XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
AAMES CAPITAL CORPORATION,
Responsible Party,
NC CAPITAL CORPORATION,
Responsible Party,
ACCREDITED HOME LENDERS, INC.,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2004
------------------
XXXXXX XXXXXXX ABS CAPITAL I INC. TRUST 2004-HE9
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2004-HE9
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the
Mortgage Loans...............................................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...........................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers.................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicer....................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee......................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee......................................................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..............................................
Section 3.10 Collection Account...........................................
Section 3.11 Withdrawals from the Collection Account......................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account.........................................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage........................................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee..........................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements..............................
Section 3.24 Trustee to Act as Servicer...................................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
Section 4.06 The Class A-3b Certificate Insurance Policy..................
Section 4.07 Effect of Payments by the Class A-3b Certificate Insurer;
Subrogation..................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
Section 5.07 Rights of the Class A-3b Certificate Insurer to Exercise
Rights of Class A-3b Certificateholders......................
Section 5.08 Class A-3b Certificate Insurer Default.......................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.....
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.....
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others...................................................
Section 6.04 Limitation on Resignation of the Servicer....................
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims.......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Trustee to Act; Appointment of Successor.....................
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account and
the Interest Rate Cap Agreements.............................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................
Section 9.02 Final Distribution on the Certificates.......................
Section 9.03 Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment....................................................
Section 10.02 Recordation of Agreement; Counterparts.......................
Section 10.03 Governing Law................................................
Section 10.04 Intention of Parties.........................................
Section 10.05 Notices......................................................
Section 10.06 Severability of Provisions...................................
Section 10.07 Assignment; Sales; Advance Facilities........................
Section 10.08 Limitation on Rights of Certificateholders...................
Section 10.09 Inspection and Audit Rights..................................
Section 10.10 Certificates Nonassessable and Fully Paid....................
Section 10.11 Rule of Construction.........................................
Section 10.12 The Class A-3b Certificate Insurer Default...................
Section 10.13 Third Party Beneficiary......................................
Section 10.14 Waiver of Jury Trial.........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties of Xxxxxx Xxxxxxx ABS Capital I
Inc. as to the Mortgage Loans
Schedule IV Representations and Warranties of Aames as to the Aames Mortgage
Loans
Schedule V Representations and Warranties of NC Capital as to the NC Capital
Mortgage Loans
Schedule VI Representations and Warranties of Accredited as to the Accredited
Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Trustee to Depositor
Exhibit N Form of Certification to be provided by the Servicer to Depositor
Exhibit O Aames Purchase Agreement
Exhibit P NC Capital Purchase Agreement
Exhibit Q Accredited Purchase Agreement
Exhibit R Form of Servicer Power of Attorney
THIS POOLING AND SERVICING AGREEMENT, dated as of November 1, 2004,
among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation (the
"Depositor"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership
(the "Servicer"), AAMES CAPITAL CORPORATION, a California corporation ("Aames"),
NC CAPITAL CORPORATION, a California corporation ("NC Capital"), ACCREDITED HOME
LENDERS, INC., a California corporation ("Accredited"), and DEUTSCHE BANK
NATIONAL TRUST COMPANY, a national banking association, as trustee (the
"Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising two REMICs
(each, a "REMIC" or, in the alternative, the Lower Tier REMIC and the Upper Tier
REMIC, respectively). Each Class of Certificates (other than the Class P and
Class R Certificates), other than the right of each Class of LIBOR Certificates
to receive Basis Risk CarryForward Amounts and the right of the Class X
Certificates to receive payments from the Interest Rate Cap Agreements,
represents ownership of a regular interest in the Upper Tier REMIC for purposes
of the REMIC Provisions. The Class R Certificate represents ownership of the
sole class of residual interest in each of the Lower Tier REMIC and the Upper
Tier REMIC for purposes of the REMIC Provisions. The Startup Day for each REMIC
described herein is the Closing Date. The latest possible maturity date for each
Certificate is the latest date referenced in Section 2.05. The Upper Tier REMIC
shall hold as assets the several classes of uncertificated Lower Tier Regular
Interests, set out below. Each such Lower Tier Regular Interest is hereby
designated as a regular interest in the Lower Tier REMIC. The Class LT-A-1,
Class LT-A-2a, Class LT-A-2b, Class LT-A-3a, Class LT-A-3b, Class LT-A-3c, Class
LT-A-3d, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5,
Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3 Interests are hereby
designated the LT Accretion Directed Classes (the "LT Accretion Directed
Classes"). The Class P Certificates represent beneficial ownership of the
Prepayment Charges, each Class of LIBOR Certificates represents beneficial
ownership of a regular interest in the Upper Tier REMIC and the right to receive
Basis Risk CarryForward Amounts and the Class X Certificates represent
beneficial ownership of a regular interest in the Upper Tier REMIC, the Excess
Reserve Fund Account and the Interest Rate Cap Agreements, which portions of the
Trust Fund shall be treated as a grantor trust.
Corresponding
Lower Tier Lower Tier Initial Lower Tier Upper Tier REMIC
Class Designation Interest Rate Principal Amount Class
--------------------- ---------------- --------------------------------------------- ----------------------
Class LT-A-1 (1) 1/2 initial Corresponding Upper Tier A-1
REMIC Class initial Class Certificate
Balance
Class LT-A-2a (1) 1/2 initial Corresponding Upper Tier A-2a
REMIC Class initial Class Certificate
Balance
Class LT-A-2b (1) 1/2 initial Corresponding Upper Tier A-2b
REMIC Class initial Class Certificate
Balance
Class LT-A-3a (1) 1/2 initial Corresponding Upper Tier A-3a
REMIC Class initial Class Certificate
Balance
Class LT-A-3b (1) 1/2 initial Corresponding Upper Tier A-3b
REMIC Class initial Class Certificate
Balance
Class LT-A-3c (1) 1/2 initial Corresponding Upper Tier A-3c
REMIC Class initial Class Certificate
Balance
Class LT-A-3d (1) 1/2 initial Corresponding Upper Tier A-3d
REMIC Class initial Class Certificate
Balance
Class LT-M-1 (1) 1/2 initial Corresponding Upper Tier M-1
REMIC Class initial Class Certificate
Balance
Class LT-M-2 (1) 1/2 initial Corresponding Upper Tier M-2
REMIC Class initial Class Certificate
Balance
Class LT-M-3 (1) 1/2 initial Corresponding Upper Tier M-3
REMIC Class initial Class Certificate
Balance
Class LT-M-4 (1) 1/2 initial Corresponding Upper Tier M-4
REMIC Class initial Class Certificate
Balance
Class LT-M-5 (1) 1/2 initial Corresponding Upper Tier M-5
REMIC Class initial Class Certificate
Balance
Class LT-M-6 (1) 1/2 initial Corresponding Upper Tier M-6
REMIC Class initial Class Certificate
Balance
Class LT-B-1 (1) 1/2 initial Corresponding Upper Tier B-1
REMIC Class initial Class Certificate
Balance
Class LT-B-2 (1) 1/2 initial Corresponding Upper Tier B-2
REMIC Class initial Class Certificate
Balance
Class LT-B-3 (1) 1/2 initial Corresponding Upper Tier B-3
REMIC Class initial Class Certificate
Balance
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Subordinated Amount, less aggregate
initial Lower Tier Principal Amount of
Class LT-Group I, Class LT-Group II and
Class LT-Group III Interests
Class LT-Group I (2) 0.001% aggregate Stated Principal
Balance of Group I Mortgage Loans (4)
Class LT-Group II (3) 0.001% aggregate Stated Principal
Balance of Group II Mortgage Loans(4)
Class LT-Group III (5) 0.001% aggregate Stated Principal
Balance of Group III Mortgage Loans(4)
Class LT-R (6) (6)
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap (without
reduction for the Premium Rate).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group I Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group II
Cap.
(4) For all Distribution Dates, the Lower Tier Principal Amount of these Lower
Tier Regular Interests shall be rounded to eight decimal places.
(5) The interest rate with respect to any Distribution Date for the Class
LT-Group III Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group III
Cap.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Charges, the Interest Rate Cap
Agreements, the Excess Reserve Fund Account, and the Lower Tier Regular
Interests.
On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the Lower Tier Principal Amounts of the
LT-Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the Class Certificate Balance of its Corresponding Class) and
will be accrued and added to the Lower Tier Principal Amount of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the Lower Tier
Principal Amount of the Class LT-Accrual Interest may not exceed interest
accruals for such Distribution Date for the Class LT-Accrual Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the Subordinated
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans or paid under the Class A-3b Certificate Insurance Policy shall
be allocated (i) 50% to the Class LT-Accrual Interest, the Class LT-Group I
Interest, the Class LT-Group II Interest and the Class LT-Group III Interest
(and further allocated among these Lower Tier Regular Interests in the manner
described below) and (ii) 50% to the LT-Accretion Directed Classes (principal
payments shall be allocated among such LT Accretion Directed Classes in an
amount equal to 50% of the principal amounts allocated to their respective
Corresponding Classes), until paid in full. Notwithstanding the above, principal
payments allocated to the Class X Certificates that result in the reduction in
the Subordinated Amount shall be allocated to the Class LT-Accrual Interest
(until paid in full). Realized Losses shall be applied so that after all
distributions have been made on each Distribution Date (i) the Lower Tier
Principal Amount of each LT-Accretion Directed Class is equal to 50% of the
Class Certificate Balance of its Corresponding Class, and (ii) the Class
LT-Accrual Interest, the Class LT-Group I Interest, the Class LT-Group II
Interest and the Class LT-Group III Interest (and further allocated among these
Lower Tier Regular Interests in the manner described below) is equal to 50% of
the aggregate Stated Principal Balance of the Mortgage Loans plus 50% of the
Subordinated Amount. As among the Class LT-Accrual Interest, the Class LT-Group
I Interest, the Class LT-Group II Interest and the Class LT-Group III Interest,
all payments of scheduled principal and prepayments of principal generated by
the Mortgage Loans, and all Realized Losses, allocable to such Lower Tier
Regular Interests shall be allocated (i) to the Class LT-Group I Interest, the
Class LT-Group II Interest and the Class LT-Group III Interest, each from the
related Loan Group so that their respective Lower Tier Principal Amounts
(computed to at least eight decimal places) are equal to 0.001% of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group and
(ii) the remainder to the Class LT-Accrual Interest.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests and each such interest, other than the Class UT-R Interest, is
hereby designated as a regular interest in the Upper Tier REMIC.
Upper Tier Interest Initial Upper Tier
Rate and Principal Amount and
Corresponding Corresponding
Upper Tier Class Pass-Through Class Certificate Corresponding
Class Designation Rate Balance Certificate Class
------------------------ --------------------- ---------------------- -------------------
Class A-1 (1) $ 120,339,000 Class A-1(11)
Class A-2a (2) $ 324,675,000 Class A-2a(11)
Class A-2b (3) $ 36,076,000 Class A-2b(11)
Class A-3a (4) $ 395,000,000 Class A-3a(11)
Class A-3b (5) $ 300,000,000 Class A-3b(11)
Class A-3c (6) $ 163,478,000 Class A-3c(11)
Class A-3d (7) $ 36,000,000 Class A-3d(11)
Class M-1 (8) $ 83,237,000 Class M-1(11)
Class M-2 (8) $ 54,920,000 Class M-2(11)
Class M-3 (8) $ 26,176,000 Class M-3(11)
Class M-4 (8) $ 28,318,000 Class M-4(11)
Class M-5 (8) $ 24,886,000 Class M-5(11)
Class M-6 (8) $ 22,311,000 Class M-6(11)
Class B-1 (8) $ 18,879,000 Class B-1(11)
Class B-2 (8) $ 16,304,000 Class B-2(11)
Class B-3 (8) $ 17,162,000 Class B-3(11)
Class X (9) $ 0(9) Class X(9)
Class UT-R (10) $ 0 Class R
------------
(1) The Class A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.4300%, (ii) the Loan Group
I Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.8600%, (ii) the Loan Group I Cap and (iii)
the WAC Cap.
(2) The Class A-2a Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.4050%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.8100%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(3) The Class A-2b Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.3800%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.7600%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(4) The Class A-3a Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.1500%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.3000%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(5) The Class A-3b Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.3100%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.6200%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(6) The Class A-3c Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.3000%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.6000%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(7) The Class A-3d Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.5000%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 1.0000%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(8) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Interests will bear interest during
each Interest Accrual Period at a per annum rate equal to (a) on or prior
to the Optional Termination Date, the lesser of (i) LIBOR plus 0.5900%,
0.6200%, 0.6800%, 1.0000%, 1.0500%, 1.2500%, 1.7000%, 1.8000%, and
3.0000%, respectively, and (ii) the WAC Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus 0.8850%, 0.9300%, 1.0200%,
1.5000%, 1.5750%, 1.8750%, 2.5500%, 2.7000%, and 4.5000%, respectively,
and (ii) the WAC Cap.
(9) The Class X Interest has an initial principal balance of $45,481,088 but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal
to the excess, if any, of the WAC Cap over the product of (i) 2 and (ii)
the weighted average Pass-Through Rate of the Lower Tier Regular
Interests, where the interest rate on each of the Class LT-Accrual
Interest, Class LT-Group I Interest, Class LT-Group II Interest and Class
LT-Group III Interest is subject to a cap equal to zero and each LT
Accretion Directed Class is subject to a cap equal to the Pass-Through
Rate on its Corresponding Class; provided, however, if the Pass-Through
Rate of the Class A-3b Interest is calculated by reference to clause
(a)(i) of its Pass-Through Rate (or clause (b)(i) after the Optional
Termination Date), the cap with respect to the Class LT-A-3b Interest
shall be increased by the lesser of the Premium Rate and the amount by
which the amount in clause (a)(ii) of the Pass-Through Rate of the Class
A-3b Interest (or clause (b)(ii) after the Optional Termination Date)
exceeds the amount in clause (a)(i) thereof (or clause (b)(i) after the
Optional Termination Date) for purposes of the calculation. With respect
to any Distribution Date, interest that so accrues on the notional
principal balance of the Class X Interest shall be deferred in an amount
equal to any increase in the Subordinated Amount on such Distribution
Date. Such deferred interest shall not itself bear interest. The Class X
Certificates will represent beneficial ownership of the Class X Interest,
the Interest Rate Cap Agreements, and amounts in the Excess Reserve Fund
Account, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk CarryForward Amounts. For
federal income tax purposes, the Trustee will treat a Class X
Certificateholder's obligation to make payments from the Excess Reserve
Fund Account as payments made pursuant to an interest rate cap contract
written by the Class X Certificateholders in favor of each Class of LIBOR
Certificates. Such rights of the Class X Certificateholders and LIBOR
Certificateholders shall be treated as held in a portion of the Trust Fund
that is treated as a grantor trust under subpart E, Part I of subchapter J
of the Code.
(10) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(11) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk CarryForward Amounts. For federal income tax purposes, the
Trustee will treat a Certificateholder's right to receive payments from
the Excess Reserve Fund Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 with integral
multiples of $1 in excess thereof. The Class P, Class R and the Class X
Certificates will each represent a 100% Percentage Interest in such class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates............ All Classes of Certificates other
than the Physical Certificates.
Class A Certificates............... Class A-1, Class A-2a, Class X-0x,
Xxxxx X-0x, Xxxxx X-0x, Class A-3c
and Class A-3d Certificates.
Delay Certificates................. None.
ERISA-Restricted Certificates...... Class R Certificates, Class P
Certificates and Class X
Certificates; any certificate with a
rating below the lowest applicable
permitted rating under the
Underwriters' Exemption.
LIBOR Certificates................. Class A and Subordinated
Certificates.
Non-Delay Certificates............. Class A, Class X and Subordinated
Certificates.
Offered Certificates............... All Classes of Certificates other
than the Private Certificates.
Physical Certificates.............. Class P, Class X and Class R
Certificates.
Private Certificates............... Class A-1, Class A-2a, Class P,
Class X and Class R Certificates.
Rating Agencies.................... Fitch, Xxxxx'x and Standard &
Poor's.
Regular Certificates............... All Classes of Certificates other
than the Class P and Class R
Certificates.
Residual Certificates.............. Class R Certificates.
Subordinated Certificates.......... Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3
Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Aames: Aames Capital Corporation, a California corporation, and its
successors in interest.
Aames Mortgage Loans: The Mortgage Loans purchased by the Purchaser
pursuant to the Aames Purchase Agreement for which Aames is identified as
Originator on the Mortgage Loan Schedule.
Aames Purchase Agreement: The Second Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of June 1, 2003, as amended by
Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx
Xx. 0 and Amendment No. 6, dated as of September 29, 2003, November 25, 2003,
December 16, 2003, February 26, 2004, March 30, 2004 and June 28, 2004,
respectively, each by and between Aames and the Purchaser, a copy of which
(including all such amendments) is attached hereto as Exhibit O.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account or the Excess Reserve Fund Account or the Policy Payment
Account. Each Account shall be an Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.
Accredited Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the Accredited Purchase Agreement for which Accredited is
identified as Originator in the Mortgage Loan Schedule.
Accredited Purchase Agreement: The Third Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of February 1, 2004,
as amended by Amendment No. 1, dated as of April 2, 2004, and Amendment No. 2,
dated as of July 2, 2004, each by and between Accredited and the Purchaser, a
copy of which (including all such amendments) is attached hereto as Exhibit Q.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02. For purposes of
determining interest allocations on a Distribution Date, the amount of Accrued
Certificate Interest Distribution Amount for the Class A-3b Certificates will be
equal to the Accrued Certificate Interest Distribution Amount for that Class for
the following Class A-3b Distribution Date.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Rate adjusts as set forth in the related Mortgage
Note and each Due Date thereafter on which the Mortgage Rate adjusts as set
forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicer on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicer
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicer during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur during the month in which such
Distribution Date occurs; (v) amounts received with respect to such Distribution
Date as the Repurchase Price in respect of a Mortgage Loan repurchased during
the related Prepayment Period; (vi) the proceeds received with respect to the
termination of the Trust Fund pursuant to clause (a) of Section 9.01; and (vii)
the Closing Date Deposit Amount; reduced by (y) amounts in reimbursement for
Advances previously made with respect to the Mortgage Loans and other amounts as
to which the Servicer, the Depositor or the Trustee are entitled to be paid or
reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on such Class of
Certificates at, with respect to the Class A-1 Certificates, the lesser of the
Loan Group I Cap or the WAC Cap, with respect to the Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, with respect
to the Group III Class A Certificates, the lesser of the Loan Group III Cap or
the WAC Cap, and with respect to each other Class of LIBOR Certificates, the WAC
Cap, as applicable, for such Distribution Date and (B) the Basis Risk
CarryForward Amount for such Class of Certificates for all previous Distribution
Dates not previously paid, together with interest thereon at a rate equal to the
sum of LIBOR and the applicable Pass-Through Margin for such Class of
Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of New
York, California or Delaware, (b) a State in which any Servicer's servicing
operations are located, or (c) the State in which the Trustee's operations are
located, are authorized or obligated by law or executive order to be closed.
Cap Provider: Xxxxxx Xxxxxxx Capital Services, Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Subordinated Certificates that have been previously reduced by Applied Realized
Loss Amounts will be increased, in order of seniority, by the amount of the
Subsequent Recovery distributed on such Distribution Date (up to the amount of
Applied Realized Loss Amounts allocated to such Class or Classes). The Class X,
Class P and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision 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 Trustee is 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.
Certification: As defined in Section 8.12.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Class A-1 Certificates, the Group II
Class A Certificates or the Group III Class A Certificates, as applicable.
Class A Certificates: The Class A-1 Certificates, the Group II Class
A Certificates and the Group III Class A Certificates.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Class A-1 Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date; (B) with respect to the
Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date; and (C) with respect to the Group III Class A
Certificates, a fraction, the numerator of which is (x) the portion of the
Principal Remittance Amount for such Distribution Date that is attributable to
the principal received or advanced on the Group III Mortgage Loans and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 60.30% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $8,581,210.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-3a Certificates: All Certificates bearing the class
designation of "Class A-3a".
Class A-3b Certificate Deficiency Amount: With respect to any
Distribution Date and the Class A-3b Certificates, an amount equal to the sum
of:
(i) the excess of (x) the Accrued Certificate Interest Distribution
Amount for the Class A-3b Certificates for such Distribution Date over (y)
the amount of Available Funds allocated to pay such Accrued Certificate
Interest Distribution Amount pursuant to Section 4.02(a)(i)(A); plus
(ii) the Class A-3b Principal Parity Amount, if any, for such
Distribution Date; and
(iii) the Class Certificate Balance of the Class A-3b Certificates
on the Final Scheduled Distribution Date or, if earlier, the date on which
the final distribution is made to the Class A-3b Certificateholders
pursuant to Article IX, in each case after giving effect to distributions
made on such date from sources other than Class A-3b Certificate Insurance
Policy for the Class A-3b Certificates.
Class A-3b Certificate Insurance Policy: The Financial Guaranty
Insurance Policy No. 51595-N, and all endorsements thereto dated the Closing
Date, issued by the Class A-3b Certificate Insurer for the benefit of the Class
A-3b Certificateholders.
Class A-3b Certificate Insurer: Financial Security Assurance Inc., a
monoline stock insurance company organized and created under the laws of the
State of New York, and its successors in interest.
Class A-3b Certificate Insurer Default: The existence and
continuance of any of the following:
(b) the Class A-3b Certificate Insurer shall have failed to make a
required payment when due under the Class A-3b Certificate Insurance
Policy in accordance with its terms;
(c) the Class A-3b Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York State Insurance
Law or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a
general assignment for the benefit of its creditors or (iii) had an order
for relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(d) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Class A-3b Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Class A-3b Certificate Insurer (or the taking of
possession of all or any material portion of property of the Class A-3b
Certificate Insurer).
Class A-3b Certificates: All Certificates bearing the class
designation of "Class X-0x Xxxxxxxxxxxx".
Xxxxx X-0x Xxxxxxxxxxxx Xxxx: With respect to the Class A-3b
Certificates, the 2nd day of each calendar month, or if such day is not a
Business Day in New York City or Tokyo, the next succeeding Business Day in New
York City and Tokyo, commencing in January 2005.
Class A-3b Principal Parity Amount: With respect to any Distribution
Date, the lesser of (A) product of (i) the Group III Principal Parity Deficit
and (ii) a fraction, the numerator of which is the Class Certificate Balance of
the Class A-3b Certificates as of the Closing Date, and the denominator of which
is the aggregate Class Certificate Balances of the Group III Class A
Certificates, in each case as of the Closing Date, and (B) the Class Certificate
Balance of the Class A-3b Certificates on such Distribution Date, after taking
into account any allocation of principal to the Class A-3b Certificates from
sources other than the Class A-3b Certificate Insurance Policy, treating such
allocation as being applied in reduction of the Class Certificate Balances of
the Class A-3b Certificates on that Distribution Date (rather than on the
following Class A-3b Distribution Date).
Class A-3c Certificates: All Certificates bearing the class
designation of "Class A-3c".
Class A-3d Certificates: All Certificates bearing the class
designation of "Class A-3d".
Class B Cap Agreement: The interest rate cap agreement, dated
November 30, 2004, between Xxxxxx Xxxxxxx Capital Services Inc. and the Trustee,
relating to the Class B Certificates.
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
allocation of the Class M-3 Principal Distribution Amount for such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the allocation of the Class M-4 Principal Distribution
Amount for such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the allocation of the Class
M-5 Principal Distribution Amount for such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account the
allocation of the Class M-6 Principal Distribution Amount for such Distribution
Date) and (H) the Class Certificate Balance of the Class B-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 90.80%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $8,581,210.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
allocation of the Class M-3 Principal Distribution Amount for such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the allocation of the Class M-4 Principal Distribution
Amount for such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the allocation of the Class
M-5 Principal Distribution Amount for such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account the
allocation of the Class M-6 Principal Distribution Amount for such Distribution
Date), (H) the Class Certificate Balance of the Class B-1 Certificates (after
taking into account the allocation of the Class B-1 Principal Distribution
Amount for such Distribution Date), and (I) the Class Certificate Balance of the
Class B-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 92.70% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$8,581,210.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
allocation of the Class M-3 Principal Distribution Amount for such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the allocation of the Class M-4 Principal Distribution
Amount for such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the allocation of the Class
M-5 Principal Distribution Amount for such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account the
allocation of the Class M-6 Principal Distribution Amount for such Distribution
Date), (H) the Class Certificate Balance of the Class B-1 Certificates (after
taking into account the allocation of the Class B-1 Principal Distribution
Amount for such Distribution Date), (I) the Class Certificate Balance of the
Class B-2 Certificates (after taking into account the allocation of the Class
B-2 Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 94.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $8,581,210.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M Cap Agreement: The interest rate cap agreement, dated
November 30, 2004, between Xxxxxx Xxxxxxx Capital Services Inc. and the Trustee,
relating to the Class M Certificates.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 70.00%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $8,581,210.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 76.40% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$8,581,210.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 79.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $8,581,210.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
allocation of the Class M-3 Principal Distribution Amount for such Distribution
Date), and (E) the Class Certificate Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 83.10%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $8,581,210.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
allocation of the Class M-3 Principal Distribution Amount for such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the allocation of the Class M-4 Principal Distribution
Amount for such Distribution Date) and (F) the Class Certificate Balance of the
Class M-5 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 86.00% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$8,581,210.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
allocation of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the allocation of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the allocation of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
allocation of the Class M-3 Principal Distribution Amount for such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the allocation of the Class M-4 Principal Distribution
Amount for such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the allocation of the Class
M-5 Principal Distribution Amount for such Distribution Date) and (G) the Class
Certificate Balance of the Class M-6 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $8,581,210.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
Class R Certificates: All Certificates bearing the class designation
of "Class R".
Class X Certificates: All Certificates bearing the class designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid as a Basis Risk
Payment.
Class X Interest: The Upper Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: November 30, 2004.
Closing Date Deposit Amount: $4,157.46 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $974.38 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans, $327.25 of the Closing Date Deposit Amount shall
be attributable to the Group II Mortgage Loans, and $2,855.83 of the Closing
Date Deposit Amount shall be attributable to the Group III Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum
of (i) the outstanding principal balance of the Second Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value as determined pursuant to the Underwriting Guidelines of the related
Mortgaged Property as of the origination of the Second Lien Mortgage Loan.
Commitment Letter: The Commitment Letter, dated November 23, 2004,
between the Depositor and the Class A-3b Certificate Insurer.
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for such Distribution Date, with
respect to voluntary Principal Prepayments in Full (excluding any payments made
upon liquidation of the Mortgage Loan) and (b) the amount of the Servicing Fee
payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, Attn: Trust Administration-MS04H9, facsimile no. (714)
247-6329 and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Class: The class of interests in any REMIC created
under this Agreement that corresponds to the class of interests in another such
REMIC or to a Class of Certificates in the manner set out below:
Corresponding Lower Tier Corresponding Upper Tier Corresponding Class
Class Designation Regular Interest of Certificates
------------------------ ------------------------ -------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-3a Class A-3a Class A-3a
Class LT-A-3b Class A-3b Class A-3b
Class LT-A-3c Class A-3c Class A-3c
Class LT-A-3d Class A-3d Class A-3d
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable cumulative
loss percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
--------------------------------- -----------------------------------------------------------
December 2007 through November 2.750% for the first month, plus an additional 1/12th of
2008 1.500% for each month thereafter (e.g., 3.500% in
June 2008)
December 2008 through November 4.250% for the first month, plus an additional 1/12th of
2009 1.000% for each month thereafter (e.g., 4.750% in
June 2009)
December 2009 through November 5.250% for the first month, plus an additional 1/12th of
2010 0.750% for each month thereafter (e.g., 5.625% in
June 2010)
December 2010 and 6.000%
thereafter
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (i) - (viii) as listed on Exhibit K
hereto.
