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, the Master Servicer may, or at
the direction of the NIMs Insurer or the Holders of Certificates evidencing not
less than 25% of the Voting Rights evidenced by the Certificates (with the
written consent of the NIMs Insurer, except after a NIMs Insurer Default),
shall, by notice in writing to the Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, other than its rights
as a Certificateholder hereunder. On or after the receipt by the Servicer of
such written notice, all authority
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and power of the Servicer hereunder, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the Master Servicer. To the extent
the Event of Default resulted from the failure of the Servicer to make a
required Advance, the Master Servicer shall thereupon make any Advance described
in Section 4.01 hereof subject to Section 3.04 hereof. The Master Servicer is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Master Servicer in effecting the termination of the Servicer's responsibilities
and rights hereunder, including, without limitation, the transfer to the Master
Servicer of all cash amounts which shall at the time be credited to the
Collection Account, or thereafter be received with respect to the Mortgage
Loans. The Servicer and the Master Servicer shall promptly notify the Rating
Agencies of the occurrence of an Event of Default or an event that, with notice,
passage of time, other action or any combination of the foregoing would be an
Event of Default, such notice to be provided in any event within two Business
Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination.
Section 7.02. Master Servicer to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Master Servicer shall, to the extent
provided in Section 3.04, be the successor to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, subject to the last paragraph of Section 7.01,
the Master Servicer shall be entitled to all fees, compensation and
reimbursement for costs and expenses that the Servicer would have been entitled
to hereunder if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Master Servicer has become the successor to the Servicer in
accordance with Section 7.01 hereof, the Master Servicer may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Section 4.01 hereof or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which
successor shall be approved by the NIMs Insurer and which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
Servicer shall be an institution that is acceptable to the NIMs Insurer and is a
Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in good standing, that has a
net worth of at least $15,000,000, and that is willing to service the Mortgage
Loans and executes and delivers to the Depositor, the Trustee and the Master
Servicer an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the Servicer
under Section 7.01), with like effect as if originally named as a party to this
Agreement; and provided further that each Rating Agency acknowledges that its
rating of
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the Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced as a result of such assignment and delegation.
No appointment of a successor to the Servicer hereunder shall be effective until
the Master Servicer shall have consented thereto, prior written consent of the
NIMs Insurer is obtained and written notice of such proposed appointment shall
have been provided by the Securities Administrator to each Certificateholder.
The Master Servicer shall not resign as servicer until a successor servicer has
been appointed and has accepted such appointment. Pending appointment of a
successor to the Servicer hereunder, the Master Servicer, unless the Master
Servicer is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Master Servicer may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Servicer hereunder. The Master Servicer and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. Neither the Master Servicer nor
any other successor servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
Section 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Securities Administrator shall give prompt written notice thereof
to Certificateholders, the Depositor and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Securities Administrator shall transmit by mail to all Certificateholders
and the NIMs Insurer notice of each such Event of Default hereunder known to the
Securities Administrator, unless such Event of Default shall have been cured or
waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01. Duties of the Trustee and the Securities Administrator.
The Trustee and the Securities Administrator, prior to the occurrence of
an Event of Default and after the curing of all Events of Default that may have
occurred, each shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement. In case an Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. In case an Event of
Default or other default by the Servicer or the Depositor hereunder shall occur
and be continuing, the Trustee shall, at the written direction of the majority
of the Certificateholders or the NIMs Insurer, or may, proceed to protect and
enforce its rights and the rights of the Certificateholders or the NIMs Insurer
under this Agreement by a suit, action or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or agreement
contained in this agreement or in aid of the execution of any
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power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee, the NIMs Insurer and the Certificateholders.
Each of the Trustee and the Securities Administrator, 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 conform on their face to the requirements of this
Agreement. If any such instrument is found not to conform on its face to the
requirements of this Agreement in a material manner, the Trustee or the
Securities Administrator, as the case may be, shall notify the person providing
such Agreement of such non-conformance, and if the instrument is not corrected
to the its satisfaction, the Securities Administrator will provide notice to the
Trustee thereof and the Trustee will provide notice thereof to the
Certificateholders and the NIMs Insurer and take such further action as directed
by the Certificateholders and the NIMs Insurer.
No provision of this Agreement shall be construed to relieve the Trustee
or the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own misconduct, its negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided,
however, that:
(i) prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee, and at all times, the duties and
obligations of the Securities Administrator shall be determined solely by the
express provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable, individually or as Trustee or Securities
Administrator, as applicable, except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the Trustee
or the Securities Administrator and, the Trustee and the Securities
Administrator may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee or the Securities Administrator and conforming to the
requirements of this Agreement that it reasonably believed in good faith to be
genuine and to have been duly executed by the proper authorities respecting any
matters arising hereunder;
(ii) neither the Trustee nor the Securities Administrator
shall, individually or as Trustee or Securities Administrator, as applicable, be
liable for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee unless the Trustee or Securities
Administrator, as applicable, was negligent or acted in bad faith or with
willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the NIMs Insurer or the
Holders in accordance with this Agreement relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee and the Securities
Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator may request
and conclusively rely upon and shall be fully protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of auditors
or any other certificate, statement, instrument,
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opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee and the Securities Administrator may consult
with counsel of its choice and any advice or Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator
shall be liable for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) at all times the Securities Administrator, and prior to
the occurrence of an Event of Default hereunder and after the curing of all
Events of Default that may have occurred, the Trustee, in each case, shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by the NIMs Insurer or the Holders of each Class
of Certificates evidencing not less than 25% of the Voting Rights of such Class;
(v) the Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, accountants or attorneys or
independent contractors and the Trustee and the Securities Administrator will
not be responsible for any misconduct or negligence on the part of any agent,
custodian, accountant, attorney or independent contractor appointed with due
care by it hereunder;
(vi) neither the Trustee nor the Securities Administrator
shall be required to expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such liability is not assured to it;
(vii) neither the Trustee nor the Securities Administrator
shall be liable, individually or as Trustee, for any loss on any investment of
funds pursuant to this Agreement (other than as issuer of the investment
security);
(viii) neither the Trustee nor the Securities Administrator
shall be deemed to have knowledge of an Event of Default until a Responsible
Officer of the Trustee or the Securities Administrator, as applicable, shall
have received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the NIMs Insurer or the Certificateholders, pursuant to the
provisions of this Agreement, unless the NIMs Insurer or such Certificateholders
shall have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred therein or
thereby; and
(x) if requested by the Servicer, the Trustee may appoint
the Servicer as the trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such power of
attorney and the Trustee shall be indemnified by the Servicer for all
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liabilities, costs and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. The Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any rerecording, refiling or
redepositing, as applicable, thereof, (B) to see to any insurance or (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund.
Section 8.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee, the Master
Servicer and the Securities Administrator assume no responsibility for their
correctness. None of the Trustee, the Securities Administrator or the Master
Servicer makes any representation as to the validity or sufficiency of this
Agreement, of any Mortgage Loan, or any related document other than with respect
to the execution and authentication of the Certificates, if it so executed or
authorized the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor, the Securities Administrator, the Master Servicer
or the Servicer of any funds paid to the Depositor, the Securities
Administrator, the Master Servicer or the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor, the Securities Administrator, the Master
Servicer or the Servicer.
Section 8.04. Trustee and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator in its individual or
any other capacity may become the owner or pledgee of Certificates with the same
rights as it would have if it was not the Trustee or the Securities
Administrator.
Section 8.05. Trustee's Fees and Expenses.
The Securities Administrator covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing by the Securities Administrator and the Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee.
Section 8.06. Indemnification and Expenses of Trustee.
(a) The Trustee and its respective directors, officers, employees
and agents shall be entitled to indemnification from the Trust Fund for any
loss, liability or expense incurred in connection with (i) any audit,
controversy or judicial proceeding relating to a governmental authority or any
legal proceeding incurred without negligence or willful misconduct on their
part, arising out of, or in connection with the acceptance or administration of
the trusts created hereunder and (ii) the performance
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of their duties hereunder, including any applicable fees and expenses payable
hereunder, and the costs and expenses of defending themselves against any claim
in connection with the exercise or performance of any of their powers or duties
hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have
given the Depositor written notice thereof promptly after the Trustee shall have
knowledge thereof; provided that failure to so notify shall not relieve the
Trust Fund of the obligation to indemnify the Trustee; however, any reasonable
delay by the Trustee to provide written notice to the Depositor and the Holders
promptly after the Trustee shall have obtained knowledge of a claim shall not
relieve the Trust Fund of the obligation to indemnify the Trustee under this
Section 8.06;
(ii) while maintaining control over its own defense, the
Trustee shall reasonably cooperate and consult with the Depositor in preparing
such defense;
(iii) notwithstanding anything to the contrary in this Section
8.06, the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld or delayed; and
(iv) indemnification therefor would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii).