Cut-off Date: November 1, 2004.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date plus the portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date, whether or not
received).
Data Tape Information: The information provided by the Originators
as of the Cut-off Date to the Depositor or the Purchaser setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan); (12) a code indicating the purpose of the loan (i.e., purchase,
rate and term refinance, equity take out refinance); (13) a code indicating the
documentation style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Originator of such Mortgage
Loan; (23) with respect to each First Lien Mortgage Loan, the LTV at
origination, and with respect to each Second Lien Mortgage Loan, the CLTV at
origination; and (24) if such Mortgage Loan is covered by a primary mortgage
insurance policy or a lender-paid primary mortgage insurance policy, the primary
mortgage insurance rate. With respect to the Mortgage Loans in the aggregate,
the Data Tape Information shall set forth the following information, as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date, a
Delinquency Trigger Event exists if the quotient (expressed as a percentage) of
(x) the rolling three month average of the Stated Principal Balances of 60+ Day
Delinquent Mortgage Loans for such Distribution Date, divided by (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date equals or exceeds 37.78% of the prior period's Senior Enhancement
Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2004-HE9 Mortgage Pass-Through Certificates, Series 2004-HE9." Funds
in the Distribution Account shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the third Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day in New York City, the next succeeding Business Day in
New York City, commencing in December 2004.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated "A-1+" by Standard & Poor's,
"F-1" by Fitch and "P-1" by Moody's (or a comparable rating if another Rating
Agency is specified by the Depositor by written notice to the Servicer) at the
time any amounts are held on deposit therein, (ii) an account or accounts the
deposits in which are fully insured by the FDIC, (iii) a trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank National Trust Company in trust for registered holders
of Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9, Mortgage Pass-Through
Certificates, Series 2004-HE9." Funds in the Excess Reserve Fund Account shall
be held in trust for the Regular Certificateholders for the uses and purposes
set forth in this Agreement. Amounts on deposit in the Excess Reserve Fund
Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: As defined in Section 8.12(a).
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate, the Trustee Fee Rate and any lender-paid
primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Trustee Fee and any lender-paid primary mortgage insurance fee, if
applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the applicable Responsible Party or the Depositor, as applicable, as
contemplated by this Agreement), a determination made by the Servicer that all
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
Month of Final
Scheduled
Distribution Date
------------------
Class A-1 Certificates.................................... November 2034
Class A-2a Certificates................................... November 2034
Class A-2b Certificates................................... November 2034
Class A-3a Certificates................................... November 2034
Class A-3b Certificates................................... December 2034
Class A-3c Certificates................................... November 2034
Class A-3d Certificates................................... November 2034
Class M-1 Certificates.................................... November 2034
Class M-2 Certificates.................................... November 2034
Class M-3 Certificates.................................... November 2034
Class M-4 Certificates.................................... November 2034
Class M-5 Certificates.................................... November 2034
Class M-6 Certificates.................................... November 2034
Class B-1 Certificates.................................... November 2034
Class B-2 Certificates.................................... November 2034
Class B-3 Certificates.................................... November 2034
Class X Certificates...................................... November 2034
Class P Certificates...................................... November 2034
Class R Certificates...................................... November 2034
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2004-HE9, or such other address as Fitch may hereafter
furnish to the Depositor and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Cap Agreement: The interest rate cap agreement,
dated November 30, 2004, between Xxxxxx Xxxxxxx Capital Services Inc. and the
Trustee, relating to the Group II Class A Certificates.
Group II Class A Certificates: The Class A-2a and Class A-2b
Certificates.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Group II Sequential Trigger Event: (a) With respect to any
Distribution Date occurring before December 2007, the circumstances in which the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Prepayment Period divided by the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds 2.75%,
and (b) with respect to any Distribution Date occurring in or after December
2007, a Trigger Event.
Group III Class A Cap Agreement: The interest rate cap agreement,
dated November 30, 2004, between Xxxxxx Xxxxxxx Capital Services Inc. and the
Trustee, relating to the Group III Class A Certificates.
Group III Class A Certificates: The Class A-3a, Class A-3b, Class
A-3c and Class A-3d Certificates.
Group III Class A Sequential Certificates: The Class A-3c and Class
A-3d Certificates.
Group III Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group III Mortgage Loans.
Group III Principal Parity Deficit: With respect to any Distribution
Date, the excess of (i) the aggregate Class Certificate Balances of the Group
III Class A Certificates on such Distribution Date, after taking into account
any allocation of principal to the Group III Class A Certificates from sources
other than the Class A-3b Certificate Insurance Policy, treating such allocation
as being applied in reduction of the Class Certificate Balance of the Class A-3b
Certificates on such Distribution Date (rather than on the following Class A-3b
Distribution Date), less the excess of (a) any Group III Principal Parity
Deficits for all prior Distribution Dates, over (b) any Class A-3b Principal
Parity Amounts for all prior Distribution Dates over (ii) the aggregate Stated
Principal Balance of the Group III Mortgage Loans for that Distribution Date.
For the first Distribution Date, the Group III Principal Parity Deficit will
equal zero.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Payment: With respect to any Distribution Date, the amount,
if any, payable under the Class A-3b Certificate Insurance Policy for such
Distribution Date.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates other than the Class A-3b Certificates and the Corresponding Class
of Lower Tier Regular Interests and any Distribution Date, the period commencing
on the Distribution Date occurring in the month preceding the month in which the
current Distribution Date occurs and ending on the day immediately preceding the
current Distribution Date (or, in the case of the first Distribution Date, the
period from and including the Closing Date to but excluding such first
Distribution Date). With respect to the Class A-3b Certificates and any Class
A-3b Distribution Date, the period commencing on the immediately preceding Class
A-3b Distribution Date and ending on the day immediately preceding the current
Class A-3b Distribution Date (or in the case of the first Class A-3b
Distribution Date, the period from and including the seventh calendar day after
the Closing Date to but excluding such first Class A-3b Distribution Date). For
purposes of computing interest accruals on each Class of Non-Delay Certificates,
each Interest Accrual Period has the actual number of days in such month and
each year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Cap Agreements: The Group II Class A Cap Agreement,
the Group III Class A Cap Agreement, the Class M Cap Agreement and the Class B
Cap Agreement.
Interest Rate Cap Payment: (a) With respect to the Group II Class A
Certificates and the first 33 Distribution Dates, the amount, if any, equal to
the product, determined on an "actual/360" basis, of (i) the excess, if any, of
the lesser of (A) the one-month LIBOR rate as of the related reset date under
the Group II Class A Cap Agreement and (B) the applicable cap ceiling rate set
forth on Schedule A to such Interest Rate Cap Agreement for such Distribution
Date over the applicable cap strike rate set forth on Schedule A to such
Interest Rate Cap Agreement for such Distribution Date, (ii) the applicable
Group II Class A notional amount set forth on Schedule A to the Group II Class A
Cap Agreement for such Distribution Date and (iii) the multiplier set forth on
Schedule A to such Interest Rate Cap Agreement; (b) with respect to the Group
III Class A Certificates and the first 33 Distribution Dates, the amount, if
any, equal to the product, determined on an "actual/360" basis, of (i) the
excess, if any, of the lesser of (A) the one-month LIBOR rate as of the related
reset date under the Group III Class A Cap Agreement and (B) the applicable cap
ceiling rate set forth on Schedule A to such Interest Rate Cap Agreement for
such Distribution Date over the applicable cap strike rate set forth on Schedule
A to such Interest Rate Cap Agreement for such Distribution Date, (ii) the
applicable Group III Class A notional amount set forth on Schedule A to the
Group III Class A Cap Agreement for such Distribution Date and (iii) the
multiplier set forth on Schedule A to such Interest Rate Cap Agreement; (c) with
respect to the Class M Certificates and the first 39 Distribution Dates, the
amount, if any, equal to the product, determined on an "actual/360" basis, of
(i) the excess, if any, of the lesser of (A) the one-month LIBOR rate as of the
related reset date under the Class M Cap Agreement and (B) the applicable cap
ceiling rate set forth on Schedule A to such Interest Rate Cap Agreement for
such Distribution Date over the applicable cap strike rate set forth on Schedule
A to such Interest Rate Cap Agreement for such Distribution Date, (ii) the
applicable Class M notional amount set forth on Schedule A to the Class M Cap
Agreement for such Distribution Date and (iii) the multiplier set forth on
Schedule A to such Interest Rate Cap Agreement; and (d) with respect to the
Class B Certificates and the first 39 Distribution Dates, the amount, if any,
equal to the product, determined on an "actual/360" basis, of (i) the excess, if
any, of the lesser of (A) the one-month LIBOR rate as of the related reset date
under the Class B Cap Agreement and (B) the applicable cap ceiling rate set
forth on Schedule A to such Interest Rate Cap Agreement for such Distribution
Date over the applicable cap strike rate set forth on Schedule A to such
Interest Rate Cap Agreement for such Distribution Date, (ii) the applicable
Class B notional amount set forth on Schedule A to the Class B Cap Agreement for
such Distribution Date and (iii) the multiplier set forth on Schedule A to such
Interest Rate Cap Agreement.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to Mortgage Loans in that Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates (including the Class A-3b Certificates), the
second London Business Day preceding the commencement of the Interest Accrual
Period for the LIBOR Certificates other than the Class A-3b Certificates.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the Servicer has certified to the Trustee that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property, or (b) is a
Second Lien Mortgage Loan (1) that is delinquent 180 days or longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan, and (3) as to
which the Servicer has certified to the Trustee that it does not believe there
is a reasonable likelihood that any further net proceeds will be received or
recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans, the Group II Mortgage Loans
or the Group III Mortgage Loans, as applicable.
Loan Group Cap: The Loan Group I Cap, the Loan Group II Cap or the
Loan Group III Cap, as applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group I Mortgage Loans and (ii) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the Interest Accrual
Period related to such Distribution Date.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group II Mortgage Loans and (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
Loan Group III Cap: With respect to the Group III Mortgage Loans as
of any Distribution Date, the product of (i) the weighted average of the
Adjusted Net Mortgage Rates (and solely for purposes of determining the
Pass-Through Rate on the Class A-3b Certificates only, minus the Premium Rate)
then in effect on the beginning of the related Due Period on the Group III
Mortgage Loans and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the Interest Accrual Period
related to such Distribution Date.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Principal Amount: As described in the Preliminary
Statement.
Lower Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class X-0x, Xxxxx XX-X-0x, Xxxxx XX-X-0x, Class LT-A-3c, Class LT-A-3d,
Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class
LT-M-6, Class LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-Group I, Class
LT-Group II, Class LT-Group III and Class LT-Accrual Interests as described in
the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with MERS Procedure Manual and (b)
the Originators have designated or will designate the Trustee as the Investor on
the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b),
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Mortgage Loan number; (2) the city, state
and zip code of the Mortgaged Property; (3) the number and type of residential
units constituting the Mortgaged Property; (4) the current Mortgage Rate; (5)
the current net Mortgage Rate; (6) the current Scheduled Payment; (7) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (8) the
original term to maturity; (9) the scheduled maturity date; (10) the principal
balance of the Mortgage Loan as of the Cut-off Date after deduction of payments
of principal due on or before the Cut-off Date whether or not collected; (11)
with respect to each Adjustable Rate Mortgage Loan, the next Interest Rate
Adjustment Date; (12) with respect to each Adjustable Rate Mortgage Loan, the
lifetime Mortgage Interest Rate Cap; (13) whether the Mortgage Loan is
convertible or not; (14) the Servicing Fee; (15) whether such Mortgage Loan is a
Group I Mortgage Loan or a Group II Mortgage Loan; (16) the applicable
Originator's name, (17) the date such Mortgage Loan was sold by the applicable
Originator to the Purchaser, (18) whether such Mortgage Loan provides for a
Prepayment Charge as well as the term and amount of such Prepayment Charge, if
any; (19) with respect to each First Lien Mortgage Loan, the LTV at origination,
and with respect to each Second Lien Mortgage Loan, the CLTV at origination;
(20) the Servicer's name; and (21) the date on which servicing of the mortgage
loan was transferred to the Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
NC Capital: NC Capital Corporation, a California corporation, and
its successors in interest.
NC Capital Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the NC Capital Purchase Agreement for which NC Capital is
identified as Originator on the Mortgage Loan Schedule.
NC Capital Purchase Agreement: The Second Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of July 1, 2003, as
amended by Amendment No. 1, Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0
and Amendment No. 5, dated as of October 22, 2003, December 30, 2003, January
29, 2004, March 30, 2004 and June 28, 2004, respectively, each by and between NC
Capital and the Purchaser, a copy of which (including all such amendments) is
attached hereto as Exhibit P.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the Compensating Interest payments made with respect
to such Distribution Date.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise. The determination by the Servicer that it has made a Nonrecoverable
Servicing Advance or that any proposed Servicing Advances, if made, would
constitute a Nonrecoverable Servicing Advance, shall be evidenced by an
Officer's Certificate delivered to the Trustee and the Class A-3b Certificate
Insurer.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans required to
be serviced by the Servicer and listed on a list delivered to the Trustee
pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or a Subservicer, reasonably acceptable to the
Trustee, provided that any Opinion of Counsel relating to (a) qualification of
either the Lower Tier REMIC or Upper Tier REMIC or (b) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Servicer of the Mortgage Loans or in an affiliate of either and
(iii) is not connected with the Servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
Originators: Each of Aames, NC Capital and Accredited.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.3575%; Class
A-2 Certificates, 0.3800%; Class A-3 Certificates, 0.4100%; Class A-4
Certificates, 0.3800%; Class A-5 Certificates, 0.1700%; Class A-6 Certificates,
0.3400%; Class A-7 Certificates, 0.5300%; Class M-1 Certificates, 0.6400%; Class
M-2 Certificates, 0.6800%; Class M-3 Certificates, 0.7500%; Class M-4
Certificates, 1.0500%; Class M-5 Certificates, 1.1500%; Class M-6 Certificates,
1.3000%; Class B-1 Certificates, 1.8000%; Class B-2 Certificates, 1.9000%; and
Class B-3 Certificates, 3.2000%. On the first Distribution Date after the
Optional Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.7150%; Class A-2 Certificates, 0.7600%; Class A-3 Certificates,
0.8200%; Class A-4 Certificates, 0.7600%; Class A-5 Certificates, 0.3400%; Class
A-6 Certificates, 0.6800%; Class A-7 Certificates, 1.0600%; Class M-1
Certificates, 0.9600%; Class M-2 Certificates, 1.0200%; Class M-3 Certificates,
1.1250%; Class M-4 Certificates, 1.5750%; Class M-5 Certificates, 1.7250%; Class
M-6 Certificates, 1.9500%; Class B-1 Certificates, 2.7000%; Class B-2
Certificates, 2.8500%; and Class B-3 Certificates, 4.8000%.
Pass-Through Rate: For each Class of Certificates and each Lower
Tier Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
"P-1" by Moody's, "F1+" by Fitch and "A-1+" by Standard & Poor's (to
the extent they are Rating Agencies hereunder);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or an Affiliate thereof, that have been
rated "Aaa" by Moody's, "AAA" by Standard & Poor's and at least "AA"
by Fitch (to the extent they are Rating Agencies hereunder); and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies
as a permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause either the Lower Tier REMIC or the Upper
Tier REMIC to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
Xxxxxxx Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Policy Payment Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.06(c) in the name of the Trustee
for the benefit of the Class A-3b Certificateholders and the Class A-3b
Certificate Insurer, and designated "Deutsche Bank National Trust Company in
trust for Financial Security Assurance Inc. and the registered holders of Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2003-HE9, Mortgage Pass-Through Certificates,
Series 2004-HE9, Class A-3b".
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Preference Amount: Any amounts distributed in respect of the Class
A-3b Certificates which are recovered from any Holder of a Class A-3b
Certificate as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code or other similar law in accordance with a final,
nonappealable order of a court having competent jurisdiction and which have not
theretofore been repaid to such Holder.
Preference Claim: As defined in Section 4.06(f) hereof.
Premium Amount: The product of the Premium Rate and the Class
Certificate Balance of the Class A-3b Certificates immediately prior to such
Distribution Date.
Premium Rate: The per annum rate at which the "Premium" is
determined as described in the letter dated November 23, 2004 between the
Depositor and the Class A-3b Certificate Insurer (a copy of which shall be
provided by the Depositor to the Trustee).
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment in Full pursuant to the terms
of the related Mortgage Note.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the related Prepayment
Period, the subject of a Principal Prepayment which is not accompanied by an
amount equal to one month of interest that would have been due on such Mortgage
Loan on the Due Date in the following month and which was applied by the
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding such Due Date an amount equal to the product of (a) the Mortgage
Rate net of the Servicing Fee Rate for such Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number of
days commencing on the date on which such Principal Prepayment was applied and
ending on the last day of the calendar month in which the related Prepayment
Period begins.
Prepayment Period: With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, and all Principal Prepayments received during the
related Prepayment Period; (ii) all Liquidation Proceeds, Condemnation Proceeds
and Insurance Proceeds on the Mortgage Loans allocable to principal actually
collected by the Servicer during the related Prepayment Period; (iii) the
portion of the Repurchase Price allocable to principal with respect to each
Mortgage Loan repurchased during the related Prepayment Period; (iv) all
Substitution Adjustment Amounts allocable to principal with respect to the
substitutions of Mortgage Loans that occur during the month in which such
Distribution Date occurs; (v) with respect to the Distribution Date in December
2004 only, the portion of the Closing Date Deposit Amount allocable to
principal; and (vi) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 9.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated November
23, 2004, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Aames Purchase Agreement, the
NC Capital Purchase Agreement and the Accredited Purchase Agreement.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs; provided,
further, however, that for any Class A-3b Certificate in definitive form, the
Record Date shall be the 15th day of the month immediately preceding the month
in which the related Class A-3b Certificate Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amount: As of any Distribution Date, the sum of (i)
all Insured Payments previously received by the Trustee and all Preference
Amounts previously paid by the Class A-3b Certificate Insurer and in each case
not previously repaid to the Class A-3b Certificate Insurer pursuant to Section
4.02 hereof plus (ii) interest accrued on each such Insured Payment and
Preference Amounts not previously repaid calculated at the Pass-Through Rate for
the Class A-3b Certificates from the date the Trustee received the related
Insured Payment or Preference Amounts were paid by the Class A-3b Certificate
Insurer.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
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 regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation and warranty made by the Depositor or any Responsible
Party hereunder exists, an amount equal to the sum of (i) the unpaid principal
balance of such Mortgage Loan as of the date of repurchase, (ii) interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage Rate from
the last date through which interest has been paid and distributed to the
Trustee to the date of repurchase, (iii) all unreimbursed Servicing Advances and
(iv) all costs and expenses incurred by the Trustee arising out of or based upon
such breach, including without limitation, costs and expenses relating to the
Trustee's enforcement of the repurchase obligation of the Depositor or such
Responsible Party hereunder. In addition to the Repurchase Price, each of Aames,
NC Capital and Accredited is obligated to make certain payments for material
breaches of representations and warranties as further set forth in Section
2.03(n) in this Agreement.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate, 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, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Responsible Parties: Aames, NC Capital and Accredited.
Rule 144A Letter: As defined in Section 5.02(b).
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
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the allocation of the Principal
Distribution Amount for such Distribution Date) by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 39.70%.
Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors in interest, and if a successor servicer is
appointed hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement, administrative or judicial proceedings, including
foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Sections
3.01, 3.09, 3.13 and 3.15. The Servicing Advances shall also include any
reasonable "out-of-pocket" costs and expenses (including legal fees) incurred by
the Servicer in connection with executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments of Mortgage in connection
with any foreclosure in respect of any Mortgage Loan to the extent not recovered
from the Mortgagor or otherwise payable under this Agreement. The Servicer shall
not be required to make any Nonrecoverable Servicing Advances.
Servicing Fee: With respect to the Servicer, each Mortgage Loan
serviced by the Servicer and for any calendar month, an amount equal to one
month's interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in Full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the applicable Stated Principal Balance of such Mortgage
Loan as of the first day of such calendar month. Such fee shall be payable
monthly, and shall be pro rated for any portion of a month during which the
Mortgage Loan is serviced by the Servicer under this Agreement. The Servicing
Fee is payable solely from the interest portion (including recoveries with
respect to interest from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds and proceeds received with respect to REO Properties, to the extent
permitted by Section 3.11) of such Scheduled Payment collected by the Servicer,
or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
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 Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure and all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 2.65% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 5.30% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to 0.50 % of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; provided, however, that
if, on any Distribution Date, a Trigger Event exists, the Specified Subordinated
Amount shall not be reduced to the applicable percentage of the then current
aggregate Stated Principal Balance of the Mortgage Loans until the Distribution
Date on which a Trigger Event no longer exists. When the Class Certificate
Balance of each Class of LIBOR Certificates has been reduced to zero, the
Specified Subordinated Amount will thereafter equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Standard & Poor's, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group - Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9, or such other address
as Standard & Poor's may hereafter furnish to the Depositor and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received by the Servicer on
or prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date and any unscheduled principal payments and other
unscheduled principal collections received during the related Prepayment Period,
and the Stated Principal Balance of any Mortgage Loan that has prepaid in full
or has become a Liquidated Mortgage Loan during the related Prepayment Period
shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in December 2007 and (b) the Distribution Date following
the Distribution Date on which the aggregate Class Certificate Balances of the
Class A Certificates have been reduced to zero and (ii) the first Distribution
Date on which the Senior Enhancement Percentage (calculated for this purpose
only after taking into account payments of principal on the Mortgage Loans
applied to reduce the Stated Principal Balance of the Mortgage Loans for the
applicable Distribution Date but prior to any allocation of the Principal
Distribution Amount to the Certificates on such Distribution Date) is greater
than or equal to the Senior Specified Enhancement Percentage.
Subordinated Amount: As of any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, on or after the Stepdown Date on which no Trigger Event exists, an amount
equal to the lesser of (a) the Excess Subordinated Amount and (b) the Net
Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by the
Responsible Party for a Deleted Mortgage Loan that satisfies the criteria set
forth in the definition of "Qualified Substitute Mortgage Loan" in the
applicable Purchase Agreement or (ii) substituted by the Depositor for a Deleted
Mortgage Loan, which, if substituted by the Depositor, must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit J, (a) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (b) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (c)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (d)
have a remaining term to maturity no greater than (and not more than one year
less than that of) the Deleted Mortgage Loan; and (e) comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicer on or prior to the related Determination Date or advanced by the
Servicer for the related Remittance Date (net of Expense Fees, the Premium
Amount and the Reimbursement Amount, if any) over (ii) the sum of the amounts
payable to the Certificates and to the Class A-3b Certificate Insurer pursuant
to Section 4.02(a)(i) on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution 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) with respect to the
Class A-3b Certificates only, the rights of the Trustee under the Class A-3b
Certificate Insurance Policy; (v) the Interest Rate Cap Agreements; (vi) the
Closing Date Deposit Amount; and (vii) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of (a) one-twelfth of the Trustee Fee Rate and (b) (i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Interest Accrual Period and (ii) with respect to the Distribution Date
in December 2004 only, the portion of the Closing Date Deposit Amount allocable
to principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0026% per
annum.
Trustee Float Period: With respect to the Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law). For purposes of determining
interest allocations on a Distribution Date, the amount of Unpaid Interest
Shortfalls for the Class A-3b Certificates will be paid to the Unpaid Interest
Shortfall for that Class for the following Class A-3b Distribution Date.
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amount with respect to such Class over (ii) the sum of
(a) all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates, and (b) the amount by which the Class Certificate
Balance of such Class has been increased due to the distribution of any
Subsequent Recovery on all previous Distribution Dates. Any amounts distributed
to a Class of Subordinated Certificates in respect of any Unpaid Realized Loss
Amount will not be applied to reduce the Class Certificate Balance of such
Class.
Upper Tier Regular Interest: As described in the Preliminary
Statement.
Upper Tier REMIC: As described in the Preliminary Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) 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 U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
(and solely for purposes of determining the Pass-Through Rate on the Class A-3b
Certificates only, minus the Premium Rate) then in effect on the beginning of
the related Due Period on the Mortgage Loans and (ii) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days in the
Interest Accrual Period related to such Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders and the Class A-3b Certificate Insurer, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund, and the
Trustee, on behalf of the Trust, hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Trustee for
the benefit of the Certificateholders and the Class A-3b Certificate Insurer the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and signed
(which may be by facsimile signature) in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the face of
the Mortgage Notes for endorsements, the endorsement may be contained on
an allonge, unless the Trustee is advised in writing by the applicable
Originator (pursuant to the applicable Purchase Agreement) that state law
does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the Trustee shall notify the applicable Originator to
deliver or cause to be delivered to the Trustee, as required under the
applicable Purchase Agreement, a photocopy of such Mortgage, together with
(i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the applicable Originator (delivered pursuant to
the applicable Purchase Agreement) or a certificate from an escrow
company, a title company or closing attorney stating that such Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered
to the Trustee upon receipt thereof by the applicable Originator; or (ii)
in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank (except with respect to MERS Designated Mortgage Loans);
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage Loan) to
the last endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of Mortgage, the Trustee shall notify the
applicable Originator, to deliver, as required under the applicable
Purchase Agreement, a photocopy of such intervening assignment, together
with (A) in the case of a delay caused by the public recording office, an
Officer's Certificate of the applicable Originator or a certificate from
an escrow company, a title company or a closing attorney stating that such
intervening assignment of Mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of Mortgage or a copy of such intervening
assignment of Mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of Mortgage will be promptly delivered to the Trustee upon
receipt thereof by the applicable Originator; or (B) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original mortgagee title insurance policy or attorney's
opinion of title and abstract of title, or, in the event such original
title policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by the
title insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor will use its reasonable efforts to assist the Trustee
and the Servicer in enforcing the obligations of each Responsible Party under
this Agreement.
The Depositor shall cause to be delivered to the Trustee the
applicable recorded document promptly upon receipt from the respective recording
office but in no event later than 180 days from the Closing Date.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all reasonable actions as are necessary at the expense
of the applicable Originator to the extent permitted under the related Purchase
Agreement and otherwise at the expense of the Depositor to cause the Trust to be
shown as the owner of the related Mortgage Loan on the records of MERS for the
purpose of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
From time to time, the Depositor or the Servicer, as applicable,
shall forward to the Trustee additional original documents, additional documents
evidencing an assumption, modification, consolidation or extension of a Mortgage
Loan in accordance with the terms of this Agreement upon receipt of such
documents. All such mortgage documents held by the Trustee as to each Mortgage
Loan shall constitute the "Custodial File".