The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
(b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
this Agreement (including fees and expenses of its counsel and all persons not
regularly in its employment), except any such expenses, disbursements and
advances that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).
Section 8.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating that would
not cause any of the Rating Agencies to reduce their respective ratings of any
Class of Certificates below the ratings issued on the Closing Date (or having
provided such security from time to time as is sufficient to avoid such
reduction) and reasonably acceptable to the NIMs Insurer. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Securities Administrator and their
respective Affiliates; provided, however, that such corporation cannot be an
Affiliate of the Servicer other than the Trustee in its role as successor to the
Servicer.
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Section 8.08. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
NIMs Insurer and the Securities Administrator by mailing notice of resignation
by first class mail, postage prepaid, to the Certificateholders at their
addresses appearing on the Certificate Register and each Rating Agency, not less
than 60 days before the date specified in such notice when, subject to Section
8.09, such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee acceptable to the NIMs Insurer in accordance with Section 8.09
and meeting the qualifications set forth in Section 8.07. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice or resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer or (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and shall promptly appoint a successor trustee
by written instrument, in triplicate, one copy of which instrument shall be
delivered to the Trustee, one copy of which shall be delivered to the Securities
Administrator and one copy of which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, with the consent of the NIMs Insurer, or the NIMs Insurer upon
failure of the Trustee to perform its obligations hereunder, may at any time
remove the Trustee and the Depositor shall appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIMs Insurer), one complete
set of which instruments shall be delivered by the successor trustee to the
Trustee so removed and one complete set to the successor so appointed. Notice of
any removal of the Trustee shall be given to the NIMs Insurer and each Rating
Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.09 hereof.
Section 8.09. Successor Trustee.
Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the NIMs Insurer and the Securities Administrator an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If
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the Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.10. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).
Section 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee and the NIMs Insurer to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Servicer and the Trustee may consider necessary or desirable. Any
such co-trustee or separate trustee shall be compensated by the Trust Fund and
subject to the written approval of the Servicer and the NIMs Insurer. The
Trustee shall not be liable for the actions of any co-trustee appointed with due
care; provided that the appointment of a co-trustee shall not relieve the
Trustee of its obligations hereunder. If the Servicer and the NIMs Insurer shall
not have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.07 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
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(iii) The Trustee, with the consent of the NIMs Insurer, may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
NIMs Insurer, the Securities Administrator and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.12. Tax Matters.
(a) It is intended that each of the REMICs provided for herein
REMIC shall constitute, and that the affairs of the Trust Fund shall be
conducted so as to allow each such REMIC to qualify as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, the Securities Administrator covenants and
agrees that it shall act as agent (and the Securities Administrator is hereby
appointed to act as agent) on behalf of each of the REMICs provided for herein
and that in such capacity it shall: (a) prepare and file, or cause to be
prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit Income Tax Return (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and filed
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each of
the REMICs provided for herein, containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for each of the REMICs provided for
herein; (c) make or cause to be made elections, on behalf of each of the REMICs
provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Class R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Person that is not a Permitted Transferee, or a pass through entity in which a
Person that is not a Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for
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such tax); (f) to the extent that they are under its control conduct the affairs
of each of the REMICs provided for herein at all times that any Certificates are
outstanding so as to maintain the status of each of the REMICs provided for
herein as a REMIC under the REMIC Provisions; (g) not knowingly or intentionally
take any action or omit to take any action that would cause the termination of
the REMIC status of any of the REMICs provided for herein or result in the
imposition of tax upon any such REMIC; (h) pay, from the sources specified in
the last paragraph of this Section 8.12, the amount of any federal, state and
local taxes, including prohibited transaction taxes as described below, imposed
on each of the REMICs provided for herein prior to the termination of the Trust
Fund when and as the same shall be due and payable (but such obligation shall
not prevent the Trustee or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Securities
Administrator from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs provided for herein, and
the fair market value and adjusted basis of the Trust Fund property determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent each of the REMICs provided for herein in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
In order to enable the Securities Administrator to perform its duties as
set forth herein, the Depositor shall provide, or cause to be provided, to the
Securities Administrator within 10 days after the Closing Date all information
or data that the Securities Administrator requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor, any such additional information or data that the
Securities Administrator may, from time to time, request in order to enable the
Securities Administrator to perform its duties as set forth herein. The
Depositor hereby agrees to indemnify the Securities Administrator for any
losses, liabilities, damages, claims or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Securities Administrator on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any
of the REMICs provided for herein as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of the any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, if not paid as otherwise provided for herein, such tax shall be paid
by (i) the Securities Administrator, if any such other tax arises out of or
results from a breach by the Securities Administrator of any of its obligations
under this Agreement or as a result of the location of the Securities
Administrator, (ii) any party hereto (other than the Securities Administrator)
to the extent any such other tax arises out of or results from a breach by such
other party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts (other than amounts
derived by the Trust Fund from a payment on the Cap Contract) otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class C
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Certificates (pro rata), second to the Class B-6 Certificates (pro rata), third
to the Class B-5 Certificates (pro rata), fourth to the Class B-4 Certificates
(pro rata), fifth, to the Class B-3 Certificates (pro rata), sixth, to the Class
B-2 Certificates (pro rata), seventh to the Class B-1 Certificates (pro rata),
eighth to the Class M-4 Certificates (pro rata), ninth to the Class M-3
Certificates (pro rata), tenth to the Class M-2 Certificates (pro rata),
eleventh to the Class M-1 Certificates (pro rata), and twelfth to the Class A
Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificate, the
Securities Administrator is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holders of the Class R Certificate
(and, if necessary, from the Holders of all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Securities Administrator
agrees to promptly notify in writing the party liable for any such tax of the
amount thereof and the due date for the payment thereof.
(b) Each of the Depositor, Securities Administrator and the
Trustee agrees not to knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any of the
REMICs provided for herein or result in the imposition of a tax upon any of the
REMICs provided for herein.
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Servicer, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of (a) an Optional Termination and (b) the
later of (i) the 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 (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States
to the Court of St. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.
(b) On or before the Determination Date following the Initial
Optional Termination Date, the Trustee shall attempt to terminate the Trust Fund
by conducting an auction of all of the Mortgage Loans and REO Properties via a
solicitation of bids from at least three (3) bidders, each of which shall be a
nationally recognized participant in mortgage finance (the "Auction"). In
addition, the Trustee will also solicit a bid from each Holder of a Class C
Certificate. The Depositor and the Trustee agree to work in good faith to
develop bid procedures in advance of the Initial Optional Termination Date to
govern the operation of the Auction. The Trustee shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Trust Fund). The Trustee shall accept the highest bid received at the
Auction; provided that the amount of such bid equals or exceeds the Optional
Termination Price. The Trustee shall determine the Optional Termination Price
based upon information provided by (i) the Servicer with respect to the amounts
described in clauses (A) and (B) of the definition of "Optional Termination
Price" (other than Trustee expenses), (ii) the Depositor with respect to the
information described in clause (C) of the definition of "Optional Termination
Price." The Trustee may conclusively rely upon the information provided to it in
accordance with the immediately preceding sentence and shall not have any
liability for the failure of any party to provide such information.
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If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the NIMs Insurer (or the
Servicer, if there is not a NIMs Insurer at such time) may, on any Distribution
Date following such Auction, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. In the event that there is a NIMs Insurer at the
time of the Auction, the Auction fails to achieve the Optional Termination Price
and the NIMs Insurer does not exercise its option to terminate the Trust Fund on
the first Distribution Date on which it is able to exercise such option, the
Servicer may, at such time, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. In connection with such termination, the Optional
Termination Price shall be delivered to the Securities Administrator no later
than the Business Day immediately preceding the related Distribution Date.
Notwithstanding anything to the contrary herein, the Optional Termination Amount
paid to the Securities Administrator by the winning bidder at the Auction or by
the NIMs Insurer or the Servicer shall be deposited by the Securities
Administrator directly into the Certificate Account immediately upon receipt.
Upon any termination as a result of an Auction, the Securities Administrator
shall, out of the Optional Termination Amount deposited into the Certificate
Account, (x) reimburse the Trustee for its costs and expenses necessary to
conduct the Auction and any other unreimbursed amounts owing to it and (y) pay
to the Servicer, the aggregate amount of any unreimbursed out-of-pocket costs
and expenses owed to the Servicer and any unpaid or unreimbursed Servicing Fees,
Advances and Servicing Advances.