No later than thirty (30) Business Days following the later of the
Closing Date and the date of receipt by the Servicer of the complete recording
information for a Mortgage, the Servicer shall promptly submit or cause to be
submitted for recording, at the expense of the applicable Originator as required
pursuant to the related Purchase Agreement and at no expense to the Trust Fund,
the Trustee, the Servicer, or the Depositor, in the appropriate public office
for real property records, each Assignment of Mortgage referred to in Section
2.01(b)(v). Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments of Mortgage shall not be required to be completed and submitted for
recording with respect to any Mortgage Loan (i) if the Trustee, each Rating
Agency and the Class A-3b Certificate Insurer have received an Opinion of
Counsel, satisfactory in form and substance to the Trustee, each Rating Agency
and the Class A-3b Certificate Insurer to the effect that the recordation of
such Assignments of Mortgage in any specific jurisdiction is not necessary to
protect the Trustee's interest in the related Mortgage Note, (ii) if such
Mortgage Loan is a MERS Designated Mortgage Loan or (iii) if the Rating Agencies
have each notified the Depositor in writing that not recording any such
Assignments of Mortgage would not cause the initial ratings on any LIBOR
Certificates to be downgraded or withdrawn (without taking into account the
Class A-3b Certificate Insurance Policy); provided, however, that the Servicer
shall not be held responsible or liable for any loss that occurs because an
Assignment of Mortgage was not recorded, but only to the extent the Servicer
does not have prior knowledge of the act or omission that causes such loss.
However, with respect to the Assignments of Mortgage referred to in clauses (i)
and (ii) above, if the Class A-3b Certificate Insurer reasonably requests or if
foreclosure proceedings occur against a Mortgaged Property, the Depositor shall
notify the Servicer and the Servicer shall record such Assignment of Mortgage at
the expense of the related Originator as required pursuant to the related
Purchase Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to "Deutsche Bank National Trust Company, as trustee
under the Pooling and Servicing Agreement dated as of November 1, 2004, Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2004-HE9". In the event that any such
Assignment of Mortgage is lost or returned unrecorded because of a defect
therein, the Depositor shall promptly cause to be delivered a substitute
Assignment of Mortgage to cure such defect and thereafter cause each such
assignment to be duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee a copy of the Data Tape Information in an electronic, machine readable
medium in a form mutually acceptable to the Trustee.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX ABS CAPITAL
I INC. TRUST 2004-HE9" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representations and warranties set
forth in paragraph (aaa) of Schedule IV, paragraph (46) of Schedule V and
paragraph (50) of Schedule VI to this Agreement.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
The Trustee on behalf of the Trust is hereby authorized to enter into the
Interest Rate Cap Agreements.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee shall acknowledge, on the Closing Date, receipt by the Trustee of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit E, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders and the
Class A-3b Certificate Insurer. The Trustee shall maintain possession of the
related Mortgage Notes in the State of California, unless otherwise permitted by
the Rating Agencies.
In connection with the Closing Date, the Trustee shall be required
to deliver via facsimile (with original to follow the next Business Day) to the
Depositor, the Servicer and the Class A-3b Certificate Insurer an Initial
Certification prior to the Closing Date, or, as the Depositor agrees to, on the
Closing Date, certifying receipt of a Mortgage Note and Assignment of Mortgage
for each Mortgage Loan. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for the
benefit of the Holders of the Certificates and the Class A-3b Certificate
Insurer, ascertain that all documents identified in the Document Certification
and Exception Report in the form attached hereto as Exhibit F are in its
possession, and shall deliver to the Depositor, the Servicer and the Class A-3b
Certificate Insurer a Document Certification and Exception Report, in the form
annexed hereto as Exhibit F, to the effect that, as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such certification): (i) all documents identified in the Document
Certification and Exception Report and required to be reviewed by it are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; (iii) based on its examination and
only as to the foregoing documents, the information set forth in items (1), (2),
(7) and (9) of the Mortgage Loan Schedule and items (1), (9) and (17) of the
Data Tape Information respecting such Mortgage Loan accurately reflects the
information set forth in the Custodial File; and (iv) each Mortgage Note has
been endorsed as provided in Section 2.01 of this Agreement. The Trustee shall
not be responsible to verify the validity, sufficiency or genuineness of any
document in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for the
benefit of the Holders of the Certificates and the Class A-3b Certificate
Insurer, based solely on the list of MERS Designated Loans and screen printouts
from the MERS System provided to the Trustee by each Responsible Party (such to
be provided to the Trustee no later than 45 days from the Closing Date), the
Trustee shall confirm, on behalf of the Trust, that the Trustee is shown as the
Investor with respect to each MERS Designated Mortgage Loan on such screen
printouts. If the Trustee is not shown as the Investor with respect to any MERS
Designated Mortgage Loans on such screen printouts, the Trustee shall promptly
notify the related Responsible Party and the Class A-3b Certificate Insurer of
such fact and the related Reponsible Party shall then either cure such defect or
repurchase such Mortgage Loan in accordance with Section 2.03.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
Each Responsible Party shall deliver to the Servicer copies of all
trailing documents required to be included in the Custodial File at the same
time the original or certified copies thereof are delivered to the Trustee,
including but not limited to such documents as the title insurance policy and
any other Mortgage Loan documents upon return from the public recording office.
The documents shall be delivered by the applicable Responsible Party at the
Responsible Party's expense to the Servicer.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans. (a) The
Servicer hereby makes the representations and warranties set forth in Schedule
II hereto to the Depositor and the Trustee as of the date set forth in such
Schedule. Upon discovery by any of the parties hereto of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
(b) The Depositor hereby makes the representations and warranties
set forth in Schedule III hereto to the Trustee as of the dates set forth in
such Schedule.
(c) Aames hereby makes the representations and warranties set forth
in Schedule IV hereto to the Depositor, the Servicer and the Trustee as of the
dates set forth in such Schedule. NC Capital hereby makes the representations
and warranties set forth in Schedule V hereto to the Depositor, the Servicer and
the Trustee as of the dates set forth in such Schedule. Accredited hereby makes
the representations and warranties set forth in Schedule VI hereto to the
Depositor, the Servicer and the Trustee as of the dates set forth in such
Schedule.
(d) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File.
(e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor, Aames, NC Capital or
Accredited, as applicable, under this Agreement, that materially and adversely
affects the value of any Mortgage Loan or the interests of the Trustee or the
Certificateholders therein, the party discovering such breach shall give prompt
written notice thereof to the other parties. Upon receiving written notice of a
breach of a representation and warranty or written notice that a Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the Trustee shall in turn notify Aames, NC Capital or
Accredited, as applicable, in writing to correct or cure, in accordance with the
this Agreement, any such breach of a representation or warranty made by Aames,
NC Capital or Accredited under this Agreement, within sixty (60) days from the
date of notice from the Trustee or the discovery by Aames, NC Capital or
Accredited of the breach, and if Aames, NC Capital or Accredited fails or is
unable to correct or cure the defect or breach within such period, the Trustee
shall notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by Aames, NC Capital or Accredited to correct or cure,
the Trustee shall notify Aames, NC Capital or Accredited to repurchase the
Mortgage Loan (a "Deleted Mortgage Loan") at the Repurchase Price or substitute
a Substitute Mortgage Loan for such Mortgage Loan, in each case, pursuant to
this Agreement, as applicable. Notwithstanding the foregoing, in the event that
the Trustee receives notice of a breach by (i) Aames of any of the
representations and warranties set forth in paragraphs (zz), (aaa), (bbb),
(ccc), (ddd), (eee), (fff), (ggg), (hhh), (iii), (jjj), (kkk) or (lll) of
Schedule IV, (ii) NC Capital of any of the representations and warranties set
forth in paragraphs (46), (47), (50), (57), (59), (60), (61), (62), (63), (64),
(65), (66) or (67) of Schedule V or (iii) Accredited of any of the
representations and warranties set forth in paragraphs (49), (50), (51), (53),
(55), (56), (57), (58), (59), (60), (61) or (62) of Schedule VI, the Trustee
shall notify Aames, NC Capital or Accredited to repurchase the Mortgage Loan at
the Repurchase Price within sixty (60) days of Aames', NC Capital's or
Accredited's receipt of such notice. If, within ten (10) Business Days of
receipt of such notice by Aames, NC Capital or Accredited Aames, NC Capital or
Accredited fails to repurchase such Mortgage Loan, the Trustee shall notify the
Depositor of such failure. The Trustee shall pursue all legal remedies available
to the Trustee against Aames, NC Capital or Accredited under this Agreement, if
the Trustee has received written notice from the Depositor directing the Trustee
to pursue such remedies.
(f) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial
File, the Trustee shall notify the applicable Responsible Party, the Servicer,
the Class A-3b Certificate Insurer and the Depositor in writing, and request
that such Responsible Party correct or cure such defect as required under this
Agreement, and if such Responsible Party fails or is unable to correct or cure
the defect within the period set forth in this Agreement, the Trustee shall
notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by such Responsible Party to correct or cure, the
Trustee shall notify the applicable Responsible Party to repurchase the Mortgage
Loan at the Repurchase Price or substitute a Substitute Mortgage Loan for such
Mortgage Loan, in each case, pursuant to the terms of this Agreement, as
applicable. If, within ten (10) Business Days of receipt of such notice by such
Responsible Party, such Responsible Party fails to repurchase such Mortgage
Loan, the Trustee shall notify the Depositor of such failure. The Trustee shall
pursue all legal remedies available to the Trustee against such Responsible
Party under this Agreement, as applicable, if the Trustee has received written
notice from the Depositor directing the Trustee to pursue such remedies.
(g) Within 90 days of the earlier of either discovery by or notice
to the Depositor of any breach of a representation or warranty set forth on
Schedule III hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Depositor shall purchase such Mortgage Loan at the Repurchase Price or
substitute a Substitute Mortgage Loan for such Mortgage Loan.
(h) Within 90 days of the earlier of either discovery by or notice
to the applicable Responsible Party of any breach of a representation or
warranty set forth on Schedule IV, Schedule V or Schedule VI, as applicable,
that materially and adversely affects the value of any Mortgage Loan or the
interest of the Trustee or the Certificateholders therein, the applicable
Responsible Party shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
applicable Responsible Party shall, at the Depositor's option, purchase such
Mortgage Loan at the Repurchase Price or substitute a Substitute Mortgage Loan
for such Mortgage Loan, if applicable.
(i) Any substitution of a Substitute Mortgage Loan by a Responsible
Party shall be made in accordance with the substitution procedures set forth in
the Aames Purchase Agreement, the NC Capital Purchase Agreement or the
Accredited Purchase Agreement, as applicable, which provisions shall be as set
forth in such agreements as if they were set forth herein. With respect to any
Substitute Mortgage Loan or Loans substituted by the Depositor or any
Responsible Party, the Depositor or such Responsible Party, as applicable, shall
deliver to the Trustee for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related Assignment of Mortgage, and such other documents
and agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. No substitution is
permitted to be made in any calendar month after the Determination Date for such
month. Scheduled Payments due with respect to Substitute Mortgage Loans in the
Due Period of substitution shall not be part of the Trust Fund and will be
retained by the Depositor or the applicable Responsible Party on the next
succeeding Distribution Date. For the Due Period of substitution, distributions
to Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the Depositor or the applicable
Responsible Party shall be entitled to retain all amounts received in respect of
such Deleted Mortgage Loan.
(j) The Servicer, based upon information provided by the Depositor
or the applicable Responsible Party, shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and, if the substitution is made
by the Depositor, the Depositor shall be deemed to have made with respect to
such Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to Section 2.03(b) with respect to
such Mortgage Loan. Upon any such substitution and the deposit into the
Collection Account of the amount required to be deposited therein in connection
with such substitution as described in Section 2.03(k), the Trustee shall
release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Depositor or the applicable
Responsible Party and shall execute and deliver at the direction of the
Depositor or the applicable Responsible Party, such instruments of transfer or
assignment prepared by the Depositor or the applicable Responsible Party, in
each case without recourse, as shall be necessary to vest title in the Depositor
or the applicable Responsible Party, of the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
(k) For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (if any) by which the aggregate unpaid principal
balance of all such Substitute Mortgage Loans as of the date of substitution is
less than the aggregate unpaid principal balance of all such Deleted Mortgage
Loans. The amount of such shortage, plus an amount equal to the sum of (i) any
accrued and unpaid interest on the Deleted Mortgage Loans and (ii) all
unreimbursed Servicing Advances with respect to such Deleted Mortgage Loans, or
the amount of any similar shortage with respect to a Substitute Mortgage Loan
substituted by a Responsible Party under this Agreement (collectively, the
"Substitution Adjustment Amount"), shall be deposited into the related
Collection Account by the Depositor on or before the Distribution Account
Deposit Date for the Distribution Date following the Prepayment Period during
which the related Mortgage Loan became required to be purchased or replaced
hereunder.
(l) Any Mortgage Loan repurchased pursuant to this Section 2.03 will
be removed from the Trust Fund. The Servicer shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of any
Mortgage Loan repurchased and the Servicer shall deliver the amended Mortgage
Loan Schedule to the Trustee. For purposes of determining the applicable
Repurchase Price, any such repurchase shall occur or shall be deemed to occur as
of the last day of the applicable Prepayment Period.
(m) In the event that the Depositor or any Responsible Party shall
have repurchased a Mortgage Loan pursuant to this Agreement, the Repurchase
Price therefor shall be deposited by the Servicer in the Collection Account
pursuant to Section 3.10 on or before the Distribution Account Deposit Date for
the Distribution Date following the Prepayment Period during which the Depositor
or such Responsible Party, as applicable, repurchased such Mortgage Loan and
upon such deposit of the Repurchase Price and receipt of a Request for Release
in the form of Exhibit J hereto, the Trustee shall release the related Custodial
File held for the benefit of the Certificateholders to such Person as directed
by the Servicer, and the Trustee shall execute and deliver at such Person's
direction such instruments of transfer or assignment prepared by such Person, in
each case without recourse, as shall be necessary to transfer title from the
Trustee.
(n) In addition to any repurchase or substitution obligation by any
Responsible Party under this Agreement, each Responsible Party shall indemnify
the Depositor and its Affiliates, the Servicer, the Purchaser, the Trustee and
the Trust for any breach of any representation and warranty of such Responsible
Party set forth in this Agreement, in accordance with the indemnification
provisions relating to breaches of representations and warranties (including
without limitation, the representations and warranties set forth in paragraph
(aaa) of Schedule IV, paragraph (46) of Schedule V and paragraph (50) of
Schedule VI to this Agreement) and defective Mortgage Loans set forth in the
Aames Purchase Agreement, the NC Capital Purchase Agreement or the Accredited
Purchase Agreement, as applicable, as if such indemnification provisions were
set forth herein for the benefit of the Depositor and its Affiliates, the
Servicer, the Purchaser, the Trustee and the Trust.
(o) It is understood and agreed that the obligation of the Depositor
or any Responsible Party under this Agreement, to cure, repurchase or substitute
any Mortgage Loan as to which a breach of a representation and warranty has
occurred and is continuing, together with any related indemnification
obligations set forth therein or herein, shall constitute the sole remedies
against such Persons respecting such breach available to Certificateholders, the
Depositor (if applicable), the Class A-3b Certificate Insurer or the Trustee on
their behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee for the benefit of the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates and for
the benefit of the Class A-3b Certificate Insurer (and all references in this
Agreement for the benefit of or actions on behalf of the Class A-3b
Certificateholders shall be deemed to include the Class A-3b Certificate
Insurer). The Trustee shall cooperate with all reasonable requests by the Class
A-3b Certificate Insurer regarding action to preserve or enforce the Class A-3b
Certificate Insurer's rights or interests under this Agreement and the Class
A-3b Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is the Distribution Date occurring in
November 2034 which is the Distribution Date following the latest Mortgage Loan
maturity date.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Class
A-3b Certificate Insurer and the Servicer that as of the date of this Agreement
or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee and shall inure to the benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders and for the benefit of the Class A-3b
Certificate Insurer (and all references in this Agreement for the benefit of or
actions on behalf of the Class A-3b Certificateholders shall be deemed to
include the Class A-3b Certificate Insurer), the Servicer shall service and
administer the Mortgage Loans in accordance with the terms of this Agreement and
the respective Mortgage Loans and, to the extent consistent with such terms, in
the same manner in which it services and administers similar mortgage loans for
its own portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall service and administer the Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
covenants that its computer and other systems used in servicing the Mortgage
Loans operate in a manner such that the Servicer can service the Mortgage Loans
in accordance with the terms of this Pooling and Servicing Agreement. The
Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents provided to the Trustee as are necessary or appropriate to enable
the Servicer or any Subservicer to carry out its servicing and administrative
duties hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement shall constitute, a power of attorney to carry out such duties,
including a power of attorney in the form of Exhibit R hereto to take title to
Mortgaged Properties after foreclosure in the name of and on behalf of the
Trustee. The Trustee shall execute a separate power of attorney in favor of the
Servicer for the purposes described herein to the extent necessary or desirable
to enable the Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Servicer or any Subservicers under such powers of
attorney. Notwithstanding anything contained herein to the contrary, neither the
Servicer nor any Subservicer shall without the Trustee's consent: (i) initiate
any action, suit or proceeding solely under the Trustee's name without
indicating the Servicer's or Subservicer's, as applicable, representative
capacity, or (ii) take any action with the intent to, or which actually does
cause, the Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (except for a reduction of interest payments resulting from the
application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause either the Upper Tier
REMIC or the Lower Tier REMIC to fail to qualify as a REMIC under the Code or
the imposition of any tax on "prohibited transactions" or "contributions after
the startup date" under the REMIC Provisions, or (iii) except as provided in
Section 3.07(a), waive any Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the Servicer shall be entitled to waive any such provisions on behalf of the
Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements"). The Servicer shall, within a
reasonable period of time, give notice to the Trustee and the Class A-3b
Certificate Insurer of any such Subservicing Agreement. The Trustee shall not be
required to review or consent to such Subservicing Agreements and shall have no
liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement to which it is a party and
will be familiar with the terms thereof. The terms of any Subservicing Agreement
will not be inconsistent with any of the provisions of this Agreement. The
Servicer and the Subservicers may enter into and make amendments to the
Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee and
the Class A-3b Certificate Insurer, without the consent of the Trustee and the
Class A-3b Certificate Insurer, respectively. Any variation without the consent
of the Trustee from the provisions set forth in Section 3.08 relating to
insurance or priority requirements of Subservicing Accounts, or credits and
charges to the Subservicing Accounts or the timing and amount of remittances by
the Subservicers to the Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee, the Class A-3b Certificate Insurer and the Depositor copies of all
Subservicing Agreements, and any amendments or modifications thereof, promptly
upon the Servicer's execution and delivery of such instruments. Unless a Class
A-3b Certificate Insurer Default exists, the Servicer shall not terminate any
Subservicing Agreement without the prior written consent of the Class A-3b
Certificate Insurer.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which the Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement to which the Servicer is a party and the
rights and obligations of any Subservicer pursuant to any such Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the Servicer
party to the related Subservicing Agreement without any act or deed on the part
of such Subservicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Subservicing Agreement
with a successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer party to the related Subservicing Agreement shall, for any reason, no
longer be the Servicer (including termination due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding 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 primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
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 such Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor to the Servicer) shall not be
deemed a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor Servicer if the successor is not the
Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee, or the successor Servicer if
the successor is not the Trustee, prior to the Trustee, or the successor
Servicer if the successor is not the Trustee, assuming such rights and
obligations, unless the Trustee elects to terminate any Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
Servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to which the predecessor Servicer was a party to the same
extent as if each Subservicing Agreement had been assigned to the assuming
party, except that (i) the Servicer shall not thereby be relieved of any
liability or obligations under any such Subservicing Agreement that arose before
it ceased to be the Servicer and (ii) none of the Depositor, the Trustee, their
designees or any successor to the Servicer shall be deemed to have assumed any
liability or obligation of the Servicer that arose before it ceased to be the
Servicer.
The Servicer at its expense shall, upon request of the Trustee, its
designee or the successor Servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement to which it is a party and
the Mortgage Loans then being serviced by it and an accounting of amounts
collected and held by or on behalf of it, and otherwise use its best efforts to
effect the orderly and efficient transfer of the Subservicing Agreements to the
assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided 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. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer may waive, in whole or in part, a
Prepayment Charge only under the following circumstances: (i) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
(ii) such Prepayment Charge is not permitted to be collected by applicable
federal, state or local law or regulation or (iii) the collection of such
Prepayment Charge would be considered "predatory" pursuant to written guidance
published or issued by any applicable federal, state or local regulatory
authority acting in its official capacity and having jurisdiction over such
matters. If a Prepayment Charge is waived other than as permitted by the prior
sentence, then the Servicer is required to pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the related Collection Account together with and
at the time that the amount prepaid on the related Mortgage Loan is required to
be deposited into the Collection Account; provided, however, that the Servicer
shall not have an obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Mortgage Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders, to receive any Basis
Risk Payment and any Interest Rate Cap Payment and to secure their limited
recourse obligation to pay to the LIBOR Certificateholders Basis Risk
CarryForward Amounts.
(ii) On each Distribution Date, the Trustee shall deposit the amount
of any Basis Risk Payment and any Interest Rate Cap Payment for such date
into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
CarryForward Amount on any Class of Certificates, the Trustee shall (1) withdraw
from the Distribution Account and deposit in the Excess Reserve Fund Account, as
set forth in Section 4.02(a)(iii)(T), the lesser of (x) the Class X
Distributable Amount (without regard to the reduction in the definition thereof
with respect to the Basis Risk Payment) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(S)) and (y) the aggregate
Basis Risk CarryForward Amounts for such Distribution Date and (2) withdraw from
the Excess Reserve Fund Account amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk CarryForward Amount. Such payments shall
be allocated to those Classes on a pro rata basis based upon the amount of Basis
Risk CarryForward Amount owed to each such Class and shall be paid in the
priority set forth in Sections 4.02(a)(iii)(U)-(V).
(ii) The Trustee shall account for the Excess Reserve Fund Account
as an asset of a grantor trust under subpart E, Part I of the subchapter J
of the Code and not an asset of any REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are
the Class X Certificateholders. For all federal tax purposes, amounts
transferred by the Upper Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to the
LIBOR Certificateholders shall be accounted for by the Trustee as amounts
paid first to the Holders of the Class X Certificates and then to the
respective Class or Classes of LIBOR Certificates. In addition, the
Trustee shall account for the LIBOR Certificateholders' rights to receive
payments of Basis Risk CarryForward Amounts as rights in a limited
recourse interest rate cap contract written by the Class X
Certificateholders in favor of the LIBOR Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.07(c) and
Sections 4.02(a)(iii)(U)-(W).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Depositor shall cause the
Closing Date Deposit Amount to be deposited into the Distribution Account on the
Closing Date. The Trustee shall, promptly upon receipt, deposit in the
Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02.
(e) The Trustee may invest the funds in the Distribution Account, in
one or more Permitted Investments, in accordance with Section 3.12. The Servicer
shall direct the Trustee to withdraw from the Distribution Account and to remit
to the Servicer no less than monthly, all income and gain realized from the
investment of the portion of funds deposited in the Distribution Account by the
Servicer (except during the Trustee Float Period). The Trustee may withdraw from
the Distribution Account any income or gain earned from the investment of funds
deposited therein during the Trustee Float Period for its own benefit.
(f) The Servicer shall give notice to the Trustee of any proposed
change of the location of the Collection Account within a reasonable period of
time prior to any change thereof and the Trustee shall forward such notice to
the Rating Agencies and the Depositor.
(g) In order to comply with its duties under the USA Patriot Act of
2001, the Trustee shall obtain and verify certain information and documentation
from the other parties to this Agreement including, but not limited to, each
such party's name, address, and other identifying information.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more accounts
(collectively, the "Subservicing Account"). The Subservicing Account shall be an
Eligible Account and shall otherwise be acceptable to the Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account of the related Servicer or remit such
proceeds to the related Servicer for deposit in the Collection Account of the
related Servicer not later than two Business Days after the deposit of such
amounts in the Subservicing Account. For purposes of this Agreement, the
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by the
Servicer. Each Tax Service Contract shall be assigned to the Trustee, or a
successor Servicer at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) above, the Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by the Servicer. To the extent the
related Mortgage provides for Escrow Payments, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (the
"Escrow Accounts"), which shall be Eligible Accounts. The Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, all collections
from the Mortgagors (or related advances from Subservicers) for the payment of
taxes, assessments, hazard insurance premiums and comparable items for the
account of the Mortgagors ("Escrow Payments") collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the Escrow
Accounts, in no event more than two Business Days after the deposit of such
funds in the clearing account, for the purpose of effecting the payment of any
such items as required under the terms of this Agreement. Withdrawals of amounts
from an Escrow Account may be made only to (i) effect payment of taxes,
assessments, hazard insurance premiums, and comparable items; (ii) reimburse the
Servicer (or a Subservicer to the extent provided in the related Subservicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.13 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Escrow Account; (v) clear and terminate the Escrow
Account at the termination of the Servicer's obligations and responsibilities in
respect of the Mortgage Loans under this Agreement or (vi) recover amounts
deposited in error. As part of its servicing duties, the Servicer or
Subservicers shall pay to the Mortgagors interest on funds in Escrow Accounts,
to the extent required by law and, to the extent that interest earned on funds
in the Escrow Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. To the extent that a Mortgage
does not provide for Escrow Payments, the Servicer shall determine whether any
such payments are made by the Mortgagor in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure of a tax
lien. The Servicer assumes full responsibility for the payment of all such bills
within such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided, however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, the "Collection Account"), held in trust for the benefit of the
Trustee. On behalf of the Trustee, the Servicer shall deposit or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Servicer's receipt thereof, and
shall thereafter deposit in the Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee of the location of the Collection
Account maintained by it when established and prior to any change thereof in
accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Trustee (A)
the Trustee Fee with respect to such Distribution Date and (B) all
Available Funds in respect of the related Distribution Date together with
all amounts representing Prepayment Charges from the Mortgage Loans
received during the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (the Servicer's right for recovery or
reimbursement has priority over the Trust);
(iii) to pay the Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan serviced by the Servicer or Subservicer, but only to
the extent of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds or other amounts as may be collected by the
Servicer from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property) (the Servicer's right for
recovery or reimbursement has priority over the Trust);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in its Collection Account;
(v) to pay to the applicable Responsible Party or the Depositor, as
applicable, with respect to each Mortgage Loan that has previously been
repurchased or replaced pursuant to this Agreement, all amounts received
thereon subsequent to the date of purchase or substitution, as further
described herein;
(vi) to reimburse the Servicer for (A) any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii) (the Servicer's right for recovery or reimbursement
has priority over the Trust);
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan serviced by the
Servicer pursuant to Section 3.15 (the Servicer's right for recovery or
reimbursement has priority over the Trust);
(viii) to reimburse the Servicer or the Depositor for expenses
incurred by or reimbursable to the Servicer or the Depositor, as the case
may be, pursuant to Section 6.03 (the Servicer's right for recovery or
reimbursement has priority over the Trust);
(ix) to reimburse the Servicer, the Class A-3b Certificate Insurer
or the Trustee, as the case may be, for expenses reasonably incurred in
respect of the breach or defect giving rise to the repurchase obligation
of any Responsible Party or the Depositor, as applicable, that were
included in the Repurchase Price of the Mortgage Loan, including any
expenses arising out of the enforcement of the repurchase obligation, to
the extent not otherwise paid pursuant to the terms hereof (the Servicer's
right for recovery or reimbursement has priority over the Trust);
(x) to withdraw any amounts deposited in the Collection Account in
error;
(xi) to withdraw any amounts held in the Collection Account and not
required to be remitted to the Trustee on the Remittance Date occurring in
the month in which such amounts are deposited into such Collection
Account, to reimburse the Servicer for xxxxxxxxxxxx X&X Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the Collection Account upon
termination of this Agreement;
(b) 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, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification (as set forth in Section
4.01(d)) to the Trustee, on or prior to the next succeeding Remittance Date,
upon making any withdrawals from the related Collection Account pursuant to
subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) The Servicer may invest the funds in the Collection
Account and the Trustee may (but is not obligated to) invest funds in the
Distribution Account during the Trustee Float Period, and, with respect to the
portion of funds in the Distribution Account deposited by the Servicer, shall
(except during the Trustee Float Period) invest such funds in the Distribution
Account at the direction of the Servicer (for purposes of this Section 3.12,
such Accounts are referred to as an "Investment Account"), in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement; provided, however, that the Trustee shall have no
obligation to invest funds deposited into the Distribution Account by the
Servicer on the Remittance Date later than 10:00 a.m. (Pacific Standard Time).
If no investment instruction is given in a timely manner, the Trustee shall hold
the funds in the Distribution Account uninvested. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account (other than investments made during the Trustee Float
Period) shall be made in the name of the Servicer. The Servicer shall be
entitled to sole possession (except with respect to investment direction of
funds and any income and gain realized on any investment in the Distribution
Account during the Trustee Float Period) over each such related investment, and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Servicer (with a copy to the Trustee or its agent if
related to investment of funds in the Distribution Account not during the
Trustee Float Period), or with respect to investments during the Trustee Float
Period, the Trustee or its agent, together with any document of transfer
necessary to transfer title to such investment to the Servicer, or with respect
to investments during the Trustee Float Period, the Trustee or its agent. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Servicer, or with respect to
investments during the Trustee Float Period, the Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the related
Servicer, shall be for the benefit of the Servicer and shall be subject to its
withdrawal in the manner set forth in Section 3.11. The Servicer shall deposit
in the Collection Account the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of the portion
of funds deposited in the Distribution Account by the Servicer and held by the
Trustee, shall be for the benefit of the Servicer (except for any income or gain
realized from the investment of funds on deposit in the Distribution Account
during the Trustee Float Period, which shall be for the benefit of the Trustee)
and shall be subject to the Trustee's withdrawal in the manner set forth in
Section 3.07(e). The Servicer shall deposit in the Distribution Account (except
with respect to losses incurred during the Trustee Float Period) the amount of
any loss of principal incurred in respect of any such Permitted Investment made
with funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account (except that if any losses
are incurred from the investment of funds deposited in the Distribution Account
during the Trustee Float Period, the Trustee shall be responsible for
reimbursing the Trust for such loss) if made in accordance with this Section
3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan serviced by the Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by the
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Trustee, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be maintained a
flood insurance policy in respect thereof. Such flood insurance shall be in an
amount equal to the lesser of (i) the unpaid principal balance of the related
Mortgage Loan and (ii) the maximum amount of such insurance available for the
related Mortgaged Property under the national flood insurance program (assuming
that the area in which such Mortgaged Property is located is participating in
such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to Xxxxxx Xxx or Xxxxxxx Mac or
(ii) having a General Policy Rating of A:X or better from Best's (or such other
rating that is comparable to such rating) insuring against hazard losses on all
of the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
Collection Account from its own funds the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of itself and the Trustee claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee upon request with
copies of any such insurance policies and fidelity bond. The Servicer shall be
deemed to have complied with this provision if an Affiliate of the Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Subservicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note; provided, that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and such substitution is in
the best interest of the Certificateholders as determined by the Servicer. In
connection with any assumption, modification or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. The Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an acquisition
of REO Property) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from this Agreement pursuant to any
other provision hereof. The Servicer shall use reasonable efforts to realize
upon such defaulted Mortgage Loans in such manner as will maximize the receipt
of principal and interest by the Trustee, taking into account, among other
things, the timing of foreclosure proceedings; provided, however, with respect
to any Second Lien Mortgage Loan for which the related first lien mortgage loan
is not included in the Trust Fund, if, after such Mortgage Loan becomes 180 days
or more delinquent, the Servicer determines that a significant net recovery is
not possible through foreclosure, such Mortgage Loan may be charged off and the
Mortgage Loan will be treated as a Liquidated Mortgage Loan giving rise to a
Realized Loss. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds from the
related Mortgaged Property, as contemplated in Section 3.11. 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 related property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the Servicer or
any Subservicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second, to reimburse the Servicer for any related
xxxxxxxxxxxx X&X Advances, pursuant to Section 3.11; third, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be distributed if not
in connection with a liquidation or REO Disposition; and fourth, as a recovery
of principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Rate (net of the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Servicer or any
Subservicer pursuant to Section 3.11 or 3.17. The portions of the recovery so
allocated to interest at the Mortgage Rate (net of the Servicing Fee Rate) and
to principal of the Mortgage Loan shall be applied as follows: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to the last paragraph of
Section 3.17 with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Depositor directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be
entitled to be reimbursed from amounts in the Collection Account pursuant to
Section 3.11. In the event the Depositor directs the Servicer not to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer
shall be reimbursed from general collections for all Servicing Advances made
with respect to the related Mortgaged Property from the Collection Account
pursuant to Section 3.11.
In the event the Servicer elects to charge-off a Second Lien
Mortgage Loan 180 days or more delinquent pursuant to this Section 3.15, no
Second Lien Mortgage Loan shall be characterized as a Liquidated Mortgage Loan,
unless the Depositor consents in writing to such characterization after the
Servicer has provided the Depositor with a combined equity analysis of such
Second Lien Mortgage Loan and the related first lien mortgage loan; provided,
that if the Depositor has failed to notify the Servicer within 3 Business Days
of receipt of such combined equity analysis, then the Depositor shall be deemed
to have consented to such characterization.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, on or before the last day of the month in which such payment in
full occurs, notify the Trustee by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Custodial File by
submitting a Request for Release to the Trustee. Upon receipt of such
certification and Request for Release, the Trustee shall promptly release the
related Custodial File to the Servicer within two (2) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Trustee when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been charged-off or
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered to the Trustee a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was charged-off or liquidated and that all amounts received
or to be received in connection with such liquidation that are required to be
deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee to the Servicer or its designee upon request
therefor. Upon receipt of a Request for Release under this Section 3.16, the
Trustee shall deliver the related Custodial File to the requesting Servicer by
regular mail, unless the Servicer requests that the Trustee deliver such
Custodial File to the Servicer by overnight courier (in which case such delivery
shall be at the Servicer's expense); provided, however, that in the event the
Servicer has not previously received copies of the relevant Mortgage Loan
Documents necessary to service the related Mortgage Loan in accordance with
Accepted Servicing Practices, the applicable Responsible Party shall reimburse
the Servicer for any overnight courier charges incurred for the requested
Custodial Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
Servicer shall cause the deed or certificate of sale to be issued in the name of
the Trustee, on behalf of the Certificateholders. Upon written request by the
Servicer, the Trustee shall provide the Servicer with a power of attorney
prepared by the Servicer with respect to such REO Property.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee. The Trustee shall
have no obligations with respect to any REO Dispositions.
(c) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(d) The Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding Servicing Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be deposited, on a daily basis in the
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan, plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition, shall be
retained by the Servicer as additional servicing compensation.
(g) The Servicer shall use its reasonable best efforts to sell, or
cause its Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property serviced by the Servicer or Subservicer as soon as possible,
but in no event later than the conclusion of the third calendar year beginning
after the year of its acquisition by the Lower Tier REMIC unless (i) the
Servicer applies for an extension of such period from the Internal Revenue
Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in which
event such REO Property shall be sold within the applicable extension period, or
(ii) the Servicer obtains for the Trustee an Opinion of Counsel, addressed to
the Depositor, the Trustee and the Servicer, to the effect that the holding by
the Lower Tier REMIC of such REO Property subsequent to such period will not
result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code or cause the Lower Tier REMIC or Upper Tier REMIC to
fail to qualify as a REMIC under the REMIC Provisions or comparable provisions
of relevant state laws at any time. The Servicer shall manage, conserve, protect
and operate each REO Property serviced by the Servicer for the Trustee solely
for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by the Lower Tier REMIC
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. 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 Trustee on behalf of the Certificateholders, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the
Trustee on behalf of the Certificateholders for the period prior to the sale of
such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Adjustment Date and shall adjust the Scheduled Payment on the
related mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. In
the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. The Servicer shall execute
and deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Trustee such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer or the receipt of
notice from the Trustee that the Servicer has failed to adjust a Mortgage Rate
or Scheduled Payment in accordance with the terms of the related Mortgage Note,
the Servicer shall deposit in the related Collection Account from its own funds
the amount of any interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Class A-3b Certificate Insurer,
the Trustee, the OTS or the FDIC and the examiners and supervisory agents
thereof, access to the documentation regarding the Mortgage Loans in its
possession required by applicable regulations of the OTS. Such access shall be
afforded without charge, but only upon five (5) Business Days' prior written
request and during normal business hours at the offices of the Servicer, the
Depositor, the Trustee or any Subservicer. Nothing in this Section shall
derogate from the obligation of any such party to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of any such party to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan serviced by the Servicer. 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 its 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 Trustee, 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, the Distribution
Account or any Escrow Account, or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the 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 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and REO Proceeds related to
such Mortgage Loan, the Servicing Fee with respect to each Mortgage Loan (less
any portion of such amounts retained by any Subservicer). In addition, the
Servicer shall be entitled to recover unpaid Servicing Fees out of related late
collections to the extent permitted in Section 3.11. The right to receive the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Servicer's responsibilities and obligations
under this Agreement; provided, however, that the Servicer may pay from the
Servicing Fee any amounts due to a Subservicer pursuant to a Subservicing
Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, and pursuant to Section 3.07(e), to direct
the Trustee to withdraw from the Distribution Account and remit to the Servicer
(except for monies invested during the Trustee Float Period), as additional
servicing compensation, interest or other income earned on the related portions
of deposits therein.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies, the
Class A-3b Certificate Insurer and the Trustee on or before March 15th of each
calendar year, commencing in 2005, 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 officers' 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. Promptly
after receipt of such Officer's Certificate, the Depositor shall review such
Officer's Certificate and, if applicable, consult with the Servicer as to the
nature of any defaults by the Servicer in the fulfillment of any of the
Servicer's obligations.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 2005, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Rating Agencies, the Class A-3b Certificate Insurer and the
Trustee a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Subservicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Subservicers. Promptly after receipt of such report, the Depositor shall
review such report and, if applicable, consult with the Servicer as to the
nature of any defaults by the Servicer in the fulfillment of any of the
Servicer's obligations.
Section 3.24 Trustee to Act as Servicer. (a) Subject to Section
7.02, 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 Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the predecessor Servicer pursuant to Section 3.10 or any
acts or omissions of the predecessor Servicer hereunder), (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of the predecessor Servicer pursuant to Section 2.03 or
(iv) deemed to have made any representations and warranties of the Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
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.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) to which it is party and the
Mortgage Loans then being serviced thereunder and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of such Subservicing Agreement to the assuming
party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date an amount from its own funds equal to the
Compensating Interest payable by the Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans required to be serviced by it and the related borrowers and
shall provide all required notices thereunder.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans
serviced by the Servicer, which Scheduled Payments were not received as of the
close of business on the related Determination Date (provided, however, that
with respect to any Balloon Loan that is delinquent on its maturity date, the
Servicer will not be required to advance the principal portion of the related
balloon payment but will be required to continue to make P&I Advances in
accordance with this Section 4.01(a) with respect to such Balloon Loan in an
amount equal to the assumed scheduled interest that would otherwise be due based
on the original amortization schedule for such Balloon Loan (with interest at
the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO Property
serviced by the Servicer, which REO Property was acquired during or prior to the
related Prepayment Period and as to which such REO Property an REO Disposition
did not occur during the related Prepayment Period, an amount equal to the
excess, if any, of the Scheduled Payments (with each interest portion thereof
net of the related Servicing Fee) that would have been due on the related Due
Date in respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Collection Account for distribution on such
Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
serviced by the Servicer for the Remittance Date either (i) from its own funds
or (ii) from the Collection Account, to the extent of funds held therein for
future distribution (in which case, it will cause to be made an appropriate
entry in the records of the Collection Account that Amounts Held for Future
Distribution have been, as permitted by this Section 4.01, used by the Servicer
in discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I Advances to be made by the
Servicer with respect to the Mortgage Loans and REO Properties. Any Amounts Held
for Future Distribution and so used shall be appropriately reflected in the
Servicer's records and replaced by the Servicer by deposit in the Collection
Account on or before any future Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee and the Class
A-3b Certificate Insurer.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall allocate from amounts then on deposit in the
Distribution Account in the following order of priority and to the extent of the
Available Funds remaining and, on such Distribution Date, shall make
distributions to the Class A-3b Certificate Insurer and on the Certificates
other than the Class A-3b Certificates in accordance with such allocation and
will hold any amounts allocated to the Class A-3b Certificates in the
Distribution Account for distribution to the Holders of the Class A-3b
Certificates on the Class A-3b Distribution Date:
(i) to the holders of each Class of LIBOR Certificates and to the
Class A-3b Certificate Insurer in the following order of priority:
(A) to the Class A Certificates, the related Accrued
Certificate Interest Distribution Amounts and any related Unpaid
Interest Amounts for such Distribution Date, and to the Class-3b
Certificate Insurer, the Premium Amount and any Reimbursement Amount
then owing to it on account of a prior drawing relating to interest
on the Class A-3b Certificates, in each case pursuant to the
allocation set forth in clauses (iv), (v) and (vi) of this Section
4.02(a);
(B) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(C) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(J) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of LIBOR Certificates then entitled to
distributions of principal and to the Class A-3b Certificate Insurer as
set forth below, from amounts remaining on deposit in the Distribution
Account after making allocations pursuant to clause (i) above, an amount
equal to the Principal Distribution Amount in the following order of
priority:
(a) to the Class A Certificates and the Class A-3b
Certificate Insurer, allocated as described in Section
4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero;
(b) to the Class A-3b Certificate Insurer, the
amount of any remaining Reimbursement Amount then owing
to it on account of a prior drawing relating to
principal on the Class A-3b Certificates; and
(c) sequentially to the Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates, in that order,
until the respective Class Certificate Balances are
reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not then in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distribution of principal and to the Class A-3b Certificate
Insurer, from amounts remaining on deposit in the Distribution Account
after making allocations pursuant to clause (i) above, an amount equal to,
in the aggregate, the Principal Distribution Amount in the following
amounts and order of priority:
(a) to the Class A Certificates and the Class A-3b
Certificate Insurer, the lesser of (x) the Principal
Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section
4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero;
(b) to the Class A-3b Certificate Insurer, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to
the Class A Certificateholders in clause (ii)(B)(a)
above and (y) the amount of any remaining Reimbursement
Amount then owing to the Class A-3b Certificate Insurer
on account of a prior drawing relating to principal on
the Class A-3b Certificates;
(c) to the Class M-1 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has
been reduced to zero;
(d) to the Class M-2 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above and to the Class M-1 Certificates in clause
(ii)(B)(c) above and (y) the Class M-2 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(e) to the Class M-3 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, and to the Class M-2 Certificates in
clause (ii)(B)(d) above and (y) the Class M-3 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(f) to the Class M-4 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, to the Class M-2 Certificates in
clause (ii)(B)(d) above, and to the Class M-3
Certificates in clause (ii)(B)(e) above, and (y) the
Class M-4 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(g) to the Class M-5 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, to the Class M-2 Certificates in
clause (ii)(B)(d) above, to the Class M-3 Certificates
in clause (ii)(B)(e) above and to the Class M-4
Certificates in clause (ii)(B)(f) above and (y) the
Class M-5 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(h) to the Class M-6 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, to the Class M-2 Certificates in
clause (ii)(B)(d) above, to the Class M-3 Certificates
in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above and to the Class
M-5 Certificates in clause (ii)(B)(g) above and (y) the
Class M-6 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(i) to the Class B-1 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, to the Class M-2 Certificates in
clause (ii)(B)(d) above, to the Class M-3 Certificates
in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, to the Class
M-5 Certificates in clause (ii)(B)(g) above and to the
Class M-6 Certificates in clause (ii)(B)(h) above and
(y) the Class B-1 Principal Distribution Amount, until
the Class Certificate Balance thereof has been reduced
to zero;
(j) to the Class B-2 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, to the Class M-2 Certificates in
clause (ii)(B)(d) above, to the Class M-3 Certificates
in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, to the Class
M-5 Certificates in clause (ii)(B)(g) above, to the
Class M-6 Certificates in clause (ii)(B)(h) above and to
the Class B-1 Certificates in clause (ii)(B)(i) above
and (y) the Class B-2 Principal Distribution Amount,
until the Class Certificate Balance thereof has been
reduced to zero; and
(k) to the Class B-3 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class A-3b Certificate Insurer in clause (ii)(B)(b)
above, to the Class M-1 Certificates in clause
(ii)(B)(c) above, to the Class M-2 Certificates in
clause (ii)(B)(d) above, to the Class M-3 Certificates
in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, to the Class
M-5 Certificates in clause (ii)(B)(g) above, to the
Class M-6 Certificates in clause (ii)(B)(h) above, to
the Class B-1 Certificates in clause (ii)(B)(i) above
and to the Class B-2 Certificates in clause (ii)(B)(j)
above and (y) the Class B-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has
been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be allocated in the
following order of priority:
(A) to the Class A-3b Certificate Insurer, to the extent of
any remaining Reimbursement Amount and any other amount then owing
to it hereunder;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(D) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(F) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(G) to the holders of the Class M-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(H) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class M-4 Certificates, any Unpaid
Realized Loss Amount for such Class;
(J) to the holders of the Class M-5 Certificates, any Unpaid
Interest Amount for such Class;
(K) to the holders of the Class M-5 Certificates, any Unpaid
Realized Loss Amount for such Class;
(L) to the holders of the Class M-6 Certificates, any Unpaid
Interest Amount for such Class;
(M) to the holders of the Class M-6 Certificates, any Unpaid
Realized Loss Amount for such Class;
(N) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(O) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(P) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(Q) to the holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(R) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(S) to the holders of the Class B-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(T) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(U) concurrently, (i) from any Interest Rate Cap Payments with
respect to the Group II Class A Cap Agreement on deposit in the
Excess Reserve Fund Account, an amount equal to any unpaid remaining
Basis Risk CarryForward Amount with respect to the Class A-2a and
Class A-2b Certificates, allocated (a) first, between the Class A-2a
and Class A-2b Certificates, pro rata, based upon their respective
Class Certificate Balances and (b) second, any remaining amounts to
the Class A-2a and Class A-2b Certificates, pro rata, based on any
Basis Risk CarryForward Amount remaining unpaid, in order to
reimburse such unpaid amounts, (ii) from any Interest Rate Cap
Payments with respect to the Group III Class A Cap Agreement on
deposit in the Excess Reserve Fund Account with respect to such
Distribution Date, an amount equal to any unpaid remaining Basis
Risk CarryForward Amount with respect to the Class A-3a, Class A-3b,
Class A-3c and Class A-3d Certificates, allocated (a) first, among
the Class A-3a, Class A-3b, Class A-3c and Class A-3d Certificates,
pro rata, based upon their respective Class Certificate Balances and
(b) second, any remaining amounts to the Class A-3a, Class A-3b,
Class A-3c and Class A-3d Certificates, pro rata, based on any Basis
Risk CarryForward Amounts remaining unpaid, in order to reimburse
such unpaid amounts, (iii) from any Interest Rate Cap Payments with
respect to the Class M Cap Agreement on deposit in the Excess
Reserve Fund Account, an amount equal to any unpaid remaining Basis
Risk CarryForward Amount with respect to the Class M Certificates,
allocated (a) first, among the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5 and Class M-6 Certificates, pro rata, based
upon their respective Class Certificate Balances and (b) second, any
remaining amounts to the Class X-0, Xxxxx X-0, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates, pro rata, based on any Basis
Risk CarryForward Amounts remaining unpaid, in order to reimburse
such unpaid amounts, (iv) from any Interest Rate Cap Payments with
respect to the Class B Cap Agreement on deposit in the Excess
Reserve Fund Account, an amount equal to any unpaid remaining Basis
Risk CarryForward Amount with respect to the Class B Certificates to
the Class B Certificates, allocated (a) first, among the Class B-1,
Class B-2 and Class B-3 Certificates, pro rata, based upon their
respective Class Certificate Balances and (b) second, any remaining
amounts to the Class B-1, Class B-2 and Class B-3 Certificates, pro
rata, based on any Basis Risk CarryForward Amounts remaining unpaid,
in order to reimburse such unpaid amounts, and (v) any remaining
Interest Rate Cap Payments, to the holders of the Class X
Certificates pursuant to Section 4.02(a)(iii)(W);
(V) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payments included in such
account), an amount equal to any Basis Risk CarryForward Amount with
respect to the LIBOR Certificates, allocated to the LIBOR
Certificates in the same order and priority in which the Accrued
Certificate Interest Distribution Amount is allocated among such
Classes of Certificates, with the allocation to the Class A
Certificates being (a) first, among the Class A Certificates, pro
rata, based on their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A Certificates, pro rata,
based on any Basis Risk CarryForward Amounts remaining unpaid, in
order to reimburse such unpaid amounts;
(W) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount and any remaining Interest Rate
Cap Payments not distributed pursuant to Sections
4.02(a)(iii)(A)-(V); and
(X) to the holders of the Class R Certificates, any remaining
amount.
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will be
allocated:
(a) first, to the Class A-1 Certificates, the
Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amount for the Class A-1 Certificates;
and
(b) second, to the Group II Class A Certificates,
the Group III Class Certificates and to the Class A-3b
Certificate Insurer, pro rata, in accordance with the
priorities set forth in Section 4.02(a)(i)(A), the
Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amounts for the Group II Class A
Certificates and the Group III Class Certificates,
respectively, and the amount of any Premium Amount and
any Reimbursement Amount then owing to the Class A-3b
Certificate Insurer on account of a prior drawing
relating to interest on the Class A-3b Certificates, to
the extent not otherwise previously paid from Interest
Remittance Amounts attributable to Group II and Group
III Mortgage Loans;
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will be
allocated:
(a) first, to the Class A-2a and Class A-2b
Certificates, pro rata, the Accrued Certificate Interest
Distribution Amounts and any Unpaid Interest Amounts for
the Class A-2a and Class A-2b Certificates; and
(b) second, to the Class A-1 Certificates, the
Group III Class A Certificates and to the Class A-3b
Certificate Insurer, pro rata, in accordance with the
priorities set forth in Section 4.02(a)(i)(A), the
Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amounts for the Class A-1 Certificates
and the Group III Class A Certificates, respectively,
and the amount of any Premium Amount and any
Reimbursement Amount then owing to the Class A-3b
Certificate Insurer on account of a prior drawing
relating to interest on the Class A-3b Certificates, to
the extent not otherwise previously paid from Interest
Remittance Amounts attributable to Group I and Group III
Mortgage Loans; and
(vi) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group III Mortgage Loans will
be allocated:
(a) first, concurrently to the Class A-3a, Class
A-3b, Class A-3c and Class A-3d Certificates and to the
Class A-3b Certificate Insurer, pro rata, the Accrued
Certificate Interest Distribution Amounts and any Unpaid
Interest Amounts for the Class A-3a, Class A-3b, Class
A-3c and Class A-3d Certificates, respectively and the
amount of any Premium Amount and any Reimbursement
Amount then owing to the Class A-3b Certificate Insurer
on account of a prior drawing relating to interest on
the Class A-3b Certificates; and
(b) second, to the Class A-1 Certificates and the
Group II Class A Certificates, pro rata, in accordance
with the priorities set forth in Section 4.02(a)(i)(A),
the Accrued Certificate Interest Distribution Amount and
any Unpaid Interest Amount for each such Class, to the
extent not otherwise previously paid from Interest
Remittance Amounts attributable to Group I and Group II
Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates is not allocated in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal allocated to the Holders of the Class A
Certificates on any Distribution Date shall be allocated among the Class A
Certificate Groups based on the Class A Principal Allocation Percentage
applicable to such Class A Certificate Groups for such Distribution Date.
However, if the Class Certificate Balances of the Class A Certificates in any
Class A Certificate Group are reduced to zero, then the remaining amount of
principal allocable to the Class A Certificates on such Distribution Date, and
the amount of such principal allocable to the Class A Certificates on all
subsequent Distribution Dates, shall be allocated to the other Class A
Certificate Groups remaining outstanding pro rata based on the Class Certificate
Balances of the Class A Certificates in such other Class A Certificate Groups
remaining outstanding after giving effect to principal allocations based on
their Class A Principal Allocation Percentage, until their Class Certificate
Balances have been reduced to zero. Any distribution of principal to the Class
A-1 Certificates shall be made first from Available Funds relating to the Group
I Mortgage Loans, any distribution of principal to the Group II Class A
Certificates shall be made first from Available Funds relating to the Group II
Mortgage Loans and any distribution of principal to the Group III Class A
Certificates shall be made first from Available Funds relating to the Group III
Mortgage Loans.
So long as a Group II Sequential Trigger Event is not in effect, any
principal allocated to the Group II Class A Certificates shall be allocated pro
rata between the Class A-2a and the Class A-2b Certificates, based on their
respective Class Certificate Balances, until their Class Certificate Balances
have been reduced to zero. If a Group II Sequential Trigger Event is in effect,
any distributions allocated to the Group II Class A Certificates shall be
allocated sequentially, first to the Class A-2a Certificates, until their Class
Certificate Balance has been reduced to zero, and then to the Class A-2b
Certificates, until their Class Certificate Balance has been reduced to zero.
Any principal allocated to the Group III Class A Certificates shall
be allocated sequentially first, to the Class A-3a Certificates until their
Class Certificate Balance has been reduced to zero and second, to the Class A-3b
Certificates and the Group III Class A Sequential Certificates, pro rata, based
on their respective Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero. Principal allocated to the Group
III Class A Sequential Certificates shall be allocated first to the Class A-3c
Certificates, until their Class Certificate Balance has been reduced to zero,
and then to the Class A-3d Certificates, until their Class Certificate Balance
has been reduced to zero. However, on and after the Distribution Date on which
the aggregate Class Certificate Balances of the Subordinated Certificates and
the principal balance of the Class X Certificates have been reduced to zero, any
principal allocated to the Group III Class A Certificates shall be allocated pro
rata among the Classes of Group III Class A Certificates, based on their
respective Class Certificate Balances.