(c) Notwithstanding anything to the contrary in clause (b) above,
in the event that the Trustee receives the written opinion of a nationally
recognized participant in mortgage finance acceptable to the Seller that the
Mortgage Loans and REO Properties to be included in the Auction will not be
saleable at a price sufficient to achieve the Optional Termination Price, the
Trustee need not conduct the Auction. In such event, the NIMs Insurer, if any,
and the Servicer in the event the NIMs Insurer declines to exercise its option,
shall have the option to purchase the Mortgage Loans and REO Properties at the
Optional Termination Price as of the Initial Optional Termination Date.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Collection Account, the Securities
Administrator shall send a final distribution notice promptly to each
Certificateholder and the NIMs Insurer or (ii) the Securities Administrator
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Securities Administrator shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Securities Administrator specified in such notice.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
Securities Administrator by letter to Certificateholders mailed no later than
the last calendar day of the month immediately preceding the month of such final
distribution (or with respect to an Auction, mailed no later than one Business
Day following completion of such Auction). Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the location of the office or agency at which such presentation
and surrender must be made, and (c) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The
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Securities Administrator will give such notice to the NIMs Insurer and each
Rating Agency at the time such notice is given to Certificateholders.
In the event such notice is given, the Securities Administrator shall
cause all funds in the Collection Account to be deposited in the Certificate
Account on the Business Day prior to the applicable Distribution Date in an
amount equal to the final distribution in respect of the Certificates. Upon such
final deposit with respect to the Trust Fund, certification to the Trustee that
such required amount has been deposited in the Trust Fund and the receipt by the
Trustee of a Request for Release therefor, the Trustee shall promptly release to
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Certificate Account in
the order and priority set forth in Section 4.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto. Upon
payment to the Class R Certificateholders of such funds and assets, neither the
Securities Administrator nor the Trustee shall not have any further duties or
obligations with respect thereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Trustee, the NIMs Insurer or the Servicer
completes an Optional Termination as provided in Section 9.01, the Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the Trustee, the NIMs Insurer or Servicer, as applicable to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited transactions"
of any of the REMICs provided for herein as defined in Section 860F of the Code,
or (ii) cause any of the REMICs provided for herein to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation
period and notify the Trustee and the Securities Administrator thereof, and the
Securities Administrator shall in turn specify the first day of such period in a
statement attached to the final tax returns of each of the REMICs provided for
herein pursuant to Treasury Regulation Section 1.860F-1. The Depositor shall
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Servicer;
(ii) During such 90-day liquidation period, and at or prior
to the time of making the final payment on the Certificates, the Depositor as
agent of the Trustee shall sell all of the assets of the Trust Fund for cash;
and
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(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or cause
to be distributed or credited, to the Class R Certificateholders all cash on
hand (other than cash retained to meet outstanding claims), and the Trust Fund
shall terminate at that time, whereupon neither the Securities Administrator nor
the Trustee shall not have any further duties or obligations with respect to
sums distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Trustee as agent for each REMIC hereby agrees to adopt and
sign such a plan of complete liquidation prepared and delivered to it by
Depositor upon the written request of the Depositor, and the receipt of the
Opinion of Counsel referred to in Section 9.03(a) and to take such other action
in connection therewith as may be reasonably requested by the Depositor.
(d) Notwithstanding any other terms of this Agreement, prior to any
termination of the Trust Fund, the Servicer may prepare a reconciliation of all
Advances and Servicing Advances made by it for which it has not been reimbursed
and a reasonable estimate of all additional Servicing Advances and other costs
for which it would be entitled to be reimbursed if the Trust Fund were not being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03 (Limitation on Liability of the Depositor, the
Servicer and Others), and the Servicer may recover these Advances, Servicing
Advances and estimated Servicing Advances and other costs from the Collection
Account (to the extent that such recovery of Servicing Advances, estimated
Servicing Advances and other costs constitutes "unanticipated expenses" within
the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
(e) Notwithstanding any other terms of this Agreement, unless the
Servicer previously has notified the Trustee that it has entered into a
servicing agreement for the servicing after the termination date of the Trust
Fund assets, at least 20 days prior to any termination of the Trust Fund, the
Trustee or the Depositor shall notify the Servicer in writing to transfer the
assets of the Trust Fund as of the termination date to the person specified in
the notice, or if such person is not then known, to continue servicing the
assets until the date that is 20 days after the termination date and on the
termination date, the Trustee or the Depositor shall notify the Servicer of the
person to whom the assets should be transferred on that date. In the latter
event the Servicer shall be entitled to recover its servicing fee and any
advances made for the interim servicing period from the collections on the
assets which have been purchased from the Trust and the new owner of the assets,
and the agreements for the new owner to obtain ownership of the assets of the
Trust Fund shall so provide.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicer, the Securities Administrator and the Trustee,
with the consent of the NIMs Insurer and without the consent of any of the
Certificateholders to,
(i) to cure any ambiguity or correct any mistake,
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(ii) to correct, modify or supplement any provision therein
which may be inconsistent with any other provision herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the
terms or provisions contained in this Agreement, provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel to such effect, adversely affect in any material respect the
interests of any Holder; provided, further, however, that such amendment will be
deemed to not adversely affect in any material respect the interest of any
Holder if the Person requesting such amendment obtains a letter from each Rating
Agency stating that such amendment will not result in a reduction or withdrawal
of its rating of any Class of the Certificates, it being understood and agreed
that any such letter in and of itself will not represent a determination as to
the materiality of any such amendment and will represent a determination only as
to the credit issues affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders but with the consent of the NIMs Insurer, the Depositor, the
Master Servicer, the Servicer, the Securities Administrator and the Trustee may
at any time and from time to time amend this Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary or appropriate
to maintain the qualification of any of the REMICs provided for herein as REMICs
under the Code or to avoid or minimize the risk of the imposition of any tax on
the Trust Fund or any of the REMICs provided for herein pursuant to the Code
that would be a claim against the Trust Fund at any time prior to the final
redemption of the Certificates, provided that the Trustee, the NIMs Insurer and
the Securities Administrator shall have been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such amendment but in
any case shall not be an expense of the Trustee, the NIMs Insurer or the
Securities Administrator, to the effect that such action is necessary or
appropriate to maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Servicer, the Securities Administrator and the Trustee and
the Holders of the Certificates affected thereby evidencing not less than 66
2/3% of the Voting Rights, with the consent of the NIMs Insurer, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (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 66
2/3% or more of the Voting Rights of such Class 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 be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee or upon the written request of
the Trustee to the Securities Administrator,
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the Securities Administrator shall furnish written notification of the substance
of such amendment to each Certificateholder and each Rating Agency. A copy of
such Opinion of Counsel shall be provided to the NIMs Insurer.
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 Securities Administrator may prescribe.
Nothing in this Agreement shall require the Trustee or the Securities
Administrator to enter into an amendment without receiving an Opinion of
Counsel, satisfactory to the Trustee or the Securities Administrator that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.
Section 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
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The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05. Notices.
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to each Rating Agency and the NIMs Insurer with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Trustee, the
Securities Administrator, the Master Servicer or the Servicer and the
appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03 and 3.12;
(v) The final payment to Certificateholders; and
(vi) Any change in the location of the Certificate Account.
(b) The Securities Administrator shall promptly furnish or make
available to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxxx Xxxxx Mortgage Investors, Inc. 000 Xxxxx Xxxxxx, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies, (i) Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and (ii) Xxxxx'x Investors Service, Inc., 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (c) in the case of the Servicer,
Wilshire Credit Corporation, 00000 X.X. Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxx 00000; (d) in the case of the Master Servicer and Securities
Administrator, Xxxxx Fargo Bank, N.A., 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Client Services Manager - Xxxxxxx Xxxxx Mortgage
Investors Trust, Series 2005-WMC1; (e) in the case of the Trustee, HSBC Bank
USA, National Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and in
the case of any of the foregoing persons, such other addresses as may hereafter
be furnished by any such persons to the other parties to
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this Agreement. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Master Servicer and Depositor;
provided, however, the Servicer is hereby authorized to enter into an Advance
Facility under which (l) the Servicer sells, assigns or pledges to an Advancing
Person the Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders, NIMs
Insurer or any other party is required before the Servicer may enter into an
Advance Facility. Notwithstanding the existence of any Advance Facility under
which an Advancing Person agrees to fund Advances and/or Servicing Advances on
the Servicer's behalf, the Servicer shall remain obligated pursuant to this
Agreement to make Advances and Servicing Advances pursuant to and as required by
this Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that
such reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan by loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all Advances
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and Servicing Advances funded by the Servicer to the extent the related rights
to be reimbursed therefor have not been sold, assigned or pledged to an
Advancing Person.
Any amendment to this Section 10.07 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee and the Servicer, without the consent of any Certificateholder
notwithstanding anything to the contrary in this Agreement, upon receipt by the
Trustee of an Opinion of Counsel that such amendment has no material adverse
effect on the Certificateholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the
Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the
Servicer on a non recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Master Servicer, the Trustee and the Trust Fund are not
otherwise obligated or liable to repay any Advances financed by the lender; (b)
the Servicer will be responsible for remitting to the lender the applicable
amounts collected by it as reimbursement for Advances funded by the lender,
subject to the restrictions and priorities created in this Agreement; and (c)
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and the lender.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such indemnity satisfactory to it as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and
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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 and Servicer each agree that, on reasonable prior
notice, it will permit any representative of the Depositor or the Trustee during
the Master Servicer's or Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer or
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,
agents, counsel and independent public accountants (and by this provision the
Master Servicer and the Servicer each hereby authorizes such accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 10.09 shall be borne by the party requesting
such inspection (except in the case of the Trustee in which case such expenses
shall be borne by the requesting Certificateholder(s)); all other such expenses
shall be borne by the Servicer or Master Servicer, as the case may be.