In the event any principal is allocated to the Class A-3b
Certificates at a time when there are unreimbursed draws under the Class A-3b
Certificate Insurance Policy for Class A-3b Principal Parity Amounts, the Class
A-3b Certificate Insurer will be entitled to receive such principal allocation
as a reimbursement for those unreimbursed draws (but only to the extent such
reimbursement will not cause there to be a Class A-3b Principal Parity Amount).
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date will be allocated as a
reduction in the following order:
(1) First, to the amount of interest payable to the
Class X Certificates; and
(2) Second, pro rata, as a reduction of the Accrued
Certificate Interest Distribution Amount for the Class A,
Class M and Class B Certificates, based on the amount of
interest to which such Classes would otherwise be entitled.
(e) On the Class A-3b Distribution Date following each Distribution
Date, the Trustee shall make a distribution on the Class A-3b Certificates in
the amounts allocated to the Class A-3b certificates as set forth in Section
4.02(a)(i) through (iii) above.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor, the Class A-3b Certificate
Insurer and each Rating Agency a statement setting forth with respect to the
related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk
CarryForward Amount for such Distribution Date and the amount of all Basis
Risk CarryForward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of Expense Fees paid to or retained by the Servicer
or the Trustee (stated separately and in the aggregate) with respect to
such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicer as outstanding as of the close of business on such
Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xii) the total number and aggregate principal balance of any REO
Properties (and market value, if available) as of the close of business on
the Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation thereof and the aggregate outstanding balance
of all 60+ Day Delinquent Mortgage Loans), and whether a Group II
Sequential Trigger Event has occurred and is continuing;
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvii) the Subordinated Amount and Specified Subordinated Amount;
(xviii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer;
(xix) the Class A-3b Certificate Deficiency Amount (with each
component thereof separately stated) and the Insured Payment for such
Distribution Date;
(xx) the Reimbursement Amount immediately prior to such Distribution
Date, and the amount of any payments to the Class A-3b Certificate Insurer
on account thereof on such Distribution Date;
(xxi) the Interest Rate Cap Payments (stated separately), if any,
for such Distribution Date; and
(xxii) the Cumulative Loss Percentage.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, the Servicer, the Class A-3b
Certificate Insurer and the Depositor is limited to the availability, timeliness
and accuracy of the information derived from the Servicer or, in the case of the
Reimbursement Amount from the Class A-3b Certificate Insurer. The Trustee will
provide the above statement via the Trustee's internet website, except that the
Trustee shall deliver a hard copy of such statement to the Class A-3b
Certificate Insurer on each Distribution Date. The Trustee's website will
initially be located at xxxxx://xxx.xxx.xx.xxx/xxxx and assistance in using the
website can be obtained by calling the Trustee's investor relations desk at
0-000-000-0000. A paper copy of the statement will also be made available upon
request.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Not later than the Determination Date for each Distribution
Date, the Servicer shall furnish to the Depositor, the Trustee and the Class
A-3b Certificate Insurer a monthly remittance advice statement (in a format
mutually agreed upon by the Servicer and the Trustee) containing such
information as shall be reasonably requested by the Trustee to enable the
Trustee to provide the reports required by Section 4.03(a) as to the
accompanying remittance and the period ending on the close of business on the
last day of the related Prepayment Period (the "Servicer Remittance Report").
The Servicer shall furnish to the Trustee monthly information
reports, as of the related Determination Date, to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, the
corresponding monthly information reports (in electronic format) shall be
received by the Trustee no later than the related Determination Date, which
reports shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to the Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, (3) 91
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the definition of
LIBOR. Until all of the LIBOR Certificates are paid in full, the Trustee will at
all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinated Certificates then outstanding in reduction of the Class Certificate
Balance thereof.
Section 4.06 The Class A-3b Certificate Insurance Policy. (a) Not
later than two (2) Business Days prior to each Distribution Date, the Trustee
shall determine with respect to such Distribution Date, the amount to be on
deposit in the Distribution Account on such Distribution Date to the extent of
Available Funds, excluding the amount of any Insured Payment.
(b) If on any Distribution Date there is a Class A-3b Certificate
Deficiency Amount, the Trustee shall complete a notice in the form of Exhibit A
to the Class A-3b Certificate Insurance Policy and submit such notice to the
Class A-3b Certificate Insurer no later than 12:00 noon New York City time on
the second Business Day preceding such Distribution Date as a claim for an
Insured Payment in an amount equal to such Class A-3b Certificate Deficiency
Amount.
(c) The Trustee shall establish a separate Eligible Account for the
benefit of Holders of the Class A-3b Certificates and the Class A-3b Certificate
Insurer referred to herein as the "Policy Payment Account" over which the
Trustee shall have exclusive control and sole right of withdrawal. The Trustee
shall deposit upon receipt any amount paid under the Class A-3b Certificate
Insurance Policy in the Policy Payment Account and distribute such amount only
for purposes of payment to the Class A-3b Certificateholders of the Insured
Payment for which a claim was made and such amount may not be applied to satisfy
any costs, expenses or liabilities of the Servicer, the Trustee or the Trust
Fund or to pay any other Class of Certificates. Amounts paid under the Class
A-3b Certificate Insurance Policy, to the extent needed to pay the Class A-3b
Certificate Deficiency Amount, shall be transferred to the Distribution Account
on the related Distribution Date and disbursed by the Trustee to the Class A-3b
Certificateholders in accordance with Section 4.02. It shall not be necessary
for such payments to be made by checks or wire transfers separate from the
checks or wire transfers used to pay other distributions to the Class A-3b
Certificateholders with other funds available to make such payment. However, the
amount of any payment of principal or of interest on the Class A-3b Certificates
to be paid from funds transferred from the Policy Payment Account shall be noted
as provided in paragraph (d) below and in the statement to be furnished to
Holders of the Class A-3b Certificates pursuant to Section 4.03(a). Funds held
in the Policy Payment Account shall not be invested. Any funds remaining in the
Policy Payment Account on the first Business Day following a Class A-3b
Distribution Date shall be returned to the Class A-3b Certificate Insurer
pursuant to the written instructions of the Class A-3b Certificate Insurer by
the end of such Business Day.
(d) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A-3b Certificate
from moneys received under the Class A-3b Certificate Insurance Policy. The
Class A-3b Certificate Insurer shall have the right to inspect such records at
reasonable times during normal business hours upon one Business Day's prior
notice to the Trustee.
(e) In the event that the Trustee has received a certified copy of
an order of the appropriate court that any Insured Payment has been voided in
whole or in part as a preference payment under applicable bankruptcy law, the
Trustee shall so notify the Class A-3b Certificate Insurer, shall comply with
the provisions of the Class A-3b Certificate Insurance Policy to obtain payment
by the Class A-3b Certificate Insurer of such voided Insured Payment, and shall,
at the time it provides notice to the Class A-3b Certificate Insurer, notify, by
mail to the Class A-3b Certificateholders of the affected Certificates that, in
the event any Class A-3b Certificateholder's Insured Payment is so recovered,
such Class A-3b Certificateholder will be entitled to payment pursuant to the
Class A-3b Certificate Insurance Policy, a copy of which shall be made available
through the Trustee, the Class A-3b Certificate Insurer or the Class A-3b
Certificate Insurer's fiscal agent, if any, and the Trustee shall furnish to the
Class A-3b Certificate Insurer or its fiscal agent, if any, its records
evidencing the payments which have been made by the Trustee and subsequently
recovered from the Class A-3b Certificateholders, and dates on which such
payments were made.
(f) The Trustee shall promptly notify the Class A-3b Certificate
Insurer and its fiscal agent 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 A-3b Certificates. Each Class A-3b Certificateholder, by
its purchase of Class A-3b Certificates, the Servicer and the Trustee agree
that, the Class A-3b Certificate Insurer (so long as no Class A-3b Certificate
Insurer Default exists) 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 Class A-3b Certificate Insurer shall be
subrogated to, and each Class A-3b Certificateholder and the Trustee hereby
delegates and assigns to the Class A-3b Certificate Insurer, to the fullest
extent permitted by law, the rights of the Trustee and each Class A-3b
Certificateholder in the conduct of any such Preference Claim, including,
without limitation, all rights of any party to any adversary proceeding or
action with respect to any court order issued in connection with any such
Preference Claim.
(g) The Trustee shall, upon retirement of the Class A-3b
Certificates, furnish to the Class A-3b Certificate Insurer a notice of such
retirement, and, upon retirement of the Class A-3b Certificates and the
expiration of the term of the Class A-3b Certificate Insurance Policy, surrender
the Class A-3b Certificate Insurance Policy to the Class A-3b Certificate
Insurer for cancellation.
(h) The Trustee will hold the Class A-3b Certificate Insurance
Policy in trust as agent for the Holders of the Class A-3b Certificates for the
purpose of making claims thereon and distributing the proceeds thereof. Neither
the Class A-3b Certificate Insurance Policy nor the amounts paid on the Class
A-3b Certificate Insurance Policy will constitute part of the Trust Fund created
by this Agreement. Each Holder of Class A-3b Certificates, by accepting its
Class A-3b Certificates, appoints the Trustee as attorney-in-fact for the
purpose of making claims on the Class A-3b Certificate Insurance Policy.
Section 4.07 Effect of Payments by the Class A-3b Certificate
Insurer; Subrogation. Anything herein to the contrary notwithstanding, any
payment with respect to principal of or interest on the Class A-3b Certificates
which is made with moneys received pursuant to the terms of the Class A-3b
Certificate Insurance Policy shall not be considered payment of the Class A-3b
Certificates from the Trust Fund. The Depositor, the Servicer and the Trustee
acknowledge, and each Holder by its acceptance of a Class A-3b Certificate
agrees, that without the need for any further action on the part of the Class
A-3b Certificate Insurer, the Depositor, the Servicer, the Trustee or the
Certificate Registrar (a) to the extent the Class A-3b Certificate Insurer makes
payments, directly or indirectly, on account of principal of or interest on the
Class A-3b Certificates to the Holders of such Class A-3b Certificates, the
Class A-3b Certificate Insurer will be fully subrogated to, and each Class A-3b
Certificateholder, the Servicer and the Trustee hereby delegate and assign to
the Class A-3b Certificate Insurer, to the fullest extent permitted by law, the
rights of such Holders to receive such principal and interest from the Trust
Fund, including, without limitation, any amounts due to the Class A-3b
Certificateholders in respect of securities law violations arising from the
offer and sale of the Class A-3b Certificates, and (b) the Class A-3b
Certificate Insurer shall be paid such amounts from the sources and in the
manner provided herein for the payment of such amounts and as provided in this
Agreement. The Trustee and the Servicer shall cooperate in all respects with any
reasonable request by the Class A-3b Certificate Insurer for action to preserve
or enforce the Class A-3b Certificate Insurer's rights or interests under this
Agreement without limiting the rights or affecting the interests of the Holders
as otherwise set forth herein.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X and
Class P Certificates in the name of the Depositor or its designee. On a date as
to which the Depositor notifies the Trustee, the Trustee shall transfer the
Class X and Class P Certificates in the name of the NIM Trustee, or such other
name or names as the Depositor shall request, and to deliver the Class X and
Class P Certificates to Deutsche Bank National Trust Company, as NIM Trustee, or
to such other Person or Persons as the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) 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 Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to (i) the
transfer of the Class X, Class P or Class R Certificates to the Depositor or an
Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, in the event that a transfer of a
Private Certificate which is a Physical Certificate 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 shall certify to the Trustee in writing the facts
surrounding the transfer in substantially the form set forth in Exhibit H (the
"Transferor Certificate") and either (i) there shall be delivered to the Trustee
a letter in substantially the form of Exhibit I (the "Rule 144A Letter") or (ii)
there shall be delivered to the Trustee at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate 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 will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of the Class R, Class X or
Class P Certificates to the Depositor or an affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, or (ii) in the case of an
ERISA-Restricted Certificate other than a Residual Certificate or a Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee and the Servicer, which Opinion of Counsel
shall not be an expense of the Trustee, the Servicer or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Depositor, the Trustee or the Servicer
to any obligation in addition to those expressly undertaken in this Agreement or
to any liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA-Restricted Certificate,
other than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact a Non-Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became a Non-Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Trustee shall be paid and delivered
by the Trustee to the last preceding Permitted Transferee of such
Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee or the
Servicer, to the effect that the elimination of such restrictions will not cause
either the Lower Tier REMIC or the Upper Tier REMIC hereunder to fail to qualify
as a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is a
Non-Permitted Transferee and (b) to provide for a means to compel the Transfer
of a Residual Certificate which is held by a Person that is a Non-Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository (and the Trustee consents) of its intent to terminate the book-entry
system through the Depository, and, upon receipt of notice of such intent from
the Depository, the Depository Participants holding beneficial interests in the
Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. Neither the Servicer, the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee, duly
executed by the Certificateholder or his attorney duly authorized in writing.
Each Certificate presented or surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Trustee in
accordance with its customary practice. No service charge shall be made for any
registration of transfer or exchange of Private Certificates, but the Trustee
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Private
Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicer, the Class
A-3b Certificate Insurer and the Trustee such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, 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 Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Trustee, the
Depositor, the Class A-3b Certificate Insurer and any agent of the Servicer, the
Depositor, the Class A-3b Certificate Insurer or the Trustee may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee, the Depositor, the Class A-3b Certificate Insurer nor any agent of the
Servicer, the Depositor, the Class A-3b Certificate Insurer or the Trustee shall
be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (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 which such Certificateholders propose to transmit, or if the
Depositor or the Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in New York, New York where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates the
offices of its agent for such purposes located at DTC Transfer Agent Services,
00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Trustee
shall give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
Section 5.07 Rights of the Class A-3b Certificate Insurer to
Exercise Rights of Class A-3b Certificateholders.
(a) By accepting its Class A-3b Certificate, each Class A-3b
Certificateholder agrees that, unless a Class A-3b Certificate Insurer Default
exists, the Class A-3b Certificate Insurer shall be deemed to be the Class A-3b
Certificateholders for all purposes (other than with respect to the receipt of
payment on the Class A-3b Certificates) and shall have the right to exercise all
rights (including, without limitation, Voting Rights) of the Class A-3b
Certificateholders under this Agreement and under the Class A-3b Certificates
without any further consent of the Class A-3b Certificateholders. The Class A-3b
Certificate Insurer shall be entitled to reimbursement for all costs and
expenses incurred in connection with such action, proceeding or investigation,
including (without limitation) reasonable attorneys' fees and any judgment or
settlement entered into affecting the Class A-3b Certificate Insurer or the
Class A-3b Certificate Insurer's interests. The Trustee shall not have any
liability for any action taken by the Class A-3b Certificate Insurer as a result
of the exercise by the Class A-3b Certificate Insurer of any such rights. Once
the Class A-3b Certificates have been paid in full, and all amounts owing to the
Class A-3b Certificate Insurer have been paid in full and the Class A-3b
Certificate Insurance Policy shall have been marked "cancelled" and returned to
the Class A-3b Certificate Insurer, the foregoing control rights of the Class
A-3b Certificate Insurer shall terminate.
(b) All notices, statement reports, certificates or opinions
required by this Agreement to be sent to any Class A-3b Certificateholder shall
also be sent to the Class A-3b Certificate Insurer.
Section 5.08 Class A-3b Certificate Insurer Default. Notwithstanding
anything elsewhere in this Agreement or in the Certificates to the contrary, if
a Class A-3b Certificate Insurer Default exists, or if and to the extent the
Class A-3b Certificate Insurer has delivered its written renunciation of all of
its rights under this Agreement, all provisions of this Agreement which (a)
permit the Class A-3b Certificate Insurer to exercise rights of the Class A-3b
Certificateholders, (b) restrict the ability of the Certificateholders, the
Servicer or the Trustee to act without the consent or approval of the Class A-3b
Certificate Insurer, (c) provide that a particular act or thing must be
acceptable to the Class A-3b Certificate Insurer, (d) permit the Class A-3b
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee, the Servicer or the Certificateholders, (e) provide that any action or
omission taken with the consent, approval or authorization of the Class A-3b
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Certificates. Nothing in the foregoing sentence,
nor any action taken pursuant thereto or in compliance therewith, shall be
deemed to have released the Class A-3b Certificate Insurer from any obligation
or liability it may have to any party or to the Class A-3b Certificateholders
hereunder, under any other agreement, instrument or document (including, without
limitation, the Class A-3b Certificate Insurance Policy) or under applicable
law. At such time as the Class A-3b Certificates are no longer outstanding
hereunder, and no amounts owed to the Class A-3b Certificate Insurer hereunder
remain unpaid, the Class A-3b Certificate Insurer's rights hereunder shall
terminate.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer 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 or the
Servicer. The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, 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 or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor 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; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to service
mortgage loans on behalf of, Xxxxxx Mae or Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer nor any of their directors,
officers, employees or agents of the Depositor shall be under any liability to
the Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor and the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor and its
Affiliates, the Purchaser, the Servicer and any director, officer, employee or
agent of the Depositor, the Purchaser or the Servicer shall be indemnified by
the Trust Fund and held harmless against any loss, liability or expense incurred
in connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Servicer shall
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that each of the
Depositor and the Servicer may in its discretion undertake any such action (or
direct the Trustee to undertake such actions pursuant to Section 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Servicer shall be entitled to be reimbursed therefor out of
the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Sections 7.01 and 10.07, the Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent of
the Servicer, the Depositor and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Depositor and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor and the Trustee. No
such resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that the Servicer determines that it will no longer
engage in the business of servicing mortgage loans, the Servicer may assign its
rights under this Agreement, provided that, (i) the Depositor in its sole
discretion has consented, (ii) the Rating Agencies' ratings of the Certificates
in effect immediately prior to such action will not be qualified, reduced or
withdrawn as a result thereof (as evidenced by a letter to such effect from the
Rating Agencies) and (iii) the Servicer shall be liable for all costs and
expenses associated with the transfer of servicing, provided further, that the
Servicer shall indemnify and hold each of the Trust Fund, the Trustee, the
Depositor, any sub-servicer, the successor Servicer and each Certificateholder
harmless against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that such party may sustain in any way related to such assignment
except with respect to a successor Servicer's failure to comply with the terms
of this Agreement. No assignment by the Servicer shall become effective until a
successor Servicer acceptable to the Depositor and the Trustee shall have
assumed in writing the Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement. Any such assignment shall not relieve the
Servicer of responsibility for any of the obligations specified herein except to
the extent that such responsibilities have been expressly assumed by the
successor Servicer.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims. The Servicer shall indemnify the Depositor, the Purchaser and the
Trustee and any director, officer, employee or agent of the Depositor, the
Purchaser or the Trustee and hold 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 them may sustain in any way related to any breach by the Servicer, of (i)
any of its representations and warranties referred to in Section 2.03(a), (ii)
any error in any tax or information return prepared by the Servicer or (iii) 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 Depositor and the Trustee if such claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the applicable Responsible Party or the Trustee in
respect of such claim.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor or by the Trustee or to the Servicer, the Depositor
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates; or
(b) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of sixty (60) days (except that (x) such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and (y) such number of days shall
be ten in the case of a failure to observe or perform any of the obligations set
forth in Sections 3.22, 3.23 or 8.12) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor or by the Trustee, or to the
Servicer, the Depositor and the Trustee by Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates and (ii) actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee or the Depositor, or to the Servicer, the Trustee
and the Depositor by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates; or
(g) any withdrawal or downgrade of two or more levels (i.e., from
"Above Average" to "Below Average" or the equivalent) of the servicer rating, as
of the Closing Date, of the Servicer by any Rating Agency which results in a
downgrade, qualification or withdrawal of the rating assigned to any Class of
Certificates by any Rating Agency.
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
direction of a majority of the Voting Rights, the Trustee 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 serviced by the Servicer and the proceeds thereof, other than
its rights as a Certificateholder hereunder; provided, however, that the Trustee
shall not be required to give written notice to the Servicer of the occurrence
of an Event of Default described in clauses (b) through (g) of this Section 7.01
unless and until a Responsible Officer of the Trustee has actual knowledge of
the occurrence of such an event. In the event that a Responsible Officer of the
Trustee has actual knowledge of the occurrence of an event of default described
in clause (a) of this Section 7.01, the Trustee shall give written notice to the
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence; provided, that if such failure is the failure to make a P&I Advance,
the Trustee shall send such notice prior to 12:00 noon New York time on the
Distribution Date and, if the Event of Default of the Servicer was the failure
to make a P&I Advance, the Trustee, as successor Servicer, shall make such P&I
Advance on the Distribution Date that such notice was delivered. On and after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. Subject to Section 7.02, the Trustee
is hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the Collection Account
of such predecessor Servicer, or thereafter be received with respect to the
Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 3.24
or Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.05, 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 P&I Advances or Servicing Advances pursuant to
Section 3.24 or Section 7.01. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account if the Servicer had
continued to act hereunder including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to its Collection Account and the Distribution Account which the Servicer would
be entitled to receive (in addition to income on investments or gain related to
the Distribution Account for the benefit of the Trustee during the Trustee Float
Period). Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01, if it is otherwise
unable to so act or at the written request of Certificateholders entitled to at
least a majority of the Voting Rights, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of 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 to the Servicer shall be an
institution which is a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such terminated Servicer (other than liabilities
of such terminated Servicer under Section 6.03 incurred prior to termination of
the Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided, that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to the Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to the predecessor
Servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor Servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the predecessor Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor Servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
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 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders, the Class A-3b
Certificate Insurer and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders, the Class A-3b
Certificate Insurer and each Rating Agency notice of each such Event of Default
hereunder known to the Trustee, unless such event shall have been cured or
waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01: (a) the Trustee may request and rely upon
and shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties and the Trustee
shall have no responsibility to ascertain or confirm the genuineness of any
signature of any such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and with respect to the investment of funds in the Distribution Account
during the Trustee Float Period);
(h) except as otherwise provided in Section 7.01, the Trustee shall
not be deemed to have knowledge of an Event of Default until a Responsible
Officer of the Trustee shall have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and
any interest or investment income earned on funds deposited in the Distribution
Account during the Trustee Float Period. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Trust Fund against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any error in any tax or information return prepared by the Servicer or
incurred in connection with any claim or legal action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement, other than any loss, liability, or expense (i) resulting from any
breach of the Servicer's obligations in connection with this Agreement for which
the Servicer has performed its obligation to indemnify the Trustee pursuant to
Section 6.05, (ii) resulting from any breach of any Responsible Party's
obligations in connection with this Agreement for which the Responsible Party
has performed its obligations to indemnify the Trustee pursuant to Section
2.03(n) or (iii) incurred because of willful misconduct, bad faith, or
negligence in the performance of any of the Trustee's duties under this
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee under this Agreement. Without limiting the
foregoing, except as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any expense, disbursement, or advance arising from the
Trustee's negligence, bad faith, or willful misconduct, the Trust Fund shall pay
or reimburse the Trustee, for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with this Agreement with
respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates,
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement, and
(C) printing and engraving expenses in connection with
preparing any Definitive Certificates.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses incurred by the
Trustee.
Section 8.06 Eligibility Requirements for the 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 which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicer and their affiliates; provided,
however, that such entity cannot be an affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications set
forth in Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to the Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
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.
Section 8.10 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 to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Servicer, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Lower Tier REMIC and Upper
Tier REMIC and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to the Lower Tier REMIC
and Upper Tier REMIC 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 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, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities and shall also furnish
to the Internal Revenue Service, on Form 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;
(c) make an election that each of the Lower Tier REMIC and the Upper
Tier REMIC be treated as a REMIC on the federal tax return for its first taxable
year (and, if necessary, under applicable state law);
(d) prepare and forward 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 the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each of the Upper Tier REMIC and Lower Tier REMIC 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 either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on the Lower Tier REMIC and the
Upper Tier REMIC created hereunder before its termination 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 Trustee from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to the Lower Tier REMIC and the Upper
Tier REMIC created hereunder, including the income, expenses, assets, and
liabilities thereof on a calendar year basis and on the accrual method of
accounting and the fair market value and adjusted basis of the assets 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 the Lower Tier
REMIC and the Upper Tier REMIC created hereunder 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
the Lower Tier REMIC and the Upper Tier REMIC created hereunder, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the Lower Tier REMIC and the Upper Tier
REMIC created hereunder, and otherwise act on behalf of each REMIC in relation
to any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to Prepayment Charges, the rights of the Class X Certificateholders to receive
Interest Rate Cap Payments and amounts in the Excess Reserve Fund Account
(subject to the obligation to pay Basis Risk CarryForward Amounts) and the
rights of the LIBOR Certificateholders to receive Basis Risk CarryForward
Amounts as the beneficial ownership of interests in a grantor trust, and not as
an obligation of either the Lower Tier REMIC or Upper Tier REMIC created
hereunder, for federal income tax purposes. The Trustee shall file or cause to
be filed with the Internal Revenue Service Form 1041 or such other form as may
be applicable and shall furnish or cause to be furnished to the Class P, Class X
and LIBOR Certificateholders the respective amounts described above that are
received, in the time or times and in the manner required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of the
Lower Tier REMIC as defined in Section 860G(c) of the Code, on any contribution
to either the Lower Tier REMIC or Upper Tier REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on either REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee if such tax arises out of or
results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the applicable Responsible Party if such
tax arises out of or results from the applicable Responsible Party's obligation
to repurchase a Mortgage Loan pursuant to Section 2.03, (iii) the Servicer, in
the case of any such minimum tax, and otherwise if such tax arises out of or
results from a breach by the Servicer of any of its obligations under this
Agreement or (iv) in all other cases, or if the Trustee, the Servicer or the
applicable Responsible Party fails to honor its obligations under the preceding
clauses (i), (ii) or (iii), any such tax will be paid with amounts otherwise to
be distributed to the Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The Trustee shall prepare on behalf of the
Trust any Forms 8-K and 10-K customary for similar securities as required by the
Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission thereunder, and the Trustee shall sign and file (via the Securities
and Exchange Commission's Electronic Data Gathering and Retrieval System) such
Forms on behalf of the Depositor, if an officer of the Depositor signs the
Certification (as defined below), or otherwise on behalf of the Trust. In the
event the Trustee is signing on behalf of the Depositor pursuant to the
preceding sentence, the Depositor hereby grants to the Trustee 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 Trustee from the Depositor of written termination of such power of attorney
and (ii) the termination of the Trust. Notwithstanding the foregoing, the
Trustee shall prepare such Form to be signed by the Depositor and the Depositor
shall sign such Form, unless the Securities and Exchange Commission has
indicated that it will accept a Certification signed by the Depositor where the
related Form 10-K is signed by the Trustee on behalf of the Depositor.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits the Servicer's annual statement of
compliance described under Section 3.22 and the accountant's report described
under Section 3.23, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit L, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Securities and Exchange Commission (the
"Certification"), which shall, except as described below, be signed by the
senior officer of the Depositor in charge of securitization. Notwithstanding the
foregoing, if it is determined by the Depositor that the Certification may be
executed by multiple persons, the Trustee shall sign the Certification in
respect of items 1 through 3 thereof and the Servicer shall cause the senior
officer in charge of servicing at the Servicer to sign the Certification in
respect of items 4 and 5 thereof solely with respect to the Servicer and the
Trustee may rely on the Certification signed by the Servicer to the same extent
as provided in subsection (c) below.