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
Authenticating Agent pursuant to this Agreement, are and shall be deemed fully
paid.
Section 10.11. Third Party Rights.
The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
Section 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and any
successor thereto shall furnish to the NIMs Insurer a copy of any notice,
direction, demand, opinion, schedule, list, certificate, report, statement,
filing, information, data or other communication provided by it or on its behalf
to any other Person pursuant to this Agreement at the same time, in the same
form and in the same manner as such communication is so provided and shall
address or cause such communication to be addressed to the NIMs Insurer in
addition to any other addressee thereof. The Servicer shall cause the NIMs
Insurer to be an addressee of any report furnished pursuant to this Agreement.
With respect to the Securities Administrator, such obligation shall be satisfied
with the provision of access to the NIMs Insurer to the Securities
Administrator's website.
(b) Wherever in this Agreement there shall be a requirement that
there be no downgrade, reduction, withdrawal or qualification of or other
adverse effect on the rating of any Class of Certificates by any Rating Agency
as of any date, there also shall be deemed to be a requirement that there be no
such adverse effect on any class of notes issued pursuant to the Indenture and
guaranteed by the NIMs Insurer as of such date. In addition, unless there exists
a continuance of any failure by the NIMs Insurer to make a required payment
under the policy insuring the NIM Notes (such event, a "NIMs Insurer Default"),
wherever in this Agreement there shall be a requirement that any Person or any
communication, object or other matter be acceptable or satisfactory to or
otherwise receive the consent or
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other approval of any other Person (whether as a condition to the eligibility of
such Person to act in any capacity, as a condition to any circumstance or state
of affairs related to such matter, or otherwise), there also shall be deemed to
be a requirement that such Person or matter be approved in writing by the NIMs
Insurer, which approval shall not be unreasonably withheld or delayed.
ARTICLE XI
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
Section 11.01. Master Servicer.
The Master Servicer shall supervise, monitor and oversee the obligation of
the Servicer to service and administer the Mortgage Loans in accordance with the
terms of this Agreement and shall have full power and authority to do any and
all things which it may deem necessary or desirable in connection with such
master servicing and administration. In performing its obligations hereunder,
the Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and consult
with the Servicer as necessary from time to time to carry out the Master
Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Servicer and shall cause the Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by the Servicer under
this Agreement. The Master Servicer shall independently and separately monitor
the Servicer's servicing activities with respect to each related Mortgage Loan,
reconcile the results of such monitoring with such information provided in the
previous sentence on a monthly basis and coordinate corrective adjustments to
the Servicer's and Master Servicer's records, and based on such reconciled and
corrected information, prepare the statements specified in Section 4.05 and any
other information and statements required to be provided by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicer to the Collection Account
pursuant to the terms hereof based on information provided to the Master
Servicer by the Servicer.
The Trustee shall furnish the Servicer and/or the Master Servicer with any
limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicer and/or the Master Servicer to
execute in the name of the Trustee, as applicable, all documents reasonably
required to perform the servicing functions described in Article III or this
Article XI. The Trustee shall have no responsibility for any action of the
Master Servicer or the Servicer pursuant to any such limited power of attorney
and shall be indemnified by the Master Servicer or the Servicer, as applicable,
for any cost, liability or expense incurred by the Trustee in connection with
such Person's misuse of any such power of attorney.
The Master Servicer and the Securities Administrator shall provide access
to the records and documentation in possession of the Master Servicer or the
Securities Administrator regarding the related Mortgage Loans and REO Property
and the master servicing and servicing thereof to the Certificateholders, the
FDIC, and the supervisory agents and examiners of the FDIC, such access being
afforded only upon reasonable prior written request and during normal business
hours at the office of the Master Servicer or the Securities Administrator;
provided, however, that, unless otherwise required by law, neither of the Master
Servicer nor the Securities Administrator shall be required to provide access to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Master Servicer and the Securities
Administrator shall allow representatives of the above entities to photocopy any
of the records and documentation and shall provide equipment for that purpose at
a charge that covers the Master Servicer's or the Securities Administrator's
actual costs.
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The Trustee shall execute and deliver to the Servicer or the Master
Servicer upon request any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Mortgage Loan
Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or any other
Mortgage Loan Document or otherwise available at law or equity.
Section 11.02. Monitoring of Servicer.
(a) The Master Servicer shall be responsible for monitoring the
compliance by the Servicer with its duties under this Agreement. In the review
of the Servicer's activities, the Master Servicer may rely upon an Officer's
Certificate of the Servicer with regard to the Servicer's compliance with the
terms of this Agreement. In the event that the Master Servicer, in its judgment,
determines that the Servicer should be terminated in accordance with the terms
hereof, or that a notice should be sent pursuant to the terms hereof with
respect to the occurrence of an event that, unless cured, would constitute a
Servicer Event of Default, the Master Servicer shall notify the Servicer, the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Securities
Administrator and the Certificateholders, shall enforce the obligations of the
Servicer under this Agreement and shall, in the event that the Servicer fails to
perform its obligations in accordance with this Agreement, subject to the
preceding paragraph, Section 3.04 and Article VII, terminate the rights and
obligations of the Servicer hereunder in accordance with the provisions of
Article VII. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) Upon termination of the rights of the Servicer upon the
Servicer's failure to perform its obligations in accordance with this Agreement,
the Master Servicer shall be entitled to be reimbursed by the Servicer (or from
amounts on deposit in the Collection Account if the Servicer is unable to
fulfill its obligations hereunder) for all reasonable out-of-pocket or third
party costs associated with the transfer of servicing from a predecessor
Servicer (or if the predecessor Servicer is the Master Servicer, from the
Servicer immediately preceding the Master Servicer), including, without
limitation, any reasonable out-of-pocket or third party costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Master Servicer to correct any errors or insufficiencies in the servicing data
or otherwise to enable the Master Servicer to service the Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.
(d) The Master Servicer shall require the Servicer to comply with
the remittance requirements and other obligations set forth in this Agreement.
(e) If the Master Servicer acts as successor to the Servicer, it
will not assume liability for the representations and warranties of the
terminated Servicer.
Section 11.03. Fidelity Bond.
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The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
Section 11.04. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Section 8.12, to do any and all things that it may deem necessary or desirable
in connection with the master servicing and administration of the Mortgage
Loans, including but not limited to the power and authority (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary consents
or waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds, and
(iv) to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan, in each case, in accordance with
the provisions of this Agreement; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 11.02, shall
not permit the Servicer to) knowingly or intentionally take any action, or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, would cause any
REMIC formed hereby to fail to qualify as a REMIC or result in the imposition of
a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not cause
any REMIC formed hereby to fail to qualify as a REMIC or result in the
imposition of a tax upon any REMIC. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with this Agreement, and the Trustee shall
execute and deliver such other documents, as the Master Servicer may request, to
enable the Master Servicer to master service and administer the Mortgage Loans
and carry out its duties hereunder, in each case in accordance with Accepted
Master Servicing Practices (and the Trustee shall have no liability for misuse
of any such powers of attorney by the Master Servicer and shall be indemnified
by the Master Servicer for any cost, liability or expense incurred by the
Trustee in connection with such Person's use or misuse of any such power of
attorney). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-Trustee pursuant to Section 8.11. In the performance of
its duties hereunder, the Master Servicer shall be an independent contractor and
shall not, except in those instances where it is taking action in the name of
the Trustee, be deemed to be the agent of the Trustee.
Section 11.05. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit to the Trustee such documents
and instruments coming into the possession of the Master Servicer from time to
time as are required by the
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terms hereof to be delivered to the Trustee. Any funds received by the Master
Servicer in respect of any Mortgage Loan or which otherwise are collected by the
Master Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be deposited in the Certificate Account. The Master Servicer
shall, and shall cause the Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Securities Administrator, its
agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the OTS, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.
(b) 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
or Insurance Proceeds, shall be deposited in the Certificate Account.
Section 11.06. Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee , shall retain possession and custody of the originals (to the
extent available) of any primary mortgage insurance policies, or certificate of
insurance if applicable, and any certificates of renewal as to the foregoing as
may be issued from time to time as contemplated by this Agreement. Until all
amounts distributable in respect of the Certificates has been distributed in
full and the Master Servicer and the Servicer have otherwise fulfilled their
respective obligations under this Agreement, the Trustee shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee, upon the execution or receipt
thereof the originals of any primary mortgage insurance policies, any
certificates of renewal, and such other documents or instruments that constitute
the Mortgage File that come into the possession of the Master Servicer from time
to time.
Section 11.07. Compensation for the Master Servicer and the Securities
Administrator.
As compensation for the activities of the Master Servicer and the
Securities Administrator hereunder, the Master Servicer and the Securities
Administrator shall be entitled to the income from investment of or earnings on
the funds from time to time in the Certificate Account, and the Securities
Administrator shall also be entitled to reimbursement for certain expenses as
provided herein. Each of the Master Servicer and the Securities Administrator
shall be required to pay all expenses incurred by it in connection with its
activities hereunder and shall not be entitled to reimbursement therefor except
as provided in this Agreement.
Section 11.08. Annual Statement as to Compliance.
Pursuant to this Agreement, the Master Servicer shall deliver to the
Depositor and the Trustee and on or before March 15 of each year beginning in
2006, (or such other date that the Depositor gives the Master Servicer at least
30 days prior notice of) in order to remain in compliance with the Section 302
Requirements, an Officer's Certificate stating, as to each signatory thereof,
that (i) a review of the activities of the Master Servicer during the preceding
calendar year and of performance under this Agreement or a similar agreement has
been made under such officer's supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Master Servicer has fulfilled all
of its obligations
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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 officers and the nature and status thereof. The Securities Administrator
shall forward a copy of each such statement received by it to each Rating
Agency. Copies of such statement shall be provided by the Securities
Administrator to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement has been delivered by the
Master Servicer to the Securities Administrator.
Section 11.09. Periodic Filings.
(a) As part of the Form 10-K required to be filed pursuant to the
terms of this Agreement, the Master Servicer shall include the accountants
report required pursuant to Section 3.18, the Officer's Certificate delivered by
the Servicer pursuant to Section 3.17 relating to the Servicer's performance of
its obligations under this Agreement and the Officer's Certificate delivered by
the Master Servicer pursuant to Section 11.08 relating to the Master Servicer's
performance of its obligations under this Agreement.
(b) The Master Servicer shall prepare for filing, and execute (other
than the initial filings and the Form 10-Ks), on behalf of the Trust Fund, and
file with the Securities and Exchange Commission, (i) within 15 days after each
Distribution Date in each month, each Monthly Statement on Form 8-K under the
Exchange Act executed by the Master Servicer, (ii) on or before March 30 of each
year beginning in 2006 or such other date in order to remain in compliance with
the Section 302 Requirements, a Form 10-K under the Exchange Act executed by the
Master Servicer, including any certification (the "Certification") required by
the Section 302 Requirements, and (iii) any and all reports, statements and
information respecting the Trust Fund and/or the Certificates required to be
filed on behalf of the Trust Fund under the Exchange Act. The Certification and
Form 10-K shall be executed by a senior officer of the Master Servicer. Upon
such filing with the Securities and Exchange Commission, the Master Servicer
shall promptly deliver to the Depositor a copy of any such executed report,
statement or information. Prior to making any such filings and certifications,
the Master Servicer shall comply with the provisions set forth in this Section.
Unless the Depositor otherwise directs, the Master Servicer shall not file a
Form 15 under the Exchange Act. The Depositor hereby grants to the Master
Servicer a limited power of attorney to execute and file each such document on
behalf of the Depositor. Such power of attorney shall continue until either the
earlier of (i) receipt by the Master Servicer from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. The Depositor agrees to promptly furnish to the Master Servicer, from time
to time upon request, such further information, reports, and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Depositor reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Master Servicer shall have no responsibility to
file any items other than those specified in this Section.
(c) [RESERVED]
(d) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which the Master Servicer
is obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this
Section. In the event a Form 15 is properly filed pursuant to paragraph (b) of
this Section, there shall be no further obligations under paragraphs (a) through
(c) of this Section with respect to the fiscal year in which the Form 15 is
filed (other than the obligations in paragraphs (a) and (b) of this Section to
be performed in such fiscal year that relate back to the prior fiscal year);
provided, however, that the Master Servicer shall not file a Form 15 without
receiving the prior written instructions of the Depositor to do so.
- 129 -
Section 11.10. Obligation of the Master Servicer in Respect of Prepayment
Interest Shortfalls.
In the event a Prepayment Interest Shortfall occurs, the Master Servicer
shall deposit in the Certificate Account not later than the related Distribution
Date an amount equal to the aggregate Prepayment Interest Shortfalls
attributable to Principal Prepayments on the related Mortgage Loans for the
related Distribution Date, to the extent such Prepayment Interest Shortfalls
were required to be, but were not so paid by the Servicer.
- 130 -
IN WITNESS WHEREOF, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer, and the Servicer have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:____________________________________
Name: Xxxxxxx Xxxxxx
Title: President
HSBC BANK USA, NATIONAL ASSOCIATION
as Trustee
By:____________________________________
Name:
Title:
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:____________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:____________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
WILSHIRE CREDIT CORPORATION,
as Servicer
By:____________________________________
Name:
Title:
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
[INTENTIONALLY OMITTED]
B-1-1
EXHIBIT B-2
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-2-1
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
[INTENTIONALLY OMITTED]
B-3-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
FORM OF TRUSTEE CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilshire Credit Corporation
00000 X.X. Xxxxxxxx Xxx,
Xxxxx 000
Xxxxxxxxx, Xxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of January 1, 2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, HSBC Bank USA, National Association, as trustee and Wilshire
Credit Corporation, as servicer (the "Pooling and Servicing Agreement"), the
undersigned, as custodian, hereby certifies that [, except as set forth in
Schedule A hereto,] as to each Mortgage Loan listed in the Mortgage Loan
Schedule attached hereto (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan.
The custodian has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number, the name of the Mortgagor, the
D-1
street address (excluding zip code), the mortgage interest rate at origination,
the gross margin (if applicable), the lifetime rate cap (if applicable), the
periodic rate cap (if applicable), the original principal balance, the first
payment due date and the original maturity date in each Mortgage File conform to
the respective Mortgage Loan number and name listed on the Mortgage Loan
Schedule and (ii) the existence in each Mortgage File of each of the documents
listed in subparagraphs (i)(A) through (G), inclusive, of Section 2.01 in the
Agreement. The custodian makes no representations or warranties as to the
validity, legality, recordability, sufficiency, enforceability or genuineness of
any of the documents contained in each Mortgage Loan or the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Pooling and Servicing
Agreement.
XXXXX FARGO BANK, N.A.,
as Custodian
By: ________________________________
Name: ______________________________
Title: _____________________________
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2005-WMC1
Ladies and Gentlemen:
We propose to purchase Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-WMC1, Class R, described in the
Prospectus Supplement, dated January 25, 2005, and Prospectus, dated January 19,
2005.
1. We certify that (a) we are not a disqualified organization and (b) we
are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they became
due, (b) we intend, and believe that we will be able, to continue to pay our
debts as they become due in the future, (c) we understand that, as beneficial
owner of the Class R Certificate, we may incur tax liabilities in excess of any
cash flows generated by the Class R Certificate, and (d) we intend to pay any
taxes associated with holding the Class R Certificate as they become due and (e)
we will not cause income from the Class R Certificate to be attributable to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)
______ The Class R Certificate will be registered in our name.
______ The Class R Certificate will be held in the name of our nominee,
_________________, which is not a disqualified organization.
4. We certify that we are not an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a
plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing
---------------------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-1
provisions of ERISA or the Code (each, a "Plan"), and are not directly or
indirectly acquiring the Class R Certificate on behalf of or with any assets of
a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the Class
R Certificate in connection with the conduct of a trade or business within the
United States and have furnished the transferor and the Securities Administrator
with a duly completed and effective Internal Revenue Service Form W-8ECI or
successor form at the time and in the manner required by the Code; for this
purpose the term "U.S. person" means a citizen or resident of the United States,
a corporation, or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of the source of its income, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such U.S. persons have the authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons. We agree that any breach by us
of this certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to transfer
any interest in the Class R Certificate, we will transfer such interest in the
Class R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person or will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and will furnish us and the Securities Administrator with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Securities Administrator a letter in the form of this letter (including
the affidavit appended hereto) and, we will provide the Securities Administrator
a written statement substantially in the form of Exhibit E-2 to the Pooling and
Servicing Agreement.
7. We hereby designate _______________________ as our fiduciary to act as
the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement.