(c) In the event the Certification is to be signed by an officer of
the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit M, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Securities and Exchange Commission) for the
benefit of the Depositor and its officers, directors and Affiliates in respect
of items 1 through 3 thereof of the Certification (provided, however, that the
Trustee shall not undertake an analysis of the accountant's report attached as
an exhibit to the Form 10-K), and the Servicer shall sign a certification solely
with respect to the Servicer (in the form attached hereto as Exhibit N, with
such changes as may be necessary or appropriate as a result of changes
promulgated by the Securities and Exchange Commission) for the benefit of the
Depositor, the Trustee and their respective officers, directors and Affiliates
in respect of items 4 and 5 of the Certification. Each such certification shall
be delivered to the Depositor no later than March 15th of each year (or if such
day is not a Business Day, the immediately preceding Business Day) and the
Depositor shall deliver the Certification to be filed to the Trustee no later
than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day). In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or the Servicer has actual
knowledge of information material to the Certification, that party shall
promptly notify the Depositor and each of the other parties signing the
certifications. In addition, (i) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors, employees, agents and Affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (ii) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Servicer's obligations under this Section 8.12(c) or any material misstatement
or omission, 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 any indemnified party, then (i) the Trustee
agrees in connection with a breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other and (ii) the Servicer
agrees that it shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, on the one hand, and the Servicer, on
the other hand, in connection with a breach of the Servicer's obligations under
this Section 8.12(c) or any material misstatement or omission, negligence, bad
faith or willful misconduct of the Servicer in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
Section 8.13 Tax Classification of the Excess Reserve Fund Account
and the Interest Rate Cap Agreements. For federal income tax purposes, the
Trustee shall treat the Excess Reserve Fund Account and the Interest Rate Cap
Agreements as beneficially owned by the holders of the Class X Certificates and
shall treat such portion of the Trust Fund as a grantor trust, within the
meaning of subpart E, Part I of subchapter J of the Code. The Trustee shall
treat the rights that each Class of LIBOR Certificates has to receive payments
of Basis Risk CarryForward Amounts from the Excess Reserve Fund Account as
rights to receive payments under an interest rate cap contract written by the
Class X Certificateholder in favor of each such Class and beneficially owned by
each such Class through the grantor trust. Accordingly, each Class of
Certificates (excluding the Class X, Class P and Class R Certificates) will be
comprised of two components - an Upper Tier Regular Interest and an interest in
an interest rate cap contract, and the Class X Certificates will be comprised of
three components - an Upper Tier Regular Interest, the Interest Rate Cap
Agreements and an interest in the Excess Reserve Fund Account, subject to
obligation to pay Basis Risk CarryForward Amounts. The Trustee shall allocate
the issue price for a Class of Certificates among the respective components for
purposes of determining the issue price of the Upper Tier Regular Interest
component based on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the Class A-3b Distribution
Date following the purchase, on or after the Optional Termination Date, by the
Servicer, of all Mortgage Loans (and REO Properties) at the price equal to the
sum of (i) 100% of the unpaid principal balance of each Mortgage Loan (other
than in respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Rate and (ii) the lesser of (x) the appraised value of any
REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at the expense of the Servicer,
plus accrued and unpaid interest on each Mortgage Loan at the applicable
Mortgage Rate and (y) the unpaid principal balance of each Mortgage Loan related
to any REO Property, in each case plus accrued and unpaid interest thereon at
the applicable Mortgage Rate 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. In no event shall the trusts created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date hereof.
No such purchase will be permitted without the consent of the Class
A-3b Certificate Insurer, unless no draw on the Class A-3b Certificate Insurance
Policy would be made or unreimbursed on the final Distribution Date for the
Class A-3b Certificates.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 9.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the Servicer shall have deposited in the related Collection
Account an amount to be remitted to the NIM Trustee that, together with such
remaining proceeds, will be sufficient to pay the outstanding principal amount
of and accrued and unpaid interest on the NIM Securities, to the extent the NIM
Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder. If the Servicer elects
to terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 20
days prior to the date the Notice of Final Distribution is to be mailed to the
affected Certificateholders, the Servicer shall notify the Depositor and the
Trustee of the date the Servicer intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date or
Class A-3b Distribution Date, as applicable, on which Certificateholders may
surrender their Certificates for payment of the final distribution and
cancellation, shall be given promptly by the Trustee by letter to
Certificateholders mailed not earlier than the 10th day and not later than the
15th day of the month next preceding the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date or
Class A-3b Distribution Date, as applicable, upon which final distribution on
the Certificates will be made upon presentation and surrender of Certificates at
the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date or Class A-3b Distribution Date, as applicable, is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Servicer will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution 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 and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer the Custodial Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicer, the Depositor, the Class A-3b
Certificate Insurer and the Trustee hereunder), in each case on the final
Distribution Date or Class A-3b Distribution Date, as applicable, and in the
order set forth in Section 4.02, in proportion to their respective Percentage
Interests, with respect to Certificateholders of the same Class, up to an amount
equal to (i) as to each Class of Regular Certificates (except the Class X
Certificates), the Certificate Balance thereof plus for each such Class and the
Class X Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust 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 which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Servicer exercises its purchase option with respect to the Mortgage Loans 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 Servicer to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on either the Lower Tier
REMIC or the Upper Tier REMIC as defined in Section 860F of the Code, or (ii)
cause either the Lower Tier REMIC or the Upper Tier REMIC to fail to qualify as
a REMIC at any time that any Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Servicer and, no later than the next Distribution Date or Class A-3b
Distribution Date, as applicable, after such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Lower Tier REMIC and the Upper Tier REMIC; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the Lower Tier REMIC and the Upper Tier REMIC stating
that pursuant to Treasury Regulations Section 1.860F-1, the first day of the
90-day liquidation period for each such REMIC was the date on which the Trustee
sold the assets of the Trust Fund to the Servicer.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer and the Trustee without the consent of any
of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct
any defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided
that any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that any such action
pursuant to clause (iv) or (v) above shall not be deemed to adversely affect in
any material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor and the Servicer also may at any time and from time to time amend this
Agreement, but without the consent of the Certificateholders to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or helpful to (i) maintain the qualification of the Lower Tier REMIC and the
Upper Tier REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on the Lower Tier REMIC or the Upper Tier REMIC pursuant
to the Code that would be a claim at any time prior to the final redemption of
the Certificates or (iii) comply with any other requirements of the Code;
provided that the Trustee has been provided an Opinion of Counsel, which opinion
shall be an expense of the party requesting such opinion but in any case shall
not be an expense of the Trustee or the Trust Fund, to the effect that such
action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 662/3% of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
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
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
662/3%, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on either the Lower Tier REMIC or the Upper Tier
REMIC or the Certificateholders or cause any such REMIC to fail to qualify as a
REMIC or the grantor trust to fail to qualify as a grantor trust at any time
that any Certificates are outstanding and (ii) the party seeking such amendment
shall have provided written notice to the Rating Agencies (with a copy of such
notice to the Trustee) of such amendment, stating the provisions of the
Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
shall be deemed not to be outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder and the Class A-3b Certificate Insurer or (B)
the conclusion set forth in the immediately preceding clause (A) is not required
to be reached pursuant to this Section 10.01.
Notwithstanding the foregoing, any amendment to this Agreement shall
require prior notice to the Class A-3b Certificate Insurer, and the prior
written consent of the Class A-3b Certificate Insurer if such amendment
adversely affects in any respect the rights or interest of the Class A-3b
Certificate Insurer or the Class A-3b Certificateholders (without regard to the
Class A-3b Certificate Insurance Policy).
Section 10.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Depositor, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number 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.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either 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
conveyances 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 transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the 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 Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Servicer or the Trustee
and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor or the
Underwriter, Xxxxxx Xxxxxxx ABS Capital I Inc. or Xxxxxx Xxxxxxx & Co.
Incorporated, (1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG Finance, 0000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (2) Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxx - Legal
Counsel (Securities), 1221 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; (3) Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx.,
Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000; (4) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx -
Whole Loan Operations, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (5) Xxxxx Xxxxxx,
Xxxxxx Xxxxxxx - RFPG, 1221 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000; and (6) in the case of a direction or demand, notification to the
following email addresses: Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx,
Xxxxxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx, Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and
Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx, or such other address as may be hereafter
furnished to the other parties hereto by the Depositor; (b) in the case of
Countrywide, Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx Xxx, Xxxx
Xxxxxx, Xxxxxxxxxx, facsimile number (000) 000-0000, Attention: Xxxx Xxxx, or
such other address as may be hereafter furnished to the other parties hereto by
Countrywide; (c) in the case of Aames, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, or such other address as may be hereafter furnished to the
other parties hereto by Aames; (d) in the case of NC Capital, 00000 Xxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx, Executive Vice
President, or such other address as may be hereafter furnished to the other
parties hereto by NC Capital; (e) in the case of Accredited, Accredited Home
Lenders, Inc., 00000 Xxxxxx xx Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Director of Operations, or such other address as may be hereafter furnished to
the Depositor and the Trustee by Accredited in writing; (f) in the case of the
Trustee, to the Corporate Trust Office, Deutsche Bank National Trust Company,
0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust
Administration MS04H9, or such other address as the Trustee may hereafter
furnish to the other parties hereto; (g) in the case of the Class A-3b
Certificate Insurer, Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Managing Director of Transaction Oversight, or
such other address as the Class A-3b Certificate Insurer may hereafter furnish
to the other parties hereto; and (h) in the case of each of the Rating Agencies,
the address specified therefor in the definition corresponding to the name of
such Rating Agency. Notices to Certificateholders shall be deemed given when
mailed, first class postage prepaid, to their respective addresses appearing in
the Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.04,
this Agreement may not be assigned by the Servicer without the prior written
consent of the Trustee, the Class A-3b Certificate Insurer and the 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 P&I
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all P&I Advances or Servicing Advances required to be made by the
Servicer pursuant to this Agreement. No consent of the Trustee,
Certificateholders 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 P&I Advances and/or Servicing
Advances on the Servicer's behalf, the Servicer shall remain obligated pursuant
to this Agreement to make P&I 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
P&I 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 P&I 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 P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
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 reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding xxxxxxxxxxxx X&X 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 applicable Mortgage Loan. The Servicer
shall remain entitled to be reimbursed by the Advancing Person or Advance
Facility trustee for all P&I Advances and Servicing Advances funded by the
Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Responsible Parties and the Servicer,
with the consent of the Class A-3b Certificate Insurer and 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 and the Class
A-3b Certificate Insurer 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 Servicer shall notify the lender under
such facility in writing that: (a) the Advances financed by and/or pledged to
the lender are obligations owed to the Servicer on a non-recourse basis payable
only from the cash flows and proceeds received under this Agreement for
reimbursement of Advances only to the extent provided herein, and the Trustee
and the Trust are not otherwise obligated or liable to repay any Advances
financed by the lender; (b) the Servicer will be responsible for remitting to
the lender the applicable amounts collected by it as reimbursement for Advances
funded by the lender, subject to the restrictions and priorities created in this
Agreement; and (c) the Trustee shall not have any responsibility to track or
monitor the administration of the financing arrangement between the Servicer and
the lender.
Section 10.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, 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 herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. The Servicer agrees that,
on 5 Business Days prior notice, it will permit any representative of the
Depositor, the Class A-3b Certificate Insurer or the Trustee during such
Person's normal business hours, to examine all the books of account, records,
reports and other papers of such Person relating to the Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the Depositor or the Trustee and to
discuss its affairs, finances and accounts relating to the Mortgage Loans with
its officers, employees and independent public accountants (and by this
provision the Servicer hereby authorizes said 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 of
the Servicer incident to the exercise by the Depositor, the Class A-3b
Certificate Insurer or the Trustee of any right under this Section 10.09 shall
be borne by the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 10.12 The Class A-3b Certificate Insurer Default. Any right
conferred to Class A-3b Certificate Insurer shall be suspended during any period
in which a Class A-3b Certificate Insurer Default exists. At such time as the
Class A-3b Certificates are no longer outstanding hereunder, and no amounts owed
to the Class A-3b Certificate Insurer hereunder remain unpaid, the Class A-3b
Certificate Insurer's rights hereunder shall terminate.
Section 10.13 Third Party Beneficiary. The parties hereto agree that
the Class A-3b Certificate Insurer is intended and shall have all rights of a
third-party beneficiary of this Agreement.
Section 10.14 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
[Signature Page Follows]
IN WITNESS WHEREOF, the Depositor, the Trustee, the Servicer and the
Responsible Parties have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXX XXXXXXX ABS CAPITAL I INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxx
Title: Assistant Vice President
By: /s/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Associate
COUNTRYWIDE HOME LOANS
SERVICING LP
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxxx Xxxxx
---------------------
Name: Xxxxxx Xxxxx
Title: Vice President
AAMES CAPITAL CORPORATION
By: /s/ Xxxx X. Xxx
---------------------
Name: Xxxx X. Xxx
Title: Executive Vice President
NC CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxx
---------------------
Name: Xxxxx Xxxxx
Title: President
ACCREDITED HOME LENDERS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: General Counsel, Assistant
Vice President & Assistant Secretary
SCHEDULE I
Mortgage Loan Schedule
(Delivered to Trustee on the Closing Date)
SCHEDULE II
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2004-HE9
Representations and Warranties of Countrywide Home Loans Servicing LP,
as Servicer
Countrywide hereby makes the representations and warranties set
forth in this Schedule II to the Depositor and the Trustee as of the Closing
Date.
(1) The Servicer is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the state of
Texas, and is licensed and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Countrywide in any state in which a Mortgaged Property securing a Mortgage
Loan is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such State, to the extent necessary to ensure
its ability to enforce each Mortgage Loan and to service the Mortgage
Loans in accordance with the terms of this Pooling and Servicing
Agreement;
(2) The Servicer has the full partnership power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Pooling
and Servicing Agreement and has duly authorized by all necessary
partnership action on the part of the Servicer the execution, delivery and
performance of this Pooling and Servicing Agreement; and this Pooling and
Servicing Agreement, assuming the due authorization, execution and
delivery thereof by the Depositor, the Responsible Party and the Trustee,
constitutes a legal, valid and binding obligation of the Servicer,
enforceable against the Servicer in accordance with its terms; except to
the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which the
Servicer is a party or by which it may be bound, or any law, statute,
rule, order, regulation, judgment or decree applicable to the Servicer or
its property of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Servicer; and the Servicer
is not a party to, bound by, or in breach or violation of any indenture or
other agreement or instrument, or subject to or in violation of any law,
statute, rule, order, regulation, judgment or decree of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which (w) materially and adversely affects or, to
the Servicer's knowledge, would in the future materially and adversely
affect, the ability of the Servicer to perform its obligations under this
Pooling and Servicing Agreement, (x) materially and adversely affects or,
to the Servicer's knowledge, would in the future materially and adversely
affect, the business, operations, financial condition, properties or
assets of the Servicer taken as a whole, (y) impair the ability of the
Trust to realize on the Mortgage Loans, or (z) impair the value of the
Mortgage Loans;
(4) The Servicer has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans;
(5) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Pooling and Servicing Agreement;
(6) No action, suit, proceeding or investigation is pending, to the
best of the Servicer's knowledge, threatened against the Servicer, before
any court, administrative agency or other tribunal asserting the
invalidity of this Pooling and Servicing Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Pooling and
Servicing Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or
in any material impairment of the right or ability of the Servicer to
carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations
of the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Pooling and Servicing Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Countrywide of, or compliance by Countrywide with, this
Pooling and Servicing Agreement or the servicing of the Mortgage Loans as
evidenced by the consummation by Countrywide of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided
monthly reports to the three credit repositories, the Servicer has fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis.
SCHEDULE III
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2004-HE9
Representations and Warranties of Xxxxxx Xxxxxxx
ABS Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect the Mortgage Loans the
following representations and warranties to the Trustee, as of the Closing Date.
(1) With respect to each Aames Mortgage Loan and each representation
and warranty made by Aames as of the date servicing with respect to such
Mortgage Loan was transferred from Aames to the Servicer (each such date, an
"Aames Servicing Transfer Date"), to the Depositor's knowledge, no event has
occurred in the period from the applicable Aames Servicing Transfer Date to the
Closing Date that would render such representations and warranties to be untrue
in any material respect.
(2) Immediately prior to the transfer of the Mortgage Loans by the
Depositor to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or encumbrances
whatsoever.
(3) In addition to the foregoing representations and warranties of
the Depositor, within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of (i) the breach of the representation and
warranty set forth in paragraph (aaa) of Schedule IV to this Agreement that
materially and adversely affects the interests of the Certificateholders in any
Aames Mortgage Loan and which has not been cured, repurchased or substituted for
by Aames in accordance with the terms of this Agreement or (ii) the breach of
the representation and warranty set forth in paragraph (g) of Schedule IV to
this Agreement that materially affects the interests of Certificateholders in
any Aames Mortgage Loan and that is discovered or as to which notice is sent (A)
during the pendency of the investigation of Aames Financial Corp. by the Federal
Trade Commission referred to in the Aames Financial Corp. Quarterly Report on
Form 10-Q filed on May 21, 2004 or (B) after a resolution of such investigation
that materially and adversely affects Aames such that Aames becomes financially
unable to meet its obligations to cure, repurchase or substitute for such Aames
Mortgage Loan pursuant to the terms of this Agreement, the Depositor shall take
such action described in Section 2.03(e) of this Agreement in respect of such
Aames Mortgage Loan. Such obligation of the Depositor shall terminate upon
receipt of a confirmation from each Rating Agency that such termination will not
cause a downgrade, qualification or withdrawal of the rating then assigned to
any Class of Certificates by any Rating Agency.
(4) The original loan balance of each Group I Mortgage Loan and each
Group II Mortgage Loan was within Xxxxxxx Mac's and Xxxxxx Mae's dollar amount
limits for conforming one- to four-family mortgage loans.
SCHEDULE IV
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2004-HE9
Representations and Warranties of Aames
as to the Aames Mortgage Loans
Aames hereby makes the representations and warranties set forth in
this Schedule IV, as to Aames Mortgage Loans only, to the Depositor, the
Servicer and the Trustee, as of the applicable Aames Servicing Transfer Date
(unless otherwise expressly indicated). Capitalized terms used but not otherwise
defined in this Schedule IV shall have the meanings ascribed thereto in the
Aames Purchase Agreement.
(a) Mortgage Loans as Described. As of November 30, 2004 (the
"Securitization Closing Date"), the information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan is 30 days
or more delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan;
(c) No Outstanding Charges. As of the Securitization Closing Date,
there are no defaults in complying with the terms of the Mortgage, and all
taxes, governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Aames has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(d) Original Terms Unmodified. As of the Securitization Closing
Date, the terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, from the date of origination except
by a written instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the Trustee or to
such other Person as the Purchaser shall designate in writing, and the terms of
which are reflected in the related Mortgage Loan Schedule. The substance of any
such waiver, alteration or modification has been approved by the issuer of any
related PMI Policy and the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the related Mortgage Loan Schedule, if
applicable. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement, approved by the issuer of any related
PMI Policy and the issuer of the title insurer, to the extent required by the
policy, and which assumption agreement is part of the Mortgage Loan File
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing and the terms of which are reflected in the related
Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Mae Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in the Servicing
Agreement. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to Xxxxxx Mae and Xxxxxxx Mac, as well as all
additional requirements set forth in the Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming Aames and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. Aames has
not engaged in, and has no knowledge of the Mortgagor's having engaged in, any
act or omission which would impair the coverage of any such policy, the benefits
of the endorsement provided for herein, or the validity and binding effect of
either including, without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by Aames;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and Aames shall maintain in its possession, available for
the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. As of the Securitization Closing
Date, the Mortgage has not been satisfied, canceled, subordinated or rescinded,
in whole or in part, and the Mortgaged Property has not been released from the
lien of the Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission.
Aames has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has Aames waived any default resulting from any action or
inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the related Mortgage Loan Schedule except
that with respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice, the
Mortgaged Property may be a leasehold estate and consists of a single parcel of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual residential condominium unit in a
low-rise condominium project, or an individual unit in a planned unit
development; provided, however, that any condominium unit or planned unit
development shall conform with the Underwriting Guidelines. In the case of a
Manufactured Home, (i) the related manufactured dwelling and the related land
are subject to a Mortgage properly filed in the appropriate public recording
office and naming Seller as mortgagee, (ii) the applicable laws of the
jurisdiction in which the related Mortgaged Property is located will deem the
manufactured dwelling located on such Mortgaged Property to be a part of the
real property on which such dwelling is located, and (iii) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code. No portion of the Mortgaged Property is used for commercial purposes, and
since the date of origination, no portion of the Mortgaged Property has been
used for commercial purposes; provided, that Mortgaged Properties which contain
a home office shall not be considered as being used for commercial purposes as
long as the Mortgaged Property has not been altered for commercial purposes and
is not storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Mortgage
Loan) or second lien (with respect to a Second Lien Mortgage Loan) on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. In no event shall any Mortgage Loan be in a lien position more junior
than a second lien. The lien of the Mortgage is subject only to:
(1) with respect to a Second Lien Mortgage Loan only, the lien
of the first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Mortgage Loan) or second lien (with respect to a Second Lien Mortgage Loan) and
first priority (with respect to a First Lien Mortgage Loan) or second priority
(with respect to a Second Lien Mortgage Loan) security interest on the property
described therein and Aames has full right to sell and assign the same to the
Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan. Aames has reviewed all
of the documents constituting the Servicing File and has made such inquiries as
it deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Aames is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon the
sale of the Mortgage Loans to the Purchaser, Aames will retain the Mortgage
Files or any part thereof with respect thereto not delivered to the Custodian,
the Purchaser or the Purchaser's designee, in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan. The Mortgage Loan
is not assigned or pledged, and Aames had good, indefeasible and marketable
title thereto, and had full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and had full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to the Aames
Purchase Agreement and following the sale of each Mortgage Loan, the Purchaser
owned such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. Aames
intends to relinquish all rights to possess, control and monitor the Mortgage
Loan. After the Closing Date, Aames will have no right to modify or alter the
terms of the sale of the Mortgage Loan and Aames will have no obligation or
right to repurchase the Mortgage Loan, except as provided in the Aames Purchase
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV; PMI Policies. No First Lien Mortgage Loan has an LTV
greater than 100%, and no Second Lien Mortgage Loan has a CLTV greater than
100%. All provisions of any PMI Policy have been and are being complied with,
such policy is in full force and effect, and all premiums due thereunder have
been paid. No action, inaction, or event has occurred and no state of facts
exists that has, or will result in the exclusion from, denial of, or defense to
coverage. If the Mortgage Loan provides for negative amortization or for the
potential for negative amortization, the PMI Policy, if any, insures any
increase in the Stated Principal Balance from the original balance of the
Mortgage Note. Each PMI Policy provides that any premiums will be paid by Aames
or its successor from their own funds.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring Aames, its successors and assigns, as to the first (with
respect to a First Lien Mortgage Loan) or second (with respect to a Second Lien
Mortgage Loan) priority lien of the Mortgage in the original principal amount of
the Mortgage Loan (or to the extent a Mortgage Note provides for negative
amortization, the maximum amount of negative amortization in accordance with the
Mortgage), subject only to the exceptions contained in clauses (1), (2) and (3)
of paragraph (j) of this Schedule IV, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
Aames, its successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and remains
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including Aames, has done, by act or omission, anything which would
impair the coverage of such lender's title insurance policy, including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by Aames;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither Aames nor any of its affiliates nor any
of their respective predecessors, have waived any default, breach, violation or
event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: Aames meets the requirements set forth in
clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by Aames, using application forms and related credit
documents approved by Aames, (ii) Aames approved each application and the
related credit documents before a commitment by the correspondent was issued,
and no such commitment was issued until Aames agreed to fund such Mortgage Loan,
(iii) the closing documents for such Mortgage Loan were prepared on forms
approved by Aames, and (iv) such Mortgage Loan was actually funded by Aames and
was purchased by Aames at closing or soon thereafter. The documents, instruments
and agreements submitted for loan underwriting were not falsified and contain no
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the information and statements therein
not misleading. Principal payments on the Mortgage Loan commenced no more than
sixty days after funds were disbursed in connection with the Mortgage Loan. The
Mortgage Interest Rate as well as, with respect to Adjustable Rate Mortgage
Loans, the Lifetime Rate Cap and the Periodic Rate Cap, are as set forth on the
Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the description of pool characteristics for the applicable Mortgage
Loan Package delivered pursuant to the Aames Purchase Agreement, the Mortgage
Loan is payable on the first day of each month. There are no Convertible
Mortgage Loans which contain a provision allowing the Mortgagor to convert the
Mortgage Note from an adjustable interest rate Mortgage Note to a fixed interest
rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in subprime mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by Aames generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. Aames is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A of the Aames Purchase
Agreement, except for such documents the originals of which have been delivered
to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project is (i) acceptable to Xxxxxx Xxx or Xxxxxxx Mac or (ii) located in a
condominium or planned unit development project which has received project
approval from Xxxxxx Mae or Xxxxxxx Mac. The representations and warranties
required by Xxxxxx Mae with respect to such condominium or planned unit
development have been satisfied and remain true and correct;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by Aames are not subject to the bulk transfer or similar statutory
provisions in effect in any applicable jurisdiction;
(dd) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of Aames' knowledge, such provision is
enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by Aames, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Mortgage Loan) or second
(with respect to a Second Lien Mortgage Loan) lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and Aames has no
knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Securitization Closing Date, the origination, servicing
and collection practices used by Aames with respect to the Mortgage Loan have
been in all respects in compliance with Accepted Servicing Practices, applicable
laws and regulations, and have been in all respects legal and proper. With
respect to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, Aames and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due Aames have been capitalized
under the Mortgage or the Mortgage Note.