Very truly yours,
[PURCHASER]
By:_________________________________
Name:
Title:
Accepted as of __________ __, 200__
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:___________________________________
Name:
Title:
E-1-2
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the
Internal Revenue Code of 1986, as amended, and (ii)
certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________ (the
"Transferee"),
2. the Transferee's Employer Identification number is __________,
3. the Transferee is not a "disqualified organization" (as
defined below), has no plan or intention of becoming a
disqualified organization, and is not acquiring any of its
interest in the Xxxxxxx Xxxxx Mortgage Investors Trust,
Mortgage Loan Asset-Backed Certificates, Series 2005-WMC1,
Class R Certificate on behalf of a disqualified organization
or any other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc.("MLMI") has
consented to the transfer to the Transferee by executing the
form of Consent affixed as Appendix B to the Transferee's
Letter to which this Certificate is affixed as Appendix A, the
Transferee is a "U.S. person" (as defined below),
5. that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
6. the Transferee has historically paid its debts as they became
due,
7. the Transferee intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
8. the Transferee understands that, as beneficial owner of the
Class R Certificate, it may incur tax liabilities in excess of
any cash flows generated by the Class R Certificate,
9. the Transferee intends to pay any taxes associated with
holding the Class R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by MLMI
(upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class R Certificate will not be
owned directly or indirectly by a disqualified organization,
and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE
[the transfer is not a direct or indirect transfer of the
Class R Certificate to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax
treaty) of the Transferee, and as to each of the residual
interests represented by the Class R Certificate, the present
value of
E-1-3
the anticipated tax liabilities associated with holding such
residual interest does not exceed the sum of:
12. the present value of any consideration given to the Transferee
to acquire such residual interest;
13. the present value of the expected future distributions on such
residual interest; and
14. the present value of the anticipated tax savings associated
with holding such residual interest as the related REMIC
generates losses.
For purposes of this declaration, (i) the Transferee is assumed to pay tax
at a rate equal to the highest rate of tax specified in Section 11(b)(1)
of the Code, but the tax rate specified in Section 55(b)(1)(B) of the Code
may be used in lieu of the highest rate specified in Section 11(b)(1) of
the Code if the Transferee has been subject to the alternative minimum tax
under Section 55 of the Code in the preceding two years and will compute
its taxable income in the current taxable year using the alternative
minimum tax rate, and (ii) present values are computed using a discount
rate equal to the Federal short-term rate prescribed by Section 1274(d) of
the Code for the month of the transfer and the compounding period used by
the Transferee;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year
of transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class R Certificate will be to
another eligible corporation in a transaction that satisfies
Treasury regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be
a direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a
domestic corporation.
For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Transferee will not cause income from the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
E-1-4
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
______________________________________________
By:___________________________________________
___________________________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
___________________________________________
___________________________________________, Secretary
E-1-5
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this day of ,
200_ .
______________________________________________
Notary Public
County of_____________________________________
State of______________________________________
My commission expires the _____ day of _______
By:_______________________________
Name:__________________________
Title:_________________________
Dated:_____________
E-1-6
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2005-WMC1
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
___________________________
Name:
Title:
E-2-1
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2005-WMC1
RE: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of January 1,
2005, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as master servicer and securities administrator, HSBC Bank USA,
National Association, as trustee and Wilshire Credit Corporation, as servicer.
Very truly yours,
___________________________
Name of Transferor
By:________________________
Name:
Title
F-1
EXHIBIT G
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2005-WMC1
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-WMC1, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of January 1,
2005 (the "Pooling and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), HSBC Bank USA, National Association, as trustee
(the "Trustee") and Wilshire Credit Corporation, as servicer (the "Servicer").
[THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR _________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Securities Administrator that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT,
THE 1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
ALSO COMPLIES WITH THE OTHER
G-1
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES
ADMINISTRATOR SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO
THE SECURITIES ADMINISTRATOR (A) AN INVESTMENT LETTER FROM THE PROSPECTIVE
INVESTOR; AND (B) REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE
OFFERING AND SALE OF THE CERTIFICATES.
3. The ERISA Restricted Certificates (other than the Class R Certificates)
will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES
ADMINISTRATOR HAS RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
OR A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF
THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING,
A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS
ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL
ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60,
OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE
SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE
ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER
TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAW
AND WILL NOT SUBJECT THE TRUSTEE, THE NIMS INSURER, THE MASTER SERVICER,
THE SECURITIES ADMINISTRATOR, THE SERVICER OR THE DEPOSITOR TO ANY
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING
AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE NIMS INSURER, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A
DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE
REPRESENTATION IN (A) OR (B) ABOVE.
4. The Class R Certificate will bear a legend to the following effect:
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH A REPRESENTATION
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE,
LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE
G-2
CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN.
5. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
6. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
7. The Purchaser will not nor has it authorized nor will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
8. The Purchaser of an ERISA Restricted Certificate (other than the Class
R Certicate) (A) is not an employee benefit plan subject to Title I of ERISA, a
plan subject to Section 4975 of the Code, a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") and is not directly or indirectly acquiring
such Certificates by, on behalf of, or with any assets of any such plan, or (B)
if the Certificate has been the subject of an ERISA-Qualifying Underwriting, is
an insurance company that is acquiring the Certificate with assets of an
"insurance company general account," as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60, and the acquisition and holding of
the Certificate are covered and exempt under Sections I and III of PTCE 95-60,
or (C) solely in the event the Certificate is a Definitive Certificate, herewith
delivers an Opinion of Counsel satisfactory to the Securities Administrator, and
upon which the Securities Administrator shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the NIMs Insurer, the Master Servicer, the Securities Administrator,
the Servicer or the Depositor to any obligation in addition to those expressly
undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the NIMs Insurer, the Master Servicer,
the Securities Administrator, the Servicer or the Depositor.
----------
* Not required of a broker/dealer purchaser.
G-3
9. The Purchaser of a Class R Certificate is not an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a plan
subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.
10. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.
11. The Purchaser agrees to indemnify the Trustee, the Master Servicer,
the Securities Administrator, the Servicer and the Depositor against any
liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:________________________
Name:
Title:
G-4
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2005-WMC1
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-WMC1, Class [____] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement, dated as of January 1,
2005 (the "Pooling and Servicing Agreement"), among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), HSBC Bank USA, National Association, as trustee
(the "Trustee"), Wilshire Credit Corporation, as servicer (the "Servicer"). [THE
PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR _________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d)(A) we are not an employee
benefit plan subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), a plan subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), a plan subject to any state,
local, federal, non-U.S. or other law substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law"), or Persons directly or
indirectly acting on behalf of or using any assets of any such plan, or (B)
solely with respect to ERISA Restricted Certificates (other than the Class R
Certificates), if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, we are an insurance company that is acquiring the Certificate with
assets of an "insurance company general account," as defined in Section V(e) of
Prohibited Transaction Class Exemption ("PTCE") 95-60, and the acquisition and
holding of the Certificate are covered and exempt under
H-1
Sections I and III of PTCE 95-60, or (C) solely in the event the Certificate is
an ERISA Restricted Certificate (other than a Class R Certificate) and also a
Definitive Certificate, we will herewith deliver an Opinion of Counsel
satisfactory to the Securities Administrator, and upon which the Securities
Administrator shall be entitled to rely, to the effect that the acquisition and
holding of the Certificate will not constitute or result in a nonexempt
prohibited transaction under Title I of ERISA or Section 4975 of the Code, or a
violation of Similar Law, and will not subject the Trustee, the NIMs Insurer,
the Master Servicer, the Securities Administrator, the Servicer or the Depositor
to any obligation in addition to those expressly undertaken in the Pooling and
Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the NIMs Insurer, the Master Servicer, the Securities Administrator,
the Servicer or the Depositor, (e) we have not, nor has anyone acting on our
behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
one of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. We are aware that the sale of the Transferred Certificates to us is
being made in reliance on Rule 144A. We are acquiring the Transferred
Certificates for our own account or for resale pursuant to Rule 144A and further
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed by us, based upon certifications of such
purchaser or information we have in our possession, to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
We agree to indemnify the Trustee, the Master Servicer, the Securities
Administrator, the Servicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:________________________
Name:
Title:
H-2
ANNEX 1
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 the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
______ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
______ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by Federal, State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
______ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over such institution or is a foreign savings and
loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
______ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the
----------
*Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
H-3
______ Securities Exchange Act of 1934, as amended.
______ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of the State,
territory or the District of Columbia.
______ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
______ ERISA Plan. The Buyer is an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of
1974, as amended.
______ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
______ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
______ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
H-4
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:_______________________________
Name:
Title:
Date:_____________________________
H-5
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
______ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
______ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
H-6
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:_______________________________
Name:
Title:
IF AN ADVISER:
__________________________________
Print Name of Buyer
Date:_____________________________
H-7
EXHIBIT I
FORM OF REQUEST FOR RELEASE
[DATE]
To: Xxxxx Fargo Bank, N.A.