With respect to each Adjustable Rate Mortgage Loan, all Mortgage
Interest Rate adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage and Mortgage Note on the
related Interest Rate Adjustment Date. If, pursuant to the terms of the Mortgage
Note for an Adjustable Rate Mortgage Loan,, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. Aames executed and
delivered any and all notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and,
with respect to each Adjustable Rate Mortgage Loan, the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. As of the Securitization Closing
Date, no action, inaction or event has occurred and no state of facts exists or
has existed that has resulted or will result in the exclusion from, denial of,
or defense to coverage under any applicable, special hazard insurance policy,
PMI Policy or bankruptcy bond, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no commission,
fee, or other compensation has been or will be received by Aames or by any
officer, director, or employee of Aames or any designee of Aames or any
corporation in which Aames or any officer, director, or employee had a financial
interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. As of the Securitization
Closing Date, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers Civil Relief Act. As of the Securitization
Closing Date, the Mortgagor has not notified Aames, and Aames has no knowledge
of any relief requested or allowed to the Mortgagor under the Relief Act or any
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by Aames, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and Aames has complied with, all applicable law with respect to the making of
the Mortgage Loans. Aames shall maintain such statement in the Mortgage File or
the credit file;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. Aames has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by Aames generally secured by properties in the
same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Closing Date (whether or not known to Aames on or
prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of Aames, the related
Mortgagor or any party involved in the application for such coverage, including
the appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or for any other
reason under such coverage, but not including the failure of such insurer to pay
by reason of such insurer's breach of such insurance policy or such insurer's
financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, Aames has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Mortgage Loan, the related first lien mortgage loan related thereto is in full
force and effect, and there is no default, breach, violation or event which
would permit acceleration existing under such first mortgage or mortgage note,
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Mortgage Loan, the related first lien mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under the
Mortgage Loan and allows such mortgagee to cure any default under the related
first lien mortgage;
(ww) No Failure to Cure Default. Aames has not received a written
notice of default of any senior mortgage loan related to the Mortgaged Property
which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by Aames to the Purchaser, that Seller has full right and authority
and is not precluded by law or contract from furnishing such information to the
Purchaser and the Purchaser is not precluded from furnishing the same to any
subsequent or prospective purchaser of such Mortgage. Aames shall hold the
Purchaser harmless from any and all damages, losses, costs and expenses
(including attorney's fees) arising from disclosure of credit information in
connection with the Purchaser's secondary marketing operations and the purchase
and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(zz) Prepayment Penalty. Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note except as set forth
on the Mortgage Loan Schedule, and (i) with respect to Mortgage Loans originated
prior to October 1, 2002, no Mortgage Loan has a prepayment penalty period in
excess of five (5) years following origination, and (ii) with respect to
Mortgage Loans originated on or after October 1, 2002, no Mortgage Loan has a
prepayment penalty period in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. None of the Mortgage Loans (a)
is covered by the Home Ownership and Equity Protection Act of 1994 or (b) is
classified as a "high cost home," "threshold," "covered" (excluding a "covered
home loan" as defined in clause (1) of the definition of such term under the New
Jersey Home Ownership Security Act of 2002), "high risk home", "predatory" or
similar loan under any other applicable federal, state or local law (including
without limitation any regulation or ordinance) (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) is a Mortgage Loan categorized as
"High Cost" or "Covered" pursuant to Appendix E of the Standard & Poor's
Glossary, and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act;
(bbb) Single-Premium Credit Life Insurance Policy. In connection
with the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a qualified mortgage
under Section 860G(a)(3) of the Code;
(ddd) Fair Credit Reporting Act. Aames has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(eee) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of the Xxxxxx Mae Guides;
(fff) Mortgagor Selection. No Mortgagor was encouraged or required
to select a mortgage loan product offered by the Mortgage Loan's originator
which is a higher cost product designed for less creditworthy mortgagors, unless
at the time of the Mortgage Loan's origination, such Mortgagor did not qualify
taking into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Mortgage Loan's originator or any affiliate
of the Mortgage Loan's originator. If, at the time of loan application, the
Mortgagor may have qualified for a lower-cost credit product then offered by any
mortgage lending affiliate of the Mortgage Loan's originator, the Mortgage
Loan's originator referred the related Mortgagor's application to such affiliate
for underwriting consideration;
(ggg) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(hhh) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, Aames, as servicer shall not impose
such prepayment premium in any instance when the mortgage debt is accelerated as
the result of the related Mortgagor's default in making the Mortgage Loan
payments;
(iii) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(jjj) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, such 5% limitation is calculated in accordance with Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Mae Guides;
(kkk) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(lll) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
SCHEDULE V
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2004-HE9
Representations and Warranties of NC Capital
as to the NC Capital Mortgage Loans
NC Capital hereby makes the representations and warranties set forth
in this Schedule V, as to NC Capital Mortgage Loans only, to the Depositor, the
Servicer and the Trustee, as of November 30, 2004 (the "Securitization Closing
Date") (unless otherwise expressly indicated). Capitalized terms used but not
otherwise defined in this Schedule V shall have the meanings ascribed thereto in
the NC Capital Purchase Agreement.
(1) Mortgage Loans as Described. NC Capital has delivered to the
Purchaser, as of November 1, 2004, the Data Tape Information and that Data
Tape Information and the information set forth on the Mortgage Loan
Schedule (other than item (21) thereof, as to which NC Capital makes no
representation or warranty) are true and correct, including, without
limitation, the terms of the Prepayment Charges, if any, as of the
Securitization Closing Date;
(2) Payments Current. All payments required to be made up to
November 1, 2004 for the Mortgage Loan under the terms of the Mortgage
Note, other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan.
The first Scheduled Payment was or shall be made with respect to the
Mortgage Loan on its Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(3) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments
or ground rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is
not yet due and payable. Neither NC Capital nor any Affiliate has advanced
funds, or induced, solicited or knowingly received any advance of funds by
a party other than the Mortgagor, directly or indirectly, for the payment
of any amount required under the Mortgage Loan, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(4) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by a written instrument which
has been recorded, if necessary to protect the interests of the Purchaser,
and which has been delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule, the Data Tape Information or
included in the Mortgage File. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any,
to the extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Trustee and
the terms of which are reflected in the Mortgage Loan Schedule and the
Data Tape Information;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Xxx
Guides or by Xxxxxxx Mac, as well as all additional requirements set forth
in Section 3.13 of the Pooling and Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, the Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect
which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac, as well as all
additional requirements set forth in Section 3.13 of the Pooling and
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming New Century Mortgage Corporation and its
successors and assigns as mortgagee, and all premiums thereon have been
paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy
is not a "master" or "blanket" hazard insurance policy covering a
condominium, or any hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid
and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Trustee
upon the consummation of the transactions contemplated by this Agreement.
NC Capital has not engaged in, and has no knowledge of the Mortgagor's
having engaged in, any act or omission which would impair the coverage of
any such policy, the benefits of the endorsement provided for herein, or
the validity and binding effect of either, including, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or
value of any kind has been or will be received, retained or realized by
any attorney, firm or other person or entity, and no such unlawful items
have been received, retained or realized by NC Capital;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions therein relating to Prepayment Charges, have
been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and
NC Capital shall maintain in its possession, available for the Purchaser's
or the Trustee's inspection, and shall deliver to the Purchaser upon
demand, evidence of compliance with all such requirements;
(8) No Satisfaction of Mortgage. Other than with respect to any
Mortgage Loan that was subject to a Principal Prepayment in Full occurring
after the Cut-off Date but prior to the Securitization Closing Date, the
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from
the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination
or rescission. NC Capital has not waived the performance by the Mortgagor
of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has NC Capital waived any
default resulting from any action or inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low rise condominium project, or an
individual unit in a planned unit development or a de minimis planned unit
development which is in each case four stories or less; provided, however,
that any condominium unit, planned unit development, mobile home (double
wide only) or manufactured dwelling shall conform with the applicable
Xxxxxx Mae and Xxxxxxx Mac requirements regarding such dwellings and that
no Mortgage Loan is secured by a single parcel of real property with a
cooperative housing corporation, a log home or, except as specified on the
Mortgage Loan Schedule, a mobile home erected thereon or by a mixed use
property, a property in excess of 10 acres or other unique property types.
As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not
be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. With respect to
any Mortgage Loan secured by a Mortgaged Property improved by manufactured
housing, (i) such Mortgage Loan conforms with the applicable Xxxxxx Mae or
Xxxxxxx Mac requirements regarding mortgage loans related to manufactured
dwellings, (ii) the related manufactured housing unit is permanently
affixed to the land, (iii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming New Century Mortgage Corporation as
mortgagee, (iv) the applicable laws of the jurisdiction in which the
related Mortgaged Property is located will deem the manufactured dwelling
located on such Mortgaged Property to be a part of the real property on
which such dwelling is located and (v) such Manufactured Home Mortgage
Loan is secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first lien (with respect to each First Lien
Mortgage Loan) or second lien (with respect to each Second Lien Mortgage
Loan) on the Mortgaged Property, including all buildings and improvements
on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage
is subject only to:
(i) with respect to a Second Lien Mortgage Loan only, the lien
of the first mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments
not yet due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority (with
respect to each First Lien Mortgage Loan) or second lien and second priority
(with respect to each Second Lien Mortgage Loan) security interest on the
property described therein and NC Capital has full right to sell and assign the
same to the Purchaser;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms (including, without limitation, any provisions therein relating
to Prepayment Charges). All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage
and any such agreement, and the Mortgage Note, the Mortgage and any other
such related agreement have been duly and properly executed by other such
related parties. No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. NC Capital or its Affiliate has reviewed
all of the documents constituting the Servicing File and NC Capital has
made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the Purchase Agreement, NC Capital was the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon the sale of the Mortgage Loans to the Purchaser, NC Capital
retained the Mortgage Files or any part thereof with respect thereto not
delivered to the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage
Loan. The Mortgage Loan was not assigned or pledged, and NC Capital had
good, indefeasible and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell
and assign each Mortgage Loan pursuant to the Purchase Agreement and
following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest. After the
Securitization Closing Date, NC Capital will have no right to modify or
alter the terms of the sale of the Mortgage Loan and NC Capital will have
no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(14) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(15) LTV. No First Lien Mortgage Loan has an LTV greater than 100%,
and no Second Lien Mortgage Loan has an CLTV greater than 100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac with respect
to Mortgage Loans and each such title insurance policy is issued by a
title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring New Century Mortgage Corporation, its successors and assigns, as
to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained in
clauses (i), (ii) and (iii) of representation 10 of this Schedule V, and
in the case of Adjustable Rate Mortgage Loans, against any loss by reason
of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Rate
and Scheduled Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
NC Capital, its successor and assigns, are the sole insureds of such
lender's title insurance policy, and such lender's title insurance policy
is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including New Century
Mortgage Corporation and NC Capital, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy, including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained
or realized by New Century Mortgage Corporation or NC Capital;
(17) No Defaults. Other than payments due but not yet 30 or more
days delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither NC
Capital nor its Affiliates or any of their respective predecessors have
waived any default, breach, violation or event which would permit
acceleration;
(18) No Mechanics' Liens. As of the date of origination, there are
no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under law could give
rise to such liens) affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being
part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a Mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit
union, insurance company or other similar institution which is supervised
and examined by a federal or state authority, or (b) the following
requirements have been met with respect to the Mortgage Loan: NC Capital
purchased the Mortgage Loan from New Century Mortgage Corporation, its
affiliate, that meets the requirements set forth in clause (a), and (i)
such Mortgage Loan was underwritten in accordance with standards
established by New Century Mortgage Corporation, using application forms
and related credit documents approved by New Century Mortgage Corporation,
(ii) New Century Mortgage Corporation approved each application and the
related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until New Century Mortgage
Corporation agreed to fund such Mortgage Loan, (iii) the closing documents
for such Mortgage Loan were prepared on forms approved by New Century
Mortgage Corporation and (iv) such Mortgage Loan was actually funded by
New Century Mortgage Corporation and was purchased by New Century Mortgage
Corporation at closing or soon thereafter. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain
no untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the information and
statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Rate is as set forth on Mortgage Loan
Schedule hereto (including in the case of Adjustable Rate Mortgage Loans,
the interest rate and payment limitations set forth on Mortgage Loan
Schedule hereto). All Mortgage Loans have Due Dates on the first day of
each month except as specified on the Mortgage Loan Schedule. Each
Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the
Mortgage Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears and is not calculated on a simple
interest basis. The monthly principal payments on each Mortgage Loan is
sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from
commencement of amortization. There is no negative amortization allowed in
the terms of any Mortgage Note. None of the Mortgage Loans allows for
negative amortization or the conversion of the interest rate thereon from
an adjustable rate to a fixed rate or from a fixed rate to an adjustable
rate. No Mortgage Loan is a Balloon Loan;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) Index. With respect to Adjustable Rate Mortgage Loans, the
Index set forth in the Mortgage Note is LIBOR;
(23) Occupancy of the Mortgaged Property. As of the Securitization
Closing Date the Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including, but not
limited to, certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities;
(24) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form, other than the assignee's name and recording information
not yet returned from the recording office, and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by NC Capital are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(28) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, and to the best of NC
Capital's knowledge, such provision is enforceable;
(29) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by NC Capital, the Mortgagor, or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor
nor does it contain any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit requirements
stated in the Mortgage Loan Documents;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority by a
title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to
Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair.
There have not been any condemnation proceedings with respect to the
Mortgaged Property and NC Capital has no knowledge of any such proceedings
in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
NC Capital and its Affiliates with respect to the Mortgage Loan have been
in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. With respect to escrow deposits and Escrow Payments, if any, all
such payments are in the possession of, or under the control of, NC
Capital and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage.
An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due NC Capital
have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Mortgage Note. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such
selection did not conflict with the terms of the related Mortgage Note. NC
Capital or an Affiliate executed and delivered any and all notices
required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Rate and the monthly payment
adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
(34) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or
will result in the exclusion from, denial of, or defense to coverage under
any insurance policy or bankruptcy bond related to the Mortgage Loans,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by NC Capital or by any officer,
director, or employee of NC Capital or any designee of NC Capital or any
corporation in which NC Capital or any officer, director, or employee had
a financial interest at the time of placement of such insurance;
(35) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(36) Servicemembers Civil Relief Act. The Mortgagor has not notified
NC Capital, and NC Capital has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief Act or any
similar state statutes;
(37) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
NC Capital, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of Xxxxxx Mae or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(38) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the originator has complied with all applicable law with
respect to the making of the Mortgage Loans;
(39) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(40) Value of Mortgaged Property. NC Capital has no knowledge of any
circumstances existing that could reasonably be expected to adversely
affect the value or the marketability of any Mortgaged Property or
Mortgage Loan or to cause the Mortgage Loans to prepay during any period
materially faster or slower than similar mortgage loans held by NC Capital
generally secured by properties in the same geographic area as the related
Mortgaged Property;
(41) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or
has existed on or prior to the Securitization Closing Date (whether or not
known to NC Capital on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any
primary mortgage insurance (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the
timely payment of the full amount of the loss otherwise due thereunder to
the insured) whether arising out of actions, representations, errors,
omissions, negligence, or fraud of NC Capital, the related Mortgagor or
any party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or for any
other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy
or such insurer's financial inability to pay;
(42) Escrow Analysis. With respect to each Mortgage, NC Capital or
its Affiliate has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so
that, assuming all required payments are timely made, any deficiency will
be eliminated on or before the first anniversary of such analysis, or any
overage will be refunded to the Mortgagor, in accordance with RESPA and
any other applicable law;
(43) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(44) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by NC Capital to the Purchaser, that Seller has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser;
(45) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event of
damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a generally accepted practice;
(46) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans (a) is covered by the Home Ownership and Equity Protection
Act of 1994 or (b) is classified as a "high cost home," "threshold,"
"covered" (excluding a "covered home loan" as defined in clause (1) of the
definition of such term under the New Jersey Home Ownership Security Act
of 2002), "high risk home", "predatory" or similar loan under any other
applicable federal, state or local law (including without limitation any
regulation or ordinance) (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) is a Mortgage Loan categorized
as "High Cost" or "Covered" pursuant to Appendix E of the Standard &
Poor's Glossary, and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act;
(47) Prepayment Penalty. No Mortgage Loan has a prepayment penalty
period in excess of three years. Any prepayment penalty is in an amount
equal to the lesser of (a) the maximum amount permitted under applicable
state law, and (b) if the Mortgaged Property is secured by residential
real property located in a state other than Arizona, Maine, Massachusetts,
New York, South Carolina or Wisconsin, six months interest on the related
prepaid amount;
(48) [Reserved];
(49) Conformance with Agency and Underwriting Standards. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms acceptable to
Xxxxxxx Mac or Xxxxxx Xxx and neither NC Capital nor any Affiliate has
made any representations to a Mortgagor that are inconsistent with the
mortgage instruments used;
(50) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance or acquire a single-premium credit life insurance
policy;
(51) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in mortgage
loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by NC Capital or any Affiliates
generally;
(52) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Originator's Underwriting Guidelines;
(53) Conversion to Fixed Interest Rate. With respect to each
Adjustable Rate Mortgage Loan, the Mortgage Loan is not a Convertible
Mortgage Loan;
(54) No Default Under First Lien. With respect to each Second Lien
Mortgage Loan, the related First Lien Loan related thereto is in full
force and effect, and there is no default, breach, violation or event
which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration
thereunder;
(55) Right to Cure First Lien. With respect to each Second Lien
Mortgage Loan, the related first lien Mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under the
Mortgage Loan and allows such mortgagee to cure any default under the
related first lien Mortgage;
(56) No Failure to Cure Default. NC Capital has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(57) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(58) Compliance with Anti-Money Laundering Laws. NC Capital or an
Affiliate has complied with all applicable anti-money laundering laws and
regulations, including, without limitation, the USA Patriot Act of 2001;
(59) Fair Credit Reporting Act. NC Capital or an Affiliate has, in
its capacity as prior servicer for each Mortgage Loan, fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis;
(60) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Mae Guides;
(61) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time
of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Originator or any Affiliate of the
Originator. If, at the time of loan application, the Mortgagor may have
qualified for a lower-cost credit product then offered by any mortgage
lending Affiliate of the Originator, the Originator referred the related
Mortgagor's application to such Affiliate for underwriting consideration;
(62) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor's equity
in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time
of origination (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan;
(63) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium, (iii) the prepayment premium is disclosed to
the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or
federal law to the contrary, the Originator, as servicer, shall not impose
such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(64) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor obtained a
prepaid single-premium credit life, disability, accident or health
insurance policy in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies as part of the origination of, or as a condition
to closing, such Mortgage Loan;
(65) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. Except in the case of a
Mortgage Loan in an original principal amount of less than $60,000 which
would have resulted in an unprofitable origination, no Mortgagor was
charged "points and fees" (whether or not financed) in an amount greater
than 5% of the principal amount of such Mortgage Loan, such 5% limitation
is calculated in accordance with Xxxxxx Mae's anti-predatory lending
requirements as set forth in the Xxxxxx Mae Guides;
(66) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation; and
(67) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction.
SCHEDULE VI
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2004-HE9
Representations and Warranties of Accredited
as to the Accredited Mortgage Loans
Accredited hereby makes the representations and warranties set forth
in this Schedule VI, as to Accredited Mortgage Loans only, to the Depositor, the
Servicer and the Trustee, as of November 30, 2004 (the "Securitization Closing
Date") (unless otherwise expressly indicated). Capitalized terms used but not
otherwise defined in this Schedule VI shall have the meanings ascribed thereto
in the Accredited Purchase Agreement.
(1) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule as prepared by the Purchaser (the "Information") is
complete, true and correct as of the date on which Accredited transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the "Accredited
Transfer Date") or, if earlier, November 1, 2004 (the "Securitization Cut-off
Date"), and such Information was provided to the Purchaser by Accredited;
(2) Payments Current. Except with respect to Accredited Mortgage
Loans representing approximately 0.539% of the aggregate principal balance of
Accredited Mortgage Loans as of the Cut-off Date, all payments required to be
made up to the Securitization Closing Date for the Mortgage Loan under the terms
of the Mortgage Note, other than payments not yet 30 days delinquent, have been
made and credited. No payment required under the Mortgage Loan is 30 days or
more delinquent nor has any payment under the Mortgage Loan been 30 days or more
delinquent at any time since the origination of the Mortgage Loan;
(3) No Outstanding Charges. Except with respect to Accredited
Mortgage Loans representing approximately 0.539% of the aggregate principal
balance of Accredited Mortgage Loans as of the Cut-off Date, as of the Cut-off
Date, and to Accredited's knowledge as of the Securitization Closing Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Accredited has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(4) Original Terms Unmodified. As of Accredited Transfer Date, the
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified in any respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the interests of the
Purchaser, and which has been delivered to the Custodian or to such other Person
as the Purchaser shall designate in writing, and the terms of which are
reflected in the Mortgage Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any, to
the extent required by the policy, and its terms are reflected on the Mortgage
Loan Schedule, if applicable. As of Accredited Transfer Date, no Mortgagor has
been released, in whole or in part, except in connection with an assumption
agreement, approved by the issuer of the title insurer, to the extent required
by the policy, and which assumption agreement is part of the Mortgage Loan File
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing and the terms of which are reflected in the Mortgage Loan
Schedule;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was funded;
(6) Hazard Insurance. As of the Accredited Transfer Date, pursuant
to the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of Xxxxxx Mae and Xxxxxxx Mac, as well as all
additional requirements set forth in Section 2.10 of the Interim Servicing
Agreement. As of Accredited Transfer Date, if required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is covered by a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to Xxxxxx
Mae and Xxxxxxx Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming Accredited and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. Accredited has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by Accredited;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to Prepayment Charges, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such laws
or regulations, and Accredited shall maintain in its possession, available for
the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements. Notwithstanding the
foregoing, Accredited shall not be responsible for a breach of a federal, state
or local law, other than those governing the origination of the Mortgage Loan,
following Accredited Transfer Date;
(8) No Satisfaction of Mortgage. As of Accredited Transfer Date, the
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
Accredited has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has Accredited waived any default resulting from any action or
inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule, except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the Mortgaged Property may be a leasehold estate, and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a mobile home,
provided, however, that any condominium unit or planned unit development shall
not fall within any of the "Ineligible Projects" of part VIII, Section 102 of
the Xxxxxx Mae Selling Guide and shall conform with the Underwriting Guidelines.
In the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable Xxxxxx Xxx or Xxxxxxx Mac requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Accredited as mortgagee, (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, and (v)
such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and to Accredited's
knowledge since the Closing Date, no portion of the Mortgaged Property has been
used for commercial purposes; provided, that Mortgaged Properties which contain
a home office shall not be considered as being used for commercial purposes as
long as the Mortgaged Property has not been altered for commercial purposes and
is not storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and Accredited has full right to sell
and assign the same to the Purchaser. As used in this Subsection 9.02,
"enforceable" shall be deemed to be subject to bankruptcy laws and general
principles of equity;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms, (including, without limitation, any provisions therein relating to
Prepayment Charges). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related parties. As
of the Closing Date, and to Accredited's knowledge, as of the Securitization
Closing Date, no fraud, error, omission, misrepresentation, or similar
occurrence with respect to the origination of a Mortgage Loan has taken place on
the part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. Accredited has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(12) Full Disbursement of Proceeds. Except to the extent the
Mortgage Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form 442 has
been delivered to the Purchaser within sixty (60) days after the Closing Date,
the Mortgage Loan has been closed and the proceeds of the Mortgage Loan have
been fully disbursed and there is no requirement for future advances thereunder,
and any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is
not entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(13) Ownership. As of the Closing Date, Accredited was the sole
owner of record and holder of the Mortgage Loan and the indebtedness evidenced
by each Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser,
Accredited will retain the Mortgage Files or any part thereof with respect
thereto not delivered to the Custodian, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. As of the Closing Date, upon payment of the
Purchase Price, the Mortgage Loan was not assigned or pledged, and Accredited
had good, indefeasible and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and had full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to the Purchase Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. As of the Closing Date, Accredited intended to relinquish all
rights to possess, control and monitor the Mortgage Loan. After the Closing
Date, Accredited will have no right to modify or alter the terms of the sale of
the Mortgage Loan and Accredited will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(14) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(15) LTV. No Mortgage Loan had an LTV at origination greater than
100%.
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring Accredited, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan (or to the
extent a Mortgage Note provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (i), (ii) and (iii) of paragraph (10) of this
Schedule VI, and in the case of adjustable rate Mortgage Loans, against any loss
by reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. Accredited, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the purchase of the
Mortgage Loan as contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including Accredited, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by Accredited;
(17) No Defaults. Except with respect to Accredited Mortgage Loans
representing approximately 0.539% of the aggregate principal balance of
Accredited Mortgage Loans as of the Cut-off Date, other than payments due but
not yet 30 days or more delinquent, as of the Closing Date and to Accredited's
knowledge as of the Securitization Closing Date, there is no default, breach,
violation or event which would permit acceleration existing under the Mortgage
or the Mortgage Note and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither
Accredited nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(18) No Mechanics' Liens. Except as insured against by the related
title insurance, as of the Closing Date and to Accredited's knowledge as of the
Securitization Closing Date, there are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. As of the Closing Date, and to Accredited's knowledge as
of the Securitization Closing Date, no improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: Accredited meets the requirements set forth
in clause (a) and (i) such Mortgage Loan was underwritten in accordance with
standards established by Accredited, using application forms and related credit
documents approved by Accredited, (ii) Accredited approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until Accredited agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by Accredited, and (iv) such Mortgage Loan was actually funded
by Accredited and was purchased by Accredited at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
are required to commence no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on the Mortgage Loan
Schedule. Except with respect to a "balloon" Mortgage Loan, the Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the Mortgage Loan Schedule, the
Mortgage Loan is payable on the first day of each month. There are no
Convertible Mortgage Loans which contain a provision allowing the Mortgagor to
convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(22) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and Accredited has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(23) Occupancy of the Mortgaged Property. As of the Closing Date,
and to Accredited's knowledge as of the Securitization Closing Date, the
Mortgaged Property is capable of being lawfully occupied under applicable law.