0000 00XX Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the Pooling and Servicing Agreement dated as of January
1, 2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx Fargo
Bank, N.A., as master servicer and securities administrator, HSBC Bank USA,
National Association, as trustee and Wilshire Credit Corporation, as servicer
(the "Pooling and Servicing Agreement"), we request the release, and hereby
acknowledge receipt, of the Mortgage File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
________ 1. Mortgage Paid in Full
________ 2. Foreclosure
________ 3. Substitution
________ 4. Other Liquidation (Repurchases, etc.)
________ 5. Nonliquidation
________
Address to which the Trustee should deliver the Mortgage File:
By:_______________________________
(authorized signer)
Address:__________________________
Date:_____________________________
I-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
XXXXX FARGO BANK, N.A.,
as Custodian
By:_________________________________ __________________________________
Signature Date
Documents returned to Custodian:
By:_________________________________ __________________________________
Signature Date
I-2
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
I, [identify the certifying individual], a [title] of Xxxxx Fargo Bank,
N.A., as securities administrator under the Pooling and Servicing Agreement
dated as of January 1, 2005 among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, HSBC Bank USA, National Association, as trustee and Wilshire
Credit Corporation, as servicer (the "Agreement"), hereby certify to the
Depositor, and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. I have reviewed the Monthly Statements delivered pursuant to the Agreement
since the last Officer's Certificate executed pursuant to Section 3.21 of
the Agreement [or in the case of the first certification, since the
Cut-off Date] (the "Securities Administrator Information").
2. Based on my knowledge, the information in the Monthly Statement, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading
as of the date hereof;
3. Based on my knowledge, the Monthly Statements required to be prepared by
the Securities Administrator under the Agreement has been prepared and
provided in accordance with the Agreement; and
4. I am responsible for reviewing the activities performed by the Securities
Administrator under the Agreement and the Securities Administrator has, as
of the date hereof fulfilled its obligations under the Agreement and there
are no significant deficiencies relating to the Securities Administrator's
compliance with the Agreement.
Date:
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
By: ___________________________
Name: ___________________________
Title: ___________________________
K-1
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2005-WMC1
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-WMC1
I, [identify the certifying individual], an authorized representative of
Wilshire Credit Corporation, as servicer under the Pooling and Servicing
Agreement dated as of January 1, 2005 among Xxxxxxx Xxxxx Mortgage Investors,
Inc., as depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, HSBC Bank USA, National Association, as trustee and Wilshire
Credit Corporation, as servicer (the "Agreement"), hereby certify to the
Securities Administrator and the Depositor, and each of their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. Based on my knowledge, the information in the annual statement of
compliance identified in Section 3.17 of the Agreement, the annual independent
public accountants' report identified in Section 3.18 of the Agreement and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Master Servicer, the Securities
Administrator and the Trustee taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the date of this certification;
2. The servicing information required to be provided to the Master
Servicer and the Securities Administrator by the Servicer under the Agreement
has been provided to the Master Servicer and the Securities Administrator;
3. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon the review required hereunder, and except as
disclosed in the annual statement of compliance identified in Section 3.17 of
the Agreement, the annual independent public accountants' report identified in
Section 3.18 of the Agreement and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans submitted
to the Master Servicer and the Securities Administrator, the Servicer has, as of
the date of this certification, fulfilled its obligations under this Agreement;
and
L-1
4. I have disclosed to the Master Servicer all significant deficiencies
relating to the Servicer's compliance with the minimum servicing standards in
accordance with a review conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or similar standard as set forth under
the Agreement.
Date:
Wilshire Credit Corporation, as Servicer
By: _________________________________
Name: _________________________________
Title: _________________________________
X-0
XXXXXXX X-0
FORM OF DELINQUENCY REPORT
STANDARD FILE LAYOUT - DELINQUENCY REPORTING
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
--------------------------- ------------------------------------------------------------ ------- ---------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. This
may be different than the LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by the originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by an external servicer
to identify a group of loans in their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the MM/DD/YYYY
servicer at the end of processing cycle, as reported
by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the bankruptcy
filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved MM/DD/YYYY
by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
Dismissal, Discharged and/or a Motion For Relief Was
Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a Foreclosure MM/DD/YYYY
Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
M-1-1
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,) or
dollar signs ($)
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the MM/DD/YYYY
property from the borrower.
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,) or
dollar signs ($)
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,) or
dollar signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is occupied.
PROP_CONDITION_CODE A code that indicates the condition of the property.
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property based on brokers 2
price opinion or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying on
a loan. Code indicates the reason why the loan is in default
for this cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,) or
dollar signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,) or
dollar signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,) or
dollar signs ($)
M-1-2
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool MM/DD/YYYY
Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,) or
dollar signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or
dollar signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,) or
dollar signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or
dollar signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,) or
dollar signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,) or
dollar signs ($)
M-1-3
STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
- ASUM- Approved Assumption
- BAP- Borrower Assistance Program
- CO- Charge Off
- DIL- Deed-in-Lieu
- FFA- Formal Forbearance Agreement
- MOD- Loan Modification
- PRE- Pre-Sale
- SS- Short Sale
- MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
- Mortgagor
- Tenant
- Unknown
- Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
- Damaged
- Excellent
- Fair
- Gone
- Good
- Poor
- Special Hazard
- Unknown
M-1-4
EXHIBIT M-2
FORM OF MONTHLY REMITTANCE ADVICE
STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
----------------- --------------------------------------------- ------- --------------------------------
LOAN_NBR Loan Number assigned by investor Text up to 10 digits
SERVICER LOAN_NBR Servicer Loan Number Text up to 10 digits
SCHED_PMT_AMT P&I constant 2 No commas(,) or dollar signs ($)
NOTE_INT_RATE Gross Interest Rate 4 Max length of 6
NET_RATE Gross Interest Rate less the Service Fee Rate 4 Max length of 6
SERV_FEE_RATE Service Fee Rate 4 Max length of 6
ARM_INDEX_RATE ARM loan's index Rate used 4 Max length of 6
ACTL_BEG_BAL Beginning Actual Balance 2 No commas(,) or dollar signs ($)
ACTL_END_BAL Ending Actual Balance 2 No commas(,) or dollar signs ($)
NEXT_DUE_DATE Borrower's next due date MM/DD/YYYY
CURT_AMT_1 Curtailment Amount 2 No commas(,) or dollar signs ($)
CURT_DATE_1 Due date Curtailment was applied to MM/DD/YYYY
CURT_ADJ_ AMT_1 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
CURT_AMT_2 Curtailment Amount 2 2 No commas(,) or dollar signs ($)
CURT_DATE_2 Due date Curtailment was applied to MM/DD/YYYY
CURT_ADJ_ AMT2 Curtailment Interest if applicable 2 No commas(,) or dollar signs ($)
CURT_AMT_3 Curtailment Amount 3 2 No commas(,) or dollar signs ($)
CURT_DATE_3 Due date Curtailment was applied to MM/DD/YYYY
CURT_ADJ_AMT3 Curtailment Interest, if applicable 2 No commas(,) or dollar signs ($)
SCHED_BEG_BAL Beginning Scheduled Balance 2 No commas(,) or dollar signs ($)
SCHED_END_BAL Ending Scheduled Balance 2 No commas(,) or dollar signs ($)
SCHED_PRIN_AMT Scheduled Principal portion of P&I 2 No commas(,) or dollar signs ($)
SCHED_NET_INT Scheduled Net Interest (less Service Fee)
portion of P&I 2 No commas(,) or dollar signs ($)
LIQ_AMT Liquidation Principal Amt to bring balance to
zero 2 No commas(,) or dollar signs ($)
PIF_DATE Liquidation Date MM/DD/YYYY
ACTION_CODE Either 60 for liquidation or 65 for Repurchase Max length of 2
M-2-1
PRIN_ADJ_AMT Principal Adjustments made to loan, if applicable 2 No commas(,) or dollar signs ($)
INT_ADJ_AMT Interest Adjustment made to loan, if applicable 2 No commas(,) or dollar signs ($)
PREPAYMENT PENALTY AMT Prepayment penalty amount, if applicable 2 No commas(,) or dollar signs ($)
SOILDER_SAILOR ADJ AMT Soldier and Sailor Adjustment amount, if
applicable 2 No commas(,) or dollar signs ($)
NON ADV LOAN AMT Non Recoverable Loan Amount, if applicable 2 No commas(,) or dollar signs ($)
X-0-0
XXXXXXX X-0
FORM OF REALIZED LOSS REPORT
XXXXX FARGO BANK, N.A. - CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: _________________ Date: _______________
Phone:______________________ Email Address:_____________________
Servicer Loan No. Servicer Name Servicer Address
XXXXX FARGO BANK, N.A. LOAN NO._____________________________
Borrower's Name: _________________________________________________________
Property Address:_________________________________________________________
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes", provide deficiency or cramdown amount __________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of Mortgage Loan $_____________ (1)
(2) Interest accrued at Net Rate ______________ (2)
(3) Accrued Servicing Fees ______________ (3)
(4) Attorney's Fees ______________ (4)
(5) Taxes (see page 2) ______________ (5)
(6) Property Maintenance ______________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ______________ (7)
(8) Utility Expenses ______________ (8)
(9) Appraisal/BPO ______________ (9)
(10) Property Inspections ______________ (10)
(11) FC Costs/Other Legal Expenses ______________ (11)
(12) Other (itemize) ______________ (12)
Cash for Keys__________________________ ______________ (12)
HOA/Condo Fees_______________________ ______________ (12)
_____________________________________________ ______________ (12)
TOTAL EXPENSES $_____________ (13)
CREDITS:
(14) Escrow Balance $_____________ (14)
(15) HIP Refund ______________ (15)
(16) Rental Receipts ______________ (16)
(17) Hazard Loss Proceeds ______________ (17)
M-3-1
(18) Primary Mortgage Insurance / Gov't Insurance ______________ (18a)
HUD Part A
______________ (18b)
HUD Part B
(19) Pool Insurance Proceeds ______________ (19)
(20) Proceeds from Sale of Acquired Property ______________ (20)
(21) Other (itemize) ______________ (21)
_______________________________________________ ______________ (21)
TOTAL CREDITS $_____________ (22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_____________ (23)
M-3-2
ESCROW DISBURSEMENT DETAIL
TYPE PERIOD OF BASE
(TAX /INS.) DATE PAID COVERAGE TOTAL PAID AMOUNT PENALTIES INTEREST
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M-3-3
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS/GAIN FORM 332 - INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND ALL
CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE REMITTANCE REPORT
DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING PASSED UNTIL THE FOLLOWING
MONTH.