As of the Closing Date, and to Accredited's knowledge as of the Securitization
Closing Date, all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities;
(24) No Additional Collateral. As of Accredited Transfer Date, the
Mortgage Note is not and has not been secured by any collateral except the lien
of the corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in paragraph (10) above;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and, as of Accredited Transfer Date, and to
Accredited's knowledge as of the Securitization Closing Date, so serves and is
named in the Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;
(26) Acceptable Investment. Accredited has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor's credit standing,
other than the subprime nature of such credit standing, that can reasonably be
expected to cause private institutional investors who invest in mortgage loans
similar to the Mortgage Loan, to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by Accredited generally;
(27) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. Accredited is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A to the Purchase Agreement,
except for such documents the originals of which have been delivered to the
Custodian;
(28) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in Accredited's Underwriting Guidelines;
(29) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by Accredited are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(30) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and to the best of
Accredited's knowledge, such provision is enforceable;
(31) [Reserved];
(32) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by Accredited, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(33) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(34) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Closing Date, and to Accredited's knowledge as of the Securitization
Closing Date, there is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property. As of the Closing Date, and to
Accredited's knowledge as of the Securitization Closing Date, the Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. As of the
Closing Date, there have not been any condemnation proceedings with respect to
the Mortgaged Property and Accredited has no knowledge of any such proceedings
in the future;
(35) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
Accredited with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and regulations,
and have been in all respects legal and proper. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or under the
control of, Accredited through Accredited Transfer Date, and, as of such date,
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. As of Accredited Transfer
Date, all Escrow Payments collected by Accredited have been collected in full
compliance with state and federal law and the provisions of the related Mortgage
Note and Mortgage. An escrow of funds is not prohibited by applicable law and,
as of Accredited Transfer Date, all escrows that have been established have been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. As of Accredited Transfer
Date, no escrow deposits or Escrow Payments or other charges or payments due
Accredited have been capitalized by Accredited under the Mortgage or the
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date. If, pursuant to the
terms of the Mortgage Note, another index was selected for determining the
Mortgage Interest Rate, the same index was used with respect to each Mortgage
Note which required a new index to be selected, and such selection did not
conflict with the terms of the related Mortgage Note. Accredited executed and
delivered any and all notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the
Monthly Payment adjustments. As of Accredited Transfer Date, any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(36) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(37) Other Insurance Policies. As of Accredited Transfer Date, no
action, inaction or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of, or
defense to coverage under any applicable, special hazard insurance policy, or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by Accredited or by any officer,
director, or employee of Accredited or any designee of Accredited or any
corporation in which Accredited or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(38) No Violation of Environmental Laws. As of the Closing Date, and
to Accredited's knowledge as of the Securitization Closing Date, there is no
pending action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue. As of the
Closing Date, to Accredited's knowledge, based upon customary and prudent
residential mortgage industry underwriting standards, and to Accredited's
knowledge as of the Securitization Closing Date, there is no violation of any
environmental law, rule or regulation with respect to the Mortgaged Property,
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(39) Servicemembers Civil Relief Act. The Mortgagor has not notified
Accredited, and Accredited has no knowledge of any relief requested or allowed
to the Mortgagor under the Servicemembers Civil Relief Act or any similar state
statute;
(40) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by Accredited, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Xxxxxx Mae or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(41) Disclosure Materials. The Mortgagor has executed one or more
statements to the effect that the Mortgagor has received all disclosure
materials required by, and Accredited has complied with, all applicable law with
respect to the making of the Mortgage Loans. Accredited shall maintain such
statement(s) in the Mortgage File;
(42) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(43) Value of Mortgaged Property. Accredited has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by Accredited generally secured by properties
in the same geographic area as the related Mortgaged Property;
(44) No Defense to Insurance Coverage. As of Accredited Transfer
Date, no action has been taken or failed to be taken, no event has occurred and
no state of facts exists or has existed on or prior to the Closing Date (whether
or not known to Accredited on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of Accredited, the related Mortgagor or any party involved in the application
for such coverage, including the appraisal, plans and specifications and other
exhibits or documents submitted therewith to the insurer under such insurance
policy, or for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(45) Escrow Analysis. With respect to each Mortgage, Accredited has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(46) Prior Servicing. As of Accredited Transfer Date, each Mortgage
Loan had been serviced by Accredited in all material respects in strict
compliance with Accepted Servicing Practices;
(47) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by Accredited to the Purchaser, that Accredited has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. Accredited
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(48) Leaseholds. As of the Closing Date and to Accredited's
knowledge as of Accredited Transfer Date, if the Mortgage Loan is secured by a
long-term residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the collateral assignment of the lease
without the lessor's consent (or such consent has been obtained) and the
acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(49) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note, except as set forth
on the Mortgage Loan Schedule, and (ii) no such prepayment penalty may be
imposed for a term in excess of five (5) years from the date of origination;
(50) Predatory Lending Regulations. None of the Mortgage Loans (a)
is covered by the Home Ownership and Equity Protection Act of 1994 or (b) is
classified as a "high cost home," "threshold," "covered" (excluding a "covered
home loan" as defined in clause (1) of the definition of such term under the New
Jersey Home Ownership Security Act of 2002), "high risk home", "predatory" or
similar loan under any other applicable federal, state or local law (including
without limitation any regulation or ordinance) (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) is a Mortgage Loan categorized as
"High Cost" or "Covered" pursuant to Appendix E of the Standard & Poor's
Glossary, and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act;
(51) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(52) Compliance with Anti-Money Laundering Laws. Accredited has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws");
(53) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(54) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(55) Fair Credit Reporting Act. Accredited has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(56) Mortgagor Selection. No Mortgagor was encouraged or required to
select a mortgage loan product offered by the Mortgage Loan's originator which
is a higher cost product designed for less creditworthy mortgagors, unless at
the time of the Mortgage Loan's origination, such Mortgagor did not qualify
taking into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Mortgage Loan's originator or any affiliate
of the Mortgage Loan's originator. If, at the time of loan application, the
Mortgagor may have qualified for a lower-cost credit product then offered by any
mortgage lending affiliate of the Mortgage Loan's originator, the Mortgage
Loan's originator referred the related Mortgagor's application to such affiliate
for underwriting consideration;
(57) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the related Mortgagor's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the related Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the related Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan, relying on the Mortgagor's representation
of the Mortgagor's income in the case of loan programs which did not require
verification of the Mortgagor's income;
(58) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) a mortgage loan without such a premium was
available to the Mortgagor at an interest rate and/or fee structure higher than
that of the Mortgage Loan, (ii) prior to the Mortgage Loan's funding, the
related Mortgagor had the option of obtaining the Mortgage Loan without a
requirement for payment of such a premium, and (iii) the prepayment premium is
disclosed to the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law;
(59) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(60) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(61) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(62) No Arbitration. No Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
EXHIBIT A
[To be added to any Class A-1 or Class A-2a Certificate while it remains a
Private Certificate.] IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate 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 will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. : A-1-[ ]
A-2-[ ]
A-3-[ ]
A-4-[ ]
A-5-[ ]
A-6-[ ]
A-7-[ ]
M-1-[ ]
M-2-[ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date : November 1, 2004
First Distribution Date : [December 27, 2004][January 3,
2005][for Class A-3b]
Initial Certificate Balance
of this Certificate
("Denomination") : $[_________]
Initial Certificate Balances [A-1] [$120,339,000]
of all Certificates of this [A-2a] [$324,675,000]
Class : [A-2b] [$36,076,000]
[A-3a] [$395,000,000]]
[A-3b] [$300,000,000]
[A-3c] [$163,478,000]
[A-3d] [$36,000,000]
[M-1] [$83,237,000]
[M-2] [$54,920,000]
[M-3] [$29,176,000]
[M-4] [$28,318,000]
[M-5] [$24,886,000]
[M-6] [$22,311,000]
[B-1] [$18,879,000]
[B-2] [$16,304,000]
[B-3] [$17,162,000]
CUSIP : [A-1] [61744C KC 9]
[A-2a] [61744C KD 7]
[A-2b] [61744C KE 5]
[X-0x] [00000X XX 2]
[A-3b] [61744C JQ 0]
[A-3c] [61744C JR 8]
[A-3d] [61744C JS 6]
[M-1] [61744C JT 4]
[M-2] [61744C JU 1]
[M-3] [61744C JV 9]
[M-4] [61744C JW 7]
[M-5] [61744C JX 5]
[M-6] [61744C JY 3]
[B-1] [61744C JZ 0]
[B-2] [61744C KA 3]
[B-3] [61744C KB 1]
ISIN : [A-1] [US61744CKC90] [A-2a]
[US61744CKD73] [A-2b] [US61744CKE56]
[A-3a] [US61744CJP23] [A-3b]
[US61744CJQ06] [A-3c] [US61744CJR88]
[A-3d] [US61744CJS61] [M-1]
[US61744CJT45] [M-2] [US61744CJU18]
[M-3] [US61744CJV90] [M-4]
[US61744CJW73] [M-5] [US61744CJX56]
[M-6] [US61744CJY30] [B-1]
[US61744CJZ05] [B-2] [US61744CKA35]
[B-3] [US61744CKB18]
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates, Series 2004-HE9
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as
servicer, Aames Capital Corporation, as a responsible party, NC Capital
Corporation, as a responsible party, Accredited Home Lenders, Inc., as a
responsible party, and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By _____________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the [25th][2nd] [for Class A-3b] day of each month or, if such day is not a
Business Day [in New York City] [in New York or Tokyo] [for Class A-3b], the
Business Day [in New York City] [in New York or Tokyo] [for Class A-3b]
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the Business Day immediately preceding such Distribution Date, provided,
however, that for any Definitive Certificates, the Record Date shall be the
[last Business Day][15th day] [for Class A-3b] of the month next preceding the
month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT 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"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. In the event that
such representation is violated, or any attempt IS MADE to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code OR A PLAN SUBJECT TO SIMILAR LAW, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Certificate No. : P-1
Cut-off Date : November 1, 2004
First Distribution Date : December 27, 2004
Percentage Interest of
this Certificate
("Denomination") : 100%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates, Series 2004-HE9
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that Xxxxxx Xxxxxxx Mortgage Capital Inc., is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Countrywide
Home Loans Servicing LP, as servicer, Aames Capital Corporation, as a
responsible party, NC Capital Corporation, as a responsible party, Accredited
Home Lenders, Inc., as a responsible party, and Deutsche Bank National Trust
Company, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purposes, or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but
solely as Trustee
By:______________________________________
Authenticated:
By ________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day in New
York City, the Business Day in New York City immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on the
face hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT 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"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. In the event that such representation is violated, or any
attempt IS MADE to transfer to a plan or arrangement subject to Section 406 of
ERISA, a plan subject to Section 4975 of the Code OR A PLAN SUBJECT TO SIMILAR
LAW, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement, such attempted transfer or acquisition
shall be void and of no effect.
Certificate No. : R-1
Cut-off Date : November 1, 2004
First Distribution Date : December 27, 2004
Percentage Interest of this
Certificate ("Denomination") : 100%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates, Series 2004-HE9
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Xxxxxx Xxxxxxx & Co. Incorporated is the
registered owner of the Percentage Interest specified above of any monthly
distributions due to the Class R Certificates pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor"), Countrywide Home Loans Servicing LP, as servicer, Aames Capital
Corporation, as a responsible party, NC Capital Corporation, as a responsible
party, Accredited Home Lenders, Inc., as a responsible party, and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this 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 this 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 this Class R
Certificate, (C) not to cause income with respect to 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 such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but
solely as Trustee
By_______________________________________
Authenticated:
By _____________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day in New York
City, the Business Day in New York City immediately following (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
applicable to each Distribution Date is the last Business Day of the month next
preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE or a plan subject to applicable Federal,
state or local law ("SIMILAR LAW") materially similar to the foregoing
provisions of ERISA or the Code or a person investing on behalf of or with plan
assets of such a plan, or, if the transferee is an insurance company, a
representation letter that it is using the assets of its general account and
that the purchase and holding of this Certificate are covered under Sections I
and III of prohibited transaction class exemption 95-60 or an opinion of counsel
satisfactory to the Trustee and the Servicer, to the effect that the Purchase or
holding of this certificate will not CONSTITUTE OR result in A NON-EXEMPT
prohibited transaction WITHIN THE MEANING oF erisa, SECTION 4975 OF the code or
ANY similar law and will not subject the trustee or the servicer to any
obligation in addition to those expressly undertaken in this agreement or to any
liability. notwithstanding anything else to the contrary herein, any purported
transfer of this certificate to or on behalf of an employee benefit plan subject
to title I of erisa, section 4975 of the code or similar law without the
representation letter or opinion of counsel satisfactory to the trustee as
described above shall be void AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : November 1, 2004
First Distribution Date : December 27, 2004
Percentage Interest of this
Certificate ("Denomination") : 100%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates, Series 2004-HE9
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that Xxxxxx Xxxxxxx Mortgage Capital Inc., is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Countrywide
Home Loans Servicing LP, as servicer, Aames Capital Corporation, as a
responsible party, NC Capital Corporation, as a responsible party, Accredited
Home Lenders, Inc., as a responsible party, and Deutsche Bank National Trust
Company, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee and the Servicer, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such Certificate will not constitute or result in a non-exempt prohibited
transaction within the meaning of ERISA, Section 4975 of the Code or any Similar
Law and will not subject the Depositor, the Trustee or the Servicer to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but
solely as Trustee
By ____________________________________
Authenticated:
By ____________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day in New
York City, the Business Day in New York City immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on the
face hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to this Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
__________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Countrywide Home Loans Servicing LP
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
Aames Capital Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Accredited Home Lenders, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November 1, 2004, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Countrywide Home
Loans Servicing LP, as Servicer, Aames Capital Corporation, as a
Responsible Party, NC Capital Corporation, as a Responsible Party,
Accredited Home Lenders, Inc., as a Responsible Party, and Deutsche
Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust, Series 2004-HE9
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse";
and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Trustee has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
as Trustee
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION REPORT OF TRUSTEE
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Countrywide Home Loans Servicing LP
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
Aames Capital Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Accredited Home Lenders, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November 1, 2004, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Countrywide Home
Loans Servicing LP, as Servicer, Aames Capital Corporation, as a
Responsible Party, NC Capital Corporation, as a Responsible Party,
Accredited Home Lenders, Inc., as a Responsible Party, and Deutsche
Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust, Series 2004-HE9
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided
in Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement
from the originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or,
if the Depositor has certified or the Trustee otherwise knows that
the related Mortgage has not been returned from the applicable
recording office, a copy of the assignment of the Mortgage
(excluding information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment
from the originator to the last endorsee.
(v) The original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment,
or a copy thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1) solely with
respect to the Mortgage Loan number, (2), (7), and (9) of the Mortgage Loan
Schedule and items (1), (9) and (17) of the Data Tape Information accurately
reflects information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
as Trustee
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2004-HE9,
Mortgage Pass-Through Certificates,
Series 2004-HE9
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
(1) The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Xxxxxx
Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Countrywide Home
Loans Servicing LP, as servicer ("Countrywide"), Aames Capital Corporation, as a
Responsible Party ("Aames"), NC Capital Corporation, as a responsible party ("NC
Capital"), Accredited Home Lenders, Inc., as a Responsible Party
("Accreditied"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). Capitalized terms used, but not defined herein or in Exhibit 1
hereto, shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee for the benefit of the Depositor and the Trustee.
(2) The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
(3) The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
(4) The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
(5) The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
(6) The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
(7) The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
(8) The Transferee's taxpayer identification number is __________.
(9) The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
(10) The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
(11) The Transferee will not cause income from the Residual
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 any other U.S. Person.
(12) Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does
not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) 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 short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
[ ] None of the above.
(13) The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 20__.
______________________________________
Print Name of Transferee
By:___________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this __ day of _____, 20__.
_________________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company,
as Trustee,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2004-HE9, Mortgage
Pass-Through Certificates, Series 2004-HE9, Class
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_________________________________________
Print Name of Transferor
By:______________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company,
as Trustee,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2004-HE9, Mortgage
Pass-Through Certificates, Series 2004-HE9, Class
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A-1, Class A-2a,
Class X-0x, Xxxxx X-0x, Xxxxx X-0x, Class A-3c, Class A-3d, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 or Class
B-3, certificate or we are not an employee benefit plan that is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or a plan or arrangement that is subject to Section 4975 of the Internal Revenue
Code of 1986, as amended, nor are we acting on behalf of any such plan or
arrangement nor using the assets of any such plan or arrangement to effect such
acquisition or, with respect to a Class X Certificate, the purchaser is an
insurance company that is purchasing this certificate with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest 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, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $ 1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation
(other than a bank, savings and loan association
or similar institution), Massachusetts or similar
business trust, partnership, or charitable
organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the
business of which is substantially confined to
banking and is supervised by the State or
territorial banking commission or similar official
or is a foreign bank or equivalent institution,
and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached
hereto.
____ Savings and Loan. The Buyer (a) is a savings and
loan association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange
Act of 1934.
____ Insurance Company. The Buyer is an insurance
company whose primary and predominant business
activity is the writing of insurance or the
reinsuring of risks underwritten by insurance
companies and which is subject to supervision by
the insurance commissioner or a similar official
or agency of a State, territory or the District
of Columbia.
____ State or Local Plan. The Buyer is a plan
established and maintained by a State, its
political subdivisions, or any agency or
instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors
Act of 1940.
____ Small Business Investment Company. Buyer is a
small business investment company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
Date:__________________________________
-------------
(1) 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.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
The Buyer owned $ in securities (other than
___ the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
The Buyer is part of a Family of Investment
___ Companies which owned in the aggregate $ in securities
(other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
______________________________________
Print Name of Transferee
By:___________________________________
Name:
Title:
IF AN ADVISER:
______________________________________
Print Name of Buyer
Date:_________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: [Trustee]
Re: In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, we request
the release, and acknowledge receipt, of the (Custodial
File/[specify documents]) for the Mortgage Loan described below, for
the reason indicated.
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies
that all amounts received in connection therewith have been
credited to its Collection Account as provided in the
Pooling and Servicing Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the
Pooling and Servicing Agreement. (The Servicer hereby
certifies that the repurchase price has been credited to
Collection Account as provided in the Pooling and Servicing
Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Servicer
hereby certifies that all proceeds of foreclosure,
insurance, condemnation or other liquidation have been
finally received and credited to its Collection Account
pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).____________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the Trustee, please acknowledge your receipt by signing in the space
indicated below, and returning this form if requested by us.
[SERVICER]
By:____________________________________
Name:
Title:
Date:
[ACKNOWLEDGED AND AGREED:
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_________________________________
Name:
Title:
Date: ]
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by applicable Servicer or delivered to and
retained by the Trustee, as applicable:
(i) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________, without
recourse" and signed in the name of the last endorsee by an
authorized officer. To the extent that there is no room on the face
of a Mortgage Note for endorsements, the endorsement may be
contained on an allonge, unless the Trustee is advised by the
applicable Originator (pursuant to the applicable Purchase
Agreement) that state law does not so allow.
(ii) The original of any guaranty executed in connection with
the Mortgage Note.
(iii) The original Mortgage with evidence of recording thereon
or a certified true copy of such Mortgage submitted for recording.
If, in connection with any Mortgage Loan, the original Mortgage
cannot be delivered with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the
Trustee shall notify the applicable Originator, as required under
the applicable Purchase Agreement, to deliver or cause to be
delivered to the Trustee, a photocopy of such Mortgage, together
with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the applicable Originator or a
certificate from an escrow company, a title company or closing
attorney stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the
original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Trustee
upon receipt thereof by the applicable Originator; or (ii) in the
case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage.
(iv) The originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon.
(v) Except with respect to each MERS Designated Mortgage Loan,
the original Assignment of Mortgage for each Mortgage Loan endorsed
in blank.
(vi) The originals of all intervening assignments of mortgage
(if any) evidencing a complete chain of assignment from the
applicable originator (or MERS with respect to each MERS Designated
Mortgage Loan) to the last endorsee with evidence of recording
thereon, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of
mortgage, the Trustee shall notify the applicable Originator to
deliver, as required under the applicable Purchase Agreement, a
photocopy of such intervening assignment, together with (i) in the
case of a delay caused by the public recording office, an Officer's
Certificate of the applicable Originator or a certificate from an
escrow company, a title company or a closing attorney stating that
such intervening assignment of mortgage has been dispatched to the
appropriate public recording office for recordation and that such
original recorded intervening assignment of mortgage or a copy of
such intervening assignment of mortgage certified by the appropriate
public recording office to be a true and complete copy of the
original recorded intervening assignment of mortgage will be
promptly delivered to the Trustee upon receipt thereof by the
applicable Originator; or (ii) in the case of an intervening
assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original
recorded intervening assignment.
(vii) The original mortgagee title insurance policy or
attorney's opinion of title and abstract of title, or, in the event
such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be
true and complete by the title insurance company.
(viii) The original of any security agreement, chattel
mortgage or equivalent document executed in connection with the
Mortgage (if provided).
(ix) Residential loan application.
(x) Mortgage Loan closing statement.
(xi) Verification of employment and income, if applicable.
(xii) Verification of acceptable evidence of source and amount
of downpayment.
(xiii) Credit report on Mortgagor.
(xiv) Residential appraisal report.
(xv) Photograph of the Mortgaged Property.
(xvi) Survey of the Mortgaged Property.
(xvii) Copy of each instrument necessary to complete
identification of any exception set forth in the exception schedule
in the title policy, i.e., map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.
(xviii) All required disclosure statements.
(xix) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(xx) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2004-HE9 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2004-HE9, issued pursuant to the
Pooling and Servicing Agreement, dated as of November 1, 2004 (the
"Pooling and Servicing Agreement"), among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor, Countrywide Home Loans Servicing LP, as
servicer (the "Servicer"), Aames Capital Corporation, as a
responsible party, NC Capital Corporation, as a responsible party,
Accredited Home Lenders, Inc., as a responsible party, and Deutsche
Bank National Trust Company, as trustee (the "Trustee")
--------------------------------------------------------------------
I, [identify the certifying individual], certify that:
(1) I have reviewed this annual report on Form 10-K (the "Annual
Report"), and all reports on Form 8-K containing distribution reports
(collectively with this Annual Report, the "Reports") filed in respect of
periods included in the year covered by this Annual Report, of the Trust;
(2) Based on my knowledge, the information in the Reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this Annual Report;
(3) Based on my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under the Pooling and
Servicing Agreement, for inclusion in the Reports is included in the Reports;
(4) Based on my knowledge and upon the annual compliance statement
included in this Annual Report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and except as
disclosed in the Reports, the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and
(5) The Reports disclose all significant deficiencies relating to
the Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the Pooling and Servicing Agreement, that
is included in the Reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee and the
Servicer.
Date: ________________________________
_________________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY THE TRUSTEE TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2004-HE9 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2004-HE9, issued pursuant to the
Pooling and Servicing Agreement, dated as November 1, 2004 (the
"Pooling and Servicing Agreement"), among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Countrywide Home Loans
Servicing LP, as servicer (the "Servicer"), Aames Capital
Corporation, as a responsible party, NC Capital Corporation, as a
responsible party, Accredited Home Lenders, Inc., as a responsible
party, and Deutsche Bank National Trust Company, as trustee (the
"Trustee")
--------------------------------------------------------------------
I, [identify the certifying individual], 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 annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year covered by
the Annual Report (collectively with the Annual Report, the "Reports"), of the
Trust;
(2) To the best of my knowledge, the information in the Reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by the Annual Report; and
(3) To the best of my knowledge, the distribution or servicing
information required to be provided to the Trustee by the Servicer under the
Pooling and Servicing Agreement for inclusion in the Reports is included in the
Reports.
Date: _________________________________
_______________________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED
BY THE SERVICER TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2004-HE9 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2004-HE9, issued pursuant to the Pooling
and Servicing Agreement, dated as November 1, 2004 (the "Pooling and
Servicing Agreement"), among Xxxxxx Xxxxxxx ABS Capital I Inc., as
depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as
servicer (the "Servicer"), Aames Capital Corporation, as a responsible
party, NC Capital Corporation, as a responsible party, Accredited Home
Lenders, Inc., as a responsible party, and Deutsche Bank National Trust
Company, as trustee (the "Trustee")
--------------------------------------------------------------------------
The Servicer certifies to the Depositor and the Trustee, and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
(1) Based on our knowledge, the information prepared by the Servicer
and relating to the mortgage loans serviced by the Servicer pursuant to the
Pooling and Servicing Agreement and provided by the Servicer to the Trustee in
its reports to the Trustee is accurate and complete in all material respects as
of the last day of the period covered by such report;
(2) Based on our knowledge, the servicing information required to be
provided to the Trustee by the Servicer pursuant to the Pooling and Servicing
Agreement has been provided to the Trustee;
(3) Based upon the review required under the Pooling and Servicing
Agreement, and except as disclosed in its annual compliance statement required
to be delivered pursuant to the Pooling and Servicing Agreement, the Servicer as
of the last day of the period covered by such annual compliance statement has
fulfilled its obligations under the Pooling and Servicing Agreement; and
(4) The Servicer has disclosed to its independent auditor, who
issues the independent auditor's report on the Uniform Single Attestation
Program for Mortgage Bankers for the Servicer, any significant deficiencies
relating to the Servicer's compliance with minimum servicing standards.
COUNTRYWIDE HOME LOANS SERVICING LP
Date: _________________________________
__________________________________________
[Signature]
[Title]
EXHIBIT O
AAMES PURCHASE AGREEMENT
EXHIBIT P
NC CAPITAL PURCHASE AGREEMENT
EXHIBIT Q
ACCREDITED PURCHASE AGREEMENT
EXHIBIT R
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
Countrywide Home Loans Servicing LP
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States, formerly known as Bankers Trust Company of California, N.A. and having
its principal place of business at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx, 00000, as Trustee pursuant to that Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2004-HE9 Pooling and Servicing Agreement dated as of November 1, 2004 (the
"Agreement") by and among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor"), Countrywide Home Loans Servicing LP, as servicer (the "Servicer"),
Aames Capital Corporation, as a responsible party ("Aames"), NC Capital
Corporation, as a responsible party ("NC Capital"), Accredited Home Lenders,
Inc., as a responsible party ("Accredited"), and Deutsche Bank National Trust
Company, as trustee (the "Trustee"), hereby constitutes and appoints the
Servicer, by and through the Servicer's officers, the Trustee's true and lawful
Attorney-in-fact, in the Trustee's name, place and stead and for the Trustee's
benefit, in connection with all mortgage loans serviced by the Servicer pursuant
to the Agreement solely for the purpose of performing such acts and executing
such documents in the name of the Trustee necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust"
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer.
This Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose of
correcting the Mortgage or Deed of Trust to conform same to the
original intent of the parties thereto or to correct title errors
discovered after such title insurance was issued; provided that (i)
said modification or re-recording, in either instance, does not
adversely affect the lien of the Mortgage or Deed of Trust as
insured and (ii) otherwise conforms to the provisions of the
Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency
or unit with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfactions/releases,
partial reconveyances or the execution or requests to trustees to
accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment
of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation or
rescission of any such foreclosure, including, without limitation,
any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e. above.
9. With respect to the sale of property acquired through a foreclosure
or deed-in lieu of foreclosure, including, without limitation, the
execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to
purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established for
repairs to the mortgaged property or reserves for replacement of
personal property.
The undersigned gives said Attorney-in-fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney-in-fact shall
be effective as of November 30, 2004.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by the Servicer to the Trustee under the Agreement, or
(ii) be construed to grant the Servicer the power to initiate or defend any
suit, litigation or proceeding in the name of Deutsche Bank National Trust
Company except as specifically provided for herein. If the Servicer receives any
notice of suit, litigation or proceeding in the name of Deutsche Bank National
Trust Company or Bankers Trust Company of California, N.A., then the Servicer
shall promptly forward a copy of same to the Trustee.
This limited power of attorney is not intended to extend the powers
granted to the Servicer under the Agreement or to allow the Servicer to take any
action with respect to Mortgages, Deeds of Trust or Mortgage Notes not
authorized by the Agreement.
The Servicer hereby agrees to indemnify and hold the Trustee and its
directors, officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by the Servicer of the
powers granted to it hereunder. The foregoing indemnity shall survive the
termination of this Limited Power of Attorney and the Agreement or the earlier
resignation or removal of the Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be governed
by the laws of the State of New York, without regard to conflicts of law
principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as Trustee
has caused its corporate seal to be hereto affixed and these presents to be
signed and acknowledged in its name and behalf by a duly elected and authorized
signatory this ___________ day of ____________.
Deutsche Bank National Trust Company, formerly known
as Bankers Trust Company of California, N.A., as
Trustee
By:______________________________________
Name:
Title:
Acknowledged and Agreed
Countrywide Home Loans Servicing LP
By: ________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared______________________________
__ of Deutsche Bank National Trust Company, as Trustee for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2004-HE9, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed that same in his/her authorized capacity, and that by his/her signature
on the instrument the entity upon behalf of which the person acted and executed
the instrument.
WITNESS my hand and official seal.
(SEAL)
____________________________________________
Notary Public, State of California