The numbers on the 332 form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced is
required.
2. The Total Interest Due less the aggregate amount of servicing fee that
would have been earned if all delinquent payments had been made as agreed.
For documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced is
required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking
out the net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For interest advances - an amortization schedule (evidencing calculation
of interest advances)
* For taxes and insurance advances - see page 2 of 332 form - breakdown
required showing period
of coverage, base tax, interest, penalty. Advances prior to default
require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
M-3-4
CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, copy of
attorney letter of Foreclosure proceeds.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and
line (18b) for Part B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
M-3-5
EXHIBIT N
FORM OF CAP CONTRACT
[INTENTIONALLY OMITTED]
N-1
EXHIBIT O
ONE-MONTH LIBOR CAP TABLE
BEGINNING ENDING NOTIONAL INDEX RATE LOWER COLLAR UPPER COLLAR
PERIOD ACCRUAL ACCRUAL BALANCE($) MULTIPLIER (%) (1) (%)
------ --------- -------- -------------- ---------- ------------ ------------
1 01/25/05 02/25/05 182,593,700.00 10 6.420 9.630
2 02/25/05 03/25/05 179,793,344.10 10 6.665 9.630
3 03/25/05 04/25/05 176,599,255.20 10 5.986 9.630
4 04/25/05 05/25/05 173,022,300.30 10 6.202 9.630
5 05/25/05 06/25/05 169,073,905.80 10 5.993 9.630
6 06/25/05 07/25/05 164,854,208.00 10 6.210 9.630
7 07/25/05 08/25/05 160,385,007.50 10 6.003 9.630
8 08/25/05 09/25/05 155,960,245.80 10 6.009 9.630
9 09/25/05 10/25/05 151,658,385.30 10 6.228 9.630
10 10/25/05 11/25/05 147,475,947.60 10 6.022 9.630
11 11/25/05 12/25/05 143,409,564.70 10 6.241 9.630
12 12/25/05 01/25/06 139,455,946.60 10 6.034 9.630
13 01/25/06 02/25/06 135,611,902.30 10 6.041 9.630
14 02/25/06 03/25/06 131,874,340.80 10 6.735 9.630
15 03/25/06 04/25/06 128,240,248.90 10 6.054 9.630
16 04/25/06 05/25/06 124,706,705.20 10 6.275 9.630
17 05/25/06 06/25/06 121,269,464.10 10 6.068 9.630
18 06/25/06 07/25/06 116,093,070.10 10 6.295 9.630
19 07/25/06 08/25/06 110,651,495.10 10 6.860 9.630
20 08/25/06 09/25/06 105,505,237.50 10 7.239 9.630
21 09/25/06 10/25/06 100,625,364.60 10 7.500 9.630
22 10/25/06 11/25/06 95,998,108.40 10 7.253 9.630
23 11/25/06 12/25/06 92,672,691.60 10 7.513 9.630
24 12/25/06 01/25/07 89,774,776.90 10 7.265 9.630
25 01/25/07 02/25/07 86,970,152.80 10 7.730 9.630
26 02/25/07 03/25/07 84,260,741.50 10 8.732 9.630
27 03/25/07 04/25/07 81,638,130.60 10 7.855 9.630
28 04/25/07 05/25/07 79,099,420.50 10 8.134 9.630
29 05/25/07 06/25/07 76,641,814.70 10 7.865 9.630
30 06/25/07 07/25/07 74,262,606.50 10 8.145 9.630
31 07/25/07 08/25/07 71,959,194.40 10 8.408 9.630
32 08/25/07 09/25/07 69,733,555.20 10 8.530 9.630
33 09/25/07 10/25/07 67,578,487.50 10 8.829 9.630
34 10/25/07 11/25/07 65,491,602.20 10 8.535 9.630
35 11/25/07 12/25/07 63,470,644.30 10 8.835 9.630
36 12/25/07 01/25/08 61,513,431.50 10 8.541 9.630
37 01/25/08 02/25/08 59,617,859.30 10 9.005 9.630
38 02/25/08 03/25/08 58,717,481.70 10 9.612 9.630
39 03/25/08 04/25/08 56,993,165.40 10 8.956 9.630
40 04/25/08 05/25/08 55,322,808.00 10 9.255 9.630
41 05/25/08 06/25/08 53,704,637.40 10 8.932 9.630
42 06/25/08 07/25/08 52,136,940.70 10 9.230 9.630
43 07/25/08 08/25/08 50,618,064.90 10 9.336 9.630
O-1
BEGINNING ENDING NOTIONAL INDEX RATE LOWER COLLAR UPPER COLLAR
PERIOD ACCRUAL ACCRUAL BALANCE($) MULTIPLIER (%) (1) (%)
------ --------- -------- -------------- ---------- ------------ ------------
44 08/25/08 09/25/08 49,148,245.70 10 9.377 9.630
45 09/25/08 10/25/08 47,723,989.60 10 9.630 9.630
46 10/25/08 11/25/08 46,343,803.00 10 9.346 9.630
47 11/25/08 12/25/08 45,006,249.90 10 9.630 9.630
48 12/25/08 01/25/09 43,709,942.80 10 9.315 9.630
49 01/25/09 02/25/09 42,453,541.80 10 9.630 9.630
50 02/25/09 03/25/09 41,236,979.50 10 9.630 9.630
51 03/25/09 04/25/09 40,057,699.70 10 9.630 9.630
52 04/25/09 05/25/09 38,914,491.20 10 9.630 9.630
53 05/25/09 06/25/09 37,806,188.20 10 9.606 9.630
54 06/25/09 07/25/09 36,731,664.30 10 9.630 9.630
55 07/25/09 08/25/09 35,689,831.20 10 9.630 9.630
56 08/25/09 09/25/09 34,679,790.00 10 9.630 9.630
57 09/25/09 10/25/09 33,698,424.20 10 9.630 9.630
58 10/25/09 11/25/09 32,746,801.10 10 9.630 9.630
59 11/25/09 12/25/09 31,823,965.90 10 9.630 9.630
60 12/25/09 01/25/10 30,926,320.70 10 9.630 9.630
61 01/25/10 02/25/10 30,032,399.30 10 9.630 9.630
62 02/25/10 03/25/10 29,165,463.50 10 9.630 9.630
63 03/25/10 04/25/10 28,324,602.60 10 9.630 9.630
64 04/25/10 05/25/10 27,508,933.80 10 9.630 9.630
65 05/25/10 06/25/10 26,717,655.20 10 9.628 9.630
66 06/25/10 07/25/10 25,949,991.60 10 9.630 9.630
67 07/25/10 08/25/10 25,205,193.50 10 9.628 9.630
68 08/25/10 09/25/10 24,482,598.40 10 9.628 9.630
69 09/25/10 10/25/10 23,781,465.30 10 9.630 9.630
70 10/25/10 11/25/10 23,101,089.20 10 9.608 9.630
71 11/25/10 12/25/10 22,440,815.40 10 9.630 9.630
72 12/25/10 01/25/11 21,800,010.80 10 9.590 9.630
73 01/25/11 02/25/11 21,178,063.00 10 9.598 9.630
74 02/25/11 03/25/11 20,574,419.20 10 9.630 9.630
75 03/25/11 04/25/11 19,988,471.50 10 9.585 9.630
76 04/25/11 05/25/11 19,419,659.40 10 9.630 9.630
77 05/25/11 06/25/11 18,867,447.60 10 9.569 9.630
78 06/25/11 07/25/11 18,331,318.30 10 9.630 9.630
79 07/25/11 08/25/11 17,810,770.60 10 9.564 9.630
80 08/25/11 09/25/11 - - - -
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined
by the Cap Contract Counterparty and subject to a cap equal to 9.630%)
exceeds the Lower Collar, the Trust Fund will receive payments pursuant to
the Cap Contract.
O-2
